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Push Is On For Double-Checking Kansas School Money Spending

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Kansas News Service
Some lawmakers are arguing that Kansas needs more people overseeing the distribution of state aid to local school districts.

Over five years, the bus money that Kansas doled out to schools — that auditors say it shouldn’t have without legislative permission — totaled $45 million.

It’s a drop in the bucket compared to the $4 billion a year that the state spends on public schools.

With so much at stake — the state’s single largest budget item — the system is drawing fresh looks.

At least one school finance expert and a cadre of legislative leaders question whether Kansas has enough checks to make sure the myriad calculations that determine aid to each of the state’s 286 school districts come out right.

“We’re talking about shuffling millions and millions of dollars,” Rutgers University education professor Bruce Baker said. “It’s a lot of money to be subject to however one person has decided to organize the columns in their spreadsheet.”

The debate boils down to whether to trust the education department’s head of school finance to make those calls.

It comes in the wake of a high-profile meeting last week that saw educators, lawmakers and former governors rally behind Dale Dennis, a long-serving deputy education commissioner and one of the most trusted voices in Kansas education.

Baker, a nationally recognized school finance expert who for years taught at the University of Kansas, says Kansans should want more eyes on the math. The extra checking should, as is the case in Texas, come from another branch of government.

Texas legislative budget experts run annual school funding calculations. The state education department checks the results independently.

“Any discrepancies that arise are brought to light and reconciled,” Lauren Callahan, a spokeswoman for the Texas Education Agency, wrote in an email.

That’s good policy, Baker argues, because translating finance formulas from law to math is tricky, with risk for controversy. Agencies are often stuck with deciding arcane details that can make a difference — such as when to round numbers or in what order to factor in various data.

Calls for an audit

Public education could soon come under a massive audit.

That’s what legislative leaders want, and this week Attorney General Derek Schmidt echoed their sense of urgency.

“Every public official who has taken an oath to uphold our Kansas Constitution,” Schmidt wrote to lawmakers, the Kansas State Board of Education and the governor’s office, “must be committed to learning what enabled this unauthorized expenditure to occur.”

Read Schmidt’s letter to legislative leaders calling for a K-12 audit

House Speaker Ron Ryckman, Senate President Susan Wagle and Senate Majority Leader Jim Denning argue for a thorough check to see whether the problematic bus allocations were an isolated instance.

Those allocations were documented in an audit last month that found the education department was giving some densely populated districts more money than state law allowed. Much of it went to the Wichita and Shawnee Mission districts.

Bus funding still fell short of actual costs, and some lawmakers wanted to codify the state agency’s approach instead of chastising it.

Still, Republican leaders argued the practice had gone on for decades without legal authority, potentially totaling hundreds of millions of dollars.

When they asked the education agency to suspend Dennis, it rattled educators and lawmakers frustrated that Kansas continues, according to court rulings, to spend too little on its schools.

They fear conservatives and the attorney general — whose office defends Kansas in the ongoing school finance lawsuit — want to muddy the judicial waters by casting doubt on the education agency’s most trusted source of financial analysis.

The Kansas State Board of Education directed its commissioner not to suspend Dennis. The education agency says Dennis followed decades-old verbal guidance from lawmakers on how to interpret the law, and that the agency’s method was repeatedly and openly discussed in legislative committees over the years. Some lawmakers and superintendents confirmed they knew about the bus calculations.

But other lawmakers say they didn’t know. Nor did legislative auditors who first suspected discrepancies in bus funding last spring.

"We had some inkling" it needed to be checked, auditor Heidi Zimmerman said.

She said that head auditor Scott Frank saw an education department spreadsheet that sparked his concern. “So,” she said, “he gave us a heads-up that he thought something was not quite right."

The risk for errors

Baker, the Rutgers professor, suspects most states handle school finance calculations within a single department — like Kansas. But that comes with risks of math errors, or of putting what amounts to policy decisions in the hands of a few bureaucrats.

It doesn’t matter if people respect Dennis, Baker said.

“Imagine if you had an individual who did have more kind of corrupt intent,” he said, “or wanted to drive money to certain places.”

Baker was an expert witness in two landmark Kansas school finance lawsuits — on the side of the plaintiff school districts.

Kansas lawmakers can check Kansas K-12 calculations after the fact by auditing them.

Audits raised at least a few questions about school calculations the past few years. In addition to the December finding that bus funding was out of whack, that same audit found a few minor misinterpretations of law.

For instance, the education department gave districts less money in some cases where students only ride the bus in one direction to or from school, but the auditors concluded state law doesn’t allow this subtraction.

And in 2015, auditors found Andover public schools were collecting too much state aid by including about 600 students at nearby Catholic schools. The Catholic schools were using an online curriculum hosted by the Andover district, an arrangement that KSDE approved for funding. That wasn’t illegal, auditors concluded, but it relied on a questionable loophole.

Denning, the Senate Majority Leader, said having more than one agency check annual calculations sounds smart.

“I'm hoping that there are checks and balances, but I don't know that for sure,” he said. “It appears from all the work we receive that there's a very small number of staff (at KSDE) that produces reports and data.”

Denning suggested the legislature appropriate money for an independent auditing firm to review the agency’s calculations. Using legislative auditors would be difficult, he said, because the project would be so big it might force them to drop other work for months.

Reviewing the process

The state education department did not make Dennis available for an interview for this story, but noted it is reviewing its process.

Although the State Board of Education last week supported Dennis, it also told Education Commissioner Randy Watson to draw up recommendations by March on how to ensure transparency and accuracy in school finance calculations.

Ann Mah, a board member and former legislator, said the proposal made sense to her as a former employee of Southwestern Bell-AT&T, where she worked in the regulatory department.

“Every once and a while you have to look at how you do things,” Mah said. “As the industry changes, as time changes.”

Senate Minority Leader Anthony Hensley said he’s not convinced the review is necessary, but the Democrat appreciates the board’s decision. Nor does he see a need for a system like the Texas model, where more than one agency checks each year’s funding figures.

“The information that Dale Dennis has given us over the years has been very accurate,” Hensley said. “I have no qualms about his honesty and integrity.”

Celia Llopis-Jepsen is a reporter for the Kansas News Service, a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio covering health, education and politics. You can reach her on Twitter @Celia_LJ. Kansas News Service stories and photos may be republished at no cost with proper attribution and a link back to the original post.

I'm the creator of the environmental podcast Up From Dust. I write about how the world is transforming around us, from topsoil loss and invasive species to climate change. My goal is to explain why these stories matter to Kansas, and to report on the farmers, ranchers, scientists and other engaged people working to make Kansas more resilient. Email me at celia@kcur.org.
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