blog-case-studyFor many larger school districts, it's difficult to create sustainable changes.

However, implementing a student-based allocation (SBA) funding method at Indianapolis Public Schools (IPS) proves that through vision, collaboration, and a concerted change management effort, large scale changes can happen in mid-to large sized districts. Districts aspiring to achieve greater equity, transparency, and flexibility can successfully transition to an SBA process even amidst structural, systemic, or financial challenges fostering inequities and inequalities. Former Director of School Finance and Budget for Indianapolis Public Schools reflects on the district’s transition to student-based allocations. Learn the challenges the district overcame to improve equity and equality for students in their district.

 

About Indianapolis Public Schools

In 1967, Marion County, the county that houses the city of Indianapolis, merged its government with the city government under a project called UniGov to consolidate city and county public services. This change left Indianapolis city with 11 separate school districts operating within the city limits. Then, 2001 saw the introduction of charter schools which proliferated quickly throughout the district.

Throughout the 2000s, the district created a handful of high-performing magnet programs to attract affluent families back to IPS and Center Township. Unfortunately, it resulted in many schools being overfunded year-over-year while others were underfunded.

By 2016, the remaining 30,000 students still served by IPS included 80% students of color, 80% free and reduced lunch status, 14% English Language Learner, and 17% special education students.

The Superintendent wanted to adopt a student-based allocation funding method to increase equity in funding, autonomy and flexibility in the use of funds, and transparency into the amount of funding schools would receive. The district was ready to implement a new strategic plan to modernize operations to best serve students and families while improving the district’s resource allocation strategy. IPS was moving from a “Managed Instruction” model to a “Diverse Provider/ Portfolio Schools” model to allow schools to have explicit autonomy over staffing and academic programming.

 

What is student-based allocation?

Student-based allocations distribute funding to schools based on students’ needs and characteristics. Through SBA, schools and communities get a clearer understanding of how and why resources are allocated to schools. SBA differs from a traditional funding system that allocates resources to schools based on staffing formulas and school-specific programs. Using SBA, schools are funded per student, and the amount of funding attached to each child will vary based on their needs as defined within the funding formula. Furthermore, schools have more flexibility in deciding how best to use their resources.

 

Making the switch to SBA

To undergo the transition to SBA, the CFO scheduled an introductory meeting with 28 central office department members to share information about the SBA plan, dispel any angst surrounding this impending change, and solicit their interest in being part of the working group. Many in the meeting were hesitant to adopt the new strategic direction as they felt the current staffing allocations worked well and didn’t need to change.

The district partnered with Education Resource Strategies (ERS) to provide an analysis of the finances and equity within the system. The financial analysis highlighted how and where the district spent the most money and provided operational next steps to improve efficiencies.

The equity analysis identified some of the inherent inequalities occurring and revealed that IPS was not funding schools or students equitably. Some schools were getting twice the funding of schools with similar student populations and student needs. IPS needed a strategic funding formula to improve equity and transparency within the district.

 

Finding Balance

One of the first resources implemented was the budget management and tracking tool, Balance. Balance sat on top of IPS’ accounting system and provided budget data and insightful visualizations in an easy to understand format. Following Balance implementation, all budget managers, including principals and school leaders now had access and insight into their budgets. This was a crucial first step in the district’s efforts to improve the data system while building access and familiarity amongst budget owners in anticipation of SBA implementation.

Next, the district upgraded the accounting system to improve navigation and tracking, simplifying the process for non-financial staff members. Lastly, ERS assisted in re-engaging interested leaders and principals and assembled a working group from various central office departments and schools across the district to establish the goals and timing for the district’s SBA implementation.

 

IPS’ Goals for SBA:

  • Increase Equity: Equitably fund each student at each school based on his or her educational needs.
  • Flexibility: Provide principals more flexibility to make budgetary and academic decisions that meet the needs of their individual school.
  • Transparency: Show exactly how much funding each school receives and why. Under SBA, principals will be able to cross check their budgets against their enrollment numbers and student demographics to check for accuracy.

The district conducted interviews with budget owners to discuss unlocking certain resources and explaining why other resources, those tied to federal laws, state laws, or board policies, had to remain locked. Additionally, the district met with principals, assistant principals, and teachers to explain SBA and solicit feedback on which student characteristics IPS should weight.

School leaders and teachers wanted to weight poverty and grade levels, with a focus on early education (grades K-2nd) and middle grades (grades 7th and 8th). With this in mind, the district refined the proposed weights to include poverty, grades K - 2nd, grade 7, and grade 9.

The funding formula and financial model was subsequently refined to use a weighted-student funding formula, utilizing budget data from the upcoming school year as the foundation for the inputs to the SBA model. After several weeks of reviewing, editing, and verifying account strings according to funding sources, resource types, and locked or unlocked status for over 100,000 lines of budget data, the district produced a coded budget file of clean data that could be manipulated according to anticipated shifts for the upcoming school year using student-based allocations.

To support principals and central office staff members, the district created courses and tools to encourage adoption of the new method. The courses covered terminology and rationale for the move to SBA as well as basic examples of possible school design choices. Users received an SBA guidebook that incorporated the policies and laws that shaped the framework and outlined the flexibilities allowed under SBA. All courses were delivered either via small in-person groups, virtually through a series of web tutorials, or individually during office hours and on an “as-needed” basis.

 

Further refinements

The district further refined the student information system and enrollment projection methods to better support SBA efforts. A newly designed enrollment projection process using the cohort survival method (e.g., 100 2nd graders become 90 3rd graders at a retention rate of 90%) and contextualized feedback from principals resulted in by-school by-grade student number and characteristics projection inputs for the model.

With final enrollment projection numbers in hand, the district refined the financial inputs to the model and finalized policy decisions around transition timelines and hold harmless. Gains from the transition to SBA were limited to 4% by school and losses were capped at 6%. Capping gains at a lower percentage than losses kept the model self-funding and wouldn’t necessitate outside resources to make the model effective. Lastly, the district implemented an average salary allocation method in an effort to allow principals to choose the best teachers for their students, regardless of salaries.

IPS’ transitioned to SBA to improve equity, transparency, and flexibility for students. In less than 18 months, the district devolved decision-making and autonomy down to the school level and put district leaders in a better position to maximize student success.