LB 2826 .A6 R5 1922 Copy 1 SURVEY OF V. FINANCIAL ADMINISTRATION OF THE PUBLIC SCHOOLS OF ARIZONA OCTOBER, 1922 r Class, JL Bg.^eb , Book— > A ^5 SURVEY OF FINANCIAL ADMINISTRATION OF THE PUBLIC SCHOOLS OF ARIZONA OCTOBER, 1922 ^MANUFAmiRING SWIDNERH" PHOENIX, ARIZONA LIBRARY OF CONGKtSS APR 9 im LB ts2^<^ o .,1 TABLE OF CONTENTS. SECTION I. Organization and Administrative Procedures Page Relation of Organization and Procedures 5 State Control of Public Schools- _ 6-7 State Control of Education in Arizona 7 State Boabd of EDtrcATioN Present Composition of Board 8 Disadvantages of the Present Composition of Board 8-9 Suggested Composition of Board 9-10 Advantages of Recommended Changes - 10 Relation of State Board to State University and State Normal Schools 10-11 Present Duties of the State Board , 11-12 Recommended Duties of the Board 13-15 Proposed Constitutional Amendment.-.. 15 State Superintendent of Public Instruction Selection of State Superintendent.... 15 • Recommended Procedure for Selection and Payment of State Superintendent 16 Duties of the State Superintendent of Public Instruction 16-18 Recommended Duties of the State Superintendent of Public Instruction 18-19 Present Organization of the Office of the State Superintendent of Public Instruction 20 Recommended Changes in the Organization of the Office of the State Superintendent of Public Instruction 20-23 Illustration of the Reorganized State Department.;... ■....;...:.'. 23 ■ T , ' County Superintendent Relation of County Superintendents to. State Organization.. 23 Exhibit 1 — Proposed Chart of (Organization of State Department of Education 24 Selection of County Superintendent..';.' .-.!.■; !... : 25 Salary and Term of Office L." 25 Qualifications of County Superintendent 26 Present Duties of County Superintendent 26-28 Criticism of Present Duties..... : 28-29 Recommended Duties of County Superintendent , 29 Board of Trustees Present Authority of Board of Trustees 29-32 Criticism of the Powers of Board of Trustees 32-33 City Boards of Trustees 33 County Board op Education Creation and Organization of Board 33 Duties of County Board 34-35 Selection of Local Directors 35 Relation of County Board of Education to City Schools and County High Schools 36 Duties of County Superintendents under County Unit Plan of Organization 36-37 Exhibit II — Proposed Chart of Organization of County System of Education 38 Organization of the Office of County Superintendent of Schools 39 TABLE OF CONTENTS— Continued. Alternate Method of Reorganizing State Board of Education and State Department OF Education Page Need for Alternate Plan_ 39 Constitutional Authority of Present State Board of Education 40 Constitutional Authority of State Superintendent 40 Recommended Plan not Unusual 40 SECTION II. Revenue Receipts and Disbursements A. Revenue Receipts Sources of School Revenue 41 Revenue from the State 41 Recommendations with Reference to State Fund 42 County Revenues 42 Relation of County Superintendent to County Taxes 43 The Reserve Fund „ , 43 Revenue from Special Taxes 44 Apportionment of School Funds 44-45 B. Disbursements Classification of Disbursements 45 General Administration 45—46 Buildings and Equipment ;. 46—47 Teachers' Salaries i 47 Textbooks ; 47-48 Supplies 49 SECTION III. Accounting Records and Procedures Relation of Accounting to Financial Administration 50 Accounting Records of the Pubhc Schools of Arizona _ 50 Inadequacy of Existing Organization for Accounting Control Absence of Centralized Control of Accounting Procedures 50-51 Domination of District Boards _ .' 51 Loss Because of Interest Payments 51 Need for Accurate Budgets 52 Need for Checking of Accounts 52 Difficulty of Securing Accurate Data from District Boards - 52-53 DesirabiKty for a Broader Conception of the Functions of Accounting Records 53 Illustrations of the Results of Decentralization 53 Need for Competent Bookkeepers 54 Other Weaknesses in Present — . 54^55 Purpose of Foregoing Discussion 55 Accounting for Office of State Superintendent Recommended Records , 56 Accounting Procedure for the Office of the State Superintendent _- 56-57 Form A — Accounting Form for Office of State Superintendent of Public Instruction 58 Budgetary Procedure for Office of the State Superintendent 59 Accounting for the County Superintendent CentraUzation of Accounting Control for County.... 59, Issue of Warrants 59 Simphcity of Records Recommended 60 TABLE OF CONTENTS— Continued. Page Objects of Accounting System Recommended 60 Form of Record for County Superintendent's Office — . 60 Accounting Procedure — Description of Form B 60 Maintenance Funds 61-62 Building Funds -- ; - - • 62-63 Objects of Form B : - 63 Report of County Treasurer to County Superintendent 63 Form B — Accounting Form for Office of County Superintendent 64 Accounting for County School Fund — Form C 65 Porm C — Accounting Form for Office of County Superintendent — County School Fund.. 66 Accountinp for County Reserve Fund — Form D 67 Need for Uniform Accounting Records for County Treasurers 67 Form D — Accounting Form for County Superintendents — County Reserve Fund 68 Form E; — Monthly Report of County Treasurer to County Superintendent of Schools .... 68 Summary - 69 Budgetary Procedure for Counties Purposes 69 Method of Estimating Expenditures — 69 Control of Estimates ----- 69 Form F — Budget Form for Office of County Superintendent 70 Budgetary Procedure for Board of Supervisors. 71 Summary 71 Accounting for City School Superintendents and High School Principals 71 Relation of City Superintendents to Purchase of Supplies 71 Method of Handling Supplies 71-72 Accounting Procedures for the Office of the City Superintendent . 72-73 Relation of High School Principal to Purchase of Supplies 73 Accounting Procedure for High Schools 73 Form G — Ledger Form for City School Superintendent — Administrative Expenses — City School Superintendent 74-75 Control of Inventory....!.. - 76 Possible Modifications of Procedures.. - 76 Form H — Form for Supplies Inventory 77 Reports Relation of Reports to Records 76 Annual Report of County Superintendent to State Superintendent 76 Form J — Annual Report of County Treasurer to State Superintendent of Public In- struction 77 Form K — Form for Annual Report on District Maintenance Funds from County Super- intendent to State Superintendent- 78-79 Report of County Treasurer to State Superintendent 80 Form L — Form for Annual Report on District Building Funds from County Superin- tendent to State Superintendent 81 Form M — Form for Annual Report on County School Fund and County Reserve Fund from County Superintendent to State Superintendent 82 Report of State Superintendent to Legislature 83 School Population and Attendance 83 School Districts and Schools ...- 83 Teachers - - 83-84 Form N — Form for report of State Superintendent to Legislature on State and Counties - 85 TABLE OF CONTENTS— Continued. Conclusions and Recommendations Page Inade lacy of Existing Systems 85 Couri Control 86 State J, erintendent 86 City Si nntendents and School Principals 86 Reports 86 SECTION IV. Statistical Data and Procedures Relation of Expenditures to Results , 87 Difficulty of Securing Data 87 Difficulty of Judging Information with Reference to School Operations 88 Standards Used in this Report 88 Purpose for which Data is Presented 88 (iENERAL Educational and Financial Trends Basis of Ayres Index Number 89 Application of Ayres' Index to Arizona 89 Comparison of Expenditures and Attendance 89 Table 1 — Educational and Financial Components of Ayres' Index Number for Arizona 1890-1918 .. 90 Table 2 — Average Daily Attendance and Total School Expenditures in Arizona 1913- 1920 . 90 Diagram 1 — Trends of Educational and Financial Components of Ayres' Index Number for Arizona 1890-1918 91 Diagram 2 — Percentage Increases in Average Daily Attendance and Total School Ex- penditure for Arizona 1914-1920 92 Table 3 — Expenditures for Maintenance and Outlay in Arizona 1913-1921 94 Compabison op Educational Conditions in Arizona with Those; in Other Western States States Chosen for Comparison 93 Comparison of States by Ayres' Index^ 93 Expenditures per Thousand Dollars of Taxable Wealth 93 Teachers' Salaries 93 Table 4 — Ayres' Index Numbers for States in the Western Division 1918 94 Table .5— Expenditure per $1,000.00 of Wealth in Arizona and 10 Western States, 1912.. 95 Table 6 — Median Salaries of Elementary Teachers in Cities from 2,500-10,000 for Western States 1921-1922 95 Table 7— Median Salaries of One Room Rural Teachers in Western States 1921-1922 96 Table 8— Median Salaries of Two Room Rural Teachers in Western States 1921-1922 96 Comparisons Among Counties Significance of Comparisons by Counties 97 E.xpenditures per Capita (average daily attendance) 97 Average Monthly Salaries of Urban and Rural Teachers 97 Expenditure per $1,000 of Taxable Wealth 97 Table 9 — Total Maintenance Expenditure Per Child in Average Daily Attendance in Arizona Counties 1921 98 Table 10 — Expenditure Per Child in Average Daily Attendance in Arizona Counties 1921 : 98 Contributions to and from State School Fund. 99 Table 11 — Average Monthly Salaries of Urban and Rural Teachers in Arizona 1920-1921 99 Diagram 3 — Average Monthly Salaries of Urban and Rural Teachers in Arizona 1920-1921 100 TABLE OF CONTENTS— Continued. Page Table 12 — Expenditure for School Purposes Per $1,000 of Wealth in Arizona Counties 1921 101 Table 13 — Assessed Valuation Per Child in Average Daily Attendance, 1921 _ 101 Table 14 — Relation to $25 per Capita Fund assuming that Institutes, Pension 'ext Books, and State Department Expenses are not Met from Other Income, U 102 Revenue Receipts and Control Sources of School Revenue 103 Table 15 — Sources of School Revenue in Arizona 1913-1921 102 Diagram 4 — Per Cent of School Revenue from State, County, and District Sources for Arizona, 1914-1921 104 . Total State School Revenue Per Child Enrolled 105 Control of Revenues 105 Table 16— Total State School Revenue Per Child Enrolled 1921 : 106 Diagram 6 — Comparison of Total Maintenance, County Superintendents' Expenses, and State Board, 1921 106 Diagram 6 — Percentage Increases in Salaries of Teachers and County Superintendents for Arizona, 1916-1921., 107 Statistical Reports and Pbocedures Need for Statistical Reports and Procedures 108 Types of Educational Statistics 108 Defects in Present Records 108 Information which Should be Available ,108-110 Responsibility for Preparation of Reports 110 Tabulation of Data 110 Essential Feature of Statistical Reports ; Ill Bureau of Statistics and Research. Ill Summary of Conclusions and Recommendations General Conclusions with Reference to Financial Administration 112 