The state should change the way annual school aid requests are formulated to avoid mid-year budget shortfalls, Legislative Auditor Daryl Purpera said in an audit issued Monday.
Under current methods, Purpera said, the Legislature has had to come up with up to $56 million in extra aid after the initial appropriation because student enrollment estimates were off target.
Rather than using historically low estimates from Feb. 1 of the previous school year, he said, forecasters should rely on more accurate projections on student count crafted by the state Department of Education to better gauge how much will be needed.
State school aid helps finance the education for about 720,000 students statewide.
The money goes through a complex formula called the Minimum Foundation Program, or MFP. Gov. Bobby Jindal has recommended a virtual freeze in state school aid for the 2015-16 school year.
The state Board of Elementary and Secondary Education on Friday approved a $36 million increase request for all students, plus another $8 million that would apply to special education youngsters and select others.
The governor’s recommendation is based on estimates from the department, which under current directives from budget officials relies on enrollment headcounts from February of the previous school year.
However, Purpera said those tallies are historically low, which then force adjustments in mid-year when it is evident that the state has more students than dollars to finance them.
A more reliable indicator, he said, are projections crafted by the agency based on historical trends, plus the knowledge that enrollment typically rises during the Oct. 1 headcount.
“Because the projection is not part of the initial executive budget, it creates a situation where less money is allocated to the MFP on the front end, which allows funds to be allocated elsewhere in the executive budget,” according to the audit.
“However, this adds to a need for budget cuts mid-year in order to fund the final costs of the MFP,” the review says.
State Superintendent of Education John White noted Monday that the budget request is submitted by the Jindal administration, not his agency. “This is a budgeting problem,” White said.
“And we agree with the Legislative Auditor’s findings that a more appropriate way of counting the real size of the MFP would be to include the Oct. 1 (headcount) rather than just Feb. 1,” he added.
Agency officials agreed with Purpera’s recommendation that it make better use of error reports.
The report said about 1,000 potentially ineligible students costing the state $3.9 million were identified in 2012 and 2013 headcounts.
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