“Section 183 General Assembly to provide for school system.

The General Assembly shall, by appropriate legislation, provide for an efficient system of common schools throughout the State (Emphasis Added).”Quoted from: Kentucky Constitution

Here’s the problem. It has been three decades since the Kentucky Supreme Court’s Rose v. Council for Better Education decision determined that:

“‘Efficient,’ in the Kentucky constitutional sense was defined as a system which required ‘substantial uniformity, substantial equality of financial resources and substantial equal educational opportunity for all students.’”

Clearly, to comply with the constitution the state must have a good handle on education’s financial resources. And, we need that information to be accurate down to the school level.

But, we don’t have that – Not even close.

Our review of newly developed files from the Kentucky Department of Education for School Level Revenues 2016-17 and School Level Expenditures 2016-17 indicates that 30 years after the Rose decision, Kentuckians still lack the financial information needed to even begin to address whether each school has a “substantial equality of financial resources” at its disposal.

In fact, the two Excel spreadsheet series accessed from the links above for each district’s schools really don’t provide any accurate information about the amount of money each individual school is dealing with. Let’s look at some examples.

Table 1 shows the school level revenue report for Floyd County in 2016-17. Except, as you can quickly see, it doesn’t show ANY school level data at all. All the revenue is reported under the Central Office line. According to this, the schools in Floyd County didn’t get any money at all in 2016-17.

Table 1(click on table to enlarge)

This just won’t fly.

Things get more involved when we examine the expenditures report for Floyd County’s schools. An extract of that (some columns totally filled with zeros are omitted) is shown in Table 2.

Table 2(Click on table to enlarge)

In the Expenditures report we do see entries for the individual schools in Floyd County, but those numbers really are not complete.

One reason to suspect the school level data is the presence of the line at the top titled “District Wide.” This line contains money that probably needs to be apportioned out to the individual schools. The problem is the spreadsheet offers no way to do that. This money might not be equally distributed among the schools. It might not be distributed according to the relative enrollment in each school, either. But, there is a considerable amount of money in the District Wide line that could change the expenditures amounts in the various cells in the spreadsheet rather considerably.

For example, the first column of financial data shows what was spent on “Instruction.” The District Wide amount in this column is $2,232,877.65. For the sake of argument, if we divide that up evenly among the 18 schools listed in the spreadsheet, that would add over $124,000 to each school’s Instructional spending figure. For the Allen Central High School, that would increase the school’s listed Instruction spending by more than 50 percent!

Consider some more issues. The Duff-Allen Central Elementary school is listed with a zero Instruction spending amount. It seems like this school is closed. Ditto for South Floyd Middle School and South Floyd Elementary School. You can find listings for Duff-Allen and South Floyd Elementary in the Department of Education’s school directory web pages, by the way, but, only a few staff members are shown in each. The South Floyd Middle School isn’t even in the directory. If these schools are closed, why are they even listed? If it is something else, the spreadsheet certainly doesn’t tell us what that explanation might be.

There’s more.

The last three lines in the Floyd County expenses file are only identified as “Local Assigned Numbers.” But, they list expenditures under the Instruction column. Are these special schools? Something else? Who knows?

And, there is STILL more.

When we pulled up the Expenditures file for Pike County Schools, for which an extract is shown in Table 3 (again, we deleted some columns filled with zeros), we made the interesting discovery that the school district showed an Instruction expense of $132,771.85…for the Bus Garage! After doing some research, it turns out that this entry was actually not for the bus garage at all but for something else not explained. This happened because Pike County decided not to follow the Kentucky Department of Education’s standard financial reporting coding scheme, known as the Chart of Accounts, that tells each district’s finance folks were to enter various types of expenses. Pike put their actual bus garage expenses in some other, nonstandard location.

Table 3(click on table to enlarge)

Clearly, with over $3.5 million in the “District Wide” Instruction catch-all instead of assigned to schools and with a six-digit figure for instruction assigned who knows where, the Pike County school level expenditures report isn’t useful.

So, here is the bottom line. We don’t see how the currently available School Level Revenues and School Level Expenditures reports tell us anything very useful.

The revenues reports are worthless if they only show money at the district level, as is the case for Floyd County. Even if a revenues report does show how local tax dollars are distributed, if it doesn’t show how local tax revenue or state SEEK money gets distributed to schools, as is the case for Allen County, we still can’t learn much of value.

There are a few more things to say about this fiscal non-reporting issue.

First, as reported in Education Week, the federal Every Student Succeeds Act requires Kentucky to report school level expenditures. This is no longer a state option (at least if we want to keep federal education support dollars coming). To be sure, EdWeek says this is a new challenge for many states, and our discussion above about Kentucky’s first cut at doing school-level financial reporting shows Kentucky is among those states being challenged. But, the requirement is there, and the clock is ticking.

Secondly, there have been problems with Kentucky’s education financial reports for a long time. Back in 2006 the Kentucky Legislative Research Commission issued Research Report 338, which covered an attempt by the commissions Office of Education Accountability (OEA) to look at “Indicators of Efficiency and Effectiveness in Elementary and Secondary Education Spending.”

Except, the OEA failed to accomplish the mission of examining efficiency and effectiveness because the agency found major problems with the state’s financial reporting system. On page x of the report, the OEA writes:

“Staff found a number of areas in which data discrepancies and coding problems threaten the reliability and validity of expenditure data.”

During testimony about the report to state legislators, the OEA said there were examples of dollars being reported under the wrong accounting codes and even some money being coded to account numbers that had been deleted from the system.

And, this happened way back in 2006, nearly 12-1/2 years ago.

Sadly, with public education, it seems like change comes slowly, if ever. So far, that holds true with Kentucky’s unacceptable fiscal reports for school revenue and expenditures.

But, our constitution, and now the federal government, require more. I know our state education staff has been working to improve this for years, but they might not have the authority they need to get the local districts onto the same page. If so, maybe it’s time for our legislators to demand that. Because, if we don’t get this right, soon, someone from DC is likely to come knocking, and I don’t think anyone in Kentucky wants that.