Student-Centered Accounting

March 17, 2011 at 7:26 AM Leave a comment

Student-centered accounting holds the potential to shrink bureaucracies, redefine resource allocation for teaching and learning, and improve student outcomes. How we achieve this will depend on how we respond to key questions in each education sector.

Under the current education finance system, governments fund bureaucracies and special programs; educators teach students. Financial incentives for innovation come in the form of short-term grant allocations that generate paper and accounting exceptions. In the end, they depend on economic factors and politics more so than their own merit. Over time, even the most enthusiastic educators experience learned helplessness where they once dreamed of possibilities for their students and designed programs to support them. To resolve the problem, we must sort out the financial data issues and retrain education managers to think like entrepreneurs.

How the money is counted impedes a district’s ability to intend its students’ outcomes. Each year, school districts receive general purpose funds and special purpose funds. They distribute general purpose funds at their discretion, while the special purpose funds target specific populations or programs and must be spent according to preset rules. Accounting systems have been set up for regulatory reporting that track expenditures in this way. Unfortunately, this approach makes it difficult to make a direct link between the overall money spent and the students who benefit from the resources. Outcomes of the education process get lost to retrospective analysis and remedial special programs.

In general, school leaders have tended to manage their share of general funds; district leaders have managed special programs. Ironically, while grant money targets student populations, supervision of each new program has created an overhead cost at the district level. The legacy of a burgeoning bureaucracy has outlived many education initiatives. In addition, centralized operations have further obscured the vision of money for outcomes. Never mind managerial accountability. It is totally diffused.

Innovative programs supported by grants do not have a systematic path to sustainability. Education programs have unnatural life cycles driven by the vagaries of government funding. In good times, particular programs that merit consideration receive generous grant funding. During economic downturns, spending is cut from all but the most politically viable programs.

Who says you have to end good programs that have lost their political backing? Once the availability of funding is threatened, program proponents publicly rally around the cause even as they privately begin to shut down. If an innovative program is to be truly effective, it must have a means to achieve more permanent funding on its own merit.

Student outcomes can be more predictable if districts knowingly maximize their investment directly in their students. Further, that investment must be stable enough to allow for orderly management of change.

Education finance is a complex issue. I have purposely simplified it to illustrate major inconsistencies between financial incentives and mission. Serious inquiry will be needed to realign the two. Some questions to ask as we explore possible solutions to the problem include…

  • Can systems be developed that meet the needs of regulatory oversight while keeping student-centered budget data intact for districts and schools?
  • Can we smooth education finance by accumulating trust funds during good times to use during lean years?
  • Where does discretion for funding of ongoing innovation belong? Would districts benefit from more discretion in their use of special funds?
  • How can we create an orderly transition to sustained funding for successful new programs that precedes the sunset clause on their grants?
  • Diffusion of best practices means they become an integral part of business as usual…does that always mean a compensatory drop of outmoded practices?
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Entry filed under: Financial data. Tags: , , , .

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