Frequently Asked Questions about the Office of the State

Auditor’s Report on Education Spending

Special Projects and Audit Response Division

April 22, 2019

Shad White
Mississippi Office of the State Auditor

1. Why didn't you adjust for inflation? Adjusting the numbers in the report for inflation would
have changed nothing about how much of the spending pie went into different buckets, which
is the focus of the report. For example, adjusting for inflation does not change the fact that the
percentage increase in spending on administrative costs outpaced the percentage increase in
spending on instructional costs. Inflation is measured by calculating the increase in the
Consumer Price Index (CPI), which accounts for changes in the cost of goods over time. CPI
measures these price changes for the average urban consumer in America. Mississippi is not an
urban state, and its inflation rate is not the same as the national rate, which means using
inflation adjustments may not accurately measure actual price increases in our state. Also, CPI
does not focus on the changes in the price of the kinds of goods that schools would purchase.
Instead, CPI measures changes in products like housing, airline fare, apparel, and even tobacco.

2. Why did you pick the years you picked? The most recent full set of data available was for the
2016-17 school year when we started the study, and we analyzed the ten years prior to that.

3. How did you decide what to count as administrative costs? Analysts relied on the
Mississippi Department of Education Accounting Manual and the statutes that define
administrative costs (e.g., Miss. Code Section 37-151-97) to determine what counted as
administrative costs.

4. Maybe the cost of testing is driving up administrative expenses? Any cost of testing
incurred by schools was included in OSA’s "in-classroom" cost analysis, so it did not drive up the
number for outside-the-classroom spending. The cost of testing is primarily borne by the state,
according the Mississippi Department of Education. The reason the remaining costs were
considered in-classroom costs is that the expenditure codes for things like the compilation of
test results and the salaries paid to teachers who administer the tests are included in either the
instructional or instructional support spending categories. Those two categories make up "in-
classroom" spending.

5. Did anyone ask you to perform this study? No one asked the Office of the State Auditor to
perform this study, other than the State Auditor. The Auditor did not have contact with any
legislators or executive branch officers prior to the release of this study about this study. He
ordered the study shortly after taking office, and analysis began around October 2018. The
Office performed this study under its statutory authority to look at "managerial policies,
methods, procedures, duties and services" to find spending that could be "eliminated,
combined, simplified and improved" and its authority to perform performance audits. The
Office has performed analyses like this since the mid-1990s.

6. Aren't school districts forced to spend a lot of money on administrative costs? Some
administrative costs are unavoidable. The report focuses on the increased administrative costs
over the last ten years, so policymakers should ask whether these unavoidable expenditures
have increased enough to account for the 18% increase in administrative costs.

7. Is the reason for the increase in administrative costs the state and federal mandates that
get forced onto schools? Federal and state mandates could be driving up the cost of operating
a school district. Part of the purpose of this report is for education policymakers to identify any
of those mandates that are driving up costs and are unreasonable. Unreasonable and costly
mandates should then be eliminated. It is also important to remember that the report focuses
on the increase in administrative costs over the last ten years, so mandates that have been
around for more than ten years may not be driving the change in spending in the last ten years.

8. What types of expenses fall into in-classroom and out-of-classroom spending? Spending
function codes in the 1000s, as defined by the Mississippi Department of Education Accounting
Manual, were classified as instructional expenditures. Function codes in the 2100s, the 2200s,
and the 2700s were considered instructional support. Function codes from the 2300s-2600s
and the 2800s were considered administrative. Function codes from the 3000s, 4000s, 5000s,
6000s, 7000s, and 8000s were considered non-instructional. The instructional and instructional
support buckets were considered "in-classroom." The administrative and non-instructional
buckets were considered "outside-the-classroom." Some examples of what falls into these
buckets are listed in the report. For a comprehensive list, consult the manual.

9. If you change the years you examined, does it change the results of the report? Changing
the years of analysis does not change the overall conclusions of the report. For instance,
administrative costs increased 18% over ten years. If the analyses were cut in half and only
performed on the most recent five years, the percent increase in administrative costs is 7%--
about what one would expect for half the time period.

10. Have you released any more information since the report about how we spend money on
schools? Yes, the Office has released a graphic showing per pupil spending on teachers’ salaries
went down by 3% while spending on administrators’ salaries increased by 10% over the last ten
years, adjusted for inflation. The Office of the State Auditor will continue to publish information
about how our state spends education money to better inform voters.