Posts filed under ‘Financial data’

A Blogger’s Reflection

Five years ago, I started the SchoolsRetooled blog and began to gather my thoughts on the US PreK-12 Education Delivery System and, more specifically, urban education. Periodic stints back in the classroom have put the blog on hiatus, and it flagged quite a bit after a family tragedy a couple of years ago. But I stand by my initial vision for education reform, not as a call for competition but, rather, a renewal of the system itself to create the capacity to fully integrate 21st Century innovations and continue to evolve toward excellence.

In December 2011, near the end of my first year of blogging on, I published Seven Keys to Education Reform. In this 10-page summary of my approach to system reform, I identified seven levers of change that could improve the system’s functioning by getting more information from data systems, taking a broader view of pedagogy, streamlining organizations around the mission of educating the children, and providing incentives for common ground among educators and between educators and the communities they serve. Beyond organizational dynamics, my thesis presumed an absence of fault on behalf of any of the participants in the education system and, in particular, an end to ageist scapegoating.

In the years since then, policy conflicts defined by political affiliation have shaped the conversations among educators, much to my dismay. My biggest disappointment has been the extent to which the goals of No Child Left Behind (NCLB) were allowed to slip away and the 2014 deadline passed unnoticed. The Obama Administration relaxed the accountabilities, pushing for the Common Core State Standards and advancement of teacher evaluations. Conservatives renewed their support for competition for public schools, choosing incubation of ideas in charter schools, often with private bankrolling.

By the time ESEA was renewed late in 2015 bipartisan support was achieved in the Every Student Succeeds Act (ESSA) with very little prescription for how this would be ensured. The clearest policy directive was the prohibition on any further Federal intervention in accountabilities that the legislation defined as states’ rights. The legislature was ruled by Republicans in both houses; the Obama activism in lieu of overdue ESEA renewal was over.

I continue to believe in system reform. The quiet period after the passage of ESSA allows me to reflect here on progress made with my own agenda as well as initiatives needed in the future.

On no-fault education reform

Education reform has evolved such that rhetoric is less about frenzied reactions to missed targets for student achievement on high-stakes tests and more about opportunities for concrete system improvements and real school transformations. However, the worst performing districts often remain trapped in blame-based failure cycles. They will not be able to get out of their own way until they become more inclusive in their solutions, recognizing their allies and working in concert rather than with antagonism and derision.

On a student-centered data system

Data systems have shown great strides within education, but they are not student-centered. ESSA authorizes a limited number of districts to experiment with student-centered accounting, but they focus only on the revenue stream, not really addressing matching of revenues to expenses at the student level. I continue to believe that we will not be able to manage student outcomes effectively until both sides of the equation are in synch. Once the money is at stake, school systems that are reluctant to embrace the challenge of student-centered accounting will realize its necessity. Data on student outcomes and teacher effectiveness will follow logically.

On broad-based pedagogy

Software is beginning to catch up with the structural changes in hardware and data. This bodes well for implementation of blended learning, which balances digital resources with tradition methods. In addition, personalized and competency-based learning can be realized with greater potential for educators and students to share management of the learning process.

Educators are accepting technology that combines attendance, assignment completion, and grading in databases that can also support student portfolio development. In addition, these same platforms support collaborative projects that can be pursued and documented on shared platforms. Textual content is available digitally, and learning is becoming an interactive, multi-media experience. Student support is routinely enhanced with multisensory digital options and close-reading strategies.

On alignment to mission and benchmarks

There have been many experiments in school transformation; however, reorganizing the actual schools has not been a priority yet. I believe this will happen organically as data systems provide better information on student outcomes.

On performance incentives for Special Education

New Special Education guidelines from Federal regulators have shifted emphasis toward student outcomes. This promising development should help to accelerate progress toward grade-level proficiency. I continue to recommend earlier student involvement as members of their education planning teams, but there has not been much movement in that direction. For now, younger students tend to be present more so if they have disciplinary hearings than for prospective planning sessions.

On school leadership and general management

A couple of years ago, the time seemed ripe for two trends to deepen. The first was the emergence of empowered parents demanding a voice in troubled schools. The second was the trend toward education schools entering joint ventures with their management school counterparts within major universities.

Threats of parent trigger interventions have given way to mayors and school district leaders joining to speak with one voice, a more politically savvy voice that recognizes the importance of community members proactively. The university-based collaborations have gotten caught up in concerns about educators finding a back door to access to highly competitive MBA programs. I suspect the long-term solution will be dual degree programs that require admission to graduate programs in both the business and education schools.

On portable pensions

The issues around underfunding of pension plans continue to dominate the conversation, and most actions are currently being focused around solvency. Unfortunately, the recommendations are more likely to be made by those who have mismanaged the programs historically. The pension beneficiaries have continued to be called out for reasons that baffle me – they are the only people who have given up their pay to the fund without fail through the whole fiasco – and ways to eliminate funding shortfalls that reduce obligations to the pensioners get more traction than ways for the government employers to pay back their missing contributions to their employees. This is particularly troublesome when government entities got holidays from making their contributions in lieu of Social Security, something that would never be allowed in the smallest of entrepreneurial businesses.

On financial incentives linking educators to performance

As I stated originally, validated educator effectiveness reports need to precede merit-based pay. There has been significant progress in teacher evaluations and leadership performance assessment. However, there is more work to be done, which necessitates postponing this objective for a while longer. The recent developments in technology cited above should offer greater options for multiple measures of educator performance, a key to getting beyond controversial value-added test scores as the proxy for overall effectiveness in schools.

