Auditor says education data collection could use improvement

Doug Hoffer
State Auditor Doug Hoffer. File photo by Morgan True/VTDigger
The state auditor and education secretary are trading blame after a largely positive audit of the Education Agency’s student population calculations still suggested school districts need more guidance on collecting and reporting data used in setting tax rates.

Auditor Doug Hoffer, in a report issued Tuesday, said the agency generally calculated the number of equalized pupils correctly for fiscal year 2016, but he pointed to narrow exceptions regarding home-schooled children and a relatively few students for whom English isn’t their first language. The auditor and Education Secretary Rebecca Holcombe also disagree over how pre-kindergartners were counted as districts began implementing the law requiring universal access to pre-K.

Hoffer acknowledged that the areas of contention are small but said the flaws he identified matter because they could affect tax rates in a given school district. The state calculates what it calls equalized pupils for each district; the heart of this system involves giving more weight to students in certain categories because they are expected to cost more to educate.

The report made clear Hoffer believed districts were having some problems collecting the right data and submitting it error-free to the Agency of Education. Hoffer recommended the agency provide training, technical support and better guidance to school districts.

At the State Board of Education meeting Tuesday in Barre, Holcombe called the review process routine and helpful, and said her agency will make some adjustments in its procedures in response.

But she reacted with apparent incredulity to the notion that her agency should provide more help to districts, explaining in a letter to Hoffer that her agency is understaffed and overwhelmed.

“We have seen a dramatic and unprecedented decline in staffing since 2008,” she wrote, noting that back then the agency had 211 full-time positions. Now it has 170, she wrote. “This somewhat limits our capacity to extend technical assistance to school districts on issues related to state funding, especially given other statutory claims on those scarce general fund dollars,” Holcombe wrote.

Rebecca Holcombe, secretary of the Agency of Education, speaks to the State Board of Education. File photo by Amy Ash Nixon/VTDigger
She then turned it around on Hoffer and suggested his office provide school officials with an education program. She said state law obligates the auditor “to make available to school districts and education program to provide instruction in fiduciary responsibility, faithful performance of duties, the importance and components of a sound system of internal financial controls, and other topics designed to assist the officials in performing the statutory and fiduciary duties of their offices.”

The audit was based in part on spot checks of data from one supervisory union.
“Based on reviews of errors, tests conducted at (Windsor Southeast Supervisory Union) and its schools, and AOE’s processes, additional guidance to the school districts and data quality checks for certain data inputs would improve the quality of these types of data,” Hoffer wrote.

The report recommended the agency come up with “more detailed” criteria for school districts to use when reporting the census data and improve the way it checks for accuracy and anomalies.

This is the second review of the agency that Hoffer has published. Last year, his office said the agency didn’t properly engage in a competitive bidding process when awarding some federal grants. The report was part of an investigation into contracting practices at several state agencies.

For the latest report, Hoffer said he chose to examine the calculation used to determine the number of equalized pupils because it is critical to figuring out homestead property taxes. Hoffer looked at the equalized pupil calculation for fiscal 2016 as well as the reliability of the census data submitted to AOE by supervisory unions in the fall of 2015.

After voters pass a budget, Vermont uses the education fund to pay each school district the amount requested, less any finances that come from other funding sources. The state divides each district’s education spending by the district’s equalized pupil count to arrive at the number used in a calculation to determine each town’s homestead education property tax rate.

Each year school districts report budget data as well as their numbers of students in public school, students tuitioned to other schools, and students in the care of the Department for Children and Families.

The Department for Children and Families is responsible for giving the Education Agency data on the number of children between ages 6 and 17 who live in families receiving food stamps.

The Agency of Education uses this information to calculate the number of equalized pupils and the school district’s spending adjustment. That is the ratio of the district’s education spending plus excess spending per equalized pupil to the base state education payment for the school year. The Education Agency feeds this to the Tax Department, which uses it as part of the equation in figuring the homestead property tax rate for the towns.

The auditor said he found errors in the way AOE reviewed data for home-schooled students and those whose native language isn’t English — called English language learners, or ELL students. He said the agency didn’t pick up on inconsistencies in information given to it by the schools. As for students in DCF custody, the agency had a process to review the school data, but this wasn’t complete, he said.