Organization 112 Revenue Receipts and Disbursements 113 Accounting 114 Statistical Data and Procedures 114-115 During the session of the Fifth State Legislature, the criticism was frequently made that the lack of reliable information of a state wide character upon the financial admin- istration of the schools, made it difficult to ascertain their needs. In the absence of adequate records covering a period of years, such information could be best made available through a survey conducted by an impartial agency; and at the request of Governor Thomas E. Campbell and the State Superintendent this was authorized by the State Board of Education at its meeting August 23, 1922. After a careful investigation the work was entrusted to the firm of Frazer and Torbet, Accoun- tants and Auditors of Chicago and New York, who were selected as being peculiarly prepared for such service through their experience as consulting experts for large business concerns in both cities, their connection with the University of Chicago, and their successful conduct of similar surveys in other states. In making their investigations they were instructed to criticize thoroughly and impartially. This report printed in the exact form submitted to the State Board of Education is the result. It is presented to the members of the legislature and to the people of the state in the belief that its careful analyses, and constructive sug- gestions are valuable material upon which to build needed educational legislation. Acknowledgment is made here for the generous cooperation of county and city superintendents, teachers, and school officials throughout the state who gave most willing and valuable assistance to the work of the survey. Elsie Toles, State Superintendent of Public Instruction. Chicago, Illinois, October 9, 1922. State Board of Education, State of Arizona, Phoenix, Arizona, Gentlemen : Pursuant to your request, we have made a survey of the financial administration of the public schools of Arizona and we submit herewith our report giving our conclu- sions and recommendations. Scope of Investigation. In the process of our survey we visited rural schools in each county in the State and had conference with the superintendents of sixteen of the principal cities of the State. In addition we had conferences with all the County superintendents of the State except one, whom we failed to meet. We talked to school board members, school patrons and business men. We inspected the accounting records and pro- cedures of district boards, city superintendents, county superintendents, county treasurers and high school principals. We inspected quite thoroughly the statistical data which have been collected by the Office of the State Superintendent of Public Instruction, and also studied the reports submitted by subordinate officers to the State Superintendent and by the State Superintendent to the Governor. The State Superintendent put at our disposal all the information in her office, including that which had been collected by the Director of Research and Statistics. The Secretary of the Budget also gave us such information as he had available. Investigation Not an Audit. In our investigation of school accounts we made no attempt to verify their accuracy. We confined ourselves to determining whether the accounts as kept were satisfactory from the viewpoint of financial administration. Although we saw no evidence of accounts which were intentionally kept improperly, we cannot assume any responsi- bility for any such cases as might exist. Relation of Recommendations to State Constitution and State Laws. If our recommendations are accepted in full it will be necessary to make an amend- ment to the Constitution and several changes in the State Laws. We have not at- tempted in this report to show the necessary changes, although we have attempted to make our recommendations in such form that as few changes as possible will be necessary in connection with the Constitutional amendment have indicated an alter- nate procedure if such an amendment cannot be secured. If our recommendations are approved by the State Board an attorney trained in the drafting of legislation should be employed to prepare bills for submission to the legislature. Ohganization of Report. We submit out conclusions and recommendations under the following headings: I. Organization and Administrative Procedures. II. Revenue Receipts and Disbursements. III. Accounting Records and Procedures. IV. Statistical Data and Procedures. V. Summary of Conclusions and Recommendations. The table of contents shows the organization of the material under each major heading. Cooperation of School Officials. The State Superintendent, the County Superintendents, the city superintendents and the high school principals whom we visited all cooperated with us to the fullest extent in the making of this survey, and we take this occasion to express our apprecia- tion of their assistance. We were especially benefited by the assistance rendered us by the State Superintendent of Public Instruction and her staff. Dr. Karl Holzinger of the faculty of the College of Education of the University of Chicago was associated with us in this survey, and is the author of the major por- tion of Section IV of this report. FaithfuUj' yours, J. 0. McKlNSEY Geo. E. Frazee THE STATE OF ARIZONA SECTION I Organization and Administrative Procedures. Relation of Organization and Procedure to Financial Control. The control of school finances in the State of Arizona is inseparably interwoven with the organization by which administrative control of school affairs is exercised. The management of the school funds is in the hands of the administrative staff of the school system and what is of particular importance the purposes for which the funds are expended are determined by members of the school organization. The economy with which funds are expended, therefore, depends upon the efficiency of the school organization. In controlling school finances, as well as in controlling the finances of a business enterprise, it is not sufficient to provide that money shall be spent only when properly authorized. It is equally important to provide: (a) that authority will be granted for its expenditure for necessary services and supplies only, (b) that these services and supplies are purchased at the lowest price consistent with the procurement of a satisfactory product, and (c) that the services and supplies are used efficiently after they are procured. The administrative organization of the public schools of Arizona is such that none of the foregoing essentials are uniformly realized. Purchases of commodities are authorized which are not needed, or, at least, are not needed as badly as are other commodities which are not available; prices are paid which are unnecessarily high, and both commodities and services are used inefficiently. It is not intended to imply that these conditions exist universally. It is also desired to emphasize that they are not the result of inefficiency of the executive heads of the school organization, but because of the nature of the organization itself. Since there is abundant evidence that these conditions have continued uninterruptedly for many years, it is apparent that the present administration is not responsible for them. In fact, the present State Superintendent and County Superintendents have done much to decrease wastes, but have been unable to eliminate them because of the weakness of the present plan of organization. It is our opinion that the first step in the establishment of effective financial con- trol is the reorganization of the present system of administration of the public schools. In this section of the report it is our purpose to point out the weaknesses in the present organization and administrative procedures and to suggest the changes which we think are necessary to correct these -weaknesses. State Control of Public Schools. It is now generally recognized that education is a state function and that the State should not only contribute to the support of the schools of the State, but that it also has the right to exercise control over their administration. Not only is this theory supported by popular opinion, but it is upheld by numerous court decisions. Typical of the trend of these decisions is the following quotation from a decision of a New York State Court (176 New York, 13): "It is apparent from the general drift of the argument that the learned counsel for the defendant is of the opinion that the employment of the teachers in the public schools, and the general conduct and management of the schools, is a city function in the same sense as it is in the care of the streets, or the employment of police, and the payment of their salaries and compensation; but that view of the relations of the city to public education, if entertained, is an obvious mistake. The city cannot rent, build or buy a schoolhouse. It cannot employ or discharge a teacher, and has no power to contract with teachers with reference to their compensation. There is no contract or official relation, express or implied, between the teachers and the city. All this results from the settled policy of the State from an early date to divorce the business of public education from all other municipal interests or business, and to take charge of it, as a peculiar and separate function, through agents of its own selection, and immediately subject and responsible to its control. * * * " Discussing the same question, the Supreme Court of Indiana has said (23 New England Reporter, 946) : "Essentially and intrinsically, the schools in which are educated and trained the children who are to become the rulers of the Commonwealth are matters of state, and not of local, jurisdiction. In such matters the State is a unit, and the legislature the source of power. The authority over schools and school affairs is not necessarily a distributive one, to be exercised by local instrumentalities; but, on the contrary, it is a central power, residing in the legislature of the State. It is for the lawmaking power to determine whether the authority shall be exercised by a state board of edu- cation, or distributed to county, township, or city organizations throughout the State. With that determination the judiciary can no more rightfully interfere than can the legislature with a decree or judgment pronounced by a judicial tribunal * * * . As the power over schools is a legislative one, it is not exhausted by exercise. The legislature, having tried one plan, is not precluded from trying another. It has a choice of methods, and may change its plans as often as it deems necessary or expedient; and for mistakes or