On valuing people of all ages

The fervor has died down over targeting veteran teachers as the source of all evil in education, and the conversations around accountability for test scores alone have softened. That said, charters schools continue to be organized with an unwritten rule against hiring teachers beyond a fairly young age. Teach for America and other similar programs continue to be granted exemption from teacher prep rules, giving an edge to youth-oriented private organizations that funnel a revolving door of teachers into public systems. As these groups mature, they are demanding a greater role in leadership at the risk of stifling the voices of educators with a deeper commitment to schools and important insight into the issues.


January 22, 2016 at 12:44 PM Leave a comment

ESEA Compromise Bill Misses Mark on Student-Centered Accounting

Student-centered education cannot naturally transcend its current regulatory environment. The best intentions of educators will always give way to funding imperatives and enforcement of the rules. That is, unless the rules are changed. Today’s ESEA Compromise Bill does not do that.

The point of student-centered accounting for PreK-12 Education is the matching of weighted funding with the spending for the student as an individual. It is intended to be the driver for centering all information – financial, academic services, and outcomes – on the student in a case management model. What it is not supposed to be is a way to siphon off public school funds to private alternatives.

We currently fund districts, NOT students, and we manage district outcomes, NOT student outcomes. Unfortunately, the current ESEA compromise bill does not seem interested in a more rational approach that enables analyses concerning to whom and how we deliver education services. Rather than give districts an incentive to become better informed about mission-driven spending, the leadership in both Houses of Congress have used popular jargon inappropriately as a smoke screen for keeping districts flying blind on actual student services AND helping conservatives to get public money for private schools.

Commitment to bettering the schools would suggest new money guidelines for the public schools to help them revise their spending and service mix to improve outcomes. At some point, once the financial models are in place and validated, it would seem logical to have the money follow the student under extraordinary cases of private placements. But that is not the intent of student-centered accounting, nor is it in any way a top priority.

Further, the conservative approach to funding is to expand block grants, presumably allowing the states to manage their own money. This does not seem a bad idea in a naive world, but one only needs to examine the actual practices to see the flaw. Most states lack internal standards for charts of accounts, and the exceptions still miss the point. Perusing hundreds of pages of detail for education accounting in a given state never yields more than a handful of line items on Instruction. If you give them money in a block grant, they will spend it without giving themselves more than block grant details for resource allocation. It is not an informed approach.

Federal ESEA law must either (A) tell the states that they will get weighted student funding and must justify future funding requests based on how they spent the the money to teach each student, or (B) create a financial and cost accounting standard that guides states on how they can better help themselves. School districts will attend to the details in the data…and that definitely has nothing to do with actual teaching.

November 18, 2015 at 4:34 PM Leave a comment

Data on Resource Allocation?

Aggregate expenditures in the US on the “instruction” portion of education are approaching $0.5 TRILLION, and that’s only about 60% of total spending. So how do we spend it across the curriculum? Dunno…there’s no uniform chart of accounts to analyze that. And the folks we trust to manage resource allocation for education are the same people who don’t seem bothered by this…they just know they always need more money.

Financial charts of accounts are boring. Especially once you have gone through them state by state without finding any unifying principle. In fact, in most states you cannot find a standard across local districts. We have no idea how we as a nation allocate our instructional resources by grade, subject, or program area. Nor do we have the ability to compare variations in spending against student outcomes with any real specificity.

If Lunch Lady Doris spends $25 on a birthday cake…we’ve got her. Alert the superintendent…the press is on the way, inquiring minds want to know. Yet no one seems concerned about the details when we spend hundreds of billions of dollars on instruction and almost half our students fall below grade level proficiency in math and literacy. One line item, which comprises 60% of spending, is the full report on instruction.

Money matters. And we need to know where it goes. Food, transportation, and buildings consume significant resources, and spending that money judiciously is important. But we put way too much emphasis on prevention of impropriety in the latter categories than we do actively intending spending for education in a rational model for student learning.

The student should be at the center of the story – weighted funding based on intensity of educational needs – with matching of corresponding expenditures in a case management model. Is anybody listening?

July 17, 2014 at 11:41 AM Leave a comment

A Vision for Information and Pedagogy

A little over a year ago, I offered a proposal for a systems integration project in education that would redefine our approach to school finance, student outcomes, and teacher effectiveness. Today, I would back off from the notion of cloud-based data. Rather, the missing element in this system is the interface with the pedagogy cloud in which each district would privately invest. However, I believe the core of the plan remains quite viable and present it here more publicly for discussion.

SchoolsRetooledTM                                                                                 Confidential Draft

Sytems Integration Proposal

A crucial problem in the management of public K-12 education in the US is a mismatch between information systems and mission. Existing systems evolved from a regulatory compliance model centered on federal exigencies and do not support the mission of delivering high quality education services to all children locally. Essentially, $500 billion is spent annual without sound microeconomic analysis of the process or a clear understanding of the outcomes.

