In this blog, Indianapolis Public Schools shares their journey from traditional school funding to student based allocation, along with the three primary benefits to the work toward a student-based allocation model.
In 1970, Indianapolis Public Schools (IPS) had an enrollment of 100,000 students. Today, that enrollment is down to 30,000 students due to population shifts from the city’s urban core. After decades of declining enrollment and funding, the district’s finances had become disorganized. In traditional funding formulas, most of the funds for schools are kept under district control centrally, funds are allocated to special programs and not for student types, and staff are distributed to schools based on enrollment counts. As a result, principals have limited budgetary authority at their individual schools. The flaws to traditional funding formulas can lead to uneven funding distribution within the district and a lack of autonomy for school administrators and leaders.
In 2013, then new Superintendent Dr. Lewis D. Ferebee faced a district with a misalignment of budget appropriations and actual spending, and where schools had either outdated budgeting systems, or no systems at all. Many of the inherent flaws of the funding formula were evident. To solve this, IPS developed a three-year strategic plan to create transparency and organize district funds using Student-Based Allocation (SBA). Student-Based Allocation is a funding model where dollars are distributed to schools based on student needs. Funding for each school is based on these student needs at each building. After proposing the three-year plan and SBA, the Strategic Plan was approved by the IPS Board of School Commissioners and implemented in the 2015-16 school year.
In 2013, IPS recognized there was a lack of understanding of how IPS schools were funded and how the needs of students were taken into account. IPS found that there was no clear rationale for why one set of schools or one school was allocated more resources than another. In addition to equity, IPS also had an issue with transparency. IPS principals were not able to access their budgets on their own. IPS wanted to add more transparency to their systems.
Another challenge, beyond process, equity and transparency, was operations. IPS had business information systems that hadn’t been updated in over 4 years. The financial data being shared from older systems was not consistent and led to a painstaking revamping process for business operations. This was a necessary step to create an organized, transparent system that could adopt SBA.
Once SBA was approved, IPS set out to develop a Weighted Student Formula. This took us a year and included:
synthesizing data across multiple departments
coordinating around various competing initiatives
developing a communications strategy
developing policies/controls to govern this new strategy
ensuring principals, as end users, had a smooth and coherent experience
The IPS Business and Innovation Offices partnered together with Education Resource Strategies (ERS) to guide this work.
The Benefits of SBA
There are three primary benefits to the work IPS embarked on in IPS to move toward a Student-Based Allocation model.
- Equity- distribute resources based on student need
- Transparency- use clear and easily understood rules for where, how and why dollars flow
- Flexibility- empower principals to make decisions based on school-level academic priorities
With Student-Based Allocation, now everyone knows exactly why and how their school is funded.
SBA enables school leadership to be more strategic with resources. IPS believes the school is the unit of change in a school district. IPS is moving from a “directive” district - making decisions at the central level in a “one-size” fits all - to a collaborative district that shifts decisions to the school level. IPS believes this shift will ultimately lead to a positive impact on student outcomes.
For more information about how IPS moved to SBA, check out our presentation from the Future of Education Finance Summit.
About the Author
Weston Young has served as the Chief Financial Manager for Indianapolis Public Schools since 2015. Prior to joining IPS, he worked for a number of financial service firms, and spent his free time volunteering and advising on finance projects for the school district. He’s a proud IPS parent and Indy resident, and is grateful for the opportunity to serve the city of Indianapolis.