Auditor Yost Releases Special Report on Open Enrollment
Auditor Yost discusses a special report on open enrollment at a media availability on Nov. 28, 2016.
Columbus – Open enrollment can boost a school district’s revenue if managed carefully but may result in a financial loss if associated costs and policy decisions are overlooked, Auditor Yost said in a special report released today.
The Auditor’s Ohio Performance Team (OPT) in 2016 released performance audits of four northeast Ohio school districts that offer open enrollment. The audits found a variety of open enrollment practices and policies that resulted in financial impacts ranging from a $1 million gain to a $1 million loss.
While the report focuses on these four districts, the insights gained from analyzing their different experiences should be helpful to communities across the state that either have open enrollment policies in place or are considering it.
“Open enrollment is a complex equation with no single solution,” Auditor Yost said. “School districts considering this educational option should tailor policies to their priorities, constantly monitor their outcomes and adjust accordingly.”
The four districts audited were:
- Austintown Local School District (Mahoning County)
- Coventry Local School District (Summit County)
- Hubbard Exempted Village School District (Trumbull County)
- Madison Local School District (Lake County)
The report highlights several key factors that school districts should consider when evaluating open enrollment and crafting policies. According to the report, it is crucial for district leaders to have a thorough understanding of the ways open enrollment can affect both revenue and expenditures.
While open enrollment students generate more state funding than resident students, local funding does not transfer from an open enrollment student’s home district to the district they choose to attend. As a result, local taxpayers subsidize students attending their districts via open enrollment. This also means open enrollment student revenue reduces, or “dilutes,” the total amount of revenue generated by the resident district on a per-student basis.
The report also recommends districts account for all of the costs associated with open enrollment rather than focusing only on the opportunity for increased revenue. If managed properly, open enrollment should increase revenue for a district without adding significant costs. However, if expenditures are overlooked, the costs of teaching open enrollment students can actually outweigh revenue, resulting in a financial loss for a school district.
Auditors saw this firsthand at the Coventry Local School District, which suffered a $1 million net loss in 2015 as a result of its open enrollment practices. The district generated $4.7 million in revenue from its 782 open enrollment students, who made up 37 percent of Coventry’s total student population, but spent $5.7 million to educate them.
A full copy of the report is available online.
Click here to view a listing of school districts that offer open enrollment (data from the Ohio Department of Education).
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.