HIBOE Testimony [3/21/2107]: HIDOE Fiscal Transparency
Good Morning Chairperson Chun
My name is John Sosa, Executive Director, of the Education Institute Of Hawaii (EIH). We would like to comment on the Department's ESSA fiscal reporting requirements through the lens of fiscal transparency, clarity and ease of understanding of the DOE budget. While we welcome the Departments efforts in improving fiscal reporting in conjunction with the CCSSO we would like to point out the following:
1. The Department and we believe many on the BOE know EIH has been advocating for fiscal transparency for well over a year. The purpose is to bring clarity to the budgetary process so that all interested parties can readily understand how 100% of the funding is allocated and how it is spent. We feel this will ultimately build true trust at all levels and actually result in much better spending decisions with clarity of purpose.
2. The process being presented here is based solely on “Who Benefits”- State Office-Complex Areas-or Schools. We advocate for a system that would be much richer. To the extent that we could obtain data to analyze the system we advocate for a system that clearly states, Who Decides-Who Budgets-Who Accounts- Who Acts- and Who Benefits. A system such as this would be of much greater help to schools, and the legislature that allocates the funding.
3. While we understand decisions have been made to exclude certain parts of the income (EDN 500 Community Schools, A+, Capital outlay, Debit services, Fringe on general funded employees, Student activity funds) we feel these exclusions result in presenting an incomplete picture of the DOE budget. If 100% of dollars are included, not just operating amounts, then the DOE will have addressed the transparency and decision-making needs of all stakeholders for most questions in a responsible way. If that DOE reporting tool allowed for stakeholders to drill down into the details of reported subtotals, then real trust would evolve.
4. Additionally this report as drafted lacks clarity and ease of understanding. For example on page 5 is a graph showing that Hawaii DOE expends 24% of its resources at the central offices and 76% school based. Further down on page 9 if I read the left side of the spreadsheet correctly it reflects a 95% figure for school level expenditures. On the HIDOE website it states that 94% of the budgeted funding goes directly to schools. Which figure is correct?
5. If you take either the 95% figure or the 94% it implies a large percentage of the funding is “reaching “ the school level. Yet this Board has heard direct testimony from Principals in past meetings that they have very little discretionary monies are available to them after all fixed cost are accounted for.
6. The extensive detail provided in the FMS detail spreadsheets, while appreciated does not lend itself to true clarity or sense of understanding. The descriptions lack clarity and understanding and would befuddle most readers.
7. Fringe on General funded employees is the elephant in the room, while we understand that the State is currently responsible for the paying down this unfunded liability, we feel it is not good practice, nor is it wise to simply ignore this cost. The DOE commands the largest share of the state budget. If we at least recognized that any DOE budget expansion request that involves positions, adds to this liability, we are then truly being transparent. By its sheer size the BOE/DOE could and should be a leader in recognizing these costs as part of the budget request process.
8. What if in the future the legislature/governor decide to pass on the responsibility to this liability directly to the state Departments? The BOE would be well served to have this salaries plus fringes built into its budget process as we move forward.
9. Lastly, the model as presented is largely regulatory reporting vs. managerial decision-making. We need a system that gives us fiscal transparency that allows us to make decisions on 100% of the dollars.
10. The ESSA Blueprint for Public Education cannot move forward without resources and we need complete transparency to make wise decisions on the use of all dollars. The state is not awash in dollars, if you doubt that witness this budgetary cycle. When it started everyone was talking about a near billion-dollar surplus, now the process is cutting to meet lower tax projections.
11. If the BOE and those within the system as well as the legislature and general public have a clear understanding of 100% of the dollars allocated and spent they will be more inclined to support honest requests.
12. The DOE and BOE also need to come to the realization that future budgetary decisions can and need to be based on what we have, rather, than simply expecting more. Shifting of current expenditures could go a long way towards meeting program needs. Then as necessary new requests could be anchored in to specific school or system level needs.
Trade offs are part of any organizations budget but we t cannot make good decisions using incomplete data. With the Boards approval EIH is willing and ready to work with the Department and the Board to provide a budgetary tool that reflects how 100% of the dollars are accounted for and expended.