abuses it is answerable to the people, but not to the courts. It is clear, therefore, that, even if it were true that the legislature had uniformly trusted the management of school affairs to local organization, it would not authorize the conclusion that it might not change the system. To deny the power to change is to affirm that progress is impossible, and that we must move forever "in the dim footsteps of antiquity." But the legislative power moves in a constant stream, and is not exhausted by its exercise in any number of instances, however great * * * ." As a final statement of this viewpoint, the argument of Secretary Hill of the Massachusetts State Board of Education, in discussing the right of the State to require every town in the State to be under the supervision of a properly qualified superin- tendent of schools, is worth quoting in full: "In this matter of determining what is best for the welfare of the schools, it should not be forgotten that it is the people as a whole who are supreme, and not portions of them here and there. It needs only an elementary acquaintance with the con- stitution of the State to satisfy one that in law the State is not the creation of the towns, but the towns rather of the State. The powers of the State are not derived from the towns, but those of the towns from the State. In other words, the people, without reference to towns existing at the time, or to possible towns thereafter, organized the State and fixed its authority. And ever since the State has been making towns and unmaking them, adding to their powers and subtracting from them, and in a thousand ways, within the hmits of the original compact, showing its supremacy. This way of putting it, however, is suggestive of a despotism that does not really exist; for it needs to be repeated that the State is not an authority apart and different from the people of the towns, ruling them from a distance and insensitive to their interests. On the contrary, the State is an expression, by formal and solemn agree- ment, of the will of the people living in these very towns, — the highest expression, indeed, the towns' people of the Commonwealth ever made of their civic aspirations and resolves. Whatever authority the town has over its schools, it has by direction and permission of the State; that is, by direction or permission of the people at large, of whom the people of the town are a part. Now, this view of the relation of the State to the towns and the schools, supported, as it is, by the constitution of the Commonwealth, should silence certain ill-considered talk that is heard when new legislation affecting the town is proposed, about the State's trespassing on town rights, usurping town privileges, establishing a central despotism, and all that. The fundamental thing about a State's power is that the State, within the terms of the constitution, can curtail, if it chooses, the rights of towns without trespass, with- draw privileges from them without usurpation, give them new powers without ex- haustion of its own, and exercise additional central authority over them, with wide margins for subsequent contingencies. The right of the State, for instance, to de- termine the nature of the supervision the schools should have is indisputable. The expediency of any particular measure looking to that end, however, is a legitimate subject for discussion." We have considered this problem at some length because of the very frequent criticism that the State authorities are usurping the rights of the local units of edu- cational organization. The foregoing statements very clearly point out that the local units obtain their authority from the State, and not the reverse. This viewpoint is undoubtedly applicable to the State of Arizona for the State Constitution pro- vides (Article XI): "The Legislature shall enact such laws as shall provide for the establishment and maintenance of a general and uniform public school system, which system shall include kindergarten schools, common schools, high schools, normal schools, industrial schools, and a university (which shall include an agricultural college, a school of mines, and such other technical schools as may be essential, until such time as it may be deemed advisable to establish separate State institutions of such character). The Legislature shall also enact such laws as shall provide for the education and care of the deaf, dumb and blind." It is sometimes contended that the centralization of educational authority is un- democratic. In this report it is assumed that democracy in education does not consist in increasing or decreasing the authority of any specific units of the school system, but rather in the administration of the public schools so that each child in the State will receive the maximum amount of education possible at the minimum amount of cost. State Control of Education in Arizona. The State of Arizona exercises control of its schools through the following agencies: (1) The State Board of Education which has control of the high schools and elementary schools. (2) The Board of Regents which has control of the State University. (3) Two Normal School Boards, each of which has control of one of the State Normal Schools. State Board of Education. Present Composition of Boaed. The Constitution of the State provides that "The State Board of Education shall be composed of the following members : The Governor, the Superintendent of Public Instruction, the President of the University, the principals of the State Normal Schools, as ex officio members, and a city superintendent of schools, a principal of a high school and a county superintendent of schools to be appointed by the Governor." There are at present two State Normal Schools, therefore the Board is composed of eight members. The State Superintendent of Public Instruction, who is elected by popular vote, is Secretary of the Board, and acts as the chief executive officer. Disadvantages of the Present Composition of Board. Although the present composition of the Board is similar to that of the Boards of several states, there are important objections which may be urged against it. The most significant of these are: (1) The Board is not continuous and therefore is not adapted for promoting continuity of educational policy. Two of its members, the Governor and the Superintendent of Public Instruction, are political officers who are elected for two year terms and are likely to change frequently. Three other members are appointed by the Governor, and it is customary for these to be changed by each governor. It can be seen, therefore, that five of the eight members are subject to the varying political fortunes of different political parties and factions. When the personnel of the Board changes there is likely to be a change in its policies. Such changes are the more probable because the temporary nature of the Board prevents it from es- tablishing definite and well established policies which can be passed on to succeeding boards. The history of the Board as reflected in its minutes and official acts indicates that frequent changes in policy have been made in the past. (2) The Governor appoints three of the members of the Board and is a member himself. The State Superintendent is usually a member of the same political faith as the Governor and may be expected to feel kindly disposed towards his wishes. The President of the State University and the principals of the State Normal Schools who compose the remaining members of the Board are appointed by boards over which the Governor exercises control by virtue of his appointive power. It can be seen, therefore, that the Governor has an opportunity to exercise a predominant influence in the affairs of the Board. This influence is the more potent because of the fact that he is a member and the presiding officer of the Board. We have no evidence that the present Governor or any of his predecessors have attempted to influence the Board for improper purposes, but there is evidence that every governor does exercise an important influence on its decisions. Many people, especially those of the teaching corps, feel that the Board is subject to political influence. Although we have no evidence that it is, we feel that it is worth while to remove this opportunitj' for criticism if possible. (3) The ex officio members of the Board, of which there are five, are required to serve regardless of their personal fitness and regardless of whether or not they have time for the work. In the case of the Governor, he has so many duties to perform that he can ill afford to spare sufficient time to give ade- quate attention to the tasks imposed upon him by his membership on the Board, and he will have a decreasing amount of time in the years to come as the administrative tasks of his office increase. To a small degree the same is true of the president and the principals of the State Normal schools. Their tasks are increasing rapidly with the increase in the size of their re- spective institutions. (4) The Board is composed, with the exception of the Governor, entirely of men engaged in educational work. Many of the problems with which the Board must deal are of such a nature that the advice of those not engaged in edu- cational work is desirable. The members of the Board do not need to be experts in education any more than the directors of a Bank need to be experts in banking. The Superintendent of Public Instruction and the executive heads of the State institutions should provide the expert advice needed by the Board. The taxpayers of the State will have more confidence in the de- cisions of the Board if it is not composed entirely of educators whose opinions on educational matters they are apt to believe to be biased. (5) Four members of the Board, the State Superintendent of Pubhc Instruction, the President of the State University, and the principals of the two State Normal schools hold responsible executive positions in the educational organization of the State and are responsible for carrying out many of the pohcies adopted by the Board. This condition will be even more true if all the educational institutions of the State are placed under the control of the Board as is recommended later in this report. Three of the remaining members are in subordinate, but significant executive positions. This results in the members of the Board, with the exception of the Governor, formulating policies which are to govern their own actions. It is doubtful if they can, under these circumstances, have an entirely impersonal at- titude towards the questions of policy which come before the Board. In business administration it has been found desirable to distinguish quite clearly between the responsibility for pohcy formation and the responsibility for the execution of policies. We believe that a similar distinction is de- sirable in educational administration. Suggested Composition of Board. In view of the foregoing statements, we believe that a change in the present com- position of the State Board of Education is desirable. We recommend the following: (1) That a board of seven members be appointed by the Governor subject to the approval of the Senate. (2) That not more than four members can be members of the same political party. (3) That the term of each member be eight years and that the term of not more than two members shall expire in any biennium. ■ (4) That members can be removed from office before the expiration of their term only by a majority vote of the Senate in response to the recommenda- tion of the Governor. (5) That no member of the Board shall be an employee of an institution which is under the control of the Board. (6) That the Board shall elect from its number a president who will be its pre- siding officer. 