Description/Abstract:
CHAPTER IV
SOME IMPLICATIONS FOR BUDGETING AND ACCOUNTING
What implications can be seen in this study of patterns of expenditure that have meaning for budgeting and accounting? Are there secondary implications for the whole accounting system? Does the educational program of the future infer changes in the present budgeting and accounting system?
These implications for budgeting and accounting will be discussed under four main heads: (A) generally speaking, the pattern of expenditure shows only minor changes as expenditure increases, (B) the present accounting system provides certain data but does not provide enough specific data that cost and quality may be analyzed thoroughly, (C) required units of measurement and categories of service should be developed, and (D) attention must be given to the requirements of budgeting and accounting for research and for the adaptability of school systems.
A. Minor Changes in the Pattern as Expenditure Increases
When expenditures are studied within the framework of the present uniform accounting system the pattern of expenditure shows relatively minor changes as expenditure increases. As was shown in Chapter III, the percentage of the budget expended for administration remains practically the same at all three levels, and the percentage given to instruction appears to increase slightly but steadily as expenditure increases. In the case of operation and maintenance of the school plant the percentage tends to go down as the level of expenditure is raised. However, the decrease for operation from 12.5 per cent at the
But the budget maker will always be cognizant of the elementary observation that the level of expenditure increases 32-1/2 per cent between the
1. In administration, the superintendentÆs salary is the big item at the
2. Even as over-all expenditure increases, the percentage going to salaries of the instructional staff increases. The cost per weighted pupil for staff salaries doubles between the
3. Most operational costs do not increase to any considerable extent as the over-all current expenditures increase. The one notable exception is custodiansÆ wages. Practically all the increase in per weighted pupil expenditure between the
4. For maintenance the percentage decreases as expenditures are increased, so that costs per weighted pupil do not increase markedly as the level of expenditure is raised.
5. Auxiliary service costs, which are mainly for health service and recreation, fluctuate radically within and among expenditure levels and accordingly do not show distinct patterns. The extent of the service and the social structure of the communities are items to be considered here.
6. Insurance, of course, is dependent on the replacement value of the building, the extent to which the board of education indulges in self-insurance, and the prevailing rates in the community. Pensions for non-instructional employees would, perhaps, have a close correlation to the salary scale for such workers. It is reasonable that these fixed charges increase markedly as the level of expenditure becomes higher.
B. Limitations of the Present Accounting System
The financial accounting system for schools, as has been pointed out by Reeder, serves three purposes:
(1) It assists in formulating policies for the whole organization or for any part or parts of the organization,
(2) it aids in ascertaining the efficiency of personnel, methods, materials and equipment, and provides such information as may be used in formulating new policies or in amending old policies,
(3) it guarantees fidelity to their trust of individuals who have the custody of public funds.
There is no doubt that the third purpose has been realized with a greater degree of satisfaction than have the first two purposes which, without minimizing the prudential value of the third purpose, are far more important. Yet the present system of personnel and financial accounting is definitely limited in its ability to reflect a modern educational program.
The chief limitations are:
1. No pupil measure has been developed that indicates satisfactorily the type, quality, or quantity of education. Average daily attendance or A.D.A. is the most widely used pupil measure, but it does not take into consideration the effects of small school or sparsity costs or the relatively higher costs of high school education as compared with elementary education. The weighted pupil unit used in this study is corrected for these two factors, but does not take into account such variables as: (a) the length of the school year or of the school day; (b) the organization of the daily program in schools which differ in the number of days per week that a subject is taught; and (c) in the length of the class period.
2. The accounting system should make it possible to draw information regarding the homogeneity of the school system, if data are to be used for comparative purposes. Some of the aspects of homogeneity that should be considered for comparative purposes are: (a) population, (b) the type of educational program offered, (c) the organization of the school system into schools of various types, (d) the ability of the district to support schools. (e) the income of the school system per pupil from local taxation and from the state, (f) the social composition of the community, particularly as it affects interest in education, (g) the location of the school district with reference to large centers of population, (h) the density of population, (i) the type of administration organization within the system, and (j) the relation of the school district to the municipal government.