I am proposing that we create a model that starts with individual students and builds up to an integrated finance, student outcome, and educator effectiveness system. The three main components of the systems would include…

  • Finance: Unit funding of students would be based on formulas built around cohorts of students with similar educational needs. Total funding would depend on actual enrollment and collective intensity of service need.* Financial reporting would be developed for each student education center, which could run the gamut from online programs to residential schools. District services would be demand driven and funded by the education centers.
  • Student Outcomes: Each student would have a multi-media portfolio, including an educational profile and evidence academic progress, psychosocial benchmarks, and individual accomplishments over time. Student records could be uploaded from school activities as well as remote diagnostic and learning resources.
  • Educator effectiveness: Each educator would have a professional development record with details of employment, credentials and evidence from professional practice. Effectiveness reports would be developed from narrative, audio/visual, and survey data collected from student portfolios as well as relevant supervisory, peer and consumer input. This information would link to merit pay files in the finance system.

The system could be built on existing platforms such as Google Plus, Google Docs, etc. However, the key distinction between emerging social networks and the education plan would be the context for sharing data. While social networking enables an explosion of data to be amassed and shared widely in consumer markets, public education data would be collected for very private internal use only, essentially an implosion of data that was harnessed for microeconomic analysis and internal quality improvement. Regulatory reporting would remain public and identities would be continue to be protected.

The long range vision would be to develop an education data cloud that comprised a series of intranets serving individual school districts across the nation. State and Federal regulatory compliance needs could be met; meanwhile, each local education authority would be the keeper of its own details. However, a major enhancement would be a shared data standard that would allow for periodic and ad hoc surveys of system-wide data to document the performance of the nation’s public education system. In addition, the movement of students and educators across schools, districts, or states could occur without loss of data integrity.

* This would entail a major redefinition of data standard for a government service. A precedent can be found in the shift from cost-plus to a case management model in healthcare services in the 1980s.

© 2013 Kathleen T. Wright



February 5, 2014 at 8:56 AM Leave a comment

Teaching to the Test…Financially

Children who perform well with access to a standards-based curriculum in the classroom also tend to do well on standardized tests in the same content area. Teachers who worry about test scores generally learn that they do not need to tailor instruction to the test. However, an insidious form of teaching to the test happens at the school-wide resource allocation level. And limitations in financial reporting allow administrators to fly under the radar with this practice.

There is no uniform chart of accounts for general education at the Federal level. Only a handful of states utilize such accounting standards within their borders. Accordingly, there is no objective or normative data available for resource allocation within the largest category of spending on education each year.

Intuitively, we suspect that school leaders intensified investments in math and literacy after the passage of No Child Left Behind (NCLB). Logically, this would have necessitated a shift in resources away from science, social studies, and elective courses. But we do not know how prevalent this practice might have been. We only know that US standings in science deteriorated globally over the same period. We cannot locate the smoking gun in the absence of detailed financial reporting.

The President has called for Federal incentives to improve STEM education. This will involve grant funding with some degree of regulatory tracking. However, total spending may actually become more obscure without consolidation of the dollars allocated between general and special funds and itemized accounts within categories. How new spending levels compare with historical patterns will remain unknown.

As I have stated previously, we would benefit from a more detailed standard chart of accounts at the Federal level. As the funding source, the US government plays a relatively small role in general education. However, as the data driver for the nation, federal regulators would do well to establish standards for record keeping that would allow periodic assessment of resource allocation.

Local education spending is highly flexible across academic content areas, and this may not be a problem. However, decision-makers need to own their choices in state and local reporting. And they need to be able to analyze student outcomes within the context of their spending patterns. This is unlikely to happen under the current data rules.

October 16, 2013 at 1:09 PM Leave a comment

Informed Policy for Efficient and Effective Public Education

School finance, student outcomes, and teacher effectiveness are inextricably linked. Unfortunately, the state of the art in data is woefully inadequate in each area. We cannot fund the mission of education, validate teacher effectiveness, or ensure desired student outcomes for an efficient and efficacious public education system without better information. And we certainly should not attempt to reinvent the system while remaining uninformed.

Consider that current policy rhetoric in public education would suggest that we…

  • Cut education spending, switch to block grant funding, and/or increase spending equitably instead of funding competitive performance-based grants.
  • Economize via ageism to cut older, higher-paid veteran educators from staff saving on salaries and breaking pension promises, increase salaries of effective teachers to $150,000 a year, and/or create compensation based on salary and merit pay for performance.
  • Fund enhanced services for gifted students and others who “want to learn,” provide combined education and social services for whole-child care, and/or shift money out of troubled districts and into charter schools or private alternatives…all while creating equity.
  • Improve teacher prep by hamstringing traditional programs with even more regulations, exempting fly-by-night schools and boot camps to keep them fleet-footed. And so on…

The absence of cognitive dissonance among policy makers is worrisome, given the logical inconsistencies among strategies, often within the same camp. Even more troubling is that we cannot reasonably assess any of these options given the current state of the art in real information. Regardless of one’s policy position, there is no clear path to valid analysis.

We currently fund bureaucracies with oblique formulas and regionally variable equity. There is no uniform chart of accounts that allows comparative analysis of long or short-term investments in educational programs from a financial perspective. Nor do we gain much insight into success or failure. For instance, we spend hundreds of billions of dollars on Special Education, yet we account for eligibility for services, not results. We may choose to highlight STEM education, but there is no data that captures comparative STEM spending or outcomes.

Technological change has created opportunities from simple paper reduction to virtual instruction. And, unlike incompatible policy-making, we actually can standardize and individualize our services to students at the same time. Beyond pedagogy, our information support for operational effectiveness is within reach with updated business systems. However, transitions with technology are costly. Again, we need a way to look at the people and the money.

