Budget Transparency: Overview of the Operating Budget James M. Brese Assistant Superintendent and CFO September, 2010 Department of Education

Budget Transparency:Overview of the Operating Budget

James M. Brese

Assistant Superintendent and CFO

September, 2010

Department of Education

Total Biennium Operating Budget Reductions

FY 2009-10 FY 2010-11Biennium

TotalReductions/RestrictionsBOE Approved Reductions (40.01)$ (40.00)$ (80.01)$ Act 162/09 Reduction (43.00)$ (43.00)$ (86.00)$ Governor's 06/01/09 Restriction for FB0911 (127.70)$ (142.60)$ (270.30)$ Act 162/09 Proviso for Restructuring Schools (1.14)$ (1.14)$ (2.28)$ Support for Struggling Non-Title I Schools (5.00)$ (5.00)$ (10.00)$ Reserve for Additional Restrictions and Anticipated Cost Increases* (10.00)$ (10.00)$ (20.00)$ Target: Total DOE Reduction/Restrictions (226.85)$ (241.74)$ (468.59)$

Total Operating Budget Reductions – FY08 vs. FY11

Data reflects General Funds only

Description FY2007-08 Budget% of Total FY2010-11 Budget

% of Total Variance

% Reduction

School Total 968,885,766$ 69% 935,710,363$ 72% (33,175,403)$ -3%Centralized Services for Schools Total 319,930,510$ 23% 285,724,932$ 22% (34,205,578)$ -11%Complex Area Total 22,283,207$ 2% 17,508,358$ 1% (4,774,849)$ -21%State Offices Total 83,165,552$ 6% 57,489,799$ 4% (25,675,753)$ -31%Subtotal 1,394,265,035$ 100% 1,296,433,452$ 100% (97,831,583)$ -7%Legislative Adjustment [1] -$ (43,000,000)$ (43,000,000)$ 0%Total 1,394,265,035$ 1,253,433,452$ (140,831,583)$ -10%

Department of EducationFY2010-11 Operating Budget Reductions - Dollars

• The greatest portion of the DOE’s budgeted dollars is allocated to the schools

• The greatest percentage reductions to the DOE’s budget has come from the State and Complex Area

Total Operating Budget Reductions – FY08 vs. FY11

Data reflects General Funds only

• The greatest portion of the DOE’s budgeted positions is allocated to the schools

• The greatest percentage reductions in the DOE’s budget has come from the State and Complex Area

Description FY2007-08 Budget% of Total FY2010-11 Budget

% of Total Variance

% Reduction

School Total 18,866.40 87% 18,526.78 87% (339.62) -2%Centralized Services for Schools Total 1,741.50 8% 1,780.50 8% 39.00 2%Complex Area Total 325.00 1% 286.50 1% (38.50) -12%State Offices Total 791.00 4% 599.50 3% (191.50) -24%Total 21,723.90 100% 21,193.28 100% (530.62) -2%

FY2010-11 Operating Budget Reductions - FTEsDepartment of Education

Total FY2010-11 Operating Budget After Reductions

General Fund Budget$1.3 Billion

$935,710,363 , 73%

$285,724,932 , 22%

$57,489,799 , 4%

$17,508,358 , 1%

School Total Centralized Services for Schools Total Complex Area Total State Offices Total

The State and Complex Area took reductions to preserve instructional services at the school level!

Total FY2010-11 Operating Budget After Reductions

The State and Complex Area took reductions to preserve instructional services at the school level!

18526.78; 87%

1780.5; 8%

286.5; 1%

599.5; 3%

General Fund FTEs21,193.28 FTEs

School Total Centralized Services for Schools Total Complex Area Total State Offices Total

What are DOE Centralized Services?

Why is this budget not allocated to the schools?

The principal can focus on being the educational leader of the school!

The DOE as a system can take advantage of standardization and economies of scale!

DOE Centralized Services Electricity bills and other utilities Network infrastructure support/development School food services Student transportation Diagnostic services for SPED services qualification Personnel hiring, recruitment, and recordkeeping Workers compensation Unemployment benefits administration Financial accounting and reporting IT development, implementation, operations Litigation support

Autism, school based behavioral health Special education provision and recordkeeping

DOE Statewide Responsibilities Strategic Planning Student Achievement Standards Development Budget Preparation and Execution Teacher Certification Hawaii State Assessments Policy Development Internal Audit Compliance with US DOE and State Regulations Federal Reporting Requirements Inter-governmental relationship management

General Funds $1.3 Billion, 76%

Federal Funds Ceilings $305.7

Million, 18%

Special Funds, Trust Funds, Interdepartmental Transfers, and Revolving Funds $92.8 Million, 6%

DOE Budget $1.7 Billion(Does not include $57 Million from the Hurricane Relief Fund)

Budget Summary by

All Means of Financing

Salaries $996.7 Million, 60%

Non-Salaries $655.2 Million,

40%


Budget Summary by

Salaries/Non-Salaries

No Fringe Benefits are Included.