3. Auxiliary services and fixed charges in the present accounting system are really miscellaneous headings for services and charges which cannot reasonably be allocated elsewhere. These catchall classifications are a real weakness of the present system.
4. Instruction as a category includes approximately 75 per cent of all the current expenditures. More information and differentiation is needed than can be given by a simple object classification and organizational unit breakdown. The term object classification refers to purpose such as salary or supplies; the term organizational unit refers to the organization such as elementary, junior high or senior high schools. Yet the Annual Financial Report for Connecticut is the only one of the three reports studied that asks for a breakdown according to organizational unit. Accordingly, the New York and New Jersey schools had only an object classification such as salaries and supplies reported for instruction.
5. Maintenance as a classification is stretched to cover objects only remotely related. The replacement of a pane of window glass or of an expensive furnace are both maintenance. Must the life of a furnace be judged by the life of a building? A building may outlast several furnaces. If that idea is accepted, then perhaps the second furnace is as much a part of capital outlay as the first one was. When a building is constructed, it may be possible to choose a roof that is semi-permanent. In this case the roof would be all counted as capital outlay. The other alternative is a roof that is comparatively inexpensive as an initial or capital outlay cost but often requires a re-surfacing which would be included under maintenance costs. The same idea can be carried through for brick construction as opposed to frame construction that requires many paint contracts during its lifetime.
6. It is difficult under the present accounting system to eliminate items such as transportation, tuition and adult education which are not chargeable to costs per weighted pupil.
Another approach to classification in budgeting and accounting may very well be one which would set up some ten categories:
1. Administration
2. Instruction (Breakdown here to reduce the instructional program to comprehensible terms. Costs for organizational units as well as for the various aspects of the educational program.)
3. Housing (To include operational costs and those maintenance costs that are not transferred to capital outlay.)
4. Health Service
5. Recreation
6. Transportation
7. Tuition
8. School Lunch
9. Community Service (Adult education, lecture courses, public forums, community recreation, and citizenship classes.)
10. Transfers to other Governmental Agencies.
This classification would permit the elimination from comparison of all items not chargeable to costs per weighted pupil. But while a thorough analysis of the accounting system is long overdue, such an analysis is beyond the purpose of this study.
C. Units of Measurement and Categories of Service.
Standards of service must be developed so that by using the appropriate unit of measurement a school system may appraise its expenditures with respect to the quality of service rendered. These standards or categories of service should be developed to the point that the various degrees of excellence may be shown. For example, in the case of the health service, one end of the scale would be medical examinations with no attempt at follow-up and at the other end of the scale a complete medical service would be provided. When standards of service are developed it will be possible for a district to know that it obtained a given quality of service at a low expenditure, at an average expenditure or at a high expenditure. Undoubtedly, this type of information will be far superior to the present information that a given district merely spent more or less in a given part of the program. The test is: What did the district buy?
Refined units of measurement need to be developed for the various aspects of the school program. The need for a more refined unit of measurement than the A.D.A. pupil or the weighted pupil has already been pointed out. The weighted pupil unit is a step in the right direction, but just one step as it considers only the variants of size and differing costs at different levels of the program.
What units should be developed for such programs as health and recreation? Part of the answer here may be indicated when these services are broken down into categories that can be related to quality.
If teaching is to be evaluated as to cost then teaching methods must be known. Text book teaching is not closely akin to the seven aspects of better teaching as recently reported by the Committee for the Association for Supervision and Curriculum Development of the National Education Association. This committee decided that the seven aspects of better teaching are:
1. Fostering security and satisfaction.
2. Promoting cooperative learning.
3. Helping pupils develop self-direction.
4. Fostering creativity.
5. Helping pupils develop values.
6. Providing opportunities for social action.
7. Helping pupil evaluate learnings.
The development of scales or units of measurement for judging better teaching is no simple matter. The development of a scale to rate the whole gamut of teaching is an even more complex problem.
The complexity of the problem of developing units of measurement is shown further in such fields as the quantity and quality of custodial service. Here consideration must be given to such variables as the type of building, the type and condition of equipment such as ventilating, heating and cleaning and the climate of the region. The wage scale in the different communities is still another variant.