Data standards and analytical tools need to be built into our new systems that allow us to be informed as we make choices to invest in productive capacity for learning as well as making sound decisions to subsidize whole child support in special cases.

May 8, 2013 at 3:10 PM Leave a comment

Rhode Island…the Little State That Could

Rhode Island has created what should be a national model for education accounting and data collection. Minor enhancements may be needed to aggregate information on virtual schooling among expenditures and to link city and town accounts for capital assets and pension liabilities. But the lion’s share of the work has already been done in Providence.

In 2004, the late Representative Paul Crowley, Senate President Paiva Weed, and Senate Education Committee Chairwoman Hanna Gallo collaborated to sponsor a better vision for education finance in Rhode Island. The result was a gargantuan effort to address the needs for transparency, uniformity, comparability, and accountability to mission in education spending. The system continues to evolve in its third year of full implementation under Commissioner Deborah Gist. But the Rhode Island Department of Education’s Uniform Chart of Accounts already could serve as a national model for K-12 finance data.

The US spends about $500 billion annually on education without matching the money to the mission of educating children. While the federal government only contributes about 10% of the funding, with state and local governments splitting the other 90%, financial reporting is only standardized with regard to a small number of federal regulatory line items.

The federal role in public education includes…

  • National data standards
  • Common Core standards for interstate portability of education
  • Management of “market” imperfections
    • Food and transportation for the poor
    • Disability benefits
    • Incubation of innovation
  • Funding adjustments for equity via specific grants

Autonomous state education authorities (SEAs) offer half the funding and carry the weight of decision support for the mission of educating the children. However, their informational common denominator is compliance data for federal reporting. Accordingly, most comparative analyses can go no further than aggregate data on general education, special student services, food, and transportation. Action items have been elusive; inefficiencies have been funded without intent or natural correction.

When Rhode Island began its data project, only six states – most notably New Mexico – had made substantive progress toward uniformity in financial data collection within their borders. Rhode Islanders gathered an extensive team of stakeholders. Together, they studied these exemplars of unified charts of accounts against their own needs for comparative analyses of local education authorities (LEAs) as well as internal assessment of the effectiveness of their spending patterns. The team paid close attention to every detail in analytics and created an incredibly robust decision architecture that addresses issues of money, mission, and regulatory compliance.

Two areas for development that I could see…

  • Virtual education resources have grown in unforeseeable ways as materials and delivery sites for education services. They need to be integrated into the system in multiple dimensions.
  • Balance sheet items concerning major assets, such as school buildings, and liabilities, such as unfunded pension obligations, need to be consolidated into school finance at least for analyses and decision-making. These line items do not have a consistent place in school or district finance, often falling under local government authority and residing in their accounting structure. However, complete understanding of these components of investment and their impact on scarce resources to support the mission of educating the children cannot be overlooked.

In addition, I am a believer in student-centered finance that goes beyond weighted funding to include direct linkage of expenses for case management. But that may be a generation away. In the meantime, hats off to Rhode Island.

Now can this best practice get shared…immediately?

February 27, 2013 at 11:51 AM Leave a comment

Privacy and Data Solutions in Education – Part 2 of 2

Big data in education must be just as big on security. Everything from children’s journals to administrators’ meeting notes can turn up on Google Docs or Facebook. These may seem like great platforms for trying out 21st century tools. However, the long range plans must include tight security as we take very privileged information and make it broadly available…on a need-know-basis?!?

The future for education data is bright. We are just beginning to realize the potential for developing integrated systems that are student-centered and can bring together student funding and outcomes…which can then be reconciled with delivery system and educator effectiveness. Whew! But can this brave new world accommodate the privacy requirements for all the players?

Consider that…

  • The New York Times has published test performance data that might have been better kept in NYC DOE teachers’ human resource files.
  • Children who are not old enough to join Facebook or understand their ever-changing privacy rules are active on the site through their classroom pages and may be revealing too much about themselves in journals or personal essays.
  • Confidential memos have been leaked and shared for sport and maximum exposure.
  • Risqué videos and inappropriate photos of teenagers have trended on Twitter with record speed.

Everyone is in the media and social networks, but it is not clear who is in charge or what the rules should be. Privacy has become a thing of the past…at least for the present.

In a period of rapid technological change, it is all a person can do to stay current. Being open to new technology is a requirement for today’s professional, but the blurring of boundaries between public and private personas challenges even the savviest users. Bringing social networks into the classroom and school community has unleashed the potential for innovation in communication and collaboration. But it has brought with it loss of control over content.

Platforms offered by Facebook, Google, or Pinterest allow us to experiment with shared portfolios of content from a variety of media. Concepts for limiting access to information exist in theory, but most privacy shields have been proven to be flawed. For the moment, anything posted on an Internet site carries risk of exposure. Does that mean we should stop experimenting with new apps? No…because the milieu will define important ways that we can integrate data in the future.

Education data banks will need to accommodate all media types, but they also must be exclusive for participation. Essentially, the old privacy rights need to be engineering into new Intranet systems. For example,

  • Children need to be shielded from personal exposure to people beyond their immediate families or the school community.
  • Only students, their parents, and relevant teachers and administrators should have access to certain student information.
  • Every staff member has the right to privacy in employment records and personal information.
  • Student outcomes, teacher performance, and education effectiveness data may be intertwined for quality assurance internally, but the identities of the participants can never be revealed in public records.

