Arizona Auditor General Report on Classroom Spending 2009: A Closer Look
As Yogi Berra once said, “It’s déjà vu all over again.” It seems like yesterday that we were looking at the 2008 Auditor General Report on Dollars Spent in the Classroom trying to explain exactly what is considered “classroom spending.” You can see our previous report here.
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In an attempt to make the report easier to understand, we are going with a ”Q & A” format. Classroom spending has become a “hot potato” issue and the Auditor General’s Report unfortunately makes it very difficult to understand and leaves out two important factors–cuts by the legislature to K-12 education funding and a precipitous fall in the Proposition 301 sales tax funds available for the Classroom Site Fund (CSF) . To read the Auditor General’s Report, Arizona Public School Districts’ Dollars Spent in the Classroom Fiscal Year 2009, click here.
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What is actually considered classroom spending in the Auditor General’s Report?
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Unlike the good old days (that would be the 2007 Auditor General’s Report), the definition of classroom spending is no longer in the front of the report; it is now relegated to Appendix C of the report. For the purpose of the report, classroom dollars are (quoting from Appendix C):
- Classroom personnel – Teachers, teachers’ aides, substitute teachers, graders, and guest lecturers
- General instructional supplies – Paper, pencils, crayons, etc
- Instructional aides – Textbooks, workbooks, software, films, etc.
- Activities – Field trips, athletics, and co-curricular activities such as choir and band
- Tuition – Paid to out-of-state and private institutions. (We wondered about this category, but it seems to be for specific student situations and is not a major item)
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Haven’t some of these classroom spending areas been cut by the Legislature?
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Yes. The 2009 cuts to funding for K-12 education in the state have led to teacher layoffs and larger class sizes. In addition, cuts to soft capital (textbooks and instructional software) and instructional aides (workbooks, etc) were also cut by the Legislature.
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The report does not mention any of these cuts to explain the .4% dip in classroom spending.
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What is considered non-classroom spending?
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Again, quoting from Appendix C, non-classroom spending includes:
- Administration- Superintendents, principals, business managers, clerical and other staff
- Plant operation and maintenance – heating, cooling, equipment repair, grounds keeping and security
- Food service – Cost of preparing and serving meals and snacks
- Instructional staff support – Librarians, teacher training, and curriculum development
- Student support services – Counselors, audiologists, speech pathologists, and nurses
Many of the items considered non-classroom spending are closely linked to student education. Students must have a safe school that is appropriately heated and cooled. They must also have the student support and instructional services needed to excel in school.
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If the national average for classroom spending is 61%, why is Arizona’s average rate 56.9%?
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The Auditor General’s Report used to show the breakouts for non-classroom spending compared to the national average to try to explain why Arizona’s classroom spending is below the national average (see 2007 report). We went into the expanded report with district pages and pulled out the national comparison numbers. Here they are:
| Arizona 2009 | National* | Difference | |
| Plant Operation | 11.6% | 9.9% | +1.7% |
| Administration | 9.0% | 10.8% | -1.8% |
| Student Support | 7.5% | 5.2% | +2.3% |
| Instructional Support | 5.5% | 4.9% | +0.6% |
| Food Services | 4.8% | 3.8% | +1.0% |
| Transportation | 4.3% | 4.2% | +0.1% |
| Other | 0.2% | 0.2% | — |
* According to the US Department of Education’s National Center for Educational Statistics 2007- most recent year available
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Several things jump out:
- Arizona has a much higher plant operating cost due to our extreme weather conditions. Keep in mind that building and maintenance funding by the state was also cut in 2009, as was utility payment support. M&O money that could have gone into classroom spending may have been shifted to this area–roofs must be fixed and utility bills must be paid.
. - Administration is lower than the national average. Administration takes a lot of knocks in the media, but Arizona is more efficient than the nation as a whole.
. - Student support and instructional support are higher in Arizona. Contributing factors include higher child poverty rates–the 2008 US child poverty rate was 17.8% while Arizona’s child poverty rate was 20.4% (US Census Bureau). In addition, there are higher rates of English Language Learners (ELL) in Arizona. ELL is an underfunded mandate in Arizona.
. - Higher food service expenditures may have a correlation to federal revenues received from the federal school lunch program. Higher poverty rates in Arizona may lead to additional meals (such as breakfast) being served incurring higher costs to serve food.
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Why doesn’t the Auditor General’s Report include charter schools?
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Since charter schools are such an integral part of the Arizona public education system, we were surprised they were not included in the Auditor General’s Report. We did find information on classroom spending for charter schools in the Annual Report of the Arizona Superintendent of Public Instruction, Fiscal Year 2008-2009, vol. 1.
