School district lobbyists did their best to kill the idea during the 2014 legislative session, but now that new financial reporting requirements are law, school districts and the Colorado Department of Education are scratching their heads and sorting out how to make them work.
There have been ripples of anxiety – and not a little confusion — in many districts as details of the mandate started to sink in after both the legislative session and the school year ended.
“People are grumpy,” said Glenn Gustafson, chief financial officer for Colorado Springs District 11. “No doubt about it.”
Some district leaders don’t necessarily see the requirements as an impossible burden, but they wonder about the value of the changes.
The financial transparency requirements are part of House Bill 14-1292, the Student Success Act that was at the center of fierce school finance policy debates during the 2014 session. (See this Chalkbeat Colorado story for details on all the bill’s provisions.)
What the law says has to be done
While many nuts and bolts of implementing the transparency requirements remain to be worked out, the new mandate goes significantly beyond a 2010 transparency law (get details on that here) and requires three main things:
Uniformity – The law requires greater standardization in how districts display financial information on their websites. “All districts will have to report [data] in the same fashion,” said Leanne Emm, associate commissioner for school finance at CDE.
Data for every school – Districts ultimately will have to report spending information for individual schools, information that some districts report now but others don’t.
One-stop shopping – Three years from now there will be a single website containing financial information about all districts and schools. The law requires the website to be designed so as “to ensure the greatest degree of clarity and comparability by laypersons of expenditures among school sites, school districts, the state Charter School Institute, and boards of cooperative services.” (The site will be created by a to-be-selected contractor, not CDE.)
What worries districts
A wide variety of district officials interviewed by Chalkbeat raised four main concerns about the law:
Implementation – District officials generally agree that compliance will be relatively painless for large districts but presents a greater challenge to some medium-sized and small districts. “It is going to be a lot of work for a lot of people. It depends on how big you are and how many people you have working for you,” Gustafson said.
Comparability – Even with the requirement for greater uniformity, some district officials wonder if district and school data will be fully comparable. They raise the question of likely district differences in how they account for costs borne by multiple schools – things like the salaries of special education teachers, psychologists and other staff who split their time among buildings.
“It is a significant change to set up your personnel systems [to account for] a teacher or even a principal who works at several different schools,” said Bill Sutter, chief financial officer of the Boulder Valley School District.
Use & Misuse – District officials say they support transparency as an ideal but are openly skeptical that new financial data will see much use by the public.
“Who’s going to actually look at this website?” asked Tracy John, business manager of the 606-student Peyton School District northeast of Colorado Springs.
Anecdotally, districts say there’s little public use of financial information currently available online. “I don’t receive very many calls about transparency,” said Guy Bellville, chief financial official of the Cherry Creek Schools.
And districts are nervous that advocacy groups will use school-level financial data for their own ends, ignoring the context and nuances of why districts spend money as they do.
“Rather than build confidence in school budgeting decisions, it is more likely to provide ammunition to public education detractors who have no interest in learning the deeper context or complexity that comes with school budgeting,” argues Jason Glass, superintendent of the Eagle County Schools.
Impact on student achievement – “Tell me how this is going to impact student achievement,” Gustafson said. “This is a distraction that takes away from student achievement.” Said Boulder’s Sutter, “I’m fairly certain there are no studies about how one more accountant in the district office is going to affect outcomes.”
Another view on data use
Sen. Mike Johnston, a prime sponsor of HB 14-1292 and the instigator of much recent education reform legislation, has a different take on the law.
The Denver Democrat made his case at a recent meeting of district finance officials and CDE staffers who are starting to flesh out the details of implementing the law.
“People will use the data depending on how easy it is to use,” he said. “I think it’s just a matter of presenting information in the right way.”
Johnston also made the pitch that greater financial transparency might make voters more sympathetic to increased funding for education.
During the Amendment 66 campaign in 2013 many voters has “this misperception that education was this large overfunded bureaucracy.” He argued the state needs “to allow parents to understand in regular language where the dollars go in their schools. Our belief is doing this well will paint a clear picture to parents and taxpayers about where those dollars are going. … This makes it easier to make that case” for more funding.
Education interest groups have a variety of reasons for supporting greater financial transparency. Reform groups that advocate for funding equity hope it will provide greater insight into whether low-performing schools are getting the money they need to help at-risk students. Charter schools think greater insight into district spending will show whether or not they’re getting an appropriate share of funding. Republican lawmakers hope transparency will shed more light on pension costs. And others hope transparency is a step toward greater control of money at the school level and even “backpack” funding for individual students.