Hoffer stated that these mistakes end up affecting homestead property tax rates, although the effects are limited due to the tiny number of students in such categories compared to total enrollments. “At an individual school district level, the significance of errors would vary depending on particular circumstances,” the report states.

While AOE acknowledged it could better inspect local home schooling data, Holcombe took issue with the auditor’s assertions around ELL students. First, she emphasized that ELL students are “highly mobile,” and she said the auditor’s office used the wrong data for comparisons.

The report used spring school test data that is required to be reported to the federal government. To figure out the equalized pupil count, state statute requires the Education Agency to get the ELL count in the fall. “Your report uses data from two different data sources, collected at two different times and for two different purposes with different criteria to decide the accuracy of our ELL inputs,” Holcombe said in her letter to Hoffer. She added, “A fundamental issue is that the data are pulled at different times, and there is student mobility between the dates of the two data pulls.”

The two officials also were at odds over the way the auditor’s team chose to consider pre-kindergarten enrollment. The agency erroneously included fiscal 2016 pre-kindergarten enrollment estimates in the long-term membership of 47 school districts, the report states.

Holcombe fired back, calling the auditor’s interpretation of the law “narrow” and not in line with the intent of lawmakers since he was preventing districts from counting pre-K children that they served before implementing Act 166, or universal pre-K.

If the agency hadn’t allowed school districts to count students they knew would likely be coming into the pre-K program, it would have substantially raised tax rates in those towns, she said.

Dover’s homestead property taxes would have increased by $76.15 for every $100,000 of property value, Holcombe said. In Chelsea, taxes would have increased by $56 per $100,000 and Hartford’s by $30.50, according to Holcombe.

Rep. Sarah Buxton D-Tunbridge, a sponsor of the pre-K law, supported Holcombe with a letter to the auditor that said the legislature’s intent “was to allow all school districts to start counting (all) anticipated preK students immediately upon this law taking effect, without making any distinction between districts that did or did not provide preK under Act 62 of 2007.”

The auditor’s report examined the Windsor Southeast Supervisory Union and its member school district’s practices in the fall of 2014 with regard to the way it reported and calculated the data. The information was considered reliable and complete, according to the report, except when it came to verifying student residential information.

The supervisory union is responsible for verifying the residency of students, the report said, but “only 3 percent of students reviewed for this audit had their residency verified.” This means it isn’t clear whether addresses reported by parents are accurate because some parents used documentation that lacked the required proof of town residency, according to the report.

Holcombe said her agency’s experience with Windsor Southeast is that, as a supervisory union with some tuition towns, it pays attention to residency issues. “The superintendent of schools has been in contact with our legal office on many occasions about residency issues along these lines and we believe he is acting responsibly and competently to ensure compliance with the residency law,” Holcombe wrote.

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  • I read the audit and found it extremely informative especially regarding a still convoluted but more understandable then Title 16 explanation of how the equalized pupil count is calculated. This was another extremely helpful, timely and well done audit by Hoffer’s office.

    On the other hand I agree with Secretary Holcomb when it comes to the expectations vs realities game. Indeed someone has to collect this data and someone else has to verify it, and it would be extremely helpful if the Auditor’s office provided some assistance to the superintendents and business managers.

    An issue related not just to the education system I see is this demand to collect more and more fine grained data. Experience has shown that this will introduce more errors into the data stream, and it gets increasingly more expensive and less cost efficient to insure absolute reliability. This error rate will increase because of human and machine induced errors.

    I think the Auditor and Secretary are both doing a fine job.

  • Doug Hoffer

    Thanks VTDigger for covering this audit report. I have a few comments.

    First, Secretary Holcombe’s comments were submitted and (as is always the case) included in the report. See our responses in Appendix VII beginning on page 46. Here are a few noted in the article.

    1. ELL data: “AOE’s response is misleading. As our report states we used ELL data independently available at AOE to identify potential discrepancies but did not draw conclusions based solely on those data. We followed up on each of the potential discrepancies, thoroughly vetting them with ELL reporting staff at the supervisory unions to ensure that they only included students enrolled at a particular school at the time of census reporting and met AOE’s definition of an ELL student. Supervisory unions subsequently contacted AOE to make corrections to the incorrectly reported numbers.”