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Based on total expenditures taken from the 2009 Annual Financial Report of school districts and charter school, we calculated the following information:
…………………………………………………………………..Classroom Spending/%.. ..***Non-Classroom Spending/%…..****Administration Spending/%
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Current Expenditures for Districts, p. I-2……………………$4,490/57.5%…………………$2,590/33.2%………………………….$720/9.2%
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(based on ADM* of 952,072; TCE** of $7,801)
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Current Expenditures for Charters, p. II-33……………$3,233/49.8%……………….. $1,896/29.2%…………………… $1,365/21%
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(based on ADM* of 99,017; TCE** of $6,494)
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According to the Annual Report of the Superintendent of Public Instruction, charter schools are spending even less than traditional public schools on classroom spending and far more on administrative costs.
* ADM= Average Daily Membership
** TCE = Total Current Expenditures
*** Non-Classroom Spending Category here only includes Student Support Services and other Support Services and does not include administration, food service or plant operation
**** Administration is not combined with any other category.
Note: The above numbers are unaudited, which would explain slight differences between these numbers and the Auditor General’s figures.
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What is Proposition 301 money?
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Proposition 301 is a voter approved initiative that passed a 0.6% sales tax earmarked for the Classroom Site Fund (CSF) for education. Revenue collected from this tax has declined during the recession. The CSF money is required to be apportioned 20% for teacher base pay increases, 40% for teacher performance pay and 40% for options such as AIMS intervention, class size reduction, drop-out prevention and other teacher compensation and development.
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Why does the report claim this money is being misspent and what is supplanting?
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The report claims that districts are not using this money to increase teacher salaries. Instead, it states that districts are supplanting CSF money. The report claims “[s]upplanting means that districts have used CSF monies to replace, rather than add to, monies being spent in the classroom” (i.e. teacher salaries). What the report doesn’t explain is that the Legislature has cut funds that would be going to the classroom–where the major expense is teacher salaries.
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Let’s look at a hypothetical example: If a teacher is paid $28,000 in base pay; another $2,000 from the money that comes from CSF teacher base pay allowance; and a $2,000 performance bonus from CSF money, they are making $32,000 per year. When the Legislature cut funding to education last year, the district had less to pay their teacher’s salary. Now, the base salary is $26,000+ the $4,000 in CSF money for a total of $30,000.
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The report claims districts are supplanting money because it assumes that anytime a cut is made to the overall salary, the district is not fulfilling its obligation for CSF dollars to increase teacher salaries.
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This leads us to question how can districts use CSF dollars to increase teacher salaries when the legislative cuts have resulted in a cut to base pay? It doesn’t make sense. It simply doesn’t add up.
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Is the decrease in Prop 301 sales tax revenue going to impact the money available for CSF and teacher salaries?
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Yes. The report doesn’t mention this issue. Over the past three years, revenues derived from the 0.6% sales tax for the Classroom Site Fund have decreased.
FY2008 $502.1 million received *
FY 2009 $360.6 million received **
FY2010 $263.8 million estimated **
* K-12 Funding (M&O, Capital and All Other)FY 2000 through FY 2009 JLBC Staff, 1/27/2009
** FY 2011 Base Line Summary. JLBC, page 24 (pdf page 29)
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Where can I get more information?
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You can read more about the issues and implication of classroom spending in a special report by Standard & Poors, The Issues and Implications of the “65 Percent Solution” funded by The Broad Foundation and the Bill & Melinda Gates Foundation in 2005.
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Thanks for compiling this information. I appreciate the link to the “Issues and Implications of the “65 Percent Solution”. It is a goal that Arizona should meet at a minimum to fund its constitutional obligations to develop and improve public education in Arizona.
Obviously, school finance is a very complex issue. Unfortunately, most reporters don’t have the time to sort through details anymore. Thank you for providing a very complete explanation. I couldn’t help to notice that the reporter failed to note ANY districts that are doing things RIGHT. Which as I recall would be telling BOTH sides of the story. (See below)
Kyrene Rankings Top All in Classroom Spending
The Auditor General’s report “Arizona Public School Districts’ Dollars Spent in the Classroom Fiscal Year 2009”was released last week. This report provides a snapshot of how Arizona’s school districts are spending the funds they receive. The report categorizes dollars spent in two broad categories: “Classroom Instruction” (or “dollars spent in the classroom”) and “Non‐classroom.”
This report presents state-wide trends in classroom and nonclassroom spending, including a preliminary analysis of the association between the percentage of dollars spent in the classroom and student achievement.
Kyrene continues to rank at the top of list for classroom spending. The report once again showed that Kyrene spends more money in the classroom than any other like-sized District. In fact, Kyrene ranked 9th highest in the state above over 200 other school districts. The 8 schools above Kyrene represent two ‘medium sized’ districts of 600 – 1,999 students and six ‘very small’ districts will less than 200 students.
