Charter School Spending and Saving in California

Abstract

Examining resource allocation practices, including savings, of charter schools is critical to understanding their financial viability and sustainability. Using 9 years of finance data from California, we find charter schools spend less on instruction and pupil support services than traditional public schools. The lower spending on instruction and pupil support is offset, not by administrative costs, but by higher spending on operations, consultant services, and a greater rate of savings (carry-over). Further, analysis indicates that the differences in resource allocation patterns between charter schools and traditional public schools is not completely explained by the characteristics of students served. The resource allocation practices revealed in this study, combined with findings from prior research, shed some light on how charter schools may avoid financial deficiency and ensure their sustainability.