9 (7) That the President of the State University serve as Secretary of the Board and in the absence of the President of the Board serve as presiding officer. The Assistant Superintendent of Public Instruction will serve as Assistant Secretary and perform such duties as the Board may provide. (8) That the Board shall meet at least quarterly, but may meet more frequently if the rules of the Board so provide. (9) That the members of the Board shall serve without pay but will receive necessary traveling expenses. The Board may or may not include persons engaged in educational work. It is preferable that the majority of the members should be engaged in other occupations. The State Superintendent should not be a member of the Board, but should be its chief executive officer in the administration of the elementary schools and high schools. The Board may well appoint an executive committee which has authority to pass on necessary problems during the time intervening between meetings of the Board. Advantages of Recommended Changes. It is thought that these changes will have the following beneficial results: (1) ' They will provide for a continuous board which will promote continuity of educational policy. Since there are not more than two members appointed in any one year, there cannot be a sudden change of the majority of the members of the Board as is possible at the present time. (2) They will tend to make the Board more non-political. At least two po- litical parties will be represented on the Board at all times and since the term of the Governor is two years and typically he will not serve for more than two consecutive terms, there will usually be not more than four members appointed by any one Governor. (3) They provide for responsibility of the Board to the people since there are no ex officio members and the appointment of the members is subject to the approval of the Senate. (4) They provide for a board which is of sufficient size to make it suitable for the formation of policies, and yet is sufficiently small not to be unwieldly. Relation of State Board to State University and State Normal Schools. At present the State Board has no control of the State University or of the two State Normal Schools. Each of these institutions is administered by a separate board. The only contact between these boards and the State Board is through the State Superintendent of Public Instruction, who is a member of all three boards, and he exercises only a minority control in each board. Consequently there is a lack of coordination of the policies of these closely related units of the public school system of the State. To bring about efficient administration, this coordination is necessary. At present each board attempts to further the interests of that part of the educational system which is under its control, which results in some units of the system undertaking ac- tivities which can better be performed by some other unit. In some cases the different boards compete with each other in trying to secure appropriations from the Legis- lature, and this tends to secure less desirable results than if they all united to secure the desired funds for the carrying on of the coordinated program of the system as a whole. The Normal boards are composed of the State Superintendent of Public Instruc- 10 tion and two other members appointed by the Governor. Usually these two members live in the vicinity of the Normal school, and they tend to regard it as a local institu- tion rather than as a part of the State Educational System. The detrimental effect of this attitude is evident. It is recommended that the State Normal School boards and the Board of Regents be abolished and that the administration of the State Normals and the University be placed in the hands of the State Board of Education. This will centrahze the ad- ministration of the educational system of the State, and tend to promote the develop- ment of a well balanced educational program for the State as a whole. We feel sure this will lead to efficiency in both educational and financial administration. The State Board may appoint committees of its members to be in immediate charge of the different educational institutions, and these committees can pass on the minor administrative problems of the institutions. The President of the University, and the Principals of the two Normal Schools will act as executive officers of the Board with reference to their respective institutions. The desired coordination of the State University with the other schools of the State will be promoted by having the President of the University serve as Secretary of the State Board as previously recom- mended. Present Duties of the State Board. The duties of the State Board at the present time as presented by the State Law (Paragraph 2697 School Laws) are as follows: (1) To keep a record of its proceedings, subject to public inspection. (2) To adopt and use in the authentication of its acts an official seal. (3) It shall have power to make rules and regulations for its own government and for the government of its executive officers. It shall assign, in addition to those assigned by law, their functions and duties, direct them as to their work and be free to change such assignments and directions to meet the necessities of the work under their direction. To determine the policy, direct the work to be undertaken and appropriate from its funds the money necessary to carry out such work. It may perform legislative functions not inconsistent with the law and shall delegate to its executive officer the execution of all policies decided upon. (4) To devise plans for the increase and management of the State School fund, and prepare a budget of the necessary expenditures for the proper main- tenance of the State Board of Education and the carrying out of the necessary investigations, and present the same to the Legislature for its approval and shall have control of expenditure of all money so appropriated. (5) To prescribe and enforce the use of a uniform series of text-books in the common schools; provided, no change of said text-books shall be considered or inade by the State Board of Education, except at its regular meetings, or at some special meeting thereof held for that purpose, and notice of such intention shall be communicated by the Secretary of said Board, in writing, to each county school superintendent at least sixty days prior to the time of holding such meetings; provided, that on the adoption of a uniform series of text-books, such series shall not be changed during the period of five years next succeeding the adoption of such series. (6) To prescribe and enforce a course of study in the common schools of the State, determine the number of credits necessary for graduation from the 11 high schools, and prescribe the necessary qualifications for admittance to the State Normal Schools and the State University. (7) The State Board of Education shall have general charge of the education of the deaf, dumb and blind under such regulations as are prescribed by law. (8) To have entire supervision and control of the certification of teachers in accordance with such rules and regulations as the Board may adopt. (9) To revoke all certificates or life diplomas for immoral or unprofessional conduct, or for evident unfitness to teach. (10) To expend a sum not to exceed Two Hundred ($200.00) Dollars annually for the purpose of maintaining State Headquarters at the annual meeting of the National Education Association. (11) To see that school laws of the State are properly enforced. (12) Recommend to the legislature needed changes in existing laws or additional legislation. (13) In co-operation with other departments of the State Government, the Board shall see to it that the rules relating to schools, health, compulsory education, child labor and child conservation are enforced. (14) At such times as may be deemed advisable, prepare and order published such reports as may constitute a contribution to the general educational welfare of the State and provide for the distribution of the same. (15) To conduct teachers' institute at such time and place as may be advisable. (16) To submit, on or before the first day of October of each year prior to the meeting of the legislature, to the Governor a statement of the expenditures of each institution under its control, fully itemized as to purposes, subjects, and amounts of each, covering a period of two fully completed fiscal years prior thereto; and a statement of estimated expenditures of all kinds, for all purposes, continuing and new purposes, which may be required for each biennial period, likewise fully itemized as proposed purposes, objects and amounts of estimated expenditures to be required for each insti- tute for such fiscal period of two years. The Governor shall transmit such estimates to the legislature, together with such recommendations as he may deem advisable, and the legislature shall appropriate such amounts as it may deem necessary. The expenditure of any fiscal year made in connection with any institution under the State Board of Education shall not exceed the amounts, item by item. (17) To appoint upon the recommendation of the Superintendent of Public In- struction such executive officers, specialists, assistants, clerks, or employees as in its judgment the execution of the work of the Board may demand, and fix the salaries of the same." It will be noted that the powers of the Board are limited, and its duties general and relatively unimportant aside from prescribing and enforcing the use of a uniform series of text-books and