Most states now have a district-driven finance system.
Districts raise money and determine how it is spent on schools, and states and the federal government distribute money to districts. This district emphasis needs to change to a school orientation if effective site-based management is to be implemented. A shift to school-based financing also would be appropriate for the dozen or so states that have charter schools and public school choice programs. Decision-making authority over the school budget is a key prerequisite to effective restructuring. Under this approach, the state would allocate most dollars in a lump sum directly to schools.