The State-wide average for instructional spending was 57.5%. Within the category of ‘large school districts’ (like Kyrene) the average instructional percentage was 56.9%. Kyrene spends 62.9% of its funds in the classroom. This is a 9.4% higher than the state average. In the other ‘non classroom categories, Kyrene demonstrated excellence above their peers as well:
• Kyrene spends 20.4% less in administration than its peers.
• Kyrene spends 22.8% less in plant operations cost than its peers.
• Kyrene spends 27.3% less in transportation than its peers.
Thank you for this information and for the link to the actual Auditor General’s report.
I just read the Arizona Republic’s piece and was really disappointed that they let some anti-public-school group like Goldwater spin it around. The fact that this report was so politicized is deplorable.
I think the reasoning presented in this Q & A is disingenuous. The example used to counter the audit’s finding of reduced CSF spending uses decreased dollars instead of decreased percentages. The audit does not assume that CSF should have increased in dollar terms. It says that the percentage of overall funds which go to the classroom has decreased. The chart in the audit report on page 5 shows (in red) what the CSF percentage would be if the pre-Prop 301 spending -percentages- had been maintiained with the additional monies from Prop 301 spent only on the classroom. Instead, the percentage of classroom funding has fallen (blue line) to the point that a lower percentage of all funds are spent in the classroom than -before- Prop 301 was passed.
A quick example of the way the percentage should go up…
If spending were exactly 50/50 before Prop 301, then out of a $100 budget, $50 would be spent on CSF, $50 oustside. Say Prop 301 brought an additional 5% of education funding. After the addition of Prop301 money, the $100 would grow to $105. The extra $5 is supposed to go entirely to CSF, so that would be $55 for CSF, $50 for non-CSF. That would be 52.3% for CSF and 47.7% for non-CSF.
The audit clearly shows this is not happening.
And just for good measure, the comment regarding the, “much higher plant operating cost due to our extreme weather conditions,” does not make sense. The most extreme weather for the vast majority of AZ schools occurs in the summer when school is, for the most part, not in session. Other areas of the country have their worst weather when school is in session.
RE: Eric T.
We have “extreme weather conditions” in AZ. Some of our rural areas were hit by a heavy winter. We live in a state that can find many school districts experiencing one extreme to the next in the course of a school year. When my son started school, temps were 100+ degrees. The A/C went down twice, and once for as long as three continuous days not too far into the first month of school. Heat went out earlier this winter. And my son’s school is in an affluent neighborhood, with engaged parents who pick up where the state leaves off. The school is clean and well maintained. But when the M&O funding has decreased across the district, as it has in every district statewide, we have to hold tight through the high temps and lows temps and just consider ourselves lucky that the ceiling tiles aren’t falling on top of any of the kids.
Furthermore, ANY “Cradle Arizonan” knows a majority of our schools have been around for ages. Heating and cooling 30-50+ year old buildings that are NOT energy efficient can cripple districts where M&O has been significantly cut. Additionally, during the 2009 session, the Legislature ELIMINATED $80 million in funds designated as part of a 2008 utility formula for “excess utilities.” In other words, funding from the state that allowed districts to compensate for the increase to their utility bills was cut. If your employer cut your pay by 10-30%, do you think you’d rearrange your spending to ensure your utility bill was paid on time?
The lights have to stay on regardless of the heat. It’s a safety thing, dude.
While people argue the legality of this versus the legality of that, some of the reasoning behind these arguments offend common sensibilities. It’s unfortunate that we’ll sit in judgment as districts are — for the most part — doing the best they can under the circumstances. The Legislature continues to cut and restrict funding to our public schools AND our teachers, while simultaneously holding our education professionals AND administrators to the furious fire of fiscal accountability and increasing the demand and expectation for high performance.
At the same time, the Legislature and lack-luster media manage to get the general public in such a froth that they storm into over crowded classrooms around the state demanding more, while voting over and over again for the same cast of characters that pass legislation that allocates less and less into our public education system. All the while charter schools are given a hall pass on their outrageous administrative expenses.
Now I ask you: Where’s THAT outrage?
I just found this site from a link on another blog. I will sign up for your email today!
Eric T: after reading your comment I re-read the post 2x. I don’t think they are countering the audit findings. It sounds more to me like they are explaining it in layman’s terms. The author(s) is also explaining what has been left out of the report, and why the missing (or appendix info) is relevant.
Too often our information from the media and politicians is taken out of context to the point that it become MISinformation! The spin I had heard on this report so far was something like; “Arizona schools wasting more on administration!” If you read the report above (and the actual facts in the Auditor Gen report), that assertion doesn’t ring true (at least when compared to average US admin costs).
