Auditor says small
charter schools may need
more funding

By Debra Barayuga
Star-Bulletin

The state auditor says the Department of Education's method of allocating funds to schools on a per-pupil basis may not be sufficient for charter schools.

Other methods to ensure they receive enough funding may need to be looked at, said auditor Marion Higa in a report on school allocations released yesterday.

In 1994, a law was passed allowing 24 schools to apply for student-centered or charter status. Only two Hawaii schools have applied: Lanikai and Waialae Elementary.

Charter schools have greater freedom over their budget, curriculum and schedules. Their funding is based on a lump-sum allocation based on student enrollment.

For Lanikai, the funding has been inadequate. When the department first negotiated its per-pupil allotment two years ago, it was barely enough to cover salaries, said Principal Donna Estomago.

In the report, the state auditor said Lanikai Elementary needs a $72,000 "small school adjustment" to compensate for the school's noninstructional fixed costs, which are higher compared to larger schools like Waialae.

When schools fall below a certain size, they bear a disproportionate share of noninstructional costs -- such as salaries, Higa said.

"A simple per-pupil allocation fails to take this into account and would not give Lanikai sufficient funds to cover supplies and equipment expenses once the salaries of the school's alloted positions are paid," the report said.

The total allocation to Lanikai, with 283 regular-education and 24 special-education students, can add up to $1 million if the school assumes functions such as multimedia services, telephone and electricity costs and repair and maintenance.

Allocations to Waialae Elementary, on the other hand, with 490 regular-education and 26 special-education students, add up to $1.6 million.

Receiving the additional subsidy is the only way Lanikai can afford its operational costs, Estomago said. Lanikai has yet to receive the $72,000.

The issue involves equity, said Al Suga, acting deputy superintendent of schools.

"If we allow student-centered schools to have it, how will we handle small schools with similar enrollment?"

Other small schools with enrollment similar to Lanikai such as Palolo, Keolu and Waikiki Elementary schools can't get a subsidy for small enrollment.

But these other schools aren't charged for the costs of paying their principal, teachers and staff, Estomago said. "We have to subtract salaries from our per-pupil allotment. They don't have to."