Towards the end of the school year, K-12 school districts still have money to spend on products and services, which could present opportunities for companies selling in the school market.
Districts have on average 27 percent of unspent funds remaining in their budgets for April, May, and June this year, according to a report on K-12 budgeting and spending trends in the first quarter of 2019 from Allovue.
At the same time, indications are that districts are spending more money at school locations than is being reflected in how those expenditures are accounted for at the central office level, the data show.
The study is based on a random sampling of budgets and spending from about 2 percent of U.S. schools. It covers districts with as few as 900 students and as many as 270,000, in 21 states that use the Allovue Balance platform to help districts create and plan budgets and monitor spending.
“Historically, there is a large spike in spending from April to June, coinciding with the end of the school year,” the report states. These funds do not include school districts’ personnel costs for salaries and benefits.
The above chart shows how, from July 2018 through March 2019, districts spent an average of 8.1 percent of their non-personnel budget, and have a significant amount of unused money.
At this time of year, many districts face decisions about their “use it or lose it” funds before the school year ends.
“One of the most interesting findings was the large percentage of dollars still recorded in central offices as opposed to school sites,” said Jess Gartner, founder and CEO of Allovue, in an email, referring to the chart below.
Their research found that central offices had spent 41.2 percent, but budgeted 54.5 percent during the time period, compared to schools, where 58.8 percent was spent, compared to 45.5 percent budgeted.
While most central office expenditures are actually spent in direct support of schools, “the data shows that districts are still recording this spending at the central office level, possibly because some states aren’t requiring large expense categories to be pushed down to the school level,” she said.
With new reporting requirements under the Every Student Succeeds Act taking effect, “it will be difficult for stakeholders to draw accurate conclusions about site-level spending if districts aren’t accurately recording their spending data,” she said.
My colleague Daarel Burnett explains ESSA’s new school-spending transparency requirement and delved into the requirement that district leaders report to the public, by the summer of 2020, how they divvy up funds among their schools.
As for K-12 spending overall, the National Center for Education Statistics released a report indicating that K-12 revenue was up 3.2 percent between fiscal years 2015 and 2016, and spending in fiscal 2016 climbed 2.4 percent to around $10,800 per student.
- Use It or Lose It: Schools’ Spending Behavior in the Spring
- Steps for Mastering the Four Seasons of the K-12 Education Market
- K-12 Spending Climbed From 2015 to 2016, NCES Reports
- Limited Impact So Far From ESSA’s School-Spending Data
- District Spending is About to Get a Lot More Transparent. Are You Ready?