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Understanding academic return on investment (A-ROI) for K-12 schools

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The primary responsibility of every K-12 school district is to ensure that the funding invested into school programs will result in the academic success of students.  As much as schools want to only spend money on what works, few districts have the tools or processes in place to help them track the effectiveness of program investments in relation to student outcomes or strategic goals. However, by introducing an academic return on investment approach to tracking costs and evaluating programs, K-12 school districts can learn how to do more with limited funds and focus on offering programs that help students achieve.


The Government Finance Officers Association defines academic return on investment (also known as “A-ROI”) as “the practice of scientifically evaluating the cost-effectiveness of academic programs and then deciding where to allocate resources accordingly.” This method requires schools to compare data that shows what students have achieved from a program against the cost of running the program. It sounds simple, but why are so few school districts implementing this system of evaluation?


By implementing an A-ROI process, K-12 school districts will be able to determine all of the costs associated with a program. As a result, they will be able to make informed decisions about how to invest money and time into programs that have the most impact on students. The report “Spending Money Wisely: Getting the Most from School District Budgets” by the DM Group outlines the numerous obstacles that can deter schools from using A-ROI, including how line-item budgeting makes it difficult to calculate the relevant cost of running programs and how calculating the cost of program strategies is not always possible. Nevertheless, introducing A-ROI to monitor and evaluate programs can still provide benefits to school districts.


Here are some recommendations for introducing an A-ROI process:


Build A-ROI into every aspect of budgeting

Calculating A-ROI for programs is easier when systems to measure costs and student growth are in place before academic activities take place. School districts need to incorporate A-ROI into day-to-day operations, including revising financial reporting and budgeting to adequately capture program costs, track student attendance by program and strategy, and designing a strategic evaluation of programs. If a school district does not create the budgets, data collection system and evaluation strategies first, they will not be able to accurately calculate the per-student costs of programs. By building a system to collect the right data before programs begin, school districts can obtain important valuable information about their programs for analysis.


Ensure strong support from the superintendent and school board

An A-ROI process that is championed by senior leaders, including the superintendent and school board, can empower the process and engage all of the departments, faculty and staff who need to be involved with A-ROI implementation. Without this kind of support and shift in process, the types of budgets and data collection systems required for A-ROI to be successful will unlikely be created and maintained.


Hire staff with data analysis expertise

The key goal of A-ROI is turning data into actionable information. Even when program data is available, making sense of the numbers requires a knowledgeable person with the training and experience finding cause and effect from statistical data. Through the proper analysis of data, K-12 school districts can learn which elements of a program contributed the most to the success of students. In addition, a data analyst who is not attached to a program, unlike a member of the school’s staff, is unlikely to harbor any bias when conducting program evaluations. Data analysts often command high salaries, but their expertise can help school districts makes sense of program data to find the answers they need to make important spending decisions.


Introduce A-ROI gradually into the budgeting process

When K-12 school districts have already committed spending to programs and strategies, analyzing every program is unrealistic. However, establishing a few budget items where the A-ROI process can be gradually introduced can put things in motion. Every school district will have different priorities, but key areas that can be considered for A-ROI include: teacher instruction and professional development, reviewing “extra help” support staff and programs, services and programs for special needs, and pilot programs for ideas or strategies that are contentious. Reviewing a few areas in the first year is likely to be more manageable and can still provide important insights about school programs.


How Questica Budget Suite complements A-ROI

As K-12 school districts struggle with smaller budgets and increasing expectations from stakeholders, it is crucial they understand which programs and strategies contribute to student academic success. An academic return on investment process is a valuable system that compares the cost of running a program with the data of student results to determine which programs are working and which programs should be discontinued. By setting up a system of tracking school programs before they begin and focusing on a few key priorities, A-ROI can deliver actionable insights that school districts can use to make smarter decisions about their programs.


Questica Budget Suite provides budgeting, performance and data visualization solutions for K-12 school districts that supports A-ROI implementation. Questica Budget is a full-featured system that offers multi-year budgeting, robust reporting, forecasting and what-if scenarios for an A-ROI process that looks ahead to future budget years when planning and budgeting for school programs. Questica Performance can establish and monitor school programs to analyze and report on the progress of strategic goals. Questica OpenBook is a sophisticated data visualization tool that can present budget information in a visual format, such as graphics, charts and informational pop-ups to help the superintendent, school board, internal and external stakeholders gain a deeper understanding of the school’s spending decisions. Using an end-to-end budgeting solution like Questica Budget complements the A-ROI process by providing budget insights that help K-12 schools make data-driven spending decisions.


To learn more about Questica Budget Suite for K-12 schools, read one of our blogs or white papers, take a product tour or sign-up for one of our free monthly informational webinars.