Editor’s note: On redefinED last week, Jason Bedrick at the Cato Institute offered suggestions to the Florida Department of Education on improving its financial transparency, including how to make fuller, more accurate per-pupil spending figures easily available to the public. The post drew the following response from the FDOE communications office.
The Florida Department of Education staff is concerned the Cato Institute’s release on financial reporting failed to explore or consider important elements of the Florida financial reporting process. In the process of grading all states, researchers often use a one-size- fits-all research model that does not necessarily accommodate state variation in financial reporting. To validate initial findings, it is appropriate to share the findings with information sources before publication. Below is a summary of available Florida school district finance data.
Florida’s school district financial reporting systems for approximately 2.7 million students and over 321,000 full-time employees have long been considered among the best in the nation. With the enactment of the Transparency Florida Act established in Section 215.985, Florida Statutes, by the 2011 Florida Legislature, the FDOE has improved the availability of school district financial data for taxpayers, parents, and education advocates. Governmental agencies, including the FDOE and school districts, provide current budget data and the most recent year’s revenue and expenditure information on their websites. Within the next year, school districts also will provide current-year expenditure information and vendor contract information on a regular basis.
Profiles of Florida School Districts
The Profiles of Florida School Districts – Financial Data is an annual publication that summarizes school district Annual Financial Report data that is available on the department’s webpage at http://www.fldoe.org/fefp/sdafr.asp. The Annual Financial Report presents data at the district level detailing revenue by source and presenting expenditures by fund, function, and object. For ease of use, the FDOE condenses the data, in part, into the profiles publication, which is available at http://www.fldoe.org/fefp/profile.asp.
Program Cost Reporting System
Florida’s Program Cost Reporting System attributes all educational costs to the educational program within a school to calculate a comprehensive education cost per student. The National Center for Education Statistics, in its document Financial Accounting for Local and State School Systems (Chapter 7), uses Florida’s cost reporting system as the model for other states. Cost data are available at the state, district, and school levels on the department’s webpage at http://public2.fldoe.org/TransparencyReports/CostReportSelectionPage.aspx. The data provide revenue generated at the school level, as well as total costs of elementary, middle, and high school instructional programs, and costs for special programs, including programs for students with disabilities, programs for students with limited English proficiency, and career and technical programs. The program cost reporting system offers numerous reports, including reports on program costs per unweighted and weighted full-time equivalent student, program costs as a percentage of revenue, and program costs expressed as a percentage of total cost. This reporting system allows users to export data into Excel files. In addition, staff and student data are available through the department’s webpage at http://www.fldoe.org/eias/eiaspubs/default.asp. Staff, student, and statistical data for multiple years are also available in Excel format.
Exclusion of Capital Outlay Expenditures from Per Pupil Total Expenditures
For many years, the FDOE has submitted school finance data to the National Center of Education Statistics within the United States Department of Education, the United States Census Bureau within the United States Department of Commerce, and the National Education Association. The information published by these entities is widely regarded as the most accurate and comprehensive available. The inclusion of capital outlay expenditures in the calculation of per pupil expenditures is neither requested nor published by these entities. Any significant deviation from long-standing financial reporting practice should be vetted among stakeholders. The summation of current and capital outlay expenditures on a per pupil basis yields information that is not comparable across states. Capital outlay spending follows enrollment cycles within each state, and these cycles vary by state. One state may be experiencing significant enrollment growth, while another is experiencing declining enrollment. The comparison of per pupil total expenditures among the states would not be meaningful because of the cyclical nature of capital outlay expenditures.
Process for Review of Financial Data
The FDOE prides itself with providing accurate financial reporting, using a system of careful review and examination. To allow sufficient time after the close of the school year, a State Board of Education rule sets a September 11 date for school districts to report data to the department. The financial data is then reviewed by FDOE staff, and school districts are contacted to validate or edit data that do not fall within expected norms. When the data are complete and accurate for all school districts, the data are compiled and reports are created and published. This process generally requires approximately four or five months, and is seldom completed before the end of the calendar year. It is interesting to note that the CATO Institute allowed a longer period of time to compile and release its report (and the report was revised following release) than that allowed the FDOE to collect, review, edit, and post school finance data.
Availability of Data
The FDOE encourages the constituent citizenry to contact FDOE staff to discuss any of its publications or to request further information. All school finance data are available in Excel format upon request; however, few requests (two or three) are received each year. The FDOE also responds to requests for data in “flat” file format, which is the preferred format for research.
Florida’s school district data reporting systems are highly regarded and are used as models for other states. The expectation that data should be available within a few months of school district reporting deadlines is not realistic and does not recognize the need for a comprehensive data review process that ensures accuracy. The grade assigned to Florida should be higher due to the timely availability of high-quality data reported in long-standing nationally accepted formats at a level of detail that is not available in many other states.
The Cato Institute has reviewed the Florida Department of Education’s objections and while we agree that Florida’s financial reporting has some strong points, we stand by our scoring method and Florida’s score.
Florida lost the most points for failing to report total per pupil expenditures. Total PPE is the true cost of public education, and the figure most useful to members of the public. That is perhaps why the NCES and 25 states report total PPE in addition to operating PPE. We also find little evidence of substantial variation among the states in total PPE trends. The average correlation between the 40 year total PPE trend in Florida and in the other states is 0.87 (on a scale of 0 to 1), which is considered a very strong correlation. We understand that FLDOE is currently fulfilling its legal obligations. That said, it would not require a great deal of additional effort on the part of the department to become the 26th state to report total PPE.
The FLDOE also notes that it took more time for us to issue our report than we allow states to receive full credit. The release date for our report was decided by our marketing department, to coincide with “back to school” season—but that is beside the point. A more relevant comparison would be to other state education departments, thirteen of which publish expenditure data for the previous school year by the end of the calendar year.
Regarding the Excel spreadsheets, Florida currently receives partial credit (7.5 / 10) for offering average salaries in Excel but not expenditure data. The Profiles of Florida School Districts, which contain the most complete expenditure data, are available only in PDF (though, since our report was released, the FLDOE has added Excel spreadsheets for the 2011-12 school year). While the Program Cost Series Analysis reports are exportable to Excel, they only offer four years of reports, not ten. Moreover, they don’t include all the expenses in the Profiles reports. For example, for the 2010-11 year, the Profile report states that the statewide current expenditure per UFTE is $8,751 but the Program Cost Series report says that the total program cost per UFTE for all combined funds is only $7,888.
Had the FLDOE provided total PPE and a chart or table comparing PPE over time, Florida would have earned a B+ (87). Had it also provided more timely expenditure data, it would have earned an A- (92.5), tied for 2nd place with South Dakota. Adding Excel spreadsheets for all the Profiles reports would have put Florida in first place with a solid A (95).
If the Cato Institute undertakes an update in a year or two, we will be happy to review Florida’s performance anew. In the mean time, while we are perfectly willing to correct anything we may have gotten wrong, we are not currently aware of any errors in our report and no doubt the FLDOE can appreciate our reluctance to make ad hoc changes to how we conduct our scoring.
Here are the relevant links:
NCES per pupil expenditures: http://nces.ed.gov/programs/digest/d12/tables/dt12_215.asp
Florida’s 2010-11 Profiles report (page 14): http://www.fldoe.org/fefp/pdf/10-11profiles.pdf
Florida’s 2010-11 Cost Series report: http://public2.fldoe.org/TransparencyReports/ReportView.aspx?ReportID=6