School district spending analysis—Fiscal year 2021

Resources

Arizona Revised Statutes §41-1279.03 requires the Auditor General to monitor school districts to determine the percentage of every dollar spent in the classroom by a school district and conduct performance audits of Arizona’s school districts. This analysis has 2 main objectives:
  • It analyzes State operational spending trends in instruction and 6 other operational categories—student support, instruction support, administration, plant operations, food service, and transportation—since monitoring began in fiscal year 2001.1 It also identifies spending differences between Arizona school districts and analyzes changes in the State average teacher salary between fiscal years 2017 and 2021.
  • It presents State and individual school district results that show performance on various measures, including instructional spending percentage, operational and nonoperational spending compared to peer and national averages, and average teacher salary.
1
In the first school district spending report we issued, which focused on fiscal year 2001 spending, we used the U.S. Department of Education National Center for Education Statistics’ definition of dollars spent on “instruction” as the definition of “dollars spent in the classroom.” For consistency in monitoring school districts’ spending and for comparability with national information, we used this same definition for all school district spending reports we have issued since then.
All data in this analysis is for fiscal year 2021 unless otherwise noted. All the State’s 236 school districts were included in State averages presented in this analysis, including the State’s fiscal year 2021 operational spending percentages and per pupil spending amounts. However, some districts were excluded from further analysis as follows:
  • When compiling data for the individual district results, transporting districts, career and technical education districts (CTEDs), and accommodation districts were excluded. Transporting districts transport all their students to other districts and, therefore, do not have expenditures in many of the operational areas, and CTEDs and accommodation districts often operate very differently than other school districts and among themselves in terms of the services they provide and how they provide them.
  • When analyzing State trends in the efficiency of district operations, very small districts, i.e., those serving fewer than 200 students, transporting districts, CTEDs, and accommodation districts were excluded. Transporting districts, CTEDs, and accommodation districts often operate differently than other school districts in terms of the services they provide, the students they serve, and the programs they offer. Additionally, these districts and very small districts often have wide ranges of operational spending and, therefore, would distort the analysis of factors generally affecting districts of other types and sizes.

To analyze the most current final expenditure data available for Arizona’s districts, we obtained fiscal year 2021 accounting data from all 236 school districts or from the County School Superintendent offices that support them. Additionally, we obtained data from various other sources, as outlined in more detail on the Glossary page, including data from the Arizona Department of Education (ADE), such as school district Annual Financial Reports (AFRs), Classroom Site Fund Narrative Results Summaries (CSF Narratives), district staffing levels, bus mileage, and average daily membership counts; and data from the Arizona Department of Administration—School Facilities Oversight Board, such as square footage and number of schools. In addition, we obtained national-level financial data from the National Center for Education Statistics and district-level poverty rates and locations relative to population centers from the U.S. Census Bureau. The information used to prepare this analysis was not subjected to all the tests and confirmations that we would normally perform during an audit. However, to help ensure that information used in this analysis was complete and reasonable, we performed certain quality control procedures, such as reviewing for funds not included in each district’s accounting data and other reasonability checks. We also performed year-to-year comparisons of district-reported data to identify anomalies and variances and to review the reasonability of changes in related measures, such as whether a district’s square footage increased after opening a new school. We interviewed school district officials about identified anomalies and variances and corrected any data errors prior to calculating instructional spending percentages and other measures analyzed for, and presented in, this analysis. Further, prior to issuing the analysis, we provided each Arizona school district the opportunity to review most of the numbers that we planned to present for the district and inform us of any issues with the data. On individual district results, “N/A” indicates that information is not available, not applicable, or not appropriate to include because it could reveal personal information about a small number of district students. “NR” indicates that we determined that the district’s information is not reliable and is, therefore, not being reported.

To analyze State spending changes and the change in the State’s average teacher salary, we reviewed and analyzed historical spending and trends. We also identified inefficient operational practices from school district performance audits we conducted and interviews of school district staff. Where noted, we adjusted spending data to fiscal year 2021 dollars using the Consumer Price Index published by the U.S. Labor Department, Bureau of Labor Statistics, when analyzing historical spending and trends.

For this year’s analysis of fiscal year 2021 school district spending, we continued to focus on providing users with the most relevant information related to our statutory requirement. Although the web-based format updated the way users interact with the analysis, our objectives, scope, and methodology, unless otherwise noted, are consistent with prior years’. Below is a summary of significant changes from last year’s analysis:

Added information:

  • On the State results, we added spending by category pie charts for administration, plant operations, food service, and transportation to provide additional detail about how dollars are generally spent within these nonclassroom areas.
  • On both the State and individual district results, we added the percentage point change in spending by area compared to the prior year, in addition to the 5-year comparison, for a year-to-year comparison of how districts spent by area.
  • On both the State and individual district results, we added the meals per student measure to the operational measures table to provide an additional performance measure for the food service area. For how this measure is calculated, see the “Operational efficiency measure calculations” section on the Glossary page.

