A new state audit has brought to light a number of flaws found within the formula used in New Jersey for funding the current system.
Released by State Auditor Stephen Eells, the report suggests the current model shows that some schools in the state are underfunded and others are overfunded.
A number of issues were identified including outdated data, inaccurate pre-kindergarten enrollments, and an out-of-date system for funding special education.
The report states that school funding is not based on district data that is current. Although lawmakers in the state passed the School Funding Reform Act in 2008 in order to determine how much money should be given to each district based on demographics and enrollments, districts with any sort of change in enrollment have not seen an increase or decrease in the amount of money they receive because the state has not been fully funding the formula.
In order to fix this issue, the report suggests current student population data and other demographic data be used in order to determine school aid.
However, in response, the state Department of Education called the recommendation "laudable." It did add that decisions concerning school funding are left to the governor and state Legislature.
The report also found special education funding not to match the needs of the district. While special education funding in the state is allocated to districts based on an assumption that around 15% of students are in need of special education services, more than 200 districts in the state actually have rates that differ by more than 10 percentage points.
Recommendations state that special education funding should be given out based on the actual percentage of special education students living within the district.
The state Department of Education does not agree with this finding, arguing that different special education students cost varying amounts to educate and a direct correlation between the number of students and the overall cost to the district cannot be identified, writes Adam Clark for NJ.com.
Lastly, the report notes that schools in the state are greatly overestimating enrollment in their pre-kindergarten programs. The state spent over $655 million in state aid for pre-K programs in the 2015-16 school year. The majority of that money went to 31 urban and low-income districts.
In order to determine how much money each district received, a projected preschool enrollment was offered to the state by each district, who then received funding on a fixed per-pupil basis.
Because many of the districts overestimated their enrollment, an excess of almost $33 million was overpaid to districts.
The report suggests that in order to fix this flaw, future payments be adjusted after actual enrollment data becomes available.
The state Department of Education agreed with this suggestion, saying such enrollment projections are typically too high and adjusting future payments could save the state a significant amount of money. However, it also fears that the state could end up paying even more money to those districts that project their enrollments too low.