State Auditor Informs Legislature About MAEP Formula Flaws

October 20, 2014

JACKSON- State Auditor Stacey Pickering has notified the Legislature of his concerns with the Mississippi Adequate Education Program (MAEP) formula.

The report provides detailed information to lawmakers on the MAEP formula in advance of the upcoming 2015 legislative session.

“Each year the Office of the State Auditor provides an overview of MAEP funds, how arbitrary changes are continually made to the formula, and how funds are used, or not used, for our students,” Pickering said. “Accountability issues are a major concern of this office, and it is past time for the MAEP formula to be seriously examined.”

Four flaws discussed in summary include:

• MAEP funding is given to districts in a lump sum with no oversight or accountability regarding how the funds are to be used as no targeted spending is required by law:

– Spending MAEP funds is at the discretion of the district with no state requirements.
– The rate at which administrative expenditures has grown far exceeds the rate at which classroom spending has grown. In fact, in all years except 2004-5, the rate of administrative spending has significantly out-paced classroom spending. Expenditures are increasingly going to administrative costs as opposed to where the money should be going, which is the classroom.

• While using enrollment might initially appear to be an ideal funding mechanism for school districts because it artificially inflates the number of children actually attending classes, it is a poor mechanism for funding for several reasons:

– It removes a district’s incentive to get children to attend school regularly.
– It does not properly reflect student or school needs.
– It would add an additional $30 million or more to school districts with no guarantee that it would be focused where it is needed the most- in the classroom.

• Using the new federal Community Eligibility Program (CEP) causes artificial inflation of the state’s “At-Risk” Program:

– This new program will give 53 districts and 506 individual schools the ability to give free lunch to all students regardless of individual eligibility.
– Base Student Cost (BSC) uses free lunch data to establish funding for “At-Risk” programs– inflated 10 percent in the “At-Risk” program portion.

• The recent change in law to use inflation rates for the BSC calculation and only fully recalculate the MAEP every fourth year will increase funding demands. This can occur in the following instances:

– If a one-time injection into the formula (i.e. 2015-2016 Teacher Pay Raise) is not properly removed and accounted for in full recalculation years; and
– When the federal government allows the inflation rate to move, it will increase the BSC, and will not be tied to any performance, accountability, or outcome measures, or actual need.

“Our brief shows that those able to manipulate a few characteristics of the formula can increase the funding of K-12 schools by nearly $40 million without even looking at actual need and with no required targeted spending,” Pickering added. “Even if we did know exactly how much to fund MAEP with using precise calculations there is no mechanism in place to ensure that once taxpayer dollars are sent to the districts they will be spent on teachers and students in the classroom.”

The full report can be viewed here.