course of study for the common schools of the State, and the certification of teachers for the common schools and high schools. It has no effective means of enforcing much of the authority which it possesses. Recommended Duties of the Board. We recommend that the authority of the Board be extended and that it be given complete control of all the educational activities of the State with power to enforce 12 its authority. This recommended increase of its authority is in conformity with modern tendencies in educational administration. This movement towards central- ization has come to its most complete expression in the Board of the State of New York. Of the powers of this board, the Illinois educational commission, in its report issued in 1911, says: "The board of regents of the University of New York is composed of twelve members, who are elected by the legislature to serve for a period of twelve years. No officers of any of the incorporated educational institutions of the State are eligible to membership. There are no ex officio members, but the commissioner of education acts as its executive officer. The Uni- versity of the State of New York is a corporation created in 1784. It includes all the incorporated higher educational institutions of the State. The State library and the State museum are departments of the university, and the board may establish other departments if they are deemed necessary to the discharge of its duties. It has power to exclude from membership any institution failing to comply with the law of the State or the rules of the board. It has charge of private academies and in some measure of the pubhc secondary schools, as well as of all the higher institutions. All the powers and duties of the board in relation to the supervision of elementary and secondary schools, including all the schools, except colleges, technical and professional schools, are devolved upon the commissioner of education, who is elected by the board. The board of New York has power to establish such rules and regulations as are necessary to carry into effect the statutes of the State relating to education. It cooperates with other agencies in bringing within the reach of the people of the State young and old, the, largest educational opportunities by stimulating interest, recommending methods, designating suitable teachers and lecturers, and by lending books and apparatus. It established in the academies of the university examina- tions in studies, furnishes a suitable standard for graduation from academies and of admission to colleges, and grants certificates and diplomas to those who pass such examinations. It controls the whole matter of granting honorary degrees and diplomas. The board has power to incorporate any university, college, academy, library, museum, or other institution for the promotion of science, literature, art, history, or other departments of knowledge." Commenting on this tendency to centralize responsibility and power in the State board of education, President Butler, of Columbia University, says: "There can be no doubt about the general tendency being strongly toward greater centralization. Not only are its advantages quite apparent, but the overwhelming current of legislation and of the decisions of the courts is making it imperative. These are practically in accord, and are to the effect that in each State the school system is not local, but general; not individual schools controlled by separate communities, but a closely related system of schools which has become a State system and is entirely under State authority. Local school officials are now uniformly held to be agents of the State for the administration of a State system of education." We beUeve that the powers and duties of the State board of education of Arizona should be clearly defined by law and we recommend that its duties and powers shall be as follows: 13 (1) To have general control and direction of all the educational activities and interests of the State. (2) To control and manage the State University, having all the powers now invested in the board of regents. (3) To control and manage the two State Normal schools now in existence and all other teacher training schools that may be established, having all the powers now invested in the present local boards of control. (4) To appoint and fix the salary of the State Superintendent of Public Instruc- tion who will have control of the common schools and high schools of the State. (5) To appoint on the recommendation of the State Superintendent, all assistants and employees of the State department of education and to fix their salaries. (6) To control and manage the State institutions for the education of orphans, the deaf, blind and feeble-minded, and other special classes as may be es- tablished, and to exercise general oversight of similar institutions receiving special State aid established by local communities and under immediate local control. (7) To examine and license all private schools which offer educational training for sale in the State. (8) To have final approval of the charters of all higher educational institutions that may be established in the State, and to determine standards on which collegiate degrees may be conferred, under such regulations as may be fixed by law. (9) To apportion the State school funds to the counties and to enforce State laws and regulations by withholding funds from counties in which schools are not maintained in accordance with the State laws or regulations of State board. (10) To have final approval of a State course of study prepared by the State de- partment of education. (11) To fix standards for graduation from the elementary schools, high schools, normal schools and university upon the recommendation of its executive officers. (12) To select text-books for the use of the elementary and high schools in the manner recommended in a subsequent section of this report. (13) To determine under general regulations fixed by law the kinds of teachers' certificates to be issued and the requirements for each. The present board of examiners should be abolished and its functions transferred to the State Board which should grant certificates upon the recommendation of the State Superintendent. (14) To control and direct through its executive officers, the public libraries, museums and other institutions and organizations of the State which are of an educational nature. (15) To prepare an approved list of dealers in school supplies from which school equipment and supplies can be purchased by county boards and city dis- tricts. It will be noted by a consideration of the foregoing that it is our belief that the chief function of the State board of education is to formulate policies and approve 14 major administrative plans. The execution of the poHcies and plans and the decision of minor questions of administrative procedure should be left to its executive officers. Proposed Constitutional Amendment. An amendment to the State Constitution will be voted on at the general election on November 7th, which provides for the estabhshment of an appointive board similar to that recommended in this report. The amendment places the State Normal schools under the control of the State board, but excludes the State University from its control. As previously stated, we think the State University should be included. The amendment provides for the repeal of the present provisions of the State Con- stitution which state the composition of the State board and the method of selecting the State Superintendent and the substitution of the amendment which states the new composition of the board and new method of selecting the State Superintendent. We think it preferable for the amendment to repeal the present provisions of the Constitution relating to these matters and to stipulate that the administrative organ- ization of public schools will be established by legislative enactment. Notwithstand- ing these disagreements with the proposed amendment we think it is a distinct im- provement over the present provisions of the Constitution, and should be adopted. State Superintendent of Public Instruction. Selection of State Superintendent. The State Superintendent of Pubhc Instruction is elected biennually at the general election. He is nominated and elected in the same manner as the Governor and other State officers. He receives an annual salary of $3,000.00. There are quite serious objections to the present plan of selecting the State Super- intendent, the most significant of which are the following: (1) There is a tendency to regard the office as a political one and for each party to nominate the candidate who will add the most strength to the ticket rather than to nominate the one who will add the most strength to the ad- ministration of the public schools. (2) Since the Superintendent is subject to popular vote, he is under great temp- tation to yield to political expediency in formulating and executing policies. Those who ignore political considerations are likely to fail of re-election. (3) The term of office (2 years) is so short that the incumbent has little time to formulate or initiate new policies. This is the more true because if he desires re-election he must spend considerable time in campaigning and performing other duties of a political nature. The superintendent has no assurance of a continuance in office beyond one term, for a change in the fortunes of the political party of which he is a member will bring about his retirement. The success of his party rather than his merit is likely to de- termine whether or not he will be re-elected. (4) Because of the pohtical and temporary nature of the position it is difficult to obtain competent men or women to seek the position. A person capable of filling the position will usually not care to seek temporary employment in an unremunerative position. One cannot think of preparing himself for such a position as can a city superintendent or a college executive of preparing for his position. Consequently those who have little training for the position are likely to seek it. 15 (5) The present salary of the State Superintendent is entirely inadequate. He is supposed to have supervision of all the public schools of the State, yet many of the city superintendents who have control of the schools of but one city receive much higher salaries. The President of the State Univer- sity receives more than three times as much. The salary of the State Superintendent must be materially increased if it is desired to attract to this position the type of men and women who are needed to perform the tasks of the office properly. Recommended Procedure for Selection and Payment of