essa financial reporting implications for resource equity

© Education Resource Strategies, Inc., 2014

ESSA: Financial ReportingImplications for Resource Equity

December 8, 2016

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Session objectives & agendaObjectives Understand key facts about ESSA’s financial reporting

requirements and relevant regulations Identify challenges and opportunities that result from these

requirements Discuss actions districts can take to link financial transparency to

equity

Agenda Summary of ESSA financial reporting requirements and regulations Key challenges and actions relevant to districts’ equity agendas

4

What problem we are trying to solve?

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

R² = 0.759417408629227

District X: School ELA proficiency against percent FRL

School percent FRL

Scho

ol p

erce

nt p

rofic

ient

, ELA

ERS data analysis of a large, urban district with nearly 100,000 pupils.

Supplement, not Supplant December 2017Districts must be ready to comply in 2018-19 or have a plan for compliance in 2019-20

September 2019Final compliance deadline

September 2018First compliance deadline

ESSA has two financial provisions that are linked to increasing equity Financial Transparency: Districts must report their per-pupil expenditures

at the LEA and school level annually, disaggregated by fund source. Supplement-not-Supplant: Districts must use title I dollars to supplement,

not supplant dollars schools would otherwise receive.

5September 2016 September 2017 September 2018 September 2019

Financial Transparency2016-17States must create a procedure for statewide expenditure reporting

Districts must plan to track per-pupil expenditures in the next fiscal year.

2017-18Districts must track per-pupil expenditures at the school level.

December 31, 2018Districts must report 2017-18 per-pupil expenditures

By June 30, 2019Report 2017-18 per-pupil expenditures

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Financial Transparency: Final Regulation Key Details Required of States:

𝑫𝒐𝒍𝒍𝒂𝒓𝒔𝑷𝒖𝒑𝒊𝒍𝒔

Numerator must include administration, instruction, instructional support, student support services, transportation, operations, fixed charges, preschool, expenditures to cover deficits for food service or activities, and exclude capital, debt service, and community services.

Denominator must be the district’s pupil count on or about October 1.

District-level per-pupil metric

Must disaggregate federal $’s from state & local States to Decide:

How the calculation of the school-level metric differs from that of the district-level metric

How to treat charters for which district is the LEA How to define a “school”

7

ESSA requires districts and states to track per-pupil expenditures to the school level

ESSA’s logic model: Financial transparency leads to equity

If districts report per-pupil expenditures at the district and school levels…

…then they will distribute resources

more effectively and

equitably.

What happens in this black box?

8

Pause and Reflect

Clarification: What questions do you have on what districts are going to be asked to do?

Challenge & Opportunity: What do you see as the critical challenges to successfully using financial reporting to improve equity in your system?

Discussion

9

Districts will face three key challenges as they take action on the new reporting requirement

Challenge #1: “Show me the money.”

Accounting for and minimizing the discrepancy between district- and school-level reporting.

Challenge #2: “These aren’t the schools you’re looking for.”

Understanding and communicating the drivers of variation in funding.

Challenge #3:“Having money isn’t everything.”

Creating a window on equity that goes beyond fundingper-pupil.

Challenge #1“Show me the money”

LEA $pp LEA $pp by Reporting$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

9497

$5,983

$1,520

$1,235

$760

District Spending by Level of Reporting

School Reported School on Central Budgets Shared Services L&M All LEA Dollars to Report

Dollars currently reported at the

school level

Centrally-reported dollars for school or

student facing activities

Solely Central Office dollars

Districts typically report 45%-70% of their spending at the school level

Dollars the public sees at the district level

Not all dollars spent on students will be reported at schools, leaving a potentially large gap between a school’s spending per-pupil and the district’s spending per-pupil.

10

Reporting accurately

11


$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

School A: $1220 pp

School-within-school, with

most teachers reported at main building rather than School A

Exceptional Student Ed OTS; SR $pp; 50000

SR $

pp

School B: >$50,000 ppSchool site where many cen-

tral staff are reported who are actually assigned out to schools across the district

All expenses and students must be accurately tagged to the schools to which they are assigned to avoid artificial outlier school expenditure figures.

MS HS


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ERS foresees four categories of accounting challenges that districts and states may face


Districts must assess their accounting practices in advance of developing budgets that can report school-level per-pupil spending. Exclusions. Districts are required to exclude certain expenditures from their reporting,

and states may require more. Charts of accounts must be set up to separate these costs.