We have a major opportunity to become far better informed as decision-makers in education. But as the song says, some things are private.

January 10, 2013 at 1:36 PM Leave a comment

Privacy and Data Solutions in Education – Part 1 of 2

Fully integrated systems in education hold incredible potential to combine a variety of types of data and media from finance, human resources, and education operations…organized around students. Once this very big picture was in place, truly mission-driven education services could become a reality. But do we have the courage to abandon our regulatory model?

Let’s make our education information systems a do-over. Start with student funding and build a zero-based budget from there. Financial statements aggregate from student education centers up. District services would be driven by demand and economy.

Then build student records that combine data fields, documents, and audio-visual inputs. A continuum of real and metaphorical snapshots of the whole child would emerge over the course of his or her education.  It would comprise the usual demographic data, formal assessments, and grades. However, portfolios also could be included with key samples of student work as evidence of academic and psychosocial benchmarks, distinctive strengths, or leaning style profiles. Special education or English language learner files could be included as well.

Every educator would have a consolidated record. It could capture the teacher or administrator’s personnel data and link it to evidence on dimensions such as student progress, videos of practice activities, or feedback from students, parents, and colleagues. Professionalism and dimensions of leadership could be captured as well.

Each player would have a good picture of current achievement levels in addition to a longitudinal progress report. Beyond the individual, finance and performance analysis would inform system leaders as they refined the education delivery system for efficiency and effectiveness. Continuous quality improvement would not only be possible – it should become mandatory – for the people and the system.

Clearly today’s regulatory model is not working. But are we ready to give up bad data, scapegoating, and plausible deniability for real information that allows us to grow?

January 10, 2013 at 11:45 AM 1 comment

Spend Education Dollars Wisely – Invest Private Equity Funds in Real Economic Capacity

This should be a no-brainer. The $500 billion dollar elementary and secondary education market needs to be fiscally responsible. And our economy needs to expand through investment in real productive assets. Yet private investors are seeking to skim profits off of the poorly administered public education money instead of going for new economic capacity. They misinterpret the difference between a stimulus package steeped in short-term spending on employment and infrastructure improvements in education and long-term profit-planning through economic growth.

Private firms eyeing profits from U.S. public schools: “…Now investors are signaling optimism that a golden moment has arrived. They’re pouring private equity and venture capital into scores of companies that aim to profit by taking over broad swaths of public education.”

This excerpt from a Reuters press release yesterday tells us that US “job creators” still don’t get it. They continue to do profit planning based on eating our young. Building a renewed private sector based on extending government spending on PreK-12 education will not make this nation stronger economically. Nor will it make sense to crowd out other investments in productive assets by developing a shadow industry for private investment money in alternative education services.

In the recent past election, the US economy was a key issue. It remains so. However, we continue to see private investment in the very public goods that conservative politicians sought to curb. Cutting healthcare spending and privatizing education were targeted as solutions, but we still need to see evidence that our great economic visionaries can see past their next short sale. The private growth opportunities cannot be healthcare and education. They crowd-out investments for the future.

Healthcare spending already consumes as much of GDP as should ever be reasonable in a stable economy. The $1 trillion investment in college loans to kids is already too high. New private dollars going into public education will continue to dampen the job opportunities for the children once they finish high school and college.

Yes, the brick-and-mortar infrastructure in education is crumbling and needs to be reinforced. And, yes, the children in the classroom should be protected from the feast and famine of economic cycles. However, compensatory money spent in either area must be seen as short-term spending.

In addition, existing private companies that serve this industry need to follow the market from paper to digital media. They must do this to survive – not expand. New players may emerge because they do this better, but the overall industry should not grow faster than the economy in the long run.

$500 billion may be enough to fund public education. We are not sure, but we need to find out what we are buying with our money. However, as long as our financial data system in education lacks transparency, the looters will come.

November 27, 2012 at 8:14 AM Leave a comment

New PreK-12 Education Priorities for the Returning Obama Administration

The Common Core State Standards, NCLB waivers, and Race to the Top initiatives have altered the landscape in education in the absence of an NCLB rewrite. On this day of reflection after Election 2012, I offer a few thoughts on resetting policy priorities until ESEA renewal becomes feasible.

Entering the 2nd term, in my humble opinion, the Obama Administration could benefit from raising the priority of three issues in PreK-12 education…

  • Decision architecture for education finance, reporting, and analysis
  • Federal support for government employee pension reform
  • Incentives/accountabilities for grade level proficiency for students in general or special education and students who are English language learners

Decision Architecture

The Race to the Top program (RttT) has instructed states and districts to design new approaches to student funding, teacher effectiveness, and student outcomes. Having completed the idea generation phase for reinvention of the decision architecture within education authorities, it is time to draw expertise from beyond traditional regulatory compliance models. Educators need to learn from non-education sources with more expertise in aligning information and analyses to the mission of educating children efficiently and effectively.

The finished products should draw on the best of the general industry models and those presented by RttT exemplars. They should include a standard for financial reporting that is student-centered as well as data elements to be automated in support of teacher effectiveness and student outcome reports.

