ARRA Reporting Soon to Include School-Level State and Local Expenditures

State education agencies across the country just completed the first round of reporting for the American Recovery and Reinvestment Act (ARRA) programs, an onerous and massive undertaking. Unfortunately, the quarterly reporting process is not likely to get any easier for states from here – on December 1^st, 2009 the Department of Education (ED) will require districts to report local and state expenditures at school-level for the 2008-09 school year, the first time such data has ever been required for any program. Rather than tracking federal funds like the majority of ARRA reporting, the school-level data will show baseline state and local funding at schools in districts that receive federal Title I Part A funds. As a result, this data could help determine whether districts and schools are using federal funds to supplement, rather than supplant, state and local funding.

Draft Department of Education guidance for the new school-level reporting indicates that any districts receiving Title I Part A funds will have to report school by school expenditures for the 2008-09 school year on:

• All personnel salaries including instructional and support staff;
• Personnel salaries for instructional staff only;
• Personnel salaries for teachers only; and
• Non-personnel expenditures.

Districts and state education agencies fear that these new requirements will present overwhelming burdens for staff. Given the current state of district accounting systems, this reaction isn’t surprising. Few accounting systems in use break out salary expenditures by school and even fewer can calculate non-personnel expenditures by school. In fact, many school districts can only calculate school-level salary expenditures by multiplying the number of full time equivalent employees employed at each school by the average staff salary in the district. Non-personnel expenditures are even more complicated because most districts purchase materials and services on a district-wide basis, rather than school-by-school.

Districts will have to work double-time to produce the data required for the December 1^st reporting, and state agencies will have to implement quality assurance systems to make sure the data are good. At the district level this could include implementing entirely new accounting systems or hiring consultants to mine last year’s expenditure data for the information needed. At the state level this likely means putting even more work on the plates of overwhelmed employees. Regardless, the rapidly approaching deadline and lack of finalized guidance from ED has state and local officials nervous.

But the value of this new data cannot be overstated – it’s availability has important implications for the reauthorization of the Elementary and Secondary Education Act (currently known as the No Child Left Behind Act). This data could be used to strengthen the “supplement not supplant” provision of Title I by determining baseline funding from state and local sources among Title I and non-Title I schools in Title I districts. While even funding distributions among schools would suggest that federal funds are being used to provide additional services for disadvantaged students, disproportionate distributions can be used to identify districts that use federal funds to replace state and local funds in schools with large disadvantaged populations.

Further, the availability of school-level teacher salary data could be used to strengthen the “comparability” provision of Title I which requires districts to spend equal amounts on instructional staff salaries in Title I and non-Title I schools. Rather than use full time equivalent average salaries or student-teacher ratios to approximate school-level expenditures, as districts are currently allowed to do, districts could use actual spending on teacher salaries in each school to demonstrate comparability.

While reporting school-level expenditures will be an onerous task for school districts and states, it will provide an important source of information on education spending as long as the guidance is published quickly and clearly. Ed Money Watch will continue to follow these new reporting requirements as guidance is finalized.