School reported vs. centrally reported. Districts must understand what expenditures play out in schools but are reported centrally and take steps to report those expenditures at schools if possible.

Allocations. Districts may need or wish to develop a method of allocating central costs out to schools and students based on the types of students those expenditures serve.

Alignment of dollars and enrollment. The “schools” to which student enrollment is reported must match the “schools” to which expenses are accounted. All expenses must be billed at the schools where they play out; all students must be tagged to the schools they attend.

ERS is creating an accounting readiness self-assessment worksheet, which we will share with EdCounsel districts in January

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Technical: What questions do you have about how you’ll need to change your accounting structures to accurately report per-pupil spending?

Strategic: Given that the state will create a standard reporting methodology for all districts, what input would be important for SEA leaders to consider?

Discussion

14

Challenge #2“These aren’t the schools you’re looking for”

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

SR $

pp

Assuming a district reports expenditures at the school-level as much as possible, and adjusts accounting and student enrollment reporting, spending differences will

remain across schools.

MS HS% FRL % FRL

Low LowHigh High

Understanding variation

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Just because some schools receive more money per pupil does not mean they are over-resourced; just because some schools receive less money per pupil doesn’t mean they are

under-resourced. Many factors drive differences in per pupil spending.

Drivers of variation What drives up per-pupil expenditure?

School size Subscale schools, typically below 350 for an elementary school or 500 for a secondary school

Student need Schools with significantly more students with disabilities, English language learners, and low-income students nearly always receive significant additional resources.

School/program type and level* Magnet, choice, and other specialized programs can require additional resources

Building utilization Schools with many empty seats, commonly less than 85% of capacity filled

Teacher compensation* Traditional compensation systems that pay for experience but not impact, while experienced teachers shift to schools with less needy students as their careers progress

Inaccurate enrollment projections Over-projecting enrollment without making appropriate fall resource adjustments

Ad-hoc exceptions* “Squeaky wheel syndrome” and/or lack of clear systems for allocating resources

Larg

est d

river

s

*Most closely tied to the intent of the law

Higher

Lower

Impact of driver on $pp


16

These drivers of funding fall into three general categories, each with its own implications for equity

Type of driver Example driver Implications for equity

Service richness and quality

• General education funding per pupil

• Special programs• Teacher compensation• Enrollment projection error

Variation in this driver indicates the possibility of inequity across schools.

Student need• Special education enrollment• ELL enrollment• FRL enrollment

Variation in this driver relates to the possibility of inequity among students within a school but does not relate directly to equity across schools.

Structural conditions • School level There is no inherent relationship between this driver and overall equity.

17


School $ PPHigh Avg. Teacher Compensation?

Accurate Enrollment Projection?

Large SWD Population?

Large FRL Population?

Large ELL Population?

Small school?

A High Low Over-Projected Above avg. Above avg. Average Small

B High Low At Projection Average Above avg. Above avg. Small

C High Average Over-Projected Below avg. Average Average Small

D High Low Over-Projected Above avg. Above avg. Above avg. Average

E High Average At Projection Above avg. Average Above avg. Average

V Low Average At Projection Below avg. Average Average Average

W Low Average Under-Projected Average Below avg. Above avg. Large

X Low Average At Projection Average Average Below avg. Average

Y Low High Under-Projected Below avg. Below avg. Below avg. Large

Z Low High Under-Projected Below avg. Below avg. Average Large

High

$ P

PLo

w $

PPDrives higher spending

Drives lower spending


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Technical: What analysis do you need to conduct to understand the extent to which variation in per-pupil spending across schools in your district is related to inequity?

Strategic: Given your answer above, how do you intend to engage stakeholders productively in the data?

Discussion

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Challenge #3“Having money isn’t everything”

There are many factors that influence the quality of education and the distribution of key educational resources that won’t show up in spending per-pupil.

School $ PP School Avg. Teacher Effectiveness? Access to Rigor?* Suspension Rates?* Racial

Segregation?

