$600M a year, yet achievement gap persists

Minnesota has spent more than $5 billion in the last decade to boost the academic performance of low-achieving students, but the state has little ability to assess how the money is being used — or whether it's making a difference.

By one measure, it's not. Stark differences in average reading and math scores for low-income students and their wealthier peers, and for whites and students of color, have remained stagnant or worsened during the past 10 years.

What Minnesota calls "basic skills" aid is by far the largest single stream of funding aimed at closing the state's achievement gap. Minnesota sends more than $600 million each year to school districts around the state, double what it was spending 15 years ago. The money comes with strings attached: School districts must spend it on any of a dozen strategies to help low-achieving students catch up with their peers. State law also requires districts to prepare annual reports that show how they spent the money and assess whether it helped to boost achievement levels.

But a Star Tribune review of data from all of Minnesota's more than 500 school districts shows major inconsistencies in how they track their spending of basic skills money. None of the school reports included the required documentation showing how the state aid affected student achievement. That makes it virtually impossible for lawmakers, educators or parents to know which of the permitted uses of the money — such as extending the school day, expanding reading, math and English-language programs, or hiring additional teachers and specialists — is proving most effective.

"We have no accountability that's really accountability for the use of these dollars," said Rep. Sondra Erickson, R-Princeton, who this year requested an audit of basic skills money by the Legislative Auditor. "We have a wide array of ways in which schools can use these dollars. But in the end, is it those dollars that made a difference in the learning for those children?"

Unlike other sources of education funding, which come with heavy paperwork requirements and regular audits, the basic skills program gets little scrutiny from the state Department of Education. Officials with that agency conceded that they need to provide clearer direction to school districts on how to report their spending. But they also acknowledged that they lack the authority and the resources to ensure districts follow the law.

"This would be one of those areas where the accountability to comply [with the law] really rests at the local level," Josh Collins said in March, when he was the department's spokesman.

Leaders in politics, education and business have for years pointed to Minnesota's persistent achievement gaps as one of the state's most pressing problems. They note the links between student success and the future social and economic health of their communities. But not since the late 1990s, when state agencies last audited basic skills spending, have lawmakers and the public had a window into one of the biggest financial efforts to solve the problem.

Deputy Legislative Auditor Judy Randall, whose office is preparing to audit the basic skills fund over the next year, said there appears to be "a big transparency problem.

"Maybe we were fine with that when we didn't have such outcomes problems," Randall said. "But now it seems like it's worth looking at; it's a ton of money."

Tracking the money

At Richfield's Centennial Elementary, where nearly 90% of students qualify for free or reduced-price lunch, and close to two-thirds are English-language learners, evidence of money spent to help lagging students is all around the building.

Walking the halls, Principal Lee Ann Wise points out that "compensatory aid" — the larger of the two pots of money that make up basic skills aid — helps keep Centennial's class sizes the lowest in the district. In several rooms, small groups of students meet with English-language teachers or reading and math specialists, getting intense help to improve their skills and catch up to their classmates. In another room, a group of girls are eating their lunch, deep in conversation with a staff member trained to defuse conflicts and help with students' social and emotional health needs.

Without that support, Wise said, students would be slower to graduate out of English-language programs and less likely to feel safe and welcomed at school. She noted that the school's test scores have ticked up in recent years, with math scores surpassing the district's average, and spoke about a fourth-grader who had arrived at school speaking no English and was proficient within a few years.

"Who knows where we'd be without the additional support," she said.

It's a level of detail that could help lawmakers and the public understand how schools and districts are using basic skills money, compare strategies and figure out what's working. But the information is impossible to get with the limited reports districts provide each year.

School districts qualify for basic skills aid based on the number — and concentration — of students in poverty and English-language learners who attend their schools. Most districts receive at least some compensatory aid, with allotments ranging from $100 to more than $3,000 per student in poverty.

All districts submit spreadsheets listing broad categories on which money is spent: salaries, materials, transportation expenses. They do not identify which of the dozen categories allowed under state law that the expenses fall into.

Further complicating the picture: Many districts reported spending vastly more or less basic skills money than they received in a given year. Some districts lump together money from a variety of sources, from general fund dollars to local levy proceeds, and call it all "basic skills" — masking how the real basic skills money is spent. A few carry over money from year to year, making it hard to tell if they are using the money to help the students who qualified for it.

