A new era of financial reporting has begun

On Board Online • October 15, 2018

By Cathy Woodruff
Senior Writer

New York school districts are entering a new era of mandated financial reporting, thanks to the introduction of two separate systems requiring them to calculate their spending for each individual school building.

The first set of reports, required by state budget legislation, is being phased in for all school districts over several years. A second set of building-level reports on spending in this school year, required by the federal Every Student Succeeds Act (ESSA), will be due in December 2019.

The state initiative, which originated with Gov. Andrew Cuomo, required 76 school districts to file reports with the Budget Division by Aug. 31. More than 60 of those reports are posted at https://on.ny.gov/2yrTtpa .

The first reporting group included school districts that have four or more school buildings and receive more than half of their annual revenue from state aid. Those criteria captured big-city school districts as well as some large suburban districts and a handful of rural ones.

Next year, all districts with four or more school buildings must complete the state reports, bringing the total to 306 districts. And, starting in 2020, all 674 school districts that receive state foundation aid will be required to submit a report - officially called the "New York State School Funding Transparency Form."

The State Education Department is developing a separate annual reporting mechanism to comply with ESSA's requirement for states to collect school-level financial breakdowns.

Proponents say the state's school-level budgeting reports will shed light on local funding decisions and reveal whether schools serving students in low-income neighborhoods are being short-changed, compared with schools in wealthier neighborhoods.

"Equal is not the same as equitable," said Ian Rosenblum, executive director of The Education Trust - New York. "The new state law provides transparency on school funding and reveals for the first time that school districts are, in many cases, not doing enough to direct resources to the schools with the greatest needs."

Rosenblum's organization has created an online tool that provides ways to sort through the data submitted to the Budget Division and draw comparisons. He asserts the first reports already show that, even when some districts do direct more resources to high-need schools, it's not enough to achieve what his organization considers to be equity.

Some local school leaders interviewed by On Board are wondering how the public will react to the new reports. They caution that the state's reporting system could lead to misinterpretation and misunderstanding, rather than clarity.

"My concern is that people (in state government) are asking questions and creating reporting requirements about a (local school) system that they are not intimately connected to or aware of," said Howard Koenig, superintendent of the Central Islip School District on Long Island, which operates eight schools and was among the first districts to report. "As a result, they are getting a lot of data that, there is a very good chance, people will review and they will misinterpret. That, to me, is not transparency."

Massena, a rural North Country district with five schools, also was among the first districts to submit a state report. Superintendent Patrick Brady said the process required the district to organize its budget information much differently than usual. "It was a challenging process that took considerable time to prepare within a relatively short window," he said.

The new data-reporting format "did not produce any new perspectives for district officials close to the numbers," he said, "as the slight variances among our school buildings immediately made sense to us."

The required financial breakdowns might be enlightening for an urban district with a range of rich and poor neighborhoods, Brady said, but "this one-size-fits-all approach is less likely to yield much usable information in rural areas like Massena, where expenditures tend to be spread out evenly within the district."

The Syracuse City School District, which operates 31 schools, submitted seven pages of explanation and analysis in its state filing. For many districts, the narrative portion was less than a page.

In a written statement, Syracuse's chief financial officer Suzanne Slack called the new requirement "a positive first step in creating transparency to the budget process," adding, "We embrace that."

"While the timing was not perfect and the process quite time-consuming, the data collected is valuable," Slack's statement said. "We will continue to work with the state on areas that we feel need refining."