School District Budgeting and Student Achievement

In NCLB’s wake, much of the debate has focused on the instructional practices that will enable all students to meet the proficiency requirements by 2014. However, if this goal is to be realized, school districts must focus on how to ensure that appropriate resources (inputs) are available to fund proven instructional strategies that produce results (outputs). This is particularly important now, when resources are dwindling due to the economic downturn. The pressure to produce better results with fewer resources has become ever more acute.

In 2008, I undertook a case study of chief business officials from school districts in the Hampton Roads (VA) area to examine the current state of budget practices and determine whether those processes have become more performance based since the inception of NCLB. In addition, I assessed how performance-based budgeting correlates with differences in student achievement. The school systems in this area range in size from as few as 1,000 students to as many as 75,000 students and are a mix of urban and rural locales. These school systems all have significant numbers of students that receive free and reduced-price lunches, with an average of approximately 40 percent.

New Trends in Budgeting
The No Child Left Behind Act calls for radical transformation of the education system whereby school districts, schools, and teachers are held accountable for certain outputs of student learning. As NCLB focuses on increased performance results, it seems counterintuitive that school districts would continue to employ an incremental or line-item approach to budgeting in which budgets are never reviewed as a whole and the existing budget base is the starting point for building the next budget.

Today, school districts are moving away from traditional line-item, incremental budgeting toward other, more results-oriented methods. School districts are more performance based in their budgeting processes.

The following is present in performance-based budgeting.
  • The budget process is open and transparent and includes stakeholder involvement.
  • The budget process includes consideration of alternative service delivery methods.
  • Performance goals are established and resources are linked to those goals.
  • Budget decisions are data informed, including the development and reporting performance indicators (that are in line with the strategic goals of the district).
  • The process encourages active “program” evaluation (and links these evaluations back to previous budget discussions).
  • The budget process results in a reallocation (reprogramming) of funds (shifting resources to more effective activities).
  • The district actively seeks to link resources (inputs) to specific results (outputs and/or outcomes).

Performance-based budgeting implies that resources will be directed or redirected toward programs and activities that have proved effective and that are tied to specific performance outcomes.

Budgets and Student Achievement
School districts’ move toward performance-based budgeting supports the idea that school systems are less focused on what they have done in the past and are more deliberative in allocating funds. This may result in better budgeting, which allows for improved educational programming.

A quantitative analysis of data on the relationship of performance-based budgeting and student achievement reveals that performance-based budgeting has a positive correlation to student achievement. Although this correlation is not considered statistically significant, approximately 23 percent of the variance of Virginia Standards of Learning pass rates is accounted for by its linear relationship with performance-based budgeting.

Although further study is needed to confirm this correlation, the fact that the data reveal a possible positive correlation between performance-based budgeting practices and student achievement is an important finding.

A 2008 Center on Educational Policy report by Kober, Chudowsky, and Chudowsky confirmed that student achievement has increased (and the achievement gap has decreased) since the enactment of NCLB and because of many interconnected policies and programs. One of these organizational processes appears to be more focused budgeting methods and practices that aim to increase achievement rather than focus on historical allocations, which has been the case in school districts’ use of traditional budgeting methods.

In other words, school districts should continue down the path of budgeting for improved results with an emphasis on the performance-based budgeting components of transparency and stakeholder involvement, data-driven decision making, a focus on teaching and learning, and reallocation of resources to activities that truly support the mission of the school district.

Scott Alan Burckbuchler, Ph.D., is assistant superintendent for finance and interim assistant superintendent for human resources for Williamsburg–James City County (Virginia) Public Schools. He can be reached at BurckbuchlerS@wjcc.k12.va.us.

This article, excerpted from the May 2009
School Business Affairs, is drawn from his doctoral dissertation at Old Dominion University.


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