Report assails Texas school districts’ accounting methods

Fort Worth Star-Telegram, By Will Weissert, The Associated Press, March 27, 2012 – 

AUSTIN — Texas public schools use such opaque accounting practices that no average person can determine how they are spending the billions in state funds they get every year, making it impossible to design a fair and efficient education system, a new privately funded report says.

Title “No Financial Accountability” and released Tuesday night, the report concludes that school districts dutifully follow state rules and provide copious amounts of data in their annual financial statements. But it also says they lump large expenditures into nebulous categories such as “instruction,” which can mean any number of things, such as how much teachers are paid or the cost of insuring students in driver’s education.

“We’ve spoken to the wealthy districts, the poor districts and they’re all acting like, ‘Why are you surprised at this? … These are the rules that we have to follow,'” said Mark Hurley, one of three co-authors who spent their spare time over two years compiling the report.

All are private equity investors who say they do not have financial links to public education. They paid for the report and have gotten no outside support.

Hurley told reporters before the report was released that the authors tried to collect financial information from about 100 school districts statewide and that about half complied. Some of the data was easily available on district websites, but other districts never produced any information, saying that doing so would take months and cost up to $10,000.

Hurley wouldn’t say which districts provided data. But in one annual report, the authors found that just 22 percent of “instruction” funds were actually going to pay teachers for teaching. Other respondents listed things like hotel expenses and staff Christmas gifts as instructional costs.

The report says state rules mandate that 29 categories of expenses are grouped under “instruction” in school districts’ financial reports. And the category encompasses an average of 56 percent of all district expenditures, according to the state comptroller’s office.

The report concludes that it is impossible to evaluate whether the system is fair without knowing how money is spent.

The report is available at www.texedap.com.

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