At the end of the day, I always pause and wonder who is looking out for the best interests of our state and our nation. I am not an expert in this area, but I am glad a group of parents has taken the time to start looking into this kind of thing!! Our leading state legislators are horrible to our schools right now and I feel bad for the teachers (and principals!!) who must feel like they are constantly under attack by wacko posturing and stereotyping.
@Military Mom
“It sounds more to me like they are explaining it in layman’s terms. The author(s) is also explaining what has been left out of the report, and why the missing (or appendix info) is relevant.”
You have proven my point that the Q & A is disingenuous. Their attempt to explain supplanting in layman’s terms totally changes the definition of supplanting. But when you reread it 2x, you still came away with the feeling that no supplanting was taking place.
If districts were spending the Prop 301 monies on CSF, then the percentage of spending would be as shown on page 5 of the audit report.
The way the Q & A was written, you were led to believe statements like this:
“The report does not mention any of these cuts to explain the .4% dip in classroom spending.”
This is in bold italics in the Q&A.
The reason the report doesn’t mention these cuts to explain the dip, is because they don’t explain the dip. The cuts reduced the non-Prop 301 dollars available for educational funding. There was also a decrease in Prop 301 funding. However, if the percentage of non-Prop 301 funds spent in the classroom had been mmaintained and the Prop 301 fund were all spent in the classroom, then the classroom percentage would have been 59.7%.
Another quote from the Q & A:
“The report claims districts are supplanting money because it assumes that anytime a cut is made to the overall salary, the district is not fulfilling its obligation for CSF dollars to increase teacher salaries.”
The report does not make this assumption, the Q & A does. The audit report does not make it’s case on average teacher salary increse or decrease. It makes it’s case on overall percentage of funds that are spent on the classroom.
@Sam D
“We have “extreme weather conditions” in AZ.”
I didn’t say we didn’t. But the cold extremes in some parts of AZ are basically the same thing that happen in a large portion of US States and the hot extremes are mostly when school is not in session. I know it can still be 100 in Aug (and can be that in May, too), but we still only have to deal with the edges of summer’s heat, not the whole thing and not the worst part. Your anecdotal evidence of the problems that occur which cost M&O monies are the exact same things that every school in every district in the nation has to deal with. Saying that the extreme weather in AZ should cause us to spend more that other states does not wash.
“Furthermore, ANY “Cradle Arizonan” knows a majority of our schools have been around for ages.”
First, it’s a nice statement with no backing, just worded such that -surely- no one would ever question it. After all, ANY one would know it. Second, the age of the schools and how hard it is to heat and cool them is meaningless without the comparison to other states and their typical facilities. Perhaps you can provide some way of making a fair comparison.
All,
The replies at me from my first post both ended with a couple paragraphs about the difficulties in the school districts and the terrible state legislature, etc. I felt they seemed to sum up as if I think the school districts are bad and the legislature is the bee’s knees. Not true.
My issue was only with this Q & A. I don’t think it is fair representation of what is in the audit report.
Hi Eric,
Just wanted to point to what a prior 2007 Auditor General report (funny that it wasn’t in this one!) says about the extreme weather in AZ:
Plant operation and maintenance costs—Arizona school districts continued
to allocate a significantly larger percentage of their dollars to plant operation and
maintenance costs than the national average. Plant costs include expenditures for
the care and upkeep of buildings, grounds, and equipment; utilities; and security.
For fiscal year 2007, this category accounted for 11.3 percent of current
expenditures in Arizona school districts, which is 1.7 percentage points higher than
the national average.
Arizona’s high plant cost percentage may be related to its higher-than-average
percentage spent on supplies, which includes energy costs. Arizona’s energy and
other supply costs account for most of the difference between the national and
state percentages.
“Arizona’s high plant cost percentage may be related to its higher-than-average
percentage spent on supplies, which includes energy costs. Arizona’s energy and
other supply costs account for most of the difference between the national and
state percentages.”
Thank you, Steve!!
Being that this was from the 2007 AG’s report, it stands to reason that the 2008 Excess Utility Formula that was eliminated in the 2009 legislative session was established as a means to address this rise in expense for our state schools. I must admit, it’s hard to read that that was in the 2007 report and not find the absence of that data in the 2009 report to be just a TAD curious. I mean…it’s almost like someone left it out so as to skew the report to make it look like those district “bureaucrats” are inflating the plant operation costs. Nah!
Eric: I admit my statement was an anecdotal statement based on round table discussions with family and friends who themselves are “Cradle Arizonans.” But these are people who, like myself, have been educated in the state; some of whom send their children to the very same buildings they attended. So while I can’t quantify it with national data I have no means of accessing, sometimes seeing is believing.