In fiscal year 2016, Arizona districts spent 53.5 percent of available operating dollars on instruction—the lowest percentage in the 16 years our Office has been monitoring district spending. This percentage has declined both during years of increased and decreased overall spending. Since its peak in fiscal year 2004, the State’s classroom dollar percentage has declined 5.1 percentage points, while the percentages spent on all other operational areas have increased. Although the impact of a declining classroom dollar percentage varies by district, it can be seen state-wide in lower teacher pay and larger class sizes. In May 2016, voters passed Proposition 123, which provided districts with approximately $250 million of additional resources in fiscal year 2016. However, because these monies are commingled with other monies, it cannot be determined whether or how the monies were spent. Further, because the monies were not available to districts until after the vote, it is likely that a large portion of these monies were not spent in fiscal year 2016.
Although factors outside a district’s control—such as district size, type, and location—can affect its efficiency, some districts operate efficiently and have lower costs despite these factors, while others do not. As a result, there are wide ranges of costs within peer groups of similar districts. Our performance audits of school districts have identified practices efficient districts use, as well as practices that make other districts less efficient. Additionally, analysis of six measures found 40 of 207 districts had a moderate to high financial stress level. District decision makers can use the details of this assessment in conjunction with other information, such as operating efficiency, to determine possible actions to reduce financial stress.
In fiscal year 2016, Arizona districts spent approximately $3,300 less per pupil than the national average and allocated their resources differently, spending lower percentages of available operating dollars on instruction and administration, and greater percentages on all other operational areas.