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##  How Schools Allocate and Use Their Resources. ERIC Digest Number 143.        

School finance has traditionally concentrated on the distribution of            resources to school districts, focusing primarily on the equitable              distribution of funds within a state. In recent years, more                     attention has been paid to the issue of productivity-how efficiently            school districts use the funds they receive to provide education to             students. 
To date, research on productivity has not been                      conclusive (see, for example, Picus forthcoming). One thing is                  clear, however-before we can fully understand how to make schools               more productive, we must better understand how schools use the                  resources currently available to them. 
This Digest summarizes data            on expenditures and staffing patterns in the nation's schools,                  weighs the impact of financial resources on students' educational               outcomes, and discusses the implications of these allocation                    patterns for future policy at both the state and local                          level. WHERE DOES THE MONEY GO?All fifty states collect fiscal            information from school districts on revenues and expenditures and              on district employees. The revenue data generally contain                       information about the sources and amounts of revenue received by                each school district. 
Expenditure data are most frequently                    collected by object of expenditure, divided into categories such as             professional salaries, classified salaries, employee benefits,                  materials and supplies, and capital expenditures. States now also               collect expenditure data by broad program area or function, such as             instruction, administration, transportation, plant operations and               maintenance, and debt service. 
Staffing data typically consist of             information on the number of licensed staff members employed by each            district and their job title (teacher, administrator, principal,                librarian, counselor, and so forth). Some states maintain databases             with information on instructional aides. In a few states, data on               teacher credentials and/or teaching assignments are also                        maintained. 
The National Center for Education Statistics (NCES)               collected data on expenditures by function at the national level                between 1920 and 1980. Over the sixty years these data were                     collected, the percentage spent on instruction declined and the                 percentage spent on operations, maintenance, and fixed                          charges (benefits) increased. In addition, the proportion spent on              instruction remained about 61 percent from about 1950                           onward. 
During the late 1980s and early 1990s, NCES inaugurated a             project to collect more detailed and consistent expenditure data                that would be available for cross-state comparisons. During this                process they made some changes to the categories of data collected.             During the 1990s, these data show that instructional expenditures               continued to compose about 61 percent of the operating budget,                  rising slightly from 60.5 percent in 1991 to 61.7 percent in 1995.              Data from the 1990s also show what have become typical school                   district expenditure patterns: about 10 percent for student and                 instructional support, 3 percent for district administration, 6                 percent for site administration, 10 percent for operations and                  maintenance, and about 10 percent for transportation, food, and                 other services. WHAT DOES THE MONEY BUY?The single biggest                expenditure in school districts is for personnel. Translating the               broad expenditure patterns identified above into staffing patterns              is the first step in analyzing what happens to the education dollar.            In looking at staffing patterns in school districts from fall 1960              to fall 1995, a number of interesting patterns                                  emerge. 
Instructional staff dropped from 69.8 percent in 1960 to              67.1 percent in 1997. But this small decline masked larger changes              in the composition of instructional staff. Teachers constituted 74.1            percent of total staff in 1950. By 1960 that figure had dropped to              64.8 percent, and by 1995 only 52.0 percent were identified as                  instructional staff. At the same time, the percentage of                        instructional aides rose from almost zero in 1960 to 9.9 percent of             staff in 1995. 
Central-office administrators composed just 1.7                percent of total staff in 1995 and school-site administrators just              2.4 percent. Combined, administrators composed a total of 4.1                   percent of all staff, a fairly small percentage in light of charges             that the education system spends too much on                                    administration. 
Similarly, the percentage of support staff also               rose over this time period, from 28.2 percent in 1960 to 31.2                   percent in 1995. These numbers show that about one-third of staff in            the education system are neither instructors nor administrators.                Rather they are secretaries, custodians, bus drivers, and other                 operations and maintenance personnel. When policymakers and local               taxpayers ask why only 60 percent of expenditures are spent on                  instruction, a partial answer is that nearly one-third of                       educational funds are allocated to building, maintaining, and                   repairing buildings, and transporting and feeding students. 
The               bottom line, however, is that the percentage of teachers dropped                nearly 33 percent in the second half of the twentieth century. Many             teachers have been "replaced" by instructional aides, pupil support             staff, and, as we shall show below, by specialist teachers within               schools who do not teach in regular classrooms. The policy and                  productivity issue is whether this use of resources is the most                 effective. WHAT IMPACT DO RESOURCES HAVE ON STUDENT                           ACHIEVEMENT?There is considerable disagreement over the impact              of additional resources on educational outcomes of students. The                complexity of the educational system, combined with the wide range              of outcomes we have established for schools and the multitude of                alternative approaches we use to fund schools, make it difficult to             come to any firm conclusions about whether or not money                         matters. 