Transparency a second-tier trend
While financial transparency doesn’t have the high profile of issues such as Common Core State Standards or testing, “it’s a trend we’re seeing right now, and it’s been going on for awhile,” said Mike Griffith, senior school finance analyst for the Education Commission of the States.
“Most states require districts to report on financial data,” Griffith said, and now policymakers are saying, “You need to start accounting on a school-level basis.”
Part of the trend is rooted in overall technological change. “As the technology has advanced and people have gotten used to looking things up … that has pushed policymakers.”
Griffith added, “When the idea is presented to policymakers they get excited because they like data. The question is what they do with it when they get it.”
On the school district side, he said, “There’s another fear – they’re going to have to change the way they do business.”
As Colorado administrators discuss the new law, Michigan and Rhode Island are frequently mentioned as possible examples to follow.
Michigan’s state system is under construction; get more information here. To see how districts report, see this page on the Lansing School District site. (All Michigan districts are required to have a prominent financial transparency logo on their home pages. But school-level data isn’t currently required.)
Learn more about Rhode Island’s system here.
The transparency to-do list
The state transparency website doesn’t have to launch until July 1, 2017, but that doesn’t mean CDE and districts don’t face a lot of work – starting now.
A subcommittee of CDE’s Financial Policies and Procedures Committee is working to develop a standard template for districts to use on their websites and hopes to finish that by October.
The full FPP group is supposed to develop a recommendation for the State Board of Education on how to report district revenues.
CDE plans to have a request for proposal finished by the end of the year. This contains specifications that outside bidders will have to meet if they want the $3 million contract to build the statewide website.
Districts will have to use the new template starting July 1, 2015, posting the financial information required by the 2010 transparency law.
In late 2016 or early 2017, using a second template developed by the state, districts will have to post individual school financial data on their sites.
Using data provided by districts, the contractor is supposed to launch the statewide site July 1, 2017.
Emm said the current 2014-15 school year “is almost a planning year” but that districts will have serious work to do starting in about February.
But it’s not fully clear what that work will require. “School districts will not understand what’s required until the FPP completes the template,” said Cherry Creek’s Bellville.
Finding district information can take some effort
District leaders and lobbyists last spring repeatedly made the point that state law already requires posting lots of financial information on district websites, making a new mandate unnecessary.
They were right that the 2010 law requires districts to post annual budgets (full budgets and summaries), audits, quarterly financial statements, salary schedules, check registers, credit and purchase card statements and investment performance reports. (See CDE’s suggested – not mandatory – current template for displaying that information.) The new law allows districts to drop quarterly statements, check registers and card statements after July 1, 2017.
But in many ways the current system is more translucent than it is transparent.
Chalkbeat clicked around the websites of Colorado’s 10 largest districts plus eight more districts of varying sizes – one district with about 1,000 students, another with about 900 students and so on down to a 100-student district.
Overall we found that if you’re looking for district financial information, be prepared to make educated guesses about which homepage link to click and be ready to do a fair amount of clicking, scrolling and opening of large PDF files.
Here are some highlights (and lowlights) of what we found, along with a few hints to help your searches.
- Home page links to transparency information aren’t consistent. We found them near the top of some pages, in the middle of others and at the bottom of some. (Boulder Valley gets kudos for its blue “BVSD Financial Transparency” button near the top of the home page. Dougco has a Transparency link in a row across the top of the home page.)
- The link doesn’t always read “Financial Transparency.” If you don’t see those words, look for links with wording like District Finance, District Office, Financials, Administration, Finance & Budget and even About. Pull-down menus generated by such links sometimes reveal a Financial Transparency link.
- When all else fails, type “financial transparency” into the search window on the district’s home page and see what you find.
- District budgets and budget summaries can contain a wealth of information, including school-level information for some larger districts. But every district uses its own format. Cherry Creek, for instance, provides easy-to-read information for every school, including photos and demographic details. Other districts’ budgets contain multiple number-crammed spreadsheets of school information. Some districts provide per-pupil spending by school; others don’t.
- You’ll need to click and scroll. Once you find it on the website, open your district’s budget in Adobe Acrobat or another PDF reader, use the table of contents column on the left and start hunting.