The bureaucratic 'skim' of federal school funding

Managing federal education dollars is costing Wisconsin taxpayers millions and benefiting children hardly at all

By DAN BENSON and DAVE DALEY | Feb. 15, 2017

It takes more than $50 million a year for hundreds of Wisconsin Department of Public Instruction staff to manage the hundreds of millions of dollars in federal funds that flow to local school districts around the state, budget figures indicate.

The figures — which don’t include spending or staff devoted to grant administration in either Washington, D.C., or in local school districts — bolster arguments by those who say the state educational system is too burdened by paperwork and diverts resources that could be better used to help students and to assist their teachers.

For the 2015-’16 school year, $877.63 million in federal money flowed from Washington to the DPI, according to a September 2015 Legislative Fiscal Bureau memorandum to state Rep. Joe Sanfelippo (R-West Allis). Of that, more than $823.8 million was passed through DPI to “subrecipients,” mostly the state’s school districts, in the form of federal grants such as Title I for disadvantaged students, school lunches, teacher training and other programs.

The rest of the money — nearly $53.7 million — went to “administration,” or, as DPI spokesman Tom McCarthy said in an email, “the operations budget of administering federal programs.”

Ted Neitzke, the former superintendent of the West Bend School District with more than 22 years in the education field and now head of a regional education agency, said the paperwork to administer federal grants in Wisconsin is overwhelming.

“DPI — they got a jillion people working there that are just checking boxes,” Neitzke said. “The paperwork — it needs to be checked 52 ways to Sunday.

“I can’t even imagine how many personnel they (DPI) have whose sole job is just checking boxes,” Neitzke continued. “Instead of focusing on federal compliance, these are people who could be working to help the state and support local schools.”

“The unfortunate fact is that cash does not move to the classroom as fast as it should. We should be results-driven, not compliance-driven,” he added.

Big administrative costs

Federal funds make up about 13 percent of DPI spending. But research by the Wisconsin Policy Research Institute shows that almost half of all DPI workers are fully paid with federal funds — 302 of 634 full-time equivalents, or nearly 48 percent.

The Legislative Fiscal Bureau memo goes on to detail how some of the $53.7 million is spent among DPI’s six divisions. In the purely administrative Finance and Management Division, 80 out of 116 positions, or 68.9 percent, measured as full-time equivalents, are paid by the federal government. Salaries and benefits for those 80 positions total $6.2 million.

Likewise, the division of DPI Superintendent Tony Evers employs 5.65 FTEs on the federal payroll, at a total cost of $651,100. Other divisions heavily manned by staff paid from the federal coffer include Learning Support, with 59 out of 69 federal FTEs at a cost of $5.4 million out of $6.5 million, and School and Student Success, with 68 out of 86.7 FTEs at a cost of $5.7 million out of $7.3 million.

Job titles of 288 individuals who completed federally required time sheets in the 2014-’15 school year, the most recent year for which data is available, indicate that at least 45 percent of them are not involved in classroom work, WPRI’s review found. That group includes accountants, grants specialists, administrators, attorneys and human resources personnel. Not all DPI employees paid by the federal government are required to fill out time sheets.

They were paid through 59 separate federal programs from six federal departments, including the departments of Education, Agriculture and Health and Human Services. Within those 59 programs, there were 136 separate funding subcategories, with some DPI employees being paid from as many as seven separate pots of federal money.

For instance, 20 deaf mentors who work through the Wisconsin School for the Deaf in Delavan each were paid through three separate funds.

‘Rewarding work’

Bonnie Eldred is the deaf mentor program coordinator at the school who approved those time sheets. She and the mentors work with about 75 families around the state, generally helping parents and their children communicate with each other.

Eldred, who is deaf, said it’s rewarding work.

“As soon as we’re done (with the interview), I’m looking forward to seeing a family I met two or three months ago; I want to see how much progress they have made. That’s a huge reward for me,” Eldred said through an interpreter.

But part of her job requires that each week Eldred spend about a half-day reviewing and approving time sheets and mileage records of the mentors.

“They have to be detailed and specific to pre-work, post-work, using different (federal) codes,” she said. “There are assessments, typing reports, following guidelines. And we’re required to do training every year.”

For Eldred, it’s just part of the job.

“I feel OK (about the paperwork). I have lot of staff support,” she said. “I’m always so inspired when a family can communicate with their child.”

Considering that there are hundreds, maybe thousands, more educators in Wisconsin like Eldred, the findings raise questions about the amount of time and money spent across the state on administration and bureaucracy rather than in classrooms.

Every one of the state’s 428 school districts that receives federal grants also employ staff and hire outside accountants to administer those dollars and make sure their district adheres to federal regulations governing the grants’ use.

No data exists for that cumulative cost, DPI officials say. But anecdotal evidence suggests it is costing taxpayers tens of millions of dollars, if not more, that otherwise could be used to improve classroom outcomes.

‘Plenty of money’

With the dawn of the federal Every Student Succeeds Act (ESSA), which is scheduled to take effect this fall and replace No Child Left Behind, legislators see an opportunity to reduce “the bureaucratic skim” and see influence over education revert to the states. They also see an opportunity for DPI to restructure itself to direct more resources and decision-making to teachers and local school boards.

“There is plenty of money in education, but too much of it is skimmed off the top” by bureaucratic busywork, Sanfelippo said.

Federal aid, of course, is ultimately funded by the taxpayers who live in the 50 states. Indeed, Wisconsin and other states just get money back with strings attached, while the bureaucracy consumes billions of dollars nationwide.

It’s an inefficient and outdated system designed to give power to Washington and diffuse accountability, Nietzke said.

 “You send them a dollar, they (Washington) send you thirty cents back,” Neitzke said. “It’s an ancient, antiquated process.”

Just the fact that almost half of DPI’s staff are paid by the federal government signals what is really happening in state education, Sanfelippo said.

“Without a question, those positions are carrying out an education policy based on what the people in Washington want.”

Neitzke, now chief education officer for CESA 6, the Oshkosh-based regional education association for 42 school districts, said one solution is the block grant concept, in which the U.S. Department of Education allocates a big block grant to Wisconsin and lets state and local officials decide how to spend the money. It’s an idea supported by House Speaker Paul Ryan (R-Wis.) and other congressional Republicans.

“There are block grants for everything else,” Neitzke said. “We don’t do transportation in Wisconsin the way they do in Wyoming, so why do we have to do education the same way they do everywhere else? When the Transportation Department sends the money, they don’t say the bridge has to be blue.”

One example: Letting local officials set the conditions for spending federal dollars means a rural school district can focus on what kind of training fits best with the local economy, Neitzke said.

“It doesn’t pay for a Weyauwega, for example, to have a lot of students educated in engineering when the local economy is agriculture and food processing. When we have a national policy that is in sync with a local economy, then we’ll have (progress),” he said.

DPI did not respond to requests for comment for this story.

Dan Benson is editor of WPRI’s Project for 21st Century Federalism, of which “Federal Grant$tanding” is a part. Dave Daley is the project’s reporter.