Challenges
- History of uneven resource distribution across 74 schools with 30,000+ students
- No staffing/programming decision-making power at the school level
- Largely inaccessible budget data, especially for principals and school-level leaders
Solution
Results
- Financial clarity for school-level budget managers, which helped them make more informed budget decisions and track spending
- Stronger collaboration between finance and non-finance staff, which supported more precise student-based resource allocations
In 2016, after years of inefficient and uneven school funding methods, Indianapolis Public Schools (IPS) in Indiana wanted to implement a student-based allocation model. With PowerSchool Allovue’s help, IPS was able to modernize their finance operations, improve budget tracking, and realign resources to better meet every student’s needs.
What Is Student-Based Allocation Funding?
Traditionally, districts allocate resources to their schools based on staffing formulas and school-specific programs. However, with student-based allocation (SBA) funding, schools are funded per student, and the amount of funding attached to each child will vary based on their needs and characteristics as defined within the funding formula.
Through SBA, schools and communities get a clearer understanding of how and why resources are allocated to schools. Plus, school leaders have more autonomy and flexibility in deciding how best to use their resources.
Mapping the History: Why IPS Needed a Change
In 1967, Marion County merged its government with Indianapolis’ government under a project called UniGov, designed to consolidate county and city public services. This change left Indianapolis with 11 separate school districts operating within city limits.
A little more than three decades later, the region saw the quick proliferation of charter schools. In response, IPS created a handful of high-performing magnet programs in the early 2000s. Unfortunately, this action resulted in some IPS schools being overfunded year after year, while others were underfunded.
By 2016, the IPS Superintendent wanted to ensure all students were getting the resources they needed. At the time, IPS served approximately 24,000 students of color, 5,100 students in special education, and 4,200 multilingual learners across 74 schools. Eighty percent of students also received free or reduced-price lunches.
Remapping Resources: The Role of Technology and Teamwork
An analysis by Education Resource Strategies helped IPS see exactly where they were spending the most money and where there were gaps: some schools were receiving double the amount of funding, despite having similar resource needs as other schools!
Technology and teamwork played major roles in helping IPS modernize their finance operations and adjust their resource allocation strategy.
Technology: How Allovue Supported IPS
Because principals and school leaders interact with students daily, IPS wanted these leaders to be part of resource planning decisions. IPS moved from a “Managed Instruction” model to a “Diverse Provider/Portfolio Schools” model, which allows schools to have explicit autonomy over staffing and academic programming.
To help with this change, one of the first resources IPS implemented was Allovue Manage, a front-end budget management tool. Allovue transforms complex data from a district’s existing ERP into clear visualizations and easy-to-understand summaries.
Using Allovue, all the district’s budget managers finally had access and up-to-date insights into their budgets. This was a crucial first step in the district’s efforts to improve operations while building finance familiarity among site-based leaders. For example, principals could now cross-check their budgets against enrollment numbers and student demographics whenever they needed.
Teamwork: How Finance and Non-Finance Teams Banded Together
IPS collaborated with multiple groups across the district to create and finalize their SBA funding model. Leaders created courses and tools to explain terminology and rationale for the move to SBA, as well as basic examples of possible school design choices. Staff received an SBA guidebook that incorporated the policies that shape the framework and outlined flexibilities. The district also explained which resources have to remain locked (those tied to federal laws, state laws, or board policies).
After several weeks of meeting with different groups—and reviewing, editing, and verifying account strings according to funding sources, resource types, and locked or unlocked status for over 100,000 lines of budget data—district leaders produced a coded budget file of clean data. This file could be manipulated according to anticipated shifts for the upcoming school year using student-based allocations.
Specifically, school leaders and teachers wanted to weight poverty and grade levels, with a focus on early education (grades K-2) and middle grades (grades 7-8). The financial model was subsequently refined to use a weighted student funding formula.
Other funding model refinements included:
- an average salary allocation method to let principals choose the best teachers for their students, regardless of salaries
- a new enrollment projection process, based on the cohort survival method and contextualized feedback from principals
- self-funding guardrails: gains from the transition to SBA were limited to 4% by school, and losses were capped at 6% (capping gains lower than losses ensured they didn’t need outside resources to make the model effective)
Taken together, these changes enabled IPS to implement a student-based allocation funding method in less than 18 months. The switch to SBA helped district leaders move budget tracking and decision making down to the school level, putting everyone in a better position to maximize student success.
For many larger school districts, it can be difficult to create this kind of sustainable change. But IPS shows us that large scale changes can happen—with a clear vision, the right technology, and strong collaboration.
