Letters 96
EPP April 1996 Letter on Budget Formats

April 12, 1996

Deputy Chancellor Lewis H. Spence
New York City Board of Education
110 Livingston Street
Brooklyn, NY 11201

Dear Deputy Chancellor Spence:

Thank you for taking decisive action on an important issue. Members of the Educational Priorities Panel were very pleased to see the resolution to have KPMG/Peat Marwick develop a "School Based Budget Report" by the end of June 1996 on the agenda of the March 6 meeting of the Board of Education. We look forward to reading this report and having, at last, an agreed upon analysis of how funds are distributed by the Board of Education.

As we told you in our meeting with you on February 2, EPP liked the format of the Coopers & Lybrand report because of its clarity, even though the report's numbers were wrong in several areas. Board of Education budget documents tend to be written from a management point of view and are geared to defining what divisions and offices have decision-making authority over different funding streams. This tendency only becomes a fault when the documents are released to the general public. The Coopers & Lybrand report was a refreshing departure from tradition because the authors understood that city officials and the general public chiefly wanted to know what resources reach the classroom. We hope that the KPMG/Peat Marwick's "School Based Budget Report" will be prepared with a similar focus on how resources relate to services for children in schools.

You may think that this cautionary note is unnecessary. What worries us is that in the spring of 1996, several members of EPP saw a Board of Education "mock-up" by yet another firm of a report similar to Coopers and Lybrand's Resource Allocations in the New York City Public Schools which was filled with visual depictions of buckets symbolizing different pots of money. While federal, state, and city officials might indeed be interested in how different funding streams flow to the classroom, it has been EPP's experience that parents and the general public are turned off by all the alphabet soup of acronyms and simply want to know what proportion of their tax money goes to direct services. We want to see the "School Based Budget Report" answer this question to everyone's satisfaction.

Since EPP has long struggled with the issue of how to present budget information about the Board of Education for the general public, we want to end this letter with a recommendation that emerged from reactions to EPP's "WHERE DOES THE MONEY GO?" flyer. As you know, this is the flyer that we brought with us at our meeting with you and asked your assistance in verifying the numbers. After Marjorie Blum helped us create a more accurate flyer, we have distributed several thousand copies and have used it in our presentations to community schools boards, parents groups, churches, and civic organizations. Now that we are seasoned in using this flyer, we take time to explain before the question and answer period that decisions about funding for private school textbooks, buses, lunch programs, special education services, and compensatory education services are decisions that have been made by federal and state officials and, sometimes, the courts. The intent of our flyer is to show that the Board of Education budget contains allocations that do not go to the public school system, not to make private schools into a target for anger by public school parents and the general public. Audiences are generally surprised to learn that half the state's private school student population is in New York City, so the Board of Education's budget will reflect larger allocations to private schools than other school districts in the state. Another way to look at it is that Board of Education per-pupil allocations for textbooks, buses, food, special education, and Title I should be calculated by using a pupil count of 1.35 million students, not 1.1 million. The inclusion of funding for the Fashion Institute of Technology and pre-school special education in the Board of Education's budget causes another inflationary factor, since the budgets of all other school districts in the state do not include these types of allocations.

In thinking of the best way to show all these funding "pass throughs" without creating confusion or deception, we have come upon a novel idea of how to reformulate the Board of Education budget which we want to share with you. Since all these "pass through" allocations must be reflected in the budget because the Board of Education is the Local Educational Agency of record (LEA), rename the Board of Education budget the "Local Educational Agency Budget" and within this larger LEA budget have as a subset the budget for the "New York City Public School System." Public officials and the general public will at a glance be able to understand the resources that go to public schools and will not be confused by all the other dollars that go to the Board of Education as a LEA. EPP would also recommend that units of allocation for fringes not be presented as a lump sum but be broken down into separate units of allocation under each functional area.

We urge you to consider this EPP recommendation and forward it on to the team that is preparing the "School Based Budget Report." The Coopers & Lybrand report dealt with the issue of "pass throughs," but the creation of an LEA budget containing a Public School System subset budget would bring even more clarity to the numbers. The public wants to know "the bottom line," so why not give them a beginning number that more accurately reflects what resources are really available to public schools in New York City? Both EPP and Coopers & Lybrand have had to subtract the "pass throughs," in order to arrive at a more accurate presentation of the actual budget for public schools, but this leaves the audience with an uncomfortable sense that we are pretending these resources don't exist. Fully identifying all resources, but clearly defining those that go to public schools and those that do not would make the presentation of numbers clearer and raise fewer questions.

We are interested in knowing what you think of our novel idea.

Sincerely,
Jan Atwell, Chairperson
Noreen Connell, Executive Director

cc
Chief Financial Officer Beverly Donohue
Budget Director Marjorie Blum