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One State Is Overhauling Its Finance Technology After Long-Standing Fights, Glitches

One key reason politicians, K-12 professionals and advocates know so little about how more than $700 billion in taxpayer money is spent on schools: States use antiquated software to dole out federal, state, and local education money. In recent years, the aging of these systems has caused high-profile glitches, including vendors not being paid on time and legislatures setting aside the wrong amount of money for teacher pay raises. Read Education Week's previous coverage here.

The platforms, known as Financial Management Systems, can cost millions of dollars to overhaul, and legislators have typically been reluctant to invest in them the same way they've invested in longitudinal data systems that track academic outcomes. 

Now that the federal government is requiring states to break out for the public how much is spent on each school—and as state lawmakers demand to know why they're spending so much while test scores remain stagnant—there's been a push in states like Arizona, Mississippi, and South Carolina to replace theses aging financial management systems. 

Hawaii, which has been tangled up in lawsuits and battles over where the state's $2 billion in K-12 dollars are spent and whether that's enough, will forge ahead with such a replacement this year. 

The state's current software system has been in use since 1991. In 2018, the entire system shut down on the state, forcing department officials to scramble to make sure hundreds of teachers and vendors were paid on time. 

Last year, Ray L'Heureux, the Hawaii education department's former assistant superintendent for school facilities and support services, sued the state for more detailed information about how the state spends its money.

"To have any sense of empowerment, you have to have an idea of the fiscal health of the department," L'Heureux said in a previous interview with Education Week. "Until we figure out whether they're being fiscally responsible ... and gain this trust back ... let's not add anymore to their budget."

The new financial management system, the state said in a press release, will be able to more specifically indicate to schools how to better recruit teachers, allow for employees to manage their benefits, expenses and vacation, and better signal to the public how its dollars are being spent. It will cost the state $2.76 million along with a recurring $1 million annual service fee and will be designed and implemented by CherryRoad Technologies, according to the Pacific Business News.

"We look forward to serving as innovative leaders of modernization within the state, while ensuring our employees have the tools they need to excel," Superintendent Christina Kishimoto said in a press release. 

The state hopes to have the system online by this summer. 

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