Removed from DOE Budget since

FY09-10. Total Amount = $456.3 Million, or $2,641 per student for

FY10-11

Weighted Student Formula

(WSF) 42% Federal Funds 11%

Other Programs 6%

Special Education

(SPED) 11%

Other SPED & Student Support Programs 10%

Other Centrally Expended 5%

Facilities (Repairs & Maintenance) 3%

Utilities 3%

Student Transportation 3%

Food Services 6%


Weighted Student Formula

(WSF)

$702.3 Million Federal Funds $175.8 Million

Other Programs

$97.1 Million

Special Education (SPED)

$186.0 Million

Other SPED & Student Support

Programs

$159.5 Million

Other Centrally Expended

$86.7 Million

Facilities (Repairs & Maintenance)

$42.8 Million

Utilities

$56.1 Million

Student Transportation

$51.3 Million

Food Services

$94.5 Million

DOE Budget $1.7 Billion (Does not include $57 Million from the Hurricane Relief Fund)

Weighted Student Formula (WSF)The Weighted Student Formula (WSF) promotes equity by allocating funds to schools based on

individual students’ educational needs.

Weighted Characteristics:

• Economically Disadvantaged

• English Language Learners

• Geographic Isolation

• School Size/Sliding Scale

• Multi-track

• K-2 Class Ratios

• Transient Students

• Neighbor Island Students

$702.3 Million of DOE Budget = 42%

With 172,806 students enrolled, approximately

$4,064 is average budget per student.

Budget per student is based on SY 2010-11 Projected Official Enrollment Count

Other Programs (Categorical)

• At Risk Programs• Summer School• Driver Education• Lost Textbooks• School Health Aides• After School A Plus

• Athletics (except Directors—now in WSF)• JROTC• Hawaiian Language Immersion Program• Hawaiian Studies• Other Instructional Services • Learning Centers• Student Activities (Student Conference, Student Council,

Awards, Student Exchange)• Peer Education Program


• Educational Research & Development• Trust Funds (Grants, Donations, Athletics, Olelo)• Hawaii Content/Performance Standards, Restructuring• Etc…

≈ $562 per student

Separate funding is allocated to ensure that specific programs are established and supported for broadened education.

Federal FundsTitle 1

No Child Left Behind

Impact Aid

Vocational Education

Smaller Grants


≈ $1,017 per student


• Teachers• Classroom Supplies• Educational Assistants

SPED Requirements at Schools

Centrally Expended for SPED and Student Support Programs

• Federal Funds• Special Olympics• School Based Behavioral Health• Services for Children with Autism• Student Support Services• Recruitment and Retention Incentive• Educational Assessment/Prescriptive Services• Special Education Database• Extended School Year• Home/Hospital Instruction• Etc…

$186.0 Million = 11% of Budget

≈ $1,076 per student

$159.5 Million = 10% of Budget≈ $923 per student


$345.4 Million (SPED Combined) =

21% of Budget

• 18,172 special education students projected enrollment in FY 2010-11

• 11% of total student enrollment

≈ $10,234 per SPED student

SPED Requirements at Schools

Centrally Expended for SPED and Student Support Programs



Food Services $94.5 Million

6%Student

Transportation $51.3 Million

3% Utilities

$56.1 Million

3%

Facilities (Repairs & Maintenance, School Inspection, State

Administration, etc.):$42.8 Million

3%

Other Parts of theDOE Budget for

Students≈ $484 per student







All Other Centralized Expenses

• Complex Area Administration

• Office of Curriculum, Instruction, and Student Support (Teleschool, Adult Education, Federal Funds for Homeless, National Science Foundation, NAEP, Etc.)

• Office of Human Resources (Teacher Improvement Services, Leadership Development, Etc.)

• Office of Information Technology

• Office of the Superintendent (Systems Accountability: Testing, Evaluation, Planning, Etc.)

• Office of Fiscal Services

• All Other (Board of Education, HTSB, and Art in Public Places)

5% of DOE Budget - $86.7 MillionIn addition to supporting student achievement, the remaining

5% of the DOE Budget supports a combination of the schools, the complex areas, and the state level functions. Many of

these impact student education directly and all others affect student education indirectly.