Meanwhile, charter schools, which receive nearly $83 million in state basic skills money annually, are not required to follow reporting requirements at all.

Compensatory aid
$4m

ELL aid
$500k

Teacher salaries	$1,633,500
English-language learner services	1,620,000
Benefits	762,300
Instructional support	217,800
Pension contributions	181,500
School counselor	108,900
Non-instructional technology	72,600
Total spent on basic skills	$5,250,000
Total received for basic skills	$4,500,000
Extra funds spent	$750,000

A typical school district in the Twin Cities suburbs might receive $4.5 million in basic skills funding in a school year, some of which is specifically for English-language learners.

State law requires that spending reports identify expenses for meeting students' needs.

But the data submitted by districts only includes broad categories on which money is spent, with little detail.

Further complicating the picture, many districts report spending vastly different amounts of basic skills money than they received in a given year.

Some districts lump together money from a variety of sources, like general fund dollars or local levy proceeds, and earmark all of it for "basic skills" — masking how the real basic skills money is spent.

State law also requires that the reports address whether spending "raised student achievement levels."

None of the reports reviewed by the Star Tribune contained that information.

District leaders say the money is an essential part of their budgets and their work, and without it they'd see more students fall further behind. But interviews with school administrators in more than a dozen districts revealed wide variation — and in some cases, confusion — over how they were supposed to account for the money.

Several officials said they met the requirement for documenting whether the money was helping student achievement by filing a separate "World's Best Workforce" report. But those reports, required since 2014, track broader goals and progress in student achievement — without assessing the impact of various streams of funding. Neither school administrators nor state education officials could identify how districts would have met the requirements of the law in the years before the World's Best Workforce system.

Department of Education officials said the inconsistencies in how districts report their spending are allowable, though they intend to "remind schools of appropriate accounting practices" in the coming months. They are largely the same issues revealed in two separate audits, completed by the State Auditor and the Legislative Auditor, in the late 1990s. Lawmakers at the time were growing increasingly concerned about widening achievement gaps and asking whether basic skills aid was making a difference.

The auditors concluded then that the state should tighten up the rules on the basic skills fund and focus on achievement-oriented programs that had been successful elsewhere. In response, lawmakers approved a law requiring the Department of Education to analyze districts' spending and release an annual basic skills report. That requirement went away about a decade ago.

Today, Department of Education officials say they only analyze districts' basic skills reports in the rare case of an outside complaint.

Tom Melcher, the director of the department's program finance division, said school officials tend to pay closer attention to their financial reports when they are directly tied to how much money the district will get the next year and closely scrutinized by the state. With more under-the-radar pots of money, like basic skills, he said, the accuracy of the data from districts is "kind of hit or miss."

Who gets how much

Most of the discussion about basic skills aid in recent years has come from school leaders and lawmakers debating whether some districts are getting too much money, or not enough.

Former state Sen. Larry Pogemiller, a DFLer from Minneapolis who later served as the state's higher education commissioner, helped shape the basic skills law during his time at the Legislature in the 1990s. He said there has always been tension between the interests of districts like Minneapolis and St. Paul and suburban and rural districts. That's because the urban districts, with their high concentrations of students in poverty and immigrant students, get a much larger share of the basic skills aid than less diverse and wealthier districts.

This year, for example, St. Paul Public Schools received more compensatory aid — more than $68 million — than any other district, adding up to nearly $2,800 per student in poverty. Minneapolis Public Schools received more than $57 million, or about $2,700 per qualifying student. On the other hand, the Rosemount-Apple-Valley-Eagan district, the state's fourth-largest, received just over $6 million, or about $1,000 per student in poverty. In Minnetonka, the total was $146,000, or about $237 per student.

After some large suburban districts raised concerns about fairness, the Legislature set up a pilot program in 2005, giving a handful of them extra money each year — and fewer restrictions. In a report to lawmakers three years later, the Department of Education found that the program had produced "inconclusive" results on achievement. But the Legislature pushed ahead, increasing funding and adding more districts.

In 2017, the suburban pilot program became permanent, allocating more than $7 million to districts each year. The largest share of the money goes to the state's biggest district, Anoka-Hennepin. None of the pilot project funding recipients are required to submit regular plans and reports, as they did before the funding became permanent.

