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 2022.
  • 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 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 2022 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 are 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 districts, we used FY 2022 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, such as school district Annual Financial Reports, 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—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 conducted and interviews of school district staff.
  • 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 are 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 each and other similar completeness checks.
  • Performing 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.
  • 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.

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.

For this year’s analysis of FY 2022 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 assigned transportation peer groups and compared transportation spending measures relative to peer group averages for FY 2022, which we had previously omitted due to the COVID-19 pandemic’s impact on the districts’ transportation operations in FY 2021. For more on how these transportation peer groups were assigned, see the “District peer groups” section on the Glossary page.
  • We presented the percentage of students who passed State assessments for Math, English Language Arts (ELA) and Science, which we had previously omitted due to the COVID-19 pandemic’s impact on student testing in FYs 2020 and 2021. We also assigned districts to achievement peer groups and compared districts’ FY 2022 percentage of students who passed State assessments to peer averages. For more on how these student achievement peer groups were assigned, see the “District peer groups” section on the Glossary page. The FY 2022 peer averages were calculated as a weighted average, based on number of students tested, of districts in the peer group. In prior years, we calculated the peer averages as an average of each district in the peer group’s percent passing.
  • Additionally, we added a bar chart of the percentage of students passing State assessments for Math, ELA, and Science for the State for FYs 2018 through 2022.
    • The State-wide passage rates for all fiscal years include students at all school types, including district schools, charter schools, and alternative schools. In prior years, we presented the State-wide percentages that included only school districts.
    • For Science specifically, the FYs 2018 and 2019 percentages now include both full academic year (FAY) and non-FAY students, which matches FY 2022 methodology. In prior years, we presented percentages that included only FAY students.

Removed information:

  • We continued to exclude the free/reduced meal eligibility percentages from State and individual district results (demographic section) due to FY 2022 data limitations as a result of the COVID-19 pandemic’s impact on district operations. The federal government 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.
  • We removed the table of “Intended and actual State average teacher salary increases” from the State results page because the final year of the annual increases in state funding was FY 2021. Instead, we present the same bar chart that is on the District results page, which shows the changes in the State’s average teacher salary and amount from the CSF for FYs 2017 through 2022.

Updated CSF terminology

Since our initial reporting, we have referred to CSF payments made as Prop 301 monies, referring to the original Proposition 301 voter initiative approved in November 2000. Proposition 301 established the transaction privilege tax (TPT) and use tax increases to generate monies for the CSFs and requirements for districts’ use of CSF monies. Although Proposition 301 was set to expire in June 2021, Laws 2018, Chapter 74, extended the TPT and use tax increases originally enacted by Proposition 301 through 2041. Additionally, Laws 2021, Chapter 67, revised the requirements for the districts’ use of CSF monies. Therefore, we no longer refer to these monies as Proposition 301 monies and instead refer to them as CSF monies.

In addition to this analysis, we have issued this data file in Microsoft Excel format, which contains the FY 2022 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.