Theory

To Add or to Subtract, That Is the Question

 in Theory by

In education, addition has been the default choice for improvement. While innovations are important, continually adding new things, often in silo, can create challenges. Despite that subtraction can add value, it is rarely considered and approached as an improvement strategy. In this 2024 SDP Harvard Strategic Data Project Convening presentation, Sean Berkstresser, C. Todd Cummings, Ph.D. and I shared our research and thinking on this long overdue topic and received good feedback. Specifically, we discussed the implications of two subtraction efforts in the legal realm for education: Paperwork Reduction Act and sunset clause. In essence, cycle-based budgeting applies the “sunset” […]

Moving beyond the “budget dance”

 in Theory  tagged AROI / Budget Analysis / Budgeting Model by

Here is the link to an article on improving district budgeting that is published in Kappan’s March issue. Abstract The annual budgeting process is a valuable opportunity for districts to systematically examine both resource use and programming and use the findings to inform and drive change to optimize resource use and improve program efficacy that will lead to increased student achievement. Bo Yan and Thomas Aberli discuss three root causes for districts’ inability to accomplish the goals (reliance on problem-driven needs as the dominant factor of budgetary decisions, disconnect between financial management and performance management, as well as human nature). […]

Investment and Operation Expenditures Revisited

 in Theory  tagged Academic Return on Investment / Budgeting Model / Return on Investment by

A few readers wrote to me asking for further clarification on the differences between investment and operation expenditures. For example, should a one-to-one initiative be classified as an operation or investment expenditure. This short post helps answer such questions. After reading Rethink District Budgeting Part I and Part II, it is apparent that all the new “budget dance” moves start with differentiating between operation and investment expenditures. While Table 1 can be readily applied to make the distinction for most expenditures, there are cases where the distinction is not that clear cut. For certain expenditures, people may have genuine differences […]

Rethink District Budgeting – Part II

 in Theory  tagged Budgeting Model by

In previous post, my colleague Dr. Tom Aberli and I discussed three forces that shape and influence district budget decisions: 1) needs-based framework, 2) existing financial management practice, and 3) human nature. In this post, we present how we can build on the existing infrastructure and processes with a new lens and framework to overcome the challenges brought about by those forces. Specifically, we propose to: 1) differentiate between operation and investment expenditures, 2) track expenses on alignment, outcome and improvement, and 3) re-orient how improvement is practiced. Operation vs Investment Expenditures As noted above, needs play a prominent role […]

Rethink District Budgeting – Part I

 in Theory  tagged Budget Decision / Budgeting Model by

In this essay, my colleague Dr. Tom Aberli and I discuss three forces that shape and influence district budget decisions. Next, we present how we can build on the existing infrastructure and processes with a new lens and framework to overcome the challenges brought about by those forces. This is a long essay and will be posted in two installments. In this first post, we discuss the three budgetary forces: 1) needs-based framework, 2) existing financial management practice, and 3) human nature. We welcome and appreciate your critiques and suggestions. Every winter, school and district leaders have the daunting task […]

Academic Return-on-Investment (AROI) and School Improvement

 in Application / Theory  tagged Academic Return on Investment / AROI / Investment Tracking by

Three years ago, we started working on an IES funded research project in collaboration with Dr. Fiona Hollands at Teachers College of Columbia University and Dr. Robert Shand at American University. The goal was to explore: 1) whether A-ROI metrics, developed as a compromise between rigor and practicality, can be used to improve decision-making regarding education programs, and 2) how to embed A-ROI results into district operations through a Cycle-based Budgeting model. This report shares our lessons learned from that project. https://www.jefferson.kyschools.us/sites/default/files/IES_AROI_Brief_3_Final_Dec_2021.pdf In this report, we talked about how we applied some of the lessons learned when developing a new version of our […]

End-of-cycle (EOC) Review

 in Application / Theory  tagged Budget Decision / Budgeting Model / End-of-cycle by

In this article, I explain what end-of-cycle review is about and how leaders can use the process to better manage program implementation and resource allocations. You might find this discussion on some key concepts of Cycle-based Budgeting helpful as a reference. You can also find an end-of-cycle review summary template with two examples on the CBB Toolkit page. End-of-cycle (EOC) is an opportunity created in cycle-based budgeting (CBB) to routinely scrutinize existing investment items for continuation and/or adjustments. When an item reaches its end of investment cycle, two things must take place. One is that the investment must be reviewed […]

Re-engineer Choice Architecture to Improve Budget Decisions

 in Application / Theory  tagged Behavioral Economics / Budget Decision / Budgeting Model / Choice Architecture by

Each year, district leaders make many decisions about school and district finances. Hidden behind those myriad decisions is a choice architecture, which, explicitly or implicitly, defines and shapes leaders’ decision-making. Learning from behavioral economics, this article offers a new perspective to look at the functions and tasks school business officials (SBOs) perform in relation to the choice architecture and calls for rethinking the role SBOs can and should play in facilitating those decisions. Specifically, three essential components of choice architecture are highlighted: default, anchor, and framing. For each component, prevalent design features and their impact on budgetary decisions are discussed. […]

Five Issues around Using Academic Return on Investment (A-ROI) to Inform and Improve Decisions: Part III – Commensurability

 in Theory  tagged Return on Investment by

COMMENSURABILITY Assuming that we have obtained valid A-ROI estimates for multiple investments, there remain issues to be considered and addressed when using those results for investment comparisons and decisions. The issues center on the extent to which those different A-ROI estimates can be compared to gauge relative cost-effectiveness and, if the answer is yes, how to compare them properly. First, there is the issue of different outcome measures. For example, A-ROI is calculated for three investments that are intended to increase reading achievement, reduce suspension, and improve sense of belonging, respectively. It is apparently inappropriate to compare the results directly […]

Five Issues around Using Academic Return on Investment (A-ROI) to Inform and Improve Decisions: Part II – Uncertainty

 in Theory  tagged Return on Investment by

In the first post of this series, I discussed validity of A-ROI as a measure of cost-effectiveness. In this post, I focus on uncertainty embedded in A-ROI results. In the business world, ROI is largely treated as an accounting measure with certainty, but the certainty only applies to the accounting period. That is, for a three-year investment, the ROI result is a both accurate and precise representation of its profitability over those three years only. Consumers of ROI information are admonished about risks when applying it to the future or other contexts. Generally, little is provided about those risks other […]