Pension Reform

Government employee pensions are straining fiscal resources while yielding inequitable benefits for plan participants and limiting their career mobility. Current retirees and vested employees need security with their defined-benefit pensions. Separately, the wisdom of continuing to underwrite such pensions in the future needs to be assessed. However, any introduction of defined-contribution pensions for new or unvested employees would result in eventual bankruptcy for legacy plans.

The Federal role in the issue could be one of mitigating the financial crisis in pension funding. Changes to the tax code could lower the effective cost of borrowing for sponsors to meet pension obligations. In addition, elimination of the Social Security opt-out would extend the safety net for employees switching to higher risk, defined-contribution pension plans. A prior post discussing this issue can be found here.

Grade Level Proficiency

When redefining the data elements needed for measuring student outcomes, Federal regulators will need to keep in mind new targets and deadlines for general grade-level proficiency among PreK-12 students. Longitudinal tracking across content areas will need to be enhanced significantly, especially to ensure that students receiving services in Special Ed or ELL programs are demonstrating accelerated progress in response to accommodations and modifications.

This shift in emphasis should create incentives to move beyond regulatory compliance to demonstration of real benefits for students, a continuation of the work announced in an Education Department notice available here.

Other items on the Federal agenda

Meanwhile, teacher preparation does not need to be such a high priority on the Federal agenda. Educators are being trained under a variety of conditions ranging from rigorous 5­-year programs that combine baccalaureate and master’s degrees to boot camp immersion programs or online courses with limited apprenticeships. Aggressive evaluation of the most highly structured programs exclusively is both unfair and at risk of overestimating the state of the art in actual practice. In addition, success has been seen with many teacher prep models, raising doubt that the problem lies with the pipeline of new teachers.

Rather, a crucial lapse in quality arises because individual schools and districts show uneven results with their ability to keep teachers in top form professionally throughout their careers. That is a local problem that is being addressed retrospectively through the teacher evaluation process. Prospectively, Federal regulators should consider grants for demonstration projects to introduce general management and human resource expertise from general industry into education leadership development.

November 7, 2012 at 2:46 PM Leave a comment

More Support for Redesigning Financial Reports for Schools

Guest blogger Marguerite Roza challenges charter schools to take on the task of containing their costs in her column found on today. However, the standard for economic analyses may need to be set before it can be implemented. In the comments, I offered my plea for better financial reporting one more time…

In their defense, charters and district schools suffer from a mixture of data limitations and relative marginalization of school business managers. A nudge is in order that must begin with the Feds.

Charters and district schools would benefit from a new standard for financial statements. The federal filing rules do not include adequate detail in financials to manage productivity, and detail is diminished when going from the district level to the school. In order to achieve prudent and creative fiscal management, schools need financial reports that conform to a business model rather than focusing on regulatory oversight of special government programs.

Districts vary in their use of discretion over internal reports. However, the entire education system could be nudged in the direction of cogent analyses of their business models if the DOE were to redesign fiscal data requirements around both macro and micro considerations.

In addition, greater depth of training in business analysis is needed for school leaders, which would be more easily achieved once the aforementioned financials were improved in their transparency and accessibility.

June 26, 2012 at 10:28 AM Leave a comment

Balance Sheets for Schools

Too many financial and facilities decisions are made under duress as school districts respond to critical needs that cannot be avoided. Often, competing needs that should have been considered arise soon after the ground is broken for a new building or a new round of debt financing has been completed. The process of allowing a district’s priorities to bubble up to the surface should be replaced with school-based balance sheets that allow a prospective and transparent look at the asset base for every education facility.

School districts make decisions to add new buildings or enhance old ones, often in isolation in response to critical needs. Each project is vetted publicly, but the opportunity cost of the choice often is only revealed after the fact. Districts need tools to strategically manage their portfolios of facilities, intending their investments in each and every school. And their choices need to be made with transparency for oversight by regulators and constituents.

Filing a complete financial balance sheet for every school is a fundamental requirement to support such an analysis on an ongoing basis. Similarly, debt is assumed by cities, towns, or school districts for capital outlays, pension funding, and operating cash needs. By matching the debt to schools, they can get a better picture of whether they are investing in the future, or mortgaging it.

Each school needs a solid asset base, current solvency, and long-term viability. Its age, benefits of modernization, and safety as a standalone structure should be known at any time. This does not mean that we should ignore the benefits of a balanced portfolio of shared resources…only that we must know the value of the home base for any group of students. And we must know the system’s exposure to risk at each facility as well.

June 5, 2012 at 10:11 AM Leave a comment

Why School Financial Statements Need an Overhaul

Wasting resources intended for our children or our retired public servants would seem to be reprehensible. Ironically, the government accounting systems that were created to protect these beneficiaries from fraudulent use of funds have become culprits. Regulatory accounting impedes analysis of the linkage between funding and mission. Further, its details are inadequate for building the robust models needed to evaluate the effectiveness of the delivery system.

Just a few of the problems with financial statements for public education…

  • There is no direct link between the sources of funds and the students served.
  • District accounting reflects compliance with regulations instead of education priorities. There is no standard for distribution of funds across content areas, cohorts of students, or programs (e.g., STEM).
  • School-based accounting shows only a partial list of accounts. It does not capture full measure of resources invested in the educational effort or allow assessment of return on investment.
  • School financial management guidelines are preoccupied with petty cash – vending machine and event cash receipts – not big picture funding of the school’s mission.
  • Governmental Accounting Standards Board (GASB) guidelines for pensions do not require accurate assessment of plan solvency.
  • Lack of transparency renders fiscal oversight dependent upon translation by insiders.

