How Illinois Districts Can Maximize State Funding

In 2017, the Illinois Evidence-Based Funding for Student Success Act (EBF) changed the state’s K-12 education funding model from “one-size-fits-all” to a formula that considers the specific needs of each school district. By 2027, the goal is to reach at least 90% of EBF’s funding adequacy target.

To comply with EBF and make the most of allocated funds over the coming years, our K-12 finance experts recommend three actions for districts: pursue priority-based budgeting strategies, revise your chart of accounts, and choose the right financial management tool.

Why Is EBF Significant?

Prior to EBF, Illinois greatly relied on local property taxes to fund public schools, leading to major disparities between wealthy and poor districts. The adoption of EBF, Public Act 100-0465 of 2017, marked a promising shift towards equity, with a commitment to increase state funding annually by at least $350 million.

The EBF law is significant for three key reasons.

• It addresses the long-standing issue of funding inequity in Illinois’ public schools. By considering the unique needs of each district, EBF aims to provide a more just and effective allocation of resources. This is crucial for ensuring that all students, regardless of their zip code, have access to a quality education.
• It promotes transparency and accountability. The new formula is based on evidence and research, outlining clear criteria for what constitutes adequate funding. This change not only helps in distributing funds more fairly, but it also provides a framework for evaluating the impact of these funds on educational outcomes. EBF ensures that funds are used effectively to support critical resources such as teachers, support staff, and educational programs.
• It supports a collaborative, goal-aligned approach to budgeting and planning. EBF encourages districts to engage in cross-functional planning that aligns financial resources with educational goals.

Since it was enacted, the EBF law has helped narrow school funding gaps. However, there are still challenges. The goal is to reach at least 90% of the funding adequacy target for all districts by 2027, but the Center for Tax and Budget Accountability reports that the state would need to increase its annual investment to $1.1 billion to reach the target by 2027 or $500 million to reach the target by 2030. 
 
As districts wait to see if funding levels may increase, they still need to comply with EBF requirements and make the most of every available dollar for their students. The three recommendations below can help.

Action #1: Pursue Priority-Based Budgeting

Priority-based budgeting (PBB) is an essential strategy for school districts to align their financial resources with educational goals. This approach involves identifying the most critical programs and services that directly impact student outcomes and allocating funds accordingly. PBB ensures that limited resources are used efficiently to support evidence-based practices and programs proven to enhance student achievement.

• Assess needs and set priorities. Districts should start by conducting a thorough needs assessment to identify areas where funding gaps exist. This involves analyzing student performance data, identifying underfunded programs, and understanding the unique challenges faced by the district. By setting clear priorities, districts can focus their resources on the most impactful areas.
• Engage stakeholders. Successful implementation of PBB requires collaboration with various stakeholders, including administrators, teachers, parents, and community members. Engaging stakeholders in the budgeting process ensures that priorities reflect the needs and values of the community, leading to more effective and sustainable financial decisions.
• Allocate funds strategically. Once priorities are set, districts should allocate funds strategically to support evidence-based programs and initiatives. This involves shifting resources from lower-priority areas to those that directly contribute to student success and provide EBF support for special student groups.
• Monitor and adjust. Continuous monitoring and evaluation are crucial for maintaining compliance with EBF requirements. Districts should regularly review their financial data and program outcomes to ensure that funds are being used as intended and making the desired impact. Adjustments should be made as necessary to address any emerging needs or challenges. 

Action #2: Revise Your Chart of Accounts

A well-organized chart of accounts is fundamental to ensuring transparency and accountability in school district finances. The EBF law emphasizes the need for districts to have a clear and detailed accounting system that tracks how funds are spent and the impact of those expenditures on student outcomes.

• Standardize accounting practices. Districts should adopt standardized accounting practices that align with state guidelines and best practices. This includes using uniform account codes for various types of expenditures, such as instructional costs, administrative expenses, and capital outlays. Standardization ensures consistency and comparability across districts, facilitating better oversight and reporting.
• Enhance detail and granularity. To comply with EBF, districts need to provide detailed information on how funds are allocated and spent. This involves breaking down expenditures into specific categories and subcategories, such as salaries, supplies, and professional development. Enhanced granularity allows for more precise tracking and analysis of spending patterns.
• Implement transparent reporting. Transparency is a key component of the EBF model. Districts should implement transparent reporting practices that provide stakeholders with clear and accessible information about financial decisions and outcomes. This includes regular financial reports, budget summaries, and public presentations that explain how funds are being used to support educational goals.
• Utilize technology for efficiency. Leveraging technology can significantly enhance the efficiency and accuracy of financial management. Look for tools that offer advanced features for budgeting, accounting, and reporting. These tools should also provide real-time insights into financial data, which support data-driven decision-making and more transparent communication with stakeholders.

Action #3: Choose the Right Financial Management Tool

When considering a new financial management tool for your district, make sure it can:

• accurately track and report district spending to ensure transparency and accountability in the use of state funds (Public Act 100-0465, Section 18-8.15) (ISBE)
• provide detailed, priority-based budgeting capabilities that align with evidence-based practices to develop budgets that reflect the needs of diverse learners and other specific student groups (Public Act 100-0465, Section 18-8.15(c)) (CTBA Online). 
• offer real-time data on funding adequacy and resource allocation to continuously assess if your district is meeting the EBF adequacy targets (Public Act 100-0465, Section 18-8.15(b)) (CTBA Online) (Advance Illinois). 
• enable integration of multiple funding sources (state, federal, local) to comprehensively manage and report all sources of funding (Public Act 100-0465, Section 18-8.15(d)) (ISBE). 
• support scenario planning and financial forecasting to prepare for future funding changes and ensure sustainable financial planning in line with EBF goals (Public Act 100-0465, Section 18-8.15(e)) (Advance Illinois).
• provide user-friendly interfaces for stakeholder engagement to involve community and stakeholder input in the budgeting process, enhancing transparency and collaboration (Public Act 100-0465, Section 18-8.15(f)) (CTBA Online).
• facilitate detailed reporting and compliance documentation to meet state reporting requirements and ensure all compliance aspects of EBF are documented and auditable (Public Act 100-0465, Section 18-8.15(g)) (ISBE) (CTBA Online).

The PowerSchool Allovue Advantage

PowerSchool Allovue’s comprehensive financial management tools are uniquely designed to help Illinois districts meet the EBF requirements listed above, streamline budget processes, enhance transparency, and achieve their educational goals more efficiently.

• Allovue Budget Suite
  Helps districts create detailed, compliant budgets that align with evidence-based practices, ensuring resources are allocated to meet the diverse needs of students. It also supports scenario planning and integrates multiple funding sources, essential for comprehensive financial management.
• Allovue Allocate
  Provides accurate tracking and reporting of district spending, offering real-time data on funding adequacy and resource allocation. This tool helps ensure transparency and accountability, critical for compliance with EBF requirements. Additionally, its user-friendly interface facilitates stakeholder engagement and detailed reporting. 
  

To chat with an Allovue expert about your district’s EBF compliance or budget planning process needs, you can request a call here.