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Time to Show the Money: Complying with Colorado’s Public School Financial Transparency Act

IP-8-2011 (October 2011)
Author: Devan Crean, Education Policy Center Research Associate
Co-author: Ben DeGrow

PDF of full Issue Paper
Scribd version of full Issue Paper

Update, November 21: The revised version of IP-8-2011 reflects a correction of both Mapleton School District’s July 2011 rating and St. Vrain Valley RE-1J’s October 2011 rating from “Almost Compliant” to “Compliant,” as well as a correction of Elizabeth School District C-1’s July and October 2011 ratings to “Compliant.” In addition, both ratings for East Central BOCES were upgraded from “Non-Compliant” to “Almost Compliant.” Appropriate changes were made to the executive summary and text, as well as to tables and appendices.

Executive Summary
Today it is more important than ever for governments to be financially transparent. The funds of public K-12 agencies in particular should be spent wisely to improve student learning. Colorado’s 2010 Public School Financial Transparency Act requires local education providers to post specified financial information online. During the summer of 2011 the Independence Institute examined the extent to which local education providers have complied with the financial transparency law by observing the substance and presentation of online financial information for each of 178 school districts, 16 BOCES and the Charter School Institute. Each website was evaluated on the requirements of the law, as well as other criteria. The findings were unsettling, as there were only nine school districts fully in compliance as of the law’s July 1, 2011, deadline, and 26 school districts fully in compliance 90 days later. (Extra time was allowed due to an ambiguity in the law that allows for diverse interpretations.)

Lack of compliance may be explained in part by the challenge of interpreting the law itself. Although, CDE has attempted to clarify some discrepancies, their conclusions are only advisory and still leave the law open to interpretation. Additionally, an enforcement mechanism and consequences for non-compliance are not clearly expressed in the law. There is an enforcement mechanism within the accreditation process, but it is ultimately weak, dependent on local self-reporting.

The Public School Financial Transparency Act is a step in the right direction, but work remains to be done. To improve compliance the Colorado General Assembly should consider the following actions:
• Clearly define terms within the law, for example, whether or not “check register” includes wire transfers; and
• Clearly define the dates when documents are to be posted, particularly for which documents the 60-day grace period does, or does not, apply.

While the legislature considers these changes, there are other steps that can be taken to improve compliance among local education providers, including:
• CDE should ensure that its recommendations and advice to the local education providers directly reflects the requirements set forth in the law;
• CDE should more closely monitor whether or not local education providers are in compliance with the financial aspects of the accreditation process, and follow through with the consequences set forth in the rules of accreditation;
• Local education providers should use the resources of CDE to ease the burden of compliance, particularly the template they can easily copy and paste to their websites;
• Citizens should hold local education providers accountable by demanding greater financial transparency through grassroots efforts within their communities; and
• Citizens should report any local education providers to CDE that do not show compliance with the requirements of the law.

The public deserves access to this important financial information, and all public K-12 agencies have an obligation to provide it.