1.0%

1.1%

1.0%

1.1%

0.5%

0.3%

0.2%

$ 99

$107

$ 98

$109

$ 44

$ 24

$ 20

≈ $502 per studentPer Student 5% Breakdown

Complex Area (ICAA) = $17.1 Million; Remaining State Offices = $69.6 Million

Summary

Expended by Principals

for Students 70%≈ $6,719 per student

42%

28%

Centralized Expenses

for Students 25%≈ $2,339 per student

Other Centralized Expenses for Schools 5% ≈ $502 per student

WSF

Categorical, SPED, Federal

95% of Budget

Budget per student is based on SY 2010-11 Projected Official Enrollment Count

SummaryBudget Breakdown Per Student

Weighted Student Formula 42%

$4,064 per student

SY 2010-11: 172,806 Students Projected

95% of Budget =

$9,058 Average Per Student

Other Student Funding at

Schools 52% $4,994 per student

All Other Centralized Expenses at 5% $502 per student

Affects Schools, Complex Areas, State Offices, etc.

100% of Budget = $9,559

Average Per Student

HSA Results

Reading - Percent Proficient

42 4145 48 47

60 62 65 67

30 30 30

44 44 44

58 58 58

72 72

86

100

0

10

20

30

40

50

60

70

80

90

100

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Per

cen

tag

e

Actual Results Annual Measurable Objectives Under NCLB

HSA Results

Math - Percent Proficient

20 20 23 24 27

3842 44

49

10 10 10

28 28 28

46 46 46

64 64

82

100

0

10

20

30

40

50

60

70

80

90

100

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Per

cen

tag

e

Actual Results Annual Measurable Objectives Under NCLB

“The Big Picture”

State of HawaiiExecutive Budget General Funds All Means of Finance

$4,943,348,231 $10,241,967,263

DOE Budget General Funds All Means of FinanceEDN100 $705,256,507 $955,364,041EDN150 306,475,682 353,790,360 EDN200 22,430,453 25,691,997 EDN300 42,517,962 42,552,963 EDN400 171,837,016 245,269,051 EDN500 4,918,832 29,253,061 EDN100-500 Total $1,253,436,452 $1,651,921,473

DOE % of Exec 25.36% 16.13%

Factor in Fixed Costs General Funds All Means of FinanceBUF725 - Debt Service $194,855,477 $194,855,477BUF745 - Retirement 249,726,061 249,726,061 BUF765 - Health Ins 206,597,259 206,597,259 DOE Share of Fixed Cost Total $651,178,797 $651,178,797

DOE Share of Fixed Cost % of Exec 13.17% 6.36%

DOE + Fixed Costs General Funds All Means of Finance$1,904,615,249 $2,303,100,270

DOE + Fixed Costs % of Executive Budget 38.53% 22.49%

FY10-11

The DOE budget (including fixed costs) represents:• 38.53% of the entire state

general fund budget• 22.49% of the entire state

budget for all means of financing

Race to the Top (RTTT) RTTT grants are aimed at

rewarding states that have “ambitious yet achievable” plans for implementing compelling and comprehensive education reform

Hawaii will receive $75 million, the maximum for a state its size, over a four-year period

“The money is meant to start reforms, to leverage reforms. This is not intended to replace our general fund budget reductions.”

Kathryn Matayoshi, Superintendent

Summarized from The StarAdvertiser, 08/25/10

Race to the Top (RTTT)

Placed in top three! (applicants judged on a 500-point scale by a five-member expert panel)

Compared Top 3 Phase II Winners Score to Hawaii

Massachusetts 471.0 8.6 points New York 464.8 2.4 points Hawaii 462.4

Only 2 Phase I Winners Tennessee Delaware


Race to the Top (RTTT)

The four-year, $75 million grant will help kick-start reforms across Hawaii’s public school system. Here is how it will be spent:$33.2 million Cultivate, reward, and leverage” effective teaching and school leadership by

instituting performance-based contracts for teachers and principals tied, in part, to student performance growth. Funds will also go to professional development, bonuses for highly effective teachers, and other initiatives.

$18.7 million Turn around the lowest-performing schools by targeting programs in “zones of school innovation,” expanding pre-kindergarten opportunities, and extending classroom time.

$9.3 million Boost student achievement and classroom rigor by implementing the national common core standards curriculum, aimed at standardizing what students across the country learn.

$7.2 million Improve student performance data collection and use, allowing teachers, parents, schools, and the DOE to quickly see when a student is struggling and track how a student performs from kindergarten through graduation (and through college).

$6.5 million Reorganize to improve and streamline how the Department of Education monitors and supports reforms.


Race to the Top (RTTT) Questions about RTTT?

For more information, please access the DOE’s website for RTTT

http://doe.k12.hi.us/arra/index.htm

Questions?

CONTACT US:Department of EducationOffice of Fiscal Services

1390 Miller Street, Room 319Honolulu, HI 96813

Phone 808-586-3737Fax 808-586-3445

Email:[email protected]

Visit our website:

http://doe.k12.hi.us/

Documents

Budget Transparency: Overview of the Operating Budget James M. Brese Assistant Superintendent and CFO September, 2010 Department of Education