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Financial Management and Accountability

From Working Paper #51 by Aren, DeLuca, Ni, and Bates (Nov. 2015):

“While most variation in district fiscal stress is explained by factors largely outside local decision-makers’ control, local decision-making does matter. Our results indicate several ways in which local resource allocation decisions (larger class size, lower teacher salaries, lower administrative spending) increase district fund balances and thereby reduce fiscal stress. We do not, however, attempt to assess the impact of such measures on the quality of education services.” (pp. 25-26)

This academic paper is helpful in many respects, including indicating how financial management and accountability may be used to rank and rescue (or allow to sink) public schools, however the relationship between expenditures and quality of education was not examined. This, of course, is not due to perceived difficulties in measuring expenditures, which are generally and initially fairly transparent, but likely due to the complexity and controversial issue of measuring quality of education.

Education functions in many ways:

  • As a signalling device to society at large, including prospective employers (e.g., wearing the badge of the Ivy League);
  • As a means of leveling the playing field (e.g., practicing legally approved preferences), or
  • As something else (e.g., a means of imparting vocational skills to students).

If education’s contents and delivery were fairly reducible to a known and accepted set of affordable across-the-board means and methods such that the poor through the rich received an otherwise adequate education independent of whether the student lived in Detroit, MI or Mountain Lakes, NJ, variations in spending would hopefully be of secondary concern. As education tends to be assessed by outputs and outcomes, including performance scores on standardized tests, the process often gets measured and tainted or praised by the ends. Adding to the complexity of tying quality of education to outcomes is the nature of scarcity in the context of the U.S. economy: If everyone were to become adept in maths, possessing the demonstrable skill of statistical analysis would be monetarily worth a lot less.

In practice, knowing which variables and inputs to use in an Excel spreadsheet goes a long way, especially as the GIGO principle seems ignored, deliberately, recklessly, or negligently in many (cheerleading) contexts. What is obvious to many, should be obvious to a lot more, but as a student of mine recently noticed – butler lies are not limited to instant messaging.

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