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SUMMARY
The Office of the Auditor General has conducted an analysis
of Arizona school districts’ percentage of dollars spent in the classroom during
fiscal year 2007. In addition, this report summarizes how districts reported
spending their Classroom Site Fund monies resulting from Proposition 301, the
education sales tax approved by voters in November 2000. This analysis was
conducted pursuant to Arizona Revised Statutes (A.R.S.) §41-1279.03, which
requires the Auditor General to monitor the percentage of each dollar spent in
the classroom and conduct performance audits of school districts. This is the
seventh year the Office of the Auditor General has conducted this analysis.
The definition of classroom dollars used in this report is
the same definition developed by the U.S. Department of Education’s National
Center for Education Statistics (NCES) for “instruction.” This definition, as
described in Table 1 (see page 2), includes current expenditures for classroom
personnel, instructional supplies, instructional aids, certain tuition payments,
field trips, athletics, and co-curricular activities. This definition has been
applied by NCES for a number of years and provides a basis for comparing
Arizona’s results with other states, the national average, and Arizona’s past
performance.
Dollars in the classroom (see pages 7 through 23)
In fiscal year 2007, Arizona’s state-wide percentage of
dollars spent in the classroom was 57.9 percent, which continues a 3-year
downward trend. Despite the infusion over the past 6 years of significant
state-provided resources largely directed to the classroom, Arizona’s classroom
dollar percentage continues to lag more than 3 percentage points behind the
national average of 61.2 percent.
Arizona school districts’ spending patterns over the past few
years indicate districts are likely using Proposition 301 monies to supplant
other district monies. As a result, new monies have not increased Arizona’s
classroom dollar percentage and the percentage is lower than it could have been.
If districts had not shifted spending patterns, the additional Proposition 301
and Indian gaming monies would have raised the state-wide average to 59.7
percent. However, most districts now spend proportionately less of their other
monies in the classroom than they did before Proposition 301.
Excluding certain special-purpose districts, classroom dollar
percentages for individual districts ranged from 22.8 to 78.8 percent, and over
half of the districts analyzed spent a smaller percentage of dollars in the
classroom in 2007 than they did in 2006. The ten largest school districts in the
State, each with more than 20,000 students, accounted for 40 percent of Arizona
school districts’ total current spending, and therefore, significantly impacted
the State’s classroom dollar percentage. Between fiscal years 2006 and 2007,
this group’s classroom dollar percentage decreased by 0.4 percentage point,
identical to the state-wide decrease.
Compared to national averages, Arizona school districts, on a
state-wide basis, continue to allocate a lower percentage of their dollars to
administration costs, but higher percentages of their dollars to plant costs,
student support services, and food service. Energy and other supply costs
account for more than half of the difference between the national and Arizona
plant cost percentages. Similarly, student support service salaries account for
more than half the difference in that category of spending. The higher salary
costs appear related to each full-time equivalent employee serving, on average,
fewer students than the national average. Higher food service expenditures may
relate to Arizona’s having a higher-than-average eligibility for the National
School Lunch Program. In Arizona, a higher proportion of free- and
reduced-price-eligible students eat meals at school, which results in more meals
being produced and higher food service costs.
Within Arizona, the primary factor associated in districts
with higher classroom dollar percentages continues to be larger student
populations. Larger populations provide districts with more money, allowing them
to meet their necessary fixed costs and leaving more money to devote to the
classroom. Conversely, higher plant operation and maintenance, administration,
student support services, and transportation costs were the most significant
factors associated in districts with lower classroom dollar percentages.
Further, within Arizona, higher per-pupil spending does not
equate to higher classroom dollar percentages. Although these districts have
more resources available to spend per pupil, on average, they put a smaller
proportion of each dollar in the classroom. As a result, districts with the
highest per-pupil spending, on average, have lower classroom dollar percentages.
Districts’ uses of Proposition 301 monies
(see pages 25 through 32)
Districts spent more than $351 million from their Classroom
Site Funds during fiscal year 2007, and they continued to use these monies
primarily to increase the salaries of certified teachers and other employees
they have defined as eligible, such as librarians, counselors, and speech
pathologists. These eligible employees received amounts ranging from $924 to
$8,203. Districts continued to address various performance goals through their
Proposition 301 performance pay plans. However, only 47 districts’ plans
addressed all or most of the performance measurement elements specified in
statute. In addition, districts reported spending Proposition 301 menu monies
primarily on teacher compensation, followed by class size reduction, teacher
development, and AIMS intervention.
Since Proposition 301’s inception, the state-wide average
teacher salary has increased by $6,657, with most of this increase occurring in
fiscal year 2006 when the average teacher salary increased by over $3,800.
However, in fiscal year 2007, the average state-wide teacher salary increased by
only $866. This amount could have been higher, but as noted in Chapter 1 of this
report, districts are likely using Proposition 301 monies to supplant other
district monies, although statute prohibits this practice. Further, school
district performance audits conducted during fiscal year 2007 identified two
districts that used Proposition 301 monies to supplant other district monies.
Despite supplanting issues, districts spent Proposition 301
monies primarily for allowable purposes. A.R.S. §15-977 requires menu monies
directed toward class size reduction, AIMS intervention, and dropout prevention
to be spent only on instruction. In prior fiscal years, some districts have
spent menu monies for expenditures not allowed by law, such as expenditures for
security personnel for a dropout prevention programs and transportation to AIMS
intervention activities. However, in fiscal year 2007, auditors did not identify
any misuses of Proposition 301 menu monies.
Appendix (see pages a-1 through a-227)
The Appendix provides alphabetically organized one-page
information sheets on individual school districts. Each page summarizes the
district’s classroom and nonclassroom spending, its reported Proposition 301
program results, and other descriptive and comparative data.
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