State Superintendent. We recommend the following: (1) That the present method of selecting the State Superintendent by popular vote be abolished and that he be appointed by the State board of education in the same manner that city superintendents are selected by the city boards of education. (2) That the Superintendent be appointed for an indefinite term of office and be continued in office so long as the board thinks that he is rendering com- petent service. This will provide for a continuity of policy and will afford the Superintendent an opportunity to formulate and establish a well bal- anced program. (3) That the Superintendent be selected without regard to residence, citizen- ship or politics. The board should not be restricted to the selection of an inhabitant of the State any more than the city boards of education are restricted to the selection of inhabitants of the State as superintendents of city schools. Some of the best city superintendents in the State at the present time were selected for their present positions while teaching in other states. The State board should be free to select the best man or woman possible regardless of residence. (4) That the salary of the Superintendent be not fixed by law but left to the determination of the board. The board should be free to pay the salary which is necessary to secure a desirable person for the position. They should be able to change this salary as conditions demand. For instance, they should have the power to increase the original salary paid to the Super- intendent when they think his services merit such an increase. Several states now have appointive superintendents, and it has been their exper- ience that this plan has assisted in securing higher grade men and women for the position and has also tended to increase their term of office. Duties of the State Superintendent of Public Instruction. The duties of the State Superintendent of Public Instruction at the present time as prescribed by the State Law (Paragraph 2705 School Laws) are as follows: "(1) To superintend the pubhc schools of the State. (2) To investigate, whenever he deems it necessary to do so: any accounts of school money kept by any state, county or district officer. (3) To apportion, subject to the supervision of the State Board of Education, to the several counties, on the second Monday in January and May of each year, the amount of money to which each county may be entitled under the provisions of this title, according to the number of persons between the ages of six and twenty-one years, as shown by the last census list of the 16 several counties, and to furnish such county treasurer and county super- intendent with an abstract of such apportionment. He shall also certify such apportionment to the State Auditor, and upon such certification the auditor shall forthwith draw his warrant on the State Treasurer in favor of the county treasurer of each county for the amount due said county. (4) To prepare, have printed and furnish, through the county superintendents to teachers and officers charged with the administration of the laws relative to public schools, such blanks and blank forms (including school registers), together or with such instructions and regulations as to their use as he may deem necessary. To prepare and have printed all blank teachers' certificates for the use of the Board of Education and board of examiners; to have printed and distributed the course of study prescribed by the State Board of Education and to have printed the questions to be used by the State Board of Examiners and the rules and regulations of the State board govern- ing the same. He shall procure such record books as may be deemed neces- sary for keeping the records of his office, the office of the State Board of Education, State Board of Examiners, and for the offices of county superin- tendents of the State. He shall also procure such stationery, postage stamps and other office supplies as may be necessary for conducting his office. He shall prepare and publish from time to time pamphlets and circulars in relation to the observance by the public schools of Arbor Day, Flag Day, Washington's Birthday, and such other school holidays as may be established by law; also in regard to school sanitation, school architecture and such other subjects as the State Board of Education may direct. He shall certify to the State Auditor the cost of the printing above speci- fied, and the cost of said record books, stationery, stamps, and other office supplies and expenses, and to whom the same is due; and said auditor shall draw his warrant on the State Treasurer in favor of the person to whom the same is so certified to be due, and the said treasurer shall pay the said warrant out of any money to the credit of the State school fund, provided, the amounts so certified do not exceed the sum of three thousand dollars annually, exclusive of printing the biennial reports and printing the school laws. (5) He shall be allowed a sum not to exceed one thousand dollars to defray his actual expenses, itemized accounts of which shall be kept and audited as other accounts, in visiting schools, teachers' institutes, associations, etc., in or outside of the State, which amount shall be payable out of the State school fund on warrant of the State Auditor. (6) To make a printed report, on or before the first day of October preceding each regular session of the legislature, to the Governor, who shall transmit a copy thereof to the legislature. Said report shall contain a full statement of the condition and amount of all funds and property apportioned for the purpose of education; the number and grade of schools in each county; the number of children in each county between the ages of six and twenty- one years; the number of such attending public schools; the number of children between the ages of eight and sixteen years; the average number of children that have attended the public schools during the two years previous to July first of that year; the number attending private schools; the number that can read and write; the amount of school money raised by county 17 taxation, district taxation, or otherwise; the amount expended for salaries of teachers and for building of school houses; a statement of plans for the management of public schools, and such other information relative to the educational interests of the State as he may deem expedient. He shall cer- tify the cost of printing said report to the State Auditor, who shall draw his warrant on the State Treasurer in favor of the person to whom said amount is due, and the treasurer shall pay said warrant out of any money in the treasury to the credit of the State school fund. (7) To have the law relating to public schools printed biennially in pamphlet form, and annexed thereto such forms as he may be unable to supply in the shape of blanks. He shall certify the cost of printing such pamphlet to the State Auditor, who shall draw his warrant on the State Treasurer in favor of the person to whom said warrant is due, and the treasurer shall pay said warrant out of any money in the treasury to the credit of the State school fund. (8) To supply school officers and teachers, school libraries and the State hbrary, with one copy of each of the pamphlets mentioned in the preceding sub- division. (9) To authenticate with the official seal of the Board of Education all writings and papers issued from this office. (10) To call annually a meeting of the county school superintendents of the State, at such time and place as he may deem best, for the discussion of ques- tions relating to the public school. Said meeting shall continue not less than two or more than three days, at the option of the Superintendent of Public Instruction. Each county superintendent shall be allowed, out of the county school fund, a remuneration for his actual expenses incurred in attending the meeting. It will be noted that the powers of the State Superintendent are limited and his duties general and indefinite in nature. He has no effective means of enforcing even the authority which he possesses. Recommended Duties of the State Superintendent of Public Instruction. We recommend that the authority of the State Superintendent of Public In- struction be extended and that he be given complete control and supervision under the State Board of Education of the Elementary schools and high schools of the State, and that he will also act as the executive officer of the Board in controlhng and directing all the other educational activities which are under the control of the Board, except those which the Board places under the control of the President of the State University and the Principals of the two Normal schools. We also recommend that he be given power to enforce his authority. We beheve that the powers and duties of the State Superintendent of Public Instruction should be clearly defined by law, and we recommend that his powers and duties be as follows: (1) To supervise all educational work supported in part or in whole by the State except that which is placed under the control of the President of the . State University and the Principals of the two State Normal schools, and that he shall report thereon to the State Board of Education. (2) To visit different parts of the State in the interest of education. He should be given assistants who will also visit the schools of the State and report thereon to the State Superintendent. The work of these assistants is ex- 18 plained in the discussion of the organization of the State Department of Education. (3) To prepare the courses of study for the public schools to be presented to the State Board for final action and to approve the courses of study in all special schools before they receive State aid. He should also have auth- ority to approve the courses of study of private schools before they receive a license to operate in the State. (4) To examine text books and recommend to the State Board the books which are to be adopted for the State use. He should also have control of the purchase and distribution of these books to the schools where they are to be used. The method which we think is desirable for their purchase and distribution is stated in a subsequent section of this report. (5) To prepare or have prepared questions for examinations for teachers' cer- tificates and to issue State certificates to those who are qualified to receive them under regulations prescribed by the State Board. The method of handling teachers' examinations and the establishment of the requirements for State certificates are discussed later. (6) To prescribe the records to be kept by all units of the school organization and to