Removed information:

  • We removed the free/reduced meal eligibility percentages from State and individual district results (demographic section) due to fiscal year 2021 data limitations as a result of the COVID-19 pandemic’s impact on district operations. The U.S. Department of Agriculture offered waivers that allowed districts to operate meal programs where the collection of income eligibility was unnecessary and, therefore, the data reflects only those districts that continued under regular National School Lunch Program guidelines. For more information, see the ADE Health and Nutrition Services Division memorandum.
  • We removed the relative-to-peer-average color scale assignment from the square footage per student measure in the operational measures table. Now, only spending-related measures in that table reflect the relative-to-peer-average color scale, while the other measures provide additional context for the spending measures. For more information, see the “Operational efficiency measure calculations” section on the Glossary page.
  • We did not assign transportation peer groups or compare transportation spending measures relative to peer group averages for fiscal year 2021 as we have in the past due to the COVID-19 pandemic’s impact on districts’ transportation operations. While working with districts to validate their data, we determined that many districts’ miles traveled and riders transported changed substantially from prior years’ primarily based on the degree to which districts continued to operate their transportation programs through virtual, in-person, and hybrid learning environments, making year-to-year comparisons and peer comparisons difficult and less meaningful than in prior years. For example, some districts will show spending per mile but no spending per rider because they primarily did not operate in-person, but they did utilize bus routes to drop off meals and homework packets to students. Although we do not present peer averages for the transportation spending measures, we still present the measures for each district because they are an accurate depiction of each individual district’s spending for the year.
  • We removed the table from State and individual district results that showed district-reported COVID-19 federal relief grant spending. For more detailed reporting on school districts’ COVID-19 federal relief grant spending, see our Office’s special report and data file.
  • We continued to not present student assessment information because, even though fiscal year 2021 student testing data was available for English Language Arts (ELA) and Math, not all eligible students participated in testing, and some districts did not administer State assessments at all or at all schools because of the continued impact of the COVID-19 pandemic on district operations. According to a report by the Arizona State Board of Education (SBE), only 84 percent and 86 percent of eligible students State-wide participated in ELA and Math, respectively, where prior-year participation rates were generally at or above 95 percent.2 ADE, who publishes the individual district results, urged users to use extreme caution when reviewing results in aggregate or making year-to-year comparisons without additional context. To view a district’s individual results in a more detailed reporting format, visit ADE's AZ School Report Cards website.

Updated size categories

For our fiscal year 2021 analysis, we did not change the methodology we used to develop district operational peer groups. We did update the size categories’ ranges for students attending average daily membership (ADM). For more information about ADM, see the "District demographic information" section of the Glossary page. Size categories are 1 of the 3 factors we use in assigning districts to operational peer groups. Over the last several years, we have seen a State-wide trend of declining enrollment, which is reflected in more districts moving into smaller size categories and a less even distribution of districts across operational peer groups. When evaluating this change, we took into consideration the COVID-19 pandemic’s impact on students attending in fiscal year 2021 to ensure this update was not primarily addressing temporary swings in students attending. To address this change, we added a seventh size category (Medium-small) and updated the size-category- ADM ranges as shown below:
Size Previous students attending range New students attending range
Very small Fewer than 200 Fewer than 200
Small 200 to 599 200 to 499
Medium-small N/A 500 to 1,199
Medium 600 to 1,999 1,200 to 1,999
Medium-large 2,000 to 7,999 2,000 to 5,999
Large 8,000 to 19,999 6,000 to 14,999
Very large 20,000+ 15,000+

As a result of the additional size category, we added an operational peer group for the medium-small unified and high school districts in towns and rural areas.

For a full listing of the districts in each peer group, see our downloadable data file below.

2
In February 2021, the Governor signed Executive Order 2021-03 requiring the SBE to issue a report for school year 2020-2021 drawing comparisons to prior years and identifying the extent of learning loss that has occurred. See the COVID-19 Academic Impact Report for full results.

In addition to this analysis, we have issued this data file in Microsoft Excel format, which contains the fiscal year 2021 numbers and other information presented in the graphics on the State and school district results. For example, the data file includes the numbers presented in the graphic that compares each district’s operational measures with averages of its operational peer group.

Download data file