We do not know what the impact on student performance                would be if schools or school districts were to dramatically change             the way they spend their resources. In 1992, Odden and Picus noted              that the research summarized above suggests that "if additional                 education revenues are spent in the same way as current education               revenues, student performance increases are unlikely to emerge."                Knowing whether high-performing schools use resources differently               than other schools would help to clarify the issue of whether money             matters. 
More recently, Odden (1997) found that the schooling                 designs developed as part of the New American Schools project have              generally led to increased student performance. In each of the seven            models studied, schools are required to divert resources away aides             and teachers with special assignments and focus on increasing the               number of regular classroom teachers, thereby lowering average class            size. In addition, each of the designs requires substantial                     investments, in both time and money, for professional                           development. 
Odden suggests that these investments can often be               funded through elimination of a position through attrition. He                  asserts that for relatively little additional money, schools can                fund existing programs and organizational structures that will                  enhance student learning. WHAT DO THESE PATTERNS MEAN FOR FUTURE              POLICY DECISIONS ON SCHOOL

FINANCE AT THE STATE AND LOCAL                    LEVELS?Regardless of what impact additional funds might have, it            is important that existing resources be used as efficiently as                  possible. In her study of the Boston school district, Miles (1995)              found that if all individuals classified as teachers were to teach              classes of equal size, the average class in the district could have             been reduced from 22 to 13 students. Although this reallocation                 would have placed all children with disabilities in regular                     programs, Miles also projected what the average class size would be             if some of the most severely disabled children continued to receive             services under current programs. Dramatic class size reductions were            still possible. 
Miles's work highlights the fact that in many                 districts it may be possible to further reduce class size through               changing teacher assignments throughout the district. To the extent             that smaller class size improves student performance, these changes             could potentially improve student performance at little or no                   cost. 
Odden and Busch (1998) argue that schools can find the                  additional funds (which range from $82,000 to $349,000 per school               per year) to finance the various New American Schools designs                   creative use of categorical funds, elimination of classroom aides,              and reallocation of resources, such as the elimination of one or two            teaching positions. While some of these options may result in larger            classes or fewer teachers, the more intensive use of staff and                  greater professional development activities available seem to result            in improved student performance in many of the schools that have                adopted these designs. 
Before seeking additional funds, there may             be ways to restructure what is done with existing funds. Levin's                Accelerated Schools, the New American Schools program designs, and              hard analyses of current staffing patterns may all yield improved               student performance. RESOURCESMiles, Karen H. "Freeing                    Resources for Improving Schools: A Case Study of Teacher Allocation             in Boston Public Schools." Educational Evaluation and Policy                    Analysis, 17, 4 (Winter 1995): 476-93. EJ 520 985. 
National Center            for Education Statistics. Digest of Educational Statistics, 1989.               Washington, D.C.: Author, 1989. 542 pages. ED 312 792. 
_____.                 Digest of Education Statistics, 1997. Washington, DC: Author, 1998.             70 pages. ED 417 230. 
Odden, Allan. "The Finance Side of                      Implementing New American Schools." Paper prepared for the New                  American Schools, Alexandria, Virginia, 1997. 
Odden, Allan, and               Carolyn Busch. Financing Schools for High Performance: Strategies               for Improving the Use of Educational Resources. San Francisco:                  Jossey-Bass, 1998. 276 pages. 
Odden, Allan R., and Lawrence O.                Picus. School Finance: A Policy Perspective. New York: McGraw Hill,             1992. 363 pages. 
Picus, Lawrence O. In Search of More Productive              Schools: A Guide to Resource Allocation in Education. Eugene,                   Oregon: ERIC Clearinghouse on Educational Management, University of             Oregon, forthcoming. 113 pages. 
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This publication was                  prepared with funding from the Office of Educational Research and               Improvement, U.S. Department of Education, under contract No.                   ED-99-C0-0011. The ideas and opinions expressed in this Digest do               not necessarily reflect the positions or policies of OERI, ED, or               the Clearinghouse. This Digest is in the public domain and may be               freely reproduced. The text of this Digest may be viewed                        electronically at http://eric.uoregon.edu  EA 030 658.                       **Title:** How Schools Allocate and Use Their Resources. ERIC Digest Number 143.        **Document Type:** Information Analyses---ERIC Information Analysis Products (IAPs) (071); Information Analyses---ERIC Digests (Selected) in Full Text (073); **Available From:** ERIC Clearinghouse on Educational Management, 5207 University of                Oregon, Eugene, OR 97403-5207; Tel: 800-438-8841; Web site:                     http://eric.uoregon.edu.                                                     **Descriptors:** Academic Achievement,  Educational Finance, Elementary Secondary                Education,  Expenditures,  Finance Reform,  Financial Support,                   Policy Formation, Public Schools,  Resource Allocation                      **Identifiers:** ERIC Digests                                                                 
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