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Lack of data, oversight raises questions on Kansas school spending

In the following report, investigative reporter Paul Soutar of the Flint Hills Center for Public Policy takes a look at school spending in Kansas. Particularly troubling is the decision to abandon an audit already in progress.

A recent decision by the 2010 Commission to not complete an efficiency audit of K-12 schools in Kansas may undercut the case for increased spending on schools.

In its 2005 session the Kansas Legislature increased state funding for school districts by more than $145 million for the following school year. The same bill also created the 2010 Commission and charged it to, in part, “conduct ongoing monitoring of the school district finance act” and directed it to “ensure that the Kansas system is efficient and effective.”

Three years into its existence, the 2010 Commission asked Legislative Post Audit (LPA) to conduct the first efficiency audit of K-12 school districts. But in its June 29 meeting, Commission members voted to cancel the second half of the audit. Commission chair Rochelle Chronister told members that district administrators are too busy dealing with budget cuts to complete the audit.

2010 Commission member Dennis Jones supports the decision not to complete the audit as originally requested. “We’re in a time of severe economic stress for everyone and school districts are also feeling the pinch. It seems to me that it’s not the best or most efficient use of the districts’ time to be inundated with a bunch of housekeeping questions about efficiency. I think it’s better use of manpower to get budgets prepared and to prepare for next school year.

Districts can voluntarily complete the audit but so far only two of the state’s 294 districts, Derby and Ellinwood, have chosen to do so.

The Legislative Division of Post Audit (LPA) was originally asked to analyze district staffing and expenditure data to identify areas where spending appeared to be out of line with their peers. The intent was to answer two questions:

  • Do the districts manage their personnel, facilities, and other resources in an efficient and economical manner?
  • Do the districts follow best practices for financial management to ensure that their financial resources are protected?

In the first phase LPA collected data from districts for analysis. According to the report released July 25, “The second phase called for following up on a sample of districts to evaluate their processes in the areas that appeared to be out-of-line to determine if there were ways they could reduce costs.”

The 2010 Commission suspended the second phase of the audit at its April 2009 meeting, and asked LPA to review the available data looking for trends or patterns that shed light on districts’ efficiency. At the May meeting, the commission asked LPA to contact districts and offer help in finding ways to operate more efficiently. The second phase of the audit was effectively canceled and the new scope of the audit was: How do school districts compare on various measures of efficiency?

The utility of that evaluation is limited, according to the LPA report, because districts do not uniformly report statistics to the Kansas Department of Education (KSDE). Reporting errors could be evaluated and corrected by completing the original audit plan.

School districts don’t report certain types of data consistently, making meaningful comparisons difficult. According to LPA, some district employees don’t know the accounting standards or ignore training. For example, the LPA report says the Goessel district reported spending an average of $4 per student on student support services for 2006-07 and 2007-08 when, on average, the 121 districts examined in the report spent $242 per student in that category Goessel officials told LPA they reported certain contracted student support services as instruction expenses.

Previous LPA reports, a Standard & Poor’s audit and even administrators at KSDE have stressed the need to follow standardized accounting practices.

Stephen Iliff is a CPA and is the only member of the 2010 Commission not connected to or retired from government or public schools. He wrote dissenting minority reports for several of the commission’s annual reports to the legislature and says district accounting staff must be trained and held accountable so comparable information can be obtained. “Public school accounting practices would not be tolerated in the private sector.”

In his dissent from the commission’s 2006 report Iliff wrote, “Legislators are continually being asked to provide more funds for education and do not understand where the money is going or how it is being used. This is like writing a blank check to the school system by the taxpayers.”

The report goes on to say, “At least 6 out of 12 duties given to the 2010 Commission include words like determine, evaluate, monitor, review and ensure the Kansas system is efficient and effective. All of these words and duties are meaningless without a system that will capture information in a comprehensive, methodical, orderly and consistent fashion.”

A March 2002 LPA audit found that laws, policies, and practices related to school district budgets are flawed in some areas including inconsistent reporting that makes it difficult to know how much money a district is taking in or how money is being spent. Iliff says those problems still exist.

Dissent Discouraged

State Board of Education member Walt Chappell, the lone dissenter in the state school board’s July 15 decision to ask the Legislature for $282 million in additional funding, says the vote was rushed and lacked serious discussion. “What I was concerned about is that we were just going through the motions. We didn’t discuss whether schools needed the money or had other priorities or whether some should go to vocational programs.”

According to Iliff dissenting opinions are not sought in school oversight. “Not only do they not ask for it but Rochelle Chronister tried to cut out three pages of one minority report and I had to go above her to a lawyer to keep it in.”

“The people Chronister asks to to speak to the Commission appear to create a stacked deck,” Iliff said in a recent phone interview.

Nine district superintendents appeared before the commission June 29 and each asked for more money, either through additional state revenue (more or higher taxes), funding to levels previously budgeted by the Legislature or adjustments in the formula. Their testimony was punctuated with stories of dramatic increases in the number of poor and special needs students and English language learners. Most had data purporting to show significant increases in student performance as measured against State assessment tests, but no comparisons were made to national achievement tests, which show much lower proficiency levels.