Incumbents in school district finance or building leadership are specially trained in the esoteric demands of the existing regulatory model. Many have never worked outside of the industry. The echo chamber cannot be expected to identify the problems and agitate for change. Indeed, inexperience, lack of knowledge, or comfort with the status quo may conspire to obstruct progress toward a fiscal model that informs decisions without loss of integrity to regulatory intent. Nevertheless, we need change now.

May 9, 2012 at 9:28 AM Leave a comment

Communicating Priorities in Education

If you want it, you have to ask for it. Let’s make it “Show Me” time to assure educators that we care about more than test scores. Ask them for details on other priorities, and support their local analyses of discretionary resource allocation in every school. In addition, update certification and facilities standards for alignment with priorities.

PreK-12 education should…

  • Guarantee that every child has the foundation knowledge at each benchmark year (3, 8, 12) to continue successfully as a lifelong learner.
  • Provide well-rounded instruction in English language arts, mathematics, social studies, science and technology, the arts, physical education, and foreign languages.
  • Be transferable across state lines without excessive need for supplemental skill-building or redundant content.
  • House the academic efforts in appropriate, safe, and efficient institutions with universal access for at-risk populations and reasonable attempts to offer flexibility to accommodate all others.
  • Provide advanced placement courses in all major content areas for high achievers.
  • Supplement educational efforts during out-of-school time to make it a way of life.

Accountability for baseline knowledge is well covered in the national dialogue. The Common Core is addressing the need for interstate mobility. However, there remains an information gap on additional priorities. We care but we do not document the details. It’s analogous to teaching material that never makes it into the grade book. No one believes it really matters.

The first step is to collect data on the financial investments made by every school in its content areas listed above, at-risk population, AP courses, and school facilities. In addition, information concerning enrollment, class sizes, and instructional time should be added to the attendance and graduation statistics. Participation in extracurricular activities and other out-of-school activities should be documented as well.

Tests are being given to inform us about student achievement in benchmark years. However, we do not support certification and facility standards that recognize the importance of 3rd grade. Can we make this an endpoint for classifications of professional preparation or school design?

Beyond building design for age appropriateness, what changing needs do we envision for the future of schools and their extended communities? What else do we need to track?

April 4, 2012 at 10:28 AM Leave a comment

More Musings on School Finance

School finance is definitely not mission driven and procedures reflect policy and compliance. Further, an emphasis on Federal compliance guarantees that the details do not reflect the state and local exigencies, despite the fact that most of the money and all of the children are local.

The big headings in school finance include…

  • General instruction
  • Student services (special ed, guidance, etc.)
  • Food
  • Transportation
  • Facilities

These topics fit the federal funding concerns. To think and manage locally, wouldn’t it be better if the last four items were subheadings to the bigger heading of educating children at each school?

Looking at the details, or lack thereof, in the federal requirements for school district reporting…

  • Details are in the sideshows, not the main event. For example, there are as many mandatory line items for the Agriculture subcategory of Vocational Education as there are for Instruction in general.
  • Mandated reporting is at the LEA (Local Education Authority) or district level.

What if we changed the details to recognize priorities within the mission of education and mandated that the reporting start at the school level and build up to the LEA aggregates?

Looking at how the business management functions within school districts are managed, there is a distinct shift toward, then away from, decentralization based on school district size.

  • School districts seem most like to decentralize business functions when they hit the 10,000 to 19,999 student size
  • Business functions are re-centralized for districts with 20,000 students or more.

Is there a creative shift that occurs in the moderate sized districts that could be exemplary for effectiveness within functions that is lost in larger districts? Or is it that a cumbersome collection of processes can be better underwritten centrally in the largest districts?

Anyway, just a few thoughts on a topic in development. Yeah, I can be boring…but I hate wasting the money dedicated to those who are least able to defend themselves.

March 16, 2012 at 11:04 AM 1 comment

Mortgaging the Future of Schools

What is a healthy debt load for a school district or other education authority to carry? Taking a first glance at the funds flow and balance sheets of a handful of school districts, there seems to be a wide variation in debt and debt servicing obligations. Investments in facilities and carrying unfunded pension benefits would account for most of these liabilities. So who is minding this store?

One of the key strategies for elementary and secondary education reform is decentralized funding of students. Directing dollars to mission just makes good financial sense. So does economic analysis of the production function that supports student learning. However, a less tangible benefit of this movement would be the improved transparency of financing decisions overall. In fact, to keep the primary mission of educating children intact, we need to get a handle on prior commitments of funds that will crowd out future investments in our children.

School districts across the nation have spent money on facilities or promised generous pensions to retirees in a manner that belies the shallow pockets of finance available to them. Cities and towns generally share control over their district school budgets and building funds with school committees, composed of elected or appointed local citizens. Often, a small number of committee members drive fiscal decisions, and they tend to be tightly aligned and like-minded incumbents. The depth of insight into the long-term financial impact of politically expedient decisions cannot be underestimated.

Decisions to mortgage the future of schools cannot go unchecked. Nor can they be swept into a blanket funding formula that rewards the highly leveraged at the expense of those who have been more prudent fiscally. We need to assess the solvency of all school systems and develop policies to serve the children equitably in the future. In the meantime, we need to go forward with attempts to develop weights for direct student funding that goes to current operating expenses, not to finance excess liabilities.

