Overview: What is FAST?

The 2009 Legislature’s House Bill 3 directed the Comptroller to “identify school districts and campuses that use resource allocation practices that contribute to high academic achievement and cost-effective operations.”¹ In response, the Comptroller’s office created the Financial Allocation Study for Texas (FAST) to examine district and campus resource allocation – and the relationship between these allocations and student achievement.

This proved to be a complex task, as many forces influence student learning, including factors both in and outside school. Similarly, the cost of education is influenced by many factors, some beyond the districts’ control.

The Comptroller’s research team evaluated academic performance and financial data to identify school districts and campuses that produce high academic achievement while maintaining cost-effective operations.

The FAST team produced methods to place Texas campuses and districts on a “level playing field” for comparisons of academic performance and spending. Any such measure must weigh certain factors, such as geography and demographics, which are beyond schools districts’ control. The measures of academic growth used in this study control for several of these factors.

The FAST team worked with a wide range of experts and groups to develop these measures. Go to Our Approach in the 2010 Study section for more information on the process used and the many experts that the Comptroller’s review team worked with.

Academic Progress Measures

• The FAST analysis uses a value-added model that measures achievement by controlling for the varying characteristics of students, campuses and districts to estimate how much a district or campus contributes to student learning.
• Using the value-added model, the FAST report measures annual progress in reading/English Language Arts and math.
• The research team developed a composite academic progress rating by combining measures of math and reading progress.
• All academic progress measures are shown in percentiles ranging from one to 99, with 99 representing the most academic progress relative to other districts in the state.
• By controlling for factors outside of teaching that influence student performance, the research team is able to compare academic progress among districts and campuses on a level playing field.
• To further ensure fair comparisons, academic progress is averaged over three years.
• Thus, if a district has a math progress score of 60, it means that during the last three school years, the district’s students showed as much or more progress on math TAKS than 60 percent of districts statewide.

Spending Index

• Texas districts and campuses operate in a variety of “cost environments” – socioeconomic and geographic characteristics that influence the cost of education and are often beyond a school district’s control.
• The research team evaluated financial data for each district and campus by comparing them to “fiscal peers” – districts and campuses that operate in similar cost environments, are of similar size and serve similar students.
• To ensure the validity of financial comparisons, the research team employed a technique called propensity-score matching to identify up to 40 peers for each Texas school district and campus, based on common cost factors such as wages, school district size and geography and student demographics.
• After a group of fiscal peers is identified for a school district, the district is then assigned a “spending index” based on its spending relative to its fiscal peers.
  • In creating the spending index, FAST compares district core operating expenditures per pupil, adjusted for geographic wage variations.
  • A district’s spending index is determined by identifying the spending quintile in which it falls relative to its fiscal peers. The quintiles range from very low to very high, with very low indicating the lowest relative spending in the fiscal peer group and very high representing the highest.
• A similar process is used to create a spending index for each campus.
• There are, however, no uniform standards for districts to follow when allocating expenses to their campuses.
  • Some districts allocate most of their central administration activities to specific campuses, while others do not.
  • Operating expenditures for campus-related activities (instruction, instructional services, school leadership and student support services) are more consistently defined across campuses.
  • Because of this, the FAST spending index for campuses is based only on campus-related expenditures.
• To alleviate the possibility of one-year anomalies in spending having undue influence, the research team used three-year averages for spending comparisons.

Five stars reflects the strongest relative progress combined with the lowest relative spending.

FAST identifies districts that have improved student achievement while keeping expenditures relatively low.

FAST Rating

• Finally, the review team created a FAST rating that integrates the academic progress and spending measures to identify districts responsible for strong and cost-effective academic growth.
• Each district has received a FAST rating ranging from one to five stars, with half-star increments (Exhibit 1).
• A five-star district has a composite progress rating between 80 and 99 and a spending index of “Very Low.”
• A one-star district has a composite progress rating below 20 and a spending index of “Very High.”
• A district with “Very High” spending and a composite progress rating of 80 to 99, and a district with “Very Low” spending and a composite progress percentile below 20, both earn three-star FAST ratings.
• This rating does not make any judgment of the relative value of spending versus academic progress, recognizing that different school districts have different priorities and different constraints.

H.B. 3 requires the Comptroller to “identify potential areas for district and campus improvement.” To accomplish this task, the research team:

• evaluated its study outcomes to identify districts that have succeeded in improving student achievement while keeping expenditures relatively low.
• contacted each of these districts and asked them to describe the strategies and programs they credit as contributing to their success;
• contacted other districts showing low spending relative to their fiscal peers or strong academic performance; and
• consulted experts in the field – superintendents, school board members, staff at regional education service centers, stakeholder associations and others with knowledge of effective school district practices – who identified other school districts that might offer additional “smart practice” ideas.

The research team sought school district practices that meet one or more of the following criteria:

• has proven to be an effective practice for containing, reducing or avoiding costs;
• improves the efficiency and effectiveness of educational program delivery, including demonstrated improvement in student performance;
• is estimated to produce a significant long-term return on investment for the district;
• has significantly increased purchasing power though the use of purchasing partnerships;
• has realized efficiencies through the use of shared services arrangements with other districts; and/or
• can be implemented by other districts.

The resulting collection of Smart Practices is a guide to other Texas school districts interested in improving the effectiveness of their operations and educational programs.