    2. Pre-K: Our reading of the statute was not “narrow,” but based on the clear language as confirmed by the Office of the Attorney General with whom we consulted. We wrote that “in the absence of contrary legislative history (e.g., committee reports) the plain meaning of section 2 of Act 166 should govern its implementation. AOE provided no documentation from the time frame in which Act 166 was being deliberated that supported its interpretation of legislative intent. The statements from Senator Mullin and Representative Buxton referenced in the comments and provided as an attachment (see pages 44 and 45) were dated last month, about two weeks before we sent a draft report to AOE for comment.”

    3. The Secretary’s suggestion that we provide technical assistance to school districts instead of the Agency is a bit of misdirection. The statutory focus is the schools’ fiduciary responsibilities and we have provided checklists to schools regarding financial management and internal control for years (see our website). In addition, we annually partner with VLCT and other groups to provide instruction and technical assistance regarding various topics of interest to schools and municipalities. On the other hand, the matters at issue here are clearly the responsibility of the Agency. Moreover, if the Auditor’s Office worked directly with the schools on such matters, we could never again conduct an audit of the process.

    Finally, it is understandable that the Secretary would express frustration about having fewer resources than in years past. But if we find problems in the course of an audit, we can’t ignore them because a department might be short-staffed. Our job is to identify areas where there is risk and make recommendations as to how the problems can be cured. To do otherwise would compromise the integrity of the work.

    • If you want to partner with school districts you should be partnering with the Vermont Superintendents Association and the Vermont School Boards Association – the Vermont League of Cities and Towns doesn’t interact much with schools.

      I can attest from personal experience the willingness of the Auditor’s office to work with school board members regarding financial oversight, and I would like to see some outreach from the Auditor’s office.

      16 VSA § 563 lists the duties of school boards, and there we will find (9) which states “Shall establish with the advice and consent of the Auditor of Accounts and the Secretary [of Education], a system of accounts for the proper control and reporting of school district finances and for stating the annual financial condition of the school district.” So we do have a legislative history of coordination between the state Auditor and the Agency of Education.

      32 VSA § 163 (“Duties of the Auditor of Accounts”) states in (12) “Make available to all county, municipality, and school district officials with fiduciary responsibilities an education program. The program shall provide instruction in fiduciary responsibility, faithful performance of duties, the importance and components of a sound system of internal financial controls, and other topics designed to assist the officials in performing the statutory and fiduciary duties of their offices. The Auditor shall consult with the Vermont School Boards Association, the Vermont Association of School Business Officials, and the Vermont League of Cities and Towns in the development of the education program.”

      As a Vermont resident, active Williamstown community member and school board member I am NOT interested in finger pointing – the facts of law and need are that BOTH the Agency and Auditor need to be working with local school boards so we can get better at performing our jobs.

    • Randy Jorgensen

      Top notch work as always Doug.

      “Moreover, if the Auditor’s Office worked directly with the schools on such matters, we could never again conduct an audit of the process.”

      Doug is absolutely correct here, the Auditor needs to stay Impartial. I’m amazed that the secretary would even entertain the notion.

  • George Cross

    Instead of acting like Republican candidates for President, the principals involved in this issue need to be grownups and work together to solve any problems that exist. Taxpayers should be able to expect that the system that is in place to determine statewide education property taxes is operating as is required by law.

  • Bud Haas

    Interesting to hear the Secretary complain about her reduced staff while at the same time calling for local districts to reduce expenses due to reduced school populations.

  • Ward Heneveld

    I think this is another example a pervasive problem in Vermont government. On the one hand, there is a demand for more and more complex “proof” that the complicated requirements set by the state, especially the legislature, should be provided to ensure equitable treatment of all citizens. On the other hand, there’s a drive to reduce the cost of government services which means that government has inadequate resources to do the tasks given to it. The result: each government department is asked to do more while there capacity to be effective declines. In education, which I watch, I suspect this means that the Department is spending more time on collecting and providing data and then discussing it with all who are interested than on supporting schools and teachers to provide effective education

    • Zeke Rivers

      Nearly everything the government (Federal or State) gets involved in contains elements best described as ‘self-licking ice cream cones’. They exist solely to perpetuate and justify their own existence. As time passes, they tend to get larger and more demanding; It’s not only education suffering from this phenomenon.