Discretionary dollars and other school-controlled dollars

If a full-fledged school-based financing system were put into place, nearly all dollars would be discretionary dollars controlled at the school site level. If budget authority is only partially decentralized to the school site, then several issues emerge:

1. Staff. Most school districts have formulas for allocating teachers, administrators, and support staff to schools. In a true site-based management approach, the staff allocation formula would allow the school to "trade" staff, either for other types of staff - two administrators for three teachers, for example - or for instructional technology or any other preferred resource.

2. Centrally budgeted items, such as supplies, utilities, and substitute teachers. A more effective strategy would establish a fund for these items in each school and allow the school to use the money for other purposes if it managed to reduce expendituresin any area. Such a strategy would create incentives for schools to obtain new discretionary dollars from existing and budgeted dollars and encourage schools to find more efficient ways to carry out current operations.

3. Unspent funds. Districts would need to allow schools to carry over any unspent funds from one year to the next. Again, this policy would provide an incentive for more efficient use of funds and reward schools with additional discretionary dollars - without increasing the district or school budget.