A High Below Avg. Below Avg. Above Avg. More Segregated

B High Below Avg. Average Average Average

C High Average Below Avg. Average More Integrated

D High Average Average Above Avg. Average

E High Below Avg. Average Average More Segregated

V Low Average Average Below Avg. More Integrated

W Low Average Above Avg. Above Avg. More Segregated

X Low Average Average Above Avg. Average

Y Low Above Avg. Above Avg. Average More Segregated

Z Low Above Avg. Above Avg. Below Avg. More Segregated

High

$ P

PLo

w $

PP

*Metrics addressing these factors are required as part of ESSA

More Strategic

Less Strategic

Broadening equity

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Like in many districts, student proficiency rates range widely in District A, despite giving additional dollars to its lowest performing schools…

Quartile 1 Quartile 2 Quartile 3 Quartile 4 Quartile 1 Quartile 2 Quartile 3 Quartile 40%

10%

20%

30%

40%

50%

60%

70%

80%

90%

37%

48%

70%

79%

31%

48%

68%

83%

36%

49%

68%

79%

31%

43%

63%

81%

Avg. % Proficient by Sch. PerformanceAvg. % Proficient Reading Avg. % Proficient Math

Middle Schools High Schools

Avg. % Proficient

Source: ERS Database

$PP $7.3K $6.6K $6.2K $6.3K $6.8K $6.1K $6.2K $6.6K

Broadening equity

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Therefore, to improve student achievement, what non-financial drivers of equity could District A focus on?

Targeting individual attention in priority subjects

Attracting and retaining top talent to its lowest performing schools

Ensuring equitable access to Special Education supports across

the district

Providing additional time to students who are struggling

Ensuring equitable access to rigorous coursework

Ensuring fair and equitable discipline practices

Promoting racially integrated schools

Broadening equity

22

But was not differentiating class size in low-performing schools, as a lever to provide more individual attention

Quartile 1 Quartile 2 Quartile 3 Quartile 4 Quartile 1 Quartile 2 Quartile 3 Quartile 40

5

10

15

20

25

30

19 19 1920

23 23 2324

1920 21 21

2324

2324

Avg. Class Size by Sch. PerformanceELA Math



Broadening equity

The lowest-performing schools also experienced higher rates of attrition, which is driven by higher rates of transfer within District A

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7.6% 8.4% 8.1% 7.7% 6.2%

4.8%

7.3%5.2%

3.9%3.3%

1.7%

2.8%

1.8%1.6%

1.0%

1.1%

0.9%

0.9%1.4%

1.1%

Teacher Attrition and Transfer in 2012-2015 by School Performance

Retired

Transferred to a non-teaching role in District A

Transferred to another District A school

Left the district

Sources: ERS Database

19.4%

16.0%14.6%

11.6%

15.3%

Broadening equity

As a result, schools with the greatest need had the least stability in their teaching force

24

45%56% 59%

69%

30%23% 20%

13%

25% 21% 20% 18%

Stability of 2015-2016 Teaching Force by School Need, since 2012

Transfers

New Hires

In The Same School

Sources: ERS Database

Avg Yrs of Exp 10.3 12.1 13.2 14.7

Broadening equity

25

And lower-performing schools had the most novice teachers and the fewest veteran teachers

Quartile 1 Quartile 2 Quartile 3 Quartile 4 Quartile 1 Quartile 2 Quartile 3 Quartile 40%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

23% 20% 15% 11%24%

18% 15% 11%

23% 27%

19%18%

22%

20%16%

16%

54% 53%67% 71%

54%62%

69% 72%

Distribution of Core Teacher Experience by School Per-formance

% Veteran% Experienced% Novice



Broadening equity

26

Challenge #3“Having money isn’t everything”

Broadening equity

Strategic: What other measures of equity should inform and supplement your analysis?

Technical: Do you have the data, staff, and processes in place to calculate those metrics?

Discussion

27

Summary: What can districts do to use the ESSA transparency requirement to increase equity?

ESSA’s logic model: Financial transparency leads to equity

If districts report per-pupil expenditures at the district and school levels…

…then they will distribute resources

more effectively and

equitably.

…and they do so accurately and comprehensively…

…and they understand what causes variation in funding…

…and they understand what additional metrics illustrate equity…

…and they [ ]…

What else?

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We intend to launch a cohort of districts to discuss these questions collaboratively

ESSA regulations are being finalized, and as states implement their plans, we will work with districts to— Further understand the steps they must take to report

clearly and accurately on equity to their communities. Study these issues together and articulate a set of

recommendations districts can make to their states as they develop plans.

Feel free to reach out to EdCounsel or to ERS directly if you’re interested in learning more

Thank you for attending

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