March 14, 2012 at 1:33 PM Leave a comment

Student Funding and the Healthcare Precedent

It is in our children’s best interest to match school finance to the mission of providing them the best education services. Weighted-average student funding could drive this focus on education’s mission, and lessons from other industries have shown how it can be accomplished. The question remains…Is the education leadership ready to take up this challenge?

In 1983, structural change began in the healthcare industry, driven by a new Medicare reimbursement program. In an attempt to control costs and create a path to case management, the Health Care Finance Administration organized hundreds of procedures that involved hospitalizations into Diagnosis Related Groups (DRGs) and set global payments for hospital care. Administrators were overwhelmed as they rushed to tweak accounting and data systems that had been rendered obsolete overnight. At the same time, they looked to quality assurance programs and utilization review with new urgency. Previously, hospitals had been compensated for their costs, without regard to efficiency or outcomes. Industry leaders were extremely concerned about financial failure and deterioration in quality of care. So what does this have to do with education?

School finance has been driven by costs, not outcomes for students, and financial accounting has been tailored to fit that model. DRGs in healthcare could be considered analogous to weighted-average student funding in education. Conversion to DRGs for healthcare reimbursement created a lever for change that cut across the entire industry. Hospitals were challenged to create data systems that informed them about individual episodes of care, both in terms of costs and outcomes. A new mindset was needed for case management and, while the transition was difficult, the emergence of patient-focused treatment, within hospitals and beyond, had to happen.

Lessons from the conversion to DRGs could be useful for educators as they begin the journey to student-centered finance and education services. Despite student centrism in the classroom, education’s mission and financial incentives have not been in synch. Like the hospital model, administrative overhead and bureaucratization have generated a burden for school districts that detracts from direct student services. Further, case management from a revenue, expense, and outcome perspective only occurs in isolated situations.

Charter schools have shown the benefits of direct student funding and outcomes management. Is it time for education finance to begin the transition to this model for all schools?

February 24, 2012 at 9:25 AM 3 comments

Updating Decision Architecture for Student Success

The decision architecture for education was designed to support macro level management of Federal exigencies. Micro level decision support has been cobbled out haphazardly across the nation by educators without the strategic vision of economists, production planners, or profiteers. These are dirty words in education, but there are lessons from microeconomics that could guide the way we create decision architecture for local management of student outcomes.

The debate over the role of Federal and State governments led me to an analysis that, for the first time, gave me insight into why we keep our books the way we do in education. It also explained why we don’t seem to fund student learning. Now, there will always be questions about how firm a hand government should have in local operations. However, the real solution lies in teaching the States how to micromanage the learning process, and I mean that in a good way.

The Federal role in public education could be suggested to include…

  • Special grant funding and financial reporting standards
  • Common Core standards for interstate portability
  • National data standards
  • Management of “market” imperfections
    • Food and transportation for the poor
    • Disability benefits
    • Incubation of innovation

If data and reporting are indicators, we already have much of the accounting and decision architecture in place for these functions at the macro level. A continuing dialogue is needed, of course, especially in the following areas…

  • Rethinking financial standards that are student-centered
  • Common Core State Standards – revisions and adoption
  • Refinement of data needs for student outcomes and education effectiveness

In addition, today’s emerging global economy demands that the US take a stronger role in the education of its people to remain competitive. Now for the micro level…

At a local level, States and their school districts address the following exigencies…

  • Student populations and their learning needs and distributions
  • Matching of resources to students
  • Creating the milieu/incentives, for effective learning
  • Managing the quality assurance process

Trouble is…we have been try to do this while accounting for budgets for

  • general education,
  • special education,
  • food,
  • transportation, and
  • capital spending.

In a world where our mission should be maximizing student outcomes while minimizing costs, we have been managing the costs alone. And we have been linking the money to the Federal concerns, not the local students.

Financial accounting standards made business performance transparent nearly a century ago. Public services, such as PK-12 education, have similar needs for mission-driven budgets and performance measurement. In addition, existing regulatory accounting places undue control over resources in the hands of specialists who operate in a relative vacuum and, without whom, leaders cannot read or present their financials. Inefficiencies, myopic vision, and episodes of corruption are guaranteed until financial standards for schools support greater transparency.

October 12, 2011 at 8:38 AM 1 comment

Decentralized Accounting in Schools – The Carpenter’s Dilemma

To paraphrase an old saying…If the Principal’s whole budget is a personnel budget…every problem looks like a person.

Asset-based management depends on knowing the true value of all of one’s inputs. Every school has bricks and mortar, people, fixtures, equipment, and supplies. It also depends on intangibles in the form of community partners, public and private. It is not the habit of a government service such as education to apply market principles to the analysis of its enterprise, its investments and its returns. However, we may well benefit from borrowing the tools of the market to know where we stand for strategic planning purposes.

In addition to taking an inventory of assets, each school would benefit from understanding all the fully allocated costs it incurs, not just the staffing costs. This would be a stepping stone to decentralized accounting, which would send more resources to the schools along with more discretion in spending and accountability for results. We have a genuine need to know where the money is spent. Teachers must demonstrate their effectiveness, but so must the many and varied offices and materials that comprise district overhead. Would any good manager intentionally pay for all of their goods and services at the current cost?

April 29, 2011 at 11:43 AM Leave a comment

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