School-level financial reporting – Why we need it

You’d have to pretty much be a hermit to not know Kentucky’s public schools are always – always – asking for more money. Schools continue to hold their hands out even after the massive increase in school spending that occurred in the Bluegrass State following passage of the Kentucky Education Reform Act of 1990 (KERA). As this table shows, even after considering inflation, the real funding increase for Kentucky’s public schools since 1990 has more than doubled.

Still, despite this more-than-doubling of real spending on public education, it seems Kentucky’s public school system will never have enough.Or, will it?A big problem with our school finance picture is that we really don’t have a useful and trustworthy picture where it counts – where the education really happens – which is at the school level.Kentucky has annual reports on districtwide finances that stretch back all the way to 1989-90. They are online and can be found under the “Annual Financial Revenues and Expenditures” – “District Level” section of this web page.

But, as our recently released report, “MISCALCULATING ACCOUNTABILITY, Kentucky’s School Financial Reports Just Don’t Add Up” shows, what little reporting on school level finances we currently have is clearly very incomplete and the actual figures reported are at least in a number of cases obviously wrong, as well.But, why does this matter?

One answer is that we presently have no way to examine how our massive school investment is actually being spent. There is no way to confidently even calculate how much of each total dollar we provide to each school district actually reaches the schools in that district.

How much is skimmed off the top by the district? Who knows? The current data isn’t nearly trustworthy or useful enough to tell us.

So, while local school councils and teachers fuss – perhaps in some cases quite rightly – the truth is that lots of dollars might be available to the schools in question if those bucks were not being withheld for use at the district level.

Another important point is that under Kentucky law, for right or wrong, at present the school councils have final say over curriculum and how the dollars that actually do reach the school get spent. But, if sufficient money isn’t passed along to the schools, that school council mission is going to be impacted.

This isn’t necessarily proof the taxpayer, who already is ponying up a lot more that at the start of KERA, isn’t providing adequate input. It might well be those tax dollars simply are not being efficiently used (efficient schools are a Kentucky constitutional requirement, by the way).

However, without decent financial reports that clearly show what the schools actually receive, there is no way for policymakers, parents and taxpayers to know if their money is being fairly distributed, let alone well-spent.It’s time for our legislature to get involved. We need an answer to the question about how much of our hard-earned tax money reaches the schools where the teaching and learning actually takes place. Until we have that information, providing even more money might just be prolonging a possibly inefficient system that not only isn’t teaching our students very well (federal testing shows only 29% of Kentucky’s eighth graders were proficient in math in 2019, for example), but might even be allowing waste and outright corruption, as witnessed by the $1.6 million embezzlement of school dollars that recently occurred in Franklin County Schools.

The Revenues and Expenditures Reports for 1989-90 and 2018-19 provided the Total Per Pupil Revenue figures shown in the table above.