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Consulting Group Praises 'Value-Based Approach' in District Budgeting

The Boston Consulting Group, whose education arm has counted among its clients Philadelphia schools, Los Angeles schools and states and districts seeking competitive federal grants, has released a report suggesting school districts need to focus on how they spend scarce funds—not just how much they have to spend.

The report, released earlier this month, offers three examples of what the group considers value-based spending practices: "identifying teacher characteristics that lead to improved student outcomes and investing to develop those; using digital technologies to boost the impact of high-performing teachers; and reallocating central-office savings to initiatives that support improved outcomes."

J. Puckett, a senior partner and managing director with BCG and one of the report's co-authors, said in an interview that districts are well past the days when across-the-board cuts could get a district through a budget shortfall. "You've probably done most of that that you can in some places, without hitting bone and muscle."

However, districts can still make strategic spending decisions that shift money from some categories into the classroom, he said.

For example, the report singles out KIPP Empower Academy in Los Angeles, which increased average class sizes from 20 students to 28 students, but made an investment in technology that, according to the group, "improves teachers' ability to target interventions where they can make the most difference."

Puckett said that many districts have been loath to make such a change, for fear that individual students will get less attention. Technology can help expand the reach of the best teachers, he said.

School districts' central offices can also be a source of wasted funds because of overlapping layers of management and other services, such as payroll and procurement. Those are services that may be more efficiently run at the school level, Puckett suggests. (I recently wrote an article on how "portfolio districts" are redefining the role of their central offices by shifting more responsibilities to schools.)

The goal is not to run school districts like businesses, but to make thoughtful decisions about district spending, the report says. "Identifying what doesn't work is as critical in an era of budget cuts as recognizing what does," the report says.

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