School district spending analysis


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 FY 2001.1 It also identifies spending differences between Arizona school districts and analyzes changes in the State average teacher salary between FYs 2017 and 2023.
  • 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, average teacher salary and average teacher base salaries, and the percentage of students who passed State assessments.
In the first school district spending report we issued, which focused on FY 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 FY 2023 unless otherwise noted. All the State’s 236 school districts were included in State averages presented in this analysis except for the following exclusions:
  • When calculating State measures, districts with unreliable data related to a measure were excluded from that measure.
  • 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 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 school districts, we used FY 2023 district-reported accounting data and Annual Financial Reports (AFRs). 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 Classroom Site Fund (CSF) Narrative Results Summaries, district staffing levels, bus mileage, State assessment results, and average daily membership counts; and data from the Arizona Department of Administration’s 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.

We also used this information to identify, analyze, and report on various spending and related trends including:

  • State spending changes and changes in the State’s average teacher salary.
  • Inefficient operational practices from school district performance audits we issued in the past 5 years.
  • COVID-19 pandemic impacts on district operations and related relief monies’ impact on spending.

The information used to prepare this analysis was not subjected to all the tests and confirmations that we would normally perform during an audit and is primarily dependent on district-collected and -reported data. Districts are responsible for ensuring that the spending data they report to us for this analysis is accurate and complete. However, to help ensure that information used in this analysis was reasonably complete and accurate for purposes of our analysis, we performed certain quality control procedures, such as:

  • Reviewing each district’s accounting data to ensure all funds were included in the accounting data and the AFR and other similar completeness checks.
  • Performing year-to-year comparisons of district-reported data to identify anomalies and variances and to review the reasonableness of changes in related measures, such as whether a district’s square footage increased after opening a new school.
  • Interviewing school district officials and requesting additional documentation to explain identified anomalies and variances and correcting any identified errors in district-reported data prior to calculating instructional spending percentages and other measures analyzed for, and presented in, this analysis.
  • Requesting each Arizona school district with individual results pages to confirm the accuracy of the district-reported data. We have indicated at the top of an individual district’s page if it did not respond to our request to confirm the accuracy of its data.

For 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.

Additionally, we became aware that due to the result of a settlement agreement related to property tax payments, some districts made certain payments related to this settlement that were included as part of their administrative spending. In FY 2023 specifically, the following districts in Yavapai County reported having made such payments: Cañon ESD, Chino Valley USD, Humboldt USD, Mayer USD, and Seligman USD.

For this year’s analysis of FY 2023 school district spending, we continued to focus on providing users with the most relevant information related to our statutory requirement. 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:

  • We calculated and presented for the State and individual districts the FY 2023 average base salaries for teachers in their first 3 years and those in their 4th year or later using district-reported salary and FTE data from district AFRs. FY 2023 was the first year that districts were required to report this information in their AFRs, and therefore, we worked with districts to validate the reported amounts compared to other available district-reported data including accounting records and district-reported, ADE-provided School District Employee Report (SDER) data. For more information about how these amounts were calculated, see the “Average teacher salary and other measures” section on the Glossary page.
  • We reported district responses to questions relating to whether they made payments to teachers to recognize years of experience, and if so, how they made those payments to teachers, on individual district results pages using district AFRs. For more information on these questions, see the “Average teacher salary and other measures” section on the Glossary page.
  • We added a bar chart of the percentage of students passing State assessments for Math, ELA, and Science for FYs 2019 through 2023 on individual district results pages. Years where we did not present the percentage of students who passed State assessments due to the COVID-19 pandemic’s impact on student testing (FYs 2020 and 2021) and years for which we were unable to present an individual district’s passage rates due to ADE redaction requirements are labeled as N/A (not available).

Updated methodology:

  • We updated the methodology used to calculate FY 2023 peer averages for students who passed State assessments for Math, ELA, and Science due to updates to ADE’s redaction requirements that resulted in more redactions to the number of students tested at school districts, which we previously used to create a weighted peer district average. To maintain comparability between districts, we updated our methodology to instead weight the peer average by students attending. We did not change any previously reported averages. Where possible, we compared the updated weighted average to the weighted averages calculated using students tested and determined that there were no significant differences in the peer district averages resulting from this change.

In addition to this analysis, we have issued this data file in Microsoft Excel format, which contains the FY 2023 numbers and other information presented in the State and school district results’ graphics. 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.