Mort calls attention to the need for a parallel development of systematic procedures in accounting for results in these categories:
1. The degree to which the schools are reaching all children of school age.
2. Ages of entrance and leaving.
3. Age-grade placement, progress and promotions.
4. The degree to which all pupils are taking advantage of the type of curriculum opportunities assumed to be available.
5. Extent of high quality medical examinations and the success of efforts to follow them up.
6. Interim checks on progress for age level in skills and knowledges that can be satisfactorily tested, together with systematic estimates where standardized instruments are not available or have too narrow a range.
7. Adequacy of the educational program as appraised through the follow-up of those who have left school or gone on to higher institutions.
The further development of satisfactory units of measurement that will be widely accepted and the defining of standards of service are two especially fruitful fields for research. These two areas should demand some of the best minds for a decade.
D. Budgeting and Accounting for Research and the Adaptability of School Systems
Budgeting and accounting must serve the school program, not be the master of it. Just as accounting should be expanded far beyond the clerical task of bookkeeping, similarly budgeting, to reach its full potential, must be considered as a function that does far more than help a district live within its income. Budgeting and accounting must assist in the constant and continuous appraisal of the educational program. This is the essence of research. At the same time budgeting and accounting should be conducive to the development of an emerging, adaptable educational program. Each must go the second mile.
During the past few decades educational leadership has come to rely more and more on the results of research, and rely less and less on ôbest guessö and opinion methods. Research, which is the scientific substitute for subjective judgment, will undoubtedly play a far greater part in the further extension of public education. The total of expenditures for research activities however, cannot be isolated within the present uniform accounting system. When public education is compared with business, the percentage given to research in public education is undoubtedly woefully small.
Public education has been, in the main, an adapter of the research carried on by research agencies such as universities, educational associations and cooperative enterprises. There is a tendency, however, for local districts to undertake more research in the field of curriculum revision, school house construction, and other administrative problems. More districts are purchasing the services of special consultants in these fields. Comprehensive surveys of the educational program are being undertaken as cooperative enterprises with established research agencies. Cooperative regional study councils are being developed in many centers of the nation. Here the opportunity for action research is being realized.
The uniform accounting system approved by the Office of Education provides for research as an item under administration. Further development of the accounting system should make it possible to isolate all expenditures for research by providing research with an object code within the main accounting classifications. But even today auditors sometime question the legality of the expenditure for membership in regional study councils. The value of such membership as cooperative action research is generally recognized, and the accounting system should provide for it.
Adaptability or the capacity of a district to make wise, considered changes can be enhanced or improved by the concept the educational leadership holds of the function of budgeting and accounting. Adaptability undoubtedly makes ever-increasing demands upon the creativeness of the social engineering of the district.
Central to the whole idea of adaptability is the recognition of needs and the invention or adaptation of ways of meeting these needs. In this enterprise, the teacher will be accepted as a full partner in the process of pushing ahead to provide a modern educational program. The teacher must not be held back by a budget document developed without consideration for needs that were not anticipated at the time it was adopted. Funds will be provided for the development of inventions or the implementation of innovations which cannot be anticipated. Of equal importance, a means will need to be found so that the teacher may be supplied with miscellaneous supplies, and materials without the formalities of the usual accounting system.
Accounting and budgeting - those hand maidens of prudence - should be subjected to a constant scrutiny to make them serve their full measure for the appraisal of the efficiency of the educational program. Techniques and practices being employed in budgeting and accounting will need to be continuously evaluated in light of practices in other fields and in the light of the present development of scientific knowledge and skill. The budget must not be a series of chapters of accidents. The whole budgeting and accounting procedure will need to undergo continuous development so that the public education system amy be an efficient and effective provider of educational services. In the final analysis, the public policy of the community, the state, or the nation, determines the amount that is spent on public education. Accounting and budgeting will serve as instruments in the development of a public policy that will provide public education with the adequate funds required for it to attain maximum effectiveness in a full-functioning economy.