direct the reports which are to be submitted by each. It is to be expected that in the reorganization of the State departments the control of all State records and reports will be centralized in one department. In this case the records and reports to be used by the various units in the school organization will be prescribed by this department, but until such a re- organization takes place, the authority for prescribing records and reports for the school system should be vested in the State Superintendent. (7) To prepare, publish and distribute matter for the promotion of public school work. (8) Collect reports from county and city superintendents and from private institutions, and to prepare and publish biennially a complete report of the status of education in the State containing such statistical data as he may think will be of service to both those engaged in education and to the public in general. (9) To compile and publish the school laws of the State. (10) To interpret school laws and aid school officers and teachers in all matters pertaining to the conduct of the schools. (11) To enforce State laws and regulations by withholding from any county disregarding them (pending the action of the State Board of Education) a portion of the State fund. (12) To hold an annual convention of county and city superintendents and of county and city boards of education. (13) . To prepare or have prepared and published, plans and specifications for school buildings. The method of controlling expenditures for school build- ings is discussed subsequently. (14) To act as the executive officer of the State Board of Education with reference to its duties in connection with the elementary and high schools of the State. 19 Present Organization of the Office of the State Superintendent of Public Instruction. There is employed by the State Board of Education in addition to the State Super- intendent of Public Instruction, the following: Assistant Superintendent, Director of Research and Statistics, a certification clerk and three clerks and stenographers. In addition to this staff, which is in the office of the State Superintendent, there are employed by the State Board of Education, acting as the State board for Vocational Education, an assistant director of vocational education, three supervisors of vo- cational education and two clerical and stenographic assistants. The State Superin- tendent of Public Instruction acts as State Director of vocational education, and in this capacity attempts to coordinate the work of the staff employed by the State Board of Vocational Education and the staff employed by the State Board of Edu- cation. The present State Superintendent of Public Instruction has attempted to reduce the expenditures of her office as much as possible, and consequently has not built up as large a staff as we believe is necessary for the proper performance of the duties of the State Superintendent if the State Superintendent is given the powers and duties which we have recommended above. The present expenditures of this office are quite small when they are compared with the total disbursements for school purposes for the State. The annual budget of both the office of the State Superintendent and the office of the Director of Voca- tional Education are given in Section IV of this report, together with comments with reference thereto. The present staff of both the office of the State Superintendent and of the office of the Director of Vocational Education seems to be quite efficient and the work of these offices seems to be done in a thorough and capable manner. Recommended Changes in the Organization of the Office of the State Superintendent of Public Instruction. If the State Board of Education and the State Superintendent of Public In- struction are to assume the greater responsibilities which we have recommended, it will be desirable to have a reorganization of the office of the State Superintendent of Public Instruction. We recommend that the following changes be made: (1) That the office of the Director of Vocational Education be abolished and that the supervision of vocational education for the State be placed under the direct control of the State Superintendent of Public Instruction, and that he be given a supervisor of vocational education who will assume the duties now performed by the office of the State Director. We do not believe that in the present state of development of education in the State of Ari- zona it is expedient to have as elaborate an organization for the supervision of vocational education as is now maintained. It is true that the State now receives $20,000.00 per year for federal aid, and if the present super- visor's staff be reduced, it is possible that this aid might be withdrawn. Even though this be true, we think that the abolition of the office of the State Director for Vocational Education is desirable. It seems entirely inconsistent to have three separate supervisors for vocational education, while at the same time there is no supervisor at all for elementary schools or for high schools. Although it is important that vocational education be encouraged in the State, it does not seem to be desirable that it be encouraged to the detriment of the remainder of the educational system. 20 We also doubt the advisability of making separate appropriations for vocational education. We feel that better results would be obtained, if vocational educational is regarded as only a part of the general educational system as a whole and that the appropriation therefor should not be segre- gated as it is at the present time. (2) That the office of the State Superintendent be organized on a functional basis so as to better direct and control the new activities which we think this office should assume. We recommend that there be established in this office the following departments or divisions: (a) Executive and Business Management. (b) Legal, School Laws and School Revenues. (c) Research and Statistical. (d) Examination, Certification and Teachers' Employment. (e) Elementary Education. (f) Secondary Education. (g) Vocational and Special Education. (h) Text-books, Buildings and Equipment. (i) Historical, Library, Museums, Pubhcations and Editorials. The duties of these various divisions should be as follows : (a) The Executive Division should have charge of the business management of the department, and the head of this division should act as the business representative of the State Board of Education. He should act as pur- chasing agent for the State Department and purchase all supplies for the use of the office of the State Superintendent and for distribution to schools. It is expected that in the reorganization of the State departments all pur- chasing will be delegated to a central purchasing agent but until this re- organization takes place the foregoing procedure is recommended. It is recommended that the head of this division act as Assistant Superintendent and assume the duties of the Superintendent in the latter's absence from the office. (b) The Legal, School Laws and Revenue Division should edit the present school laws, make recommendations with reference to changes in these laws, interpret these for the benefit of school officials and see that the regu- lations and rules of the State Board are properly enforced. It should also make studies with reference to present sources of school revenues, the method of distributing these to the various units of the school system, and make recommendations with reference to changes which it thinks should be made. The head of this division should apportion the State school fund under the direction of the State Superintendent. Until the duties of the office become more numerous we suggest that the State Superintendent act as head of this division. (c) The Research and Statistical Division should have charge of collecting statistical data with reference to the schools of the State and of presenting this for the use of the State Superintendent, State Board of Education, State Legislature, school officials and the public. It should carry on research with reference to methods of instruction and school administration and prepare material for pubhcation and distribution to teachers and school 21 officials. It should be responsible for prescribing the records and statistical reports to be prepared by the various units of the school organization, and should also be responsible for seeing that the prescribed records and reports are properly used. This division has been established by the present State Superintendent and has done some capable work. It should be retained and its activities increased. (d) The Examination, Certification and Employment Division should be re- sponsible for preparing the examination questions for teachers' certificates, the prescribing of rules for the conduct of examinations, for the grading of the papers and for the issuance of certificates. It should also maintain a hst of teachers available for employment, together with their qualifications, and recommend teachers to county boards and city schools. If this division is established in the office of the State Superintendent, the present State Board of Examiners can be abolished, and we think that this procedure is desirable. There now exists in the office of the State Superintendent a Certification Clerk. This employee should be given the necessary assistance and her activities enlarged to conform with the foregoing recommendations. (e). The Elementary Education Division should be responsible for the super- vision and direction of the elementary schools of the State. The head of this division should act as State Supervisor of Elementary Education, and in this capacity should visit the elementary schools of the State and work with the county superintendents in formulating and carrying out a program of elementary education. This division should study the means for im- proving the elementary schools and should attempt in every way possible to be of service to school patrons, school officials and school teachers. This division does not now exist in the office of the State Superintendent. (f) The secondary Education Division should have supervision over the high schools of the State, and the head of this division should act as Supervisor of high schools. It should be his duty to classify and grade the high schools of the State and inspect them from time to time to see that they comply with State requirements. He should work with city superintendents and high school principals in reorganizing and developing the high school course of study. This division is not now existing. (g) The Vocational and Special Education Division should have