Mark Tallman, Assistant Executive Director/Advocacy for the Kansas Association of School Boards was the concluding witness before the 2010 Commission on June 29 and presented data in support of the superintendents’ pleas for more money.

Data used use to show increases in student performance are connected to increased funding is deceptive according to Iliff. “Before the increases in cash because of the Supreme Court decision the graphs were already heading upward.” Iliff says he believes the trend is more the result of the standards and sanctions put in place by No Child Left Behind.

A 2008 LPA report on district’s use of increased funding says, “student outcomes had been improving for several years before the changes to the funding formula, and have continued to improve.” The report goes on to say, “because student performance is the result of years of accumulated instruction, it’s too early to tell how the new funding has affected performance.”

School superintendents also made their case for increased funding.

Brenda Dietrich, superintendent of USD 437, Auburn-Washburn schools in Topeka, asked the commission to urge the legislature to provide the funding that was initially budgeted in conjunction with court-mandated spending increases. Proponents of increased funding say the legislature is in violation of the Kansas Supreme Court’s order if they don’t provide the funding.

Dietrich noted, “There was plenty of money in our state treasury to fund education and all other agencies a mere three years ago.” She also put the onus squarely on state legislators, “Through the state’s budget process they single-handedly control the conditions under which the children of Kansas can access a quality education.”

Dennis Stones, superintendent of USD 441, Sabetha, asked that the legislature seek additional revenue streams and enact a moratorium on tax breaks and tax cuts. His district is cutting activities including some athletic games and freshman football.

Chronister told Stones he should do more than cut a few coaches and games. “If you cut football programs suddenly a tax increase might not look so bad.”

When asked in a later phone interview to clarify her comment, Chronister said, “I’m going to ask what have you done to really wake your patrons up. I know some people the only thing they care about is who’s coaching the football team and who’s wining games. I also know we seldom have people come and yell and scream about the math teacher but it’s not uncommon to have people yelling about the football coach.”

Beth Reust, superintendent of USD 270, Plainville, said her district tried to eliminate driver’s education to help balance their budget. After strong reaction from the community it was reinstated along with a $350 tuition charge. The district planned for 28 students but only 15 signed up because some parents found a better deal; a neighboring district offers the class for $150.

Reust also asked that the legislature ramp spending down rather than cutting it all at once. “If you have $60,000 then get $90,000 and start living on $90,000 you get accustomed to it.”

Jill Shackelford, superintendent of USD 500, Kansas City, Kan., also mentioned getting accustomed to budget increases. “I started as superintendent the first year of the Montoy increase. I thought that honeymoon was going to last forever.”

Iliff says, “Some people in education spend like there’s no tomorrow.”

Legislature responsibility

“The legislature either needs to belly up to the bar, so to speak, or change the law,” Chronister said during the phone interview. “If they change the law they are going to be in a position that the courts are going to be right back at them for not providing the money for a public education for every child as the state constitution charges them.”

According to Chronister the current focus of the commission is urging the legislature to find additional money for schools.

Jones thinks that’s a mistake. “If we wanted to be California that might be a position to take. The legislature still has the constitutional authority to determine a suitable provision for finance. In these times of dire economic stress the legislature has to have flexibility to meet the needs of all of Kansans.”

Jones sees flaws in the formula. “We were far better off when local districts had some autonomy over how much to spend and how to spend it. We’ve taken that away from local districts and said every student in Kansas is lumped in category A and then some other sub-categories. That hamstrings the local school board.”

Jones also believes the legislature is unduly bound. “The Supreme Court has determined that an opportunity for a quality education is a basic right of every student in Kansas and we’re going to measure that with outputs and with an arbitrary funding formula. I think to some extent that hamstrings the legislature.”

“The most important single function the state of Kansas provides is the education of its students,” Jones said. “We must give our young people an opportunity to prepare for the challenges of tomorrow. And in an ideal world the funding would be whatever it takes. Unfortunately we don’t live in an ideal world. Schools are going to have to share in the sacrifice asked of everyone.”

Donald Adkisson, Director of Finance for USD 260, Derby, says Derby’s decision to voluntarily proceed with the LPA audit is an opportunity to get some more information. “We’ve made so many cuts in the last 10 years, we’re at the point we’re willing to hear ideas from anyone.” Transparency and efficiency are important in Derby according to Adkisson, “We don’t hide anything. Come in and look at us. We’re going to do as much as we can to keep the costs low for the taxpayers.”

Iliff says asking for increased funding in the current economy is arrogant. “It’s insensitive to the struggles of the common person who has lost his job. A lot of people are foregoing a lot of benefits just to make ends meet. The people asking for increases seem like they’re impervious, a new dynasty or political class.”

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One Comment

  1. TRUMAN July 25, 2009

    So many areas of power and influence! If someone has good business ideas or a few common sense proposals to save the taxpayers money, they can’t get past the lowest district’s idea of how things need to be! Only by showing a pattern of several successful school districts operation methods can we shame the excessive spenders into trying a better way. Success by definition would be school systems that have the most fully functioning students for the least possible cost. After all, this is what all sucessful businesses must do in order to stay in existence.

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