Pogemiller said he worries that the initial purpose of the fund — helping students in poverty, who often have major obstacles to achievement — has sometimes been lost amid political wrangling.

"It kind of gets down to the tension between: 'It's all about the money,' or, 'No, this money is [here] to solve this challenge,' " he said.

There have also been long-running debates over how much control districts should have over the money. Lawmakers have expanded the list of allowed uses and tweaked the spending requirements repeatedly since the earliest form of basic skills aid was created in 1971. At times, the money has come with no restrictions. At other times, districts have been required to spend it exclusively in the school buildings serving students in poverty. Currently, they must spend half the money on the students who qualified for the aid but can spread the rest of it around the district, so long as it's on something in one of the approved categories.

In some communities, parents and outside groups have raised concerns about whether or not enough of the money ends up in the schools that need it most. Two years ago, a group seeking to address disparities in the Duluth school district pushed officials to change the way they allocated basic skills aid. The district had been using the money to keep class sizes down in all school buildings, but later adjusted its policy to dedicate more of the funds to high-poverty schools.

District officials in both St. Paul and Minneapolis said they put virtually all of the basic skills money they receive back into the schools attended by students in poverty. It pays for English-language instructors, classroom aides, and math and reading specialists.

In St. Paul, the district uses the money to hold down class sizes and help cover the costs of all-day kindergarten and extended-day programs. It's also one of the few districts in the state that matches up the amount of basic skills money it receives and spends in the report it files with the state.

"We're not just utilizing [basic skills aid] as a slush fund," said Marie Schrul, chief financial officer for St. Paul Public Schools. "It's for the purpose of the statute, for the students."

Leaders of other districts say they categorize spending from a variety of accounts as "basic skills" because the money allocated from the state is far too little to meet the needs of their students. The St. Michael-Albertville district last year reported that it spent four times the amount of basic skills money it received on related expenses. Superintendent Ann-Marie Foucault said that's because the district is underfunded — and officials want "to be transparent and show our taxpayers the true cost of our intervention programming."

"We want the public to see that academic achievement is extremely important to us and we choose to use our very low funding to help students achieve academic success," she said.

A bigger picture

Basic skills aid is far from the only dedicated source of money to fight achievement gaps. There's federal Title I funds for low-income students, and a variety of other state funding sources, including "achievement and integration" aid, money for early education, money for rural schools, and money for specific groups, like American Indian students. Increasingly, schools, local governments and nonprofits are working together to address other factors seen as critical to student achievement, like housing, health care and transportation.

As a result, some in education say it's unfair to single out one pot of money as the problem or the solution to Minnesota's troubling achievement gaps.

Michelle Walker, a former St. Paul school administrator and current executive director of Generation Next, a nonprofit group focused on student achievement, said she doesn't think there are major problems in the way districts use and report basic skills aid. She said districts should be trusted to use the money as they see fit, and that the public should think about state spending on education in broader terms.

"When I think about revenue toward the achievement gap, I think about all of it in totality," she said. "How much does the state value education? With the multiple streams [of funding], how much are we investing in education?"

But Erickson, the lawmaker who requested the upcoming audit, said she thinks it's time for the Legislature to reopen discussions about how the money should be allocated, used and tracked. She's concerned about fairness, and notes the likely political clash: she and most of her Republican colleagues represent rural or suburban districts, while DFLers represent the urban and suburban districts that get the largest share of the money.

But she said the state needs to focus more on what it expects from districts that get the money, and require reporting that ties in more directly to other accountability systems, like the World's Best Workforce report.

"Put some parameters around the use of some of the dollars," she said.

Administrators, already worried about the ups and downs of state education funding, say the solution to any concerns about basic skills spending shouldn't be to do away with the fund. Richfield Superintendent Steven Unowsky said basic skills money isn't the only answer to the achievement-gap challenges his district faces, but it goes a long way toward making measurable changes in the schools in need of the most help.

"I know often conversations are around outcomes related to money," he said. "But then my question is: Is there a belief that removing funding to help students in poverty would actually help students in poverty to achieve to a higher level?"

Erin Golden • 612-673-4790

MaryJo Webster • 612-673-1789