supervision over the vocational education of the State, and should also supervise all schools giving special kinds of training, including private schools of the State. The head of this division should act as Supervisor of Vocational and Special Education, and should inspect all schools which are under his control. It is particularly urged that special attention be given to the courses in com- mercial subjects which are given in the various schools in the State. Our survey indicates to us that the supervision of this branch of education has been neglected during the past and that it is in need of immediate and thorough attention. The Director of Vocational Education has exercised supervision over courses in agriculture, courses in manual arts and courses in domestic science, but little or no supervision has been exercised over courses in commercial subjects. (h) The Text-books, Buildings and Equipment Division should have super- vision over the selection of text-books, the design of school buildings and school equipment. In subsequent pages of this report the method which 22 we think desirable for selecting and handling text-books is explained in detail* The head of this division should have control, however, of the detail and clerical work involved in the adoption of text-books, and should be respon- sible for seeing that the adopted text-books are used. This division should also be responsible for formulating standard plans for school buildings which will be provided for the use of school ofRcials. It is hoped that in the re- organization of the State departments, there will be established a depart- ment of public works which will be responsible for supervising the design and construction of all public buildings of the State. If this reorganization . is effected, the design of school buildings will then be in the hands of the de- partment of pubhc works, but this department should work in close cooperation with the State Superintendent of Pubhc Instruction. This division should prepare a list of approved equipment for use in the public schools of the State, and should also prepare a list of the approved companies from which equipment and supplies can be purchased. This procedure will prevent unscrupulous companies from taking advantage of school officials in the sale of equipment and supplies, (i) The Historical, Library, Museum and Editorial Division will have control and supervision of the various educational activities which are outside of the formal instruction given in the class room. It is thought that much may be done toward furthering these activities which will be of educational value to the people of the State as a whole. This department should also be respon- sible for editing all the publications of the State Department, and no publi- cation should be permitted which has not received the approval of this division. Illustration of the Reorganized State Department. If the State Board of Education and the office of the State Superintendent of Public Instruction is reorganized in accordance with the foregoing recornmendation, the organization of the State Department of Education will appear as represented in Exhibit 1. It should be understood that we do not intend to insist that each of the functional divisions which we recommend, and which are illustrated in this exhibit, should necessarily be under the control of a separate individual. It may not be thought expedient to incur sufficient expense to make this possible and the present duties of the State Department may not be sufficiently numerous to make this necessary. It is our belief, however, that these separate divisions should be set up in the State Department so that the responsibilities of all these separate groups of activities may be definitely shown. It is, of course, possible that one individual ma}' act as head of two or more divisions, but the fact that the divisions are clearly shown will facilitate the performance of the activities which they represent. County Superintendents. Relation of County Superintendents to State Organizations. The County Superintendents of Schools is the immediate subordinate of the State Superintendent in the State organization of public schools. He is nominally the chief executive officer of the county schools but, as we will see later, his authority is so limited that in manj' respects he fails to accomplish this end. Theoretically the County Superintendent bears the same relation to the county schools that the Superintendent bears to the schools of the State, and both bear certain responsibilities in school admin- 23 o u U Q v v G o •< a ss s At present all supplies are purchased by the local Board of Trustees. We think that a considerable saving can be effected and that better supplies will be secured if the supplies for each county are purchased by the County Board of Education. As previously stated, we think that the County Board should purchase the supplies not only of the rural schools but also of the high schools and city schools. In some cases it will be found expedient to delegate to the principals of high schools and superin- tendents of city schools the authority to make certain purchases. The County Board should grant this authority upon the recommendation of the County Superintendent. All supplies purchased will be paid for by warrant issued by the County Board of Education in response to invoices approved by the County Superintendent. These supplies will be distributed from the office of the County Superintendent to the various schools. The County Superintendent will make regulations with reference to the use and care of supplies. The actual purchase of these supplies should be made by the Assistant Superintendent, subject, of course, in all cases to the super- vision and approval of the County Superintendent. We feel that a very material saving will be effected in the cost of supplies if the foregoing plan is followed. 49 STATE OF ARIZONA SECTION III Accounting Records and Procedures Relation of Accounting to Financial Administration. It has long been agreed by business administrators that there is a very close relation between financial administration and accounting. This belief is evidenced b}^ the fact that in many business organizations the financial executive, who is usually termed the Treasurer, is the executive head of the Accounting Department or at least has the Accounting Department under his control. This situation has developed no doubt because of the constant use of the accounting records by the treasurer in the performance of his tasks. We believe that a similar relationship exists between accounting and financial control in school administration. Without complete and comprehensive records it is impossible to exercise effective control of financial operations. Without such records information is not available for the making of financial plans and financial planning is the essence of financial administration. Moreover after plans are made there is no means of judging the effectiveness with which they are enforced unless there be proper records of receipts and disbursements. To set up financial standards without, establishing records which will provide a means of checking these standards is as effective as preparing a time schedule without providing a watch with which to check the operations performed under the time schedule. Accounting Records of the Schools of Arizona. Our survey convinces us that the present accounting records and procedures of the public schools of Arizona are inadequate for proper financial administration. We think this inadequacy is due primarily to two reasons: (1) The inadequacy of the present system of organization for school adminis- tration, and (2) The inadequacy of the present accounting forms and procedures. The second condition is largely the outgrowth of the first. In the following pages we will discuss and illustrate; (1) The weaknesses of the present accounting records and procedures. (2) The records and procedures which we think should be adopted under the revised plan of organization which we recommend. Inadequacy of Existing Organization for Accounting Control. Absence of Centralized Control of Accounting Procedures. As previously stated, inadequacy of accounting methods now in use is to be at- tributed fundamentally to the failure upon the part of one central authority to pre- 50 scribe and enforce a uniform system throughout the State. Several instances were found of school officials who, though efficient in the keeping of accounting and statis- tical records, were prevented from eliminating apparent weaknesses because of the fact that they were beyond their control. We think a uniform system of accounting for the various units of the school organization is a prerequisite to the compilation of accurate statistical data from which it is possible not only to make comparisons and observe trends, but also of exercising control over units in the school system. Data for the entire State cannot be more accurate than the data of individual units within the State. As long as the accounting practice of County units remains unstandardized and subject in the main to notions of the individuals responsible therefor, who may or may not have knowledge of effective accounting procedure, the entire accounting system of the State schools will tend to fall short of its objectives. The fact that several attempts have been made to introduce throughout the State, uniform records and report forms with but indifferent success is evidence of the point we wish to make here. At present there is no central authority within the State who can introduce, install and enforce standard accounting methods. Domination of District Boards. Under its present plan of organization, the State School sj^stem is dominated to a considerable extent by the smallest, and what is characteristically its least effective unit, the district board of trustees. Not only does the district board issue all vouchers covering expenditures within the district, but the law specifically states that county superintendents shall issue warrants for all vouchers in the order in which they are received. Warrants when presented to county treasurer must either be paid or registered; in the latter case draw interest at six or eight per cent. As a result of this system overdrafts upon district funds occur frequently. The tendency is to regu- late expenditures by comparison with district budgets rather than with actual receipts into district funds. Boards often do not know what funds are available and often do not keep records with either receipts or disbursements other than that shown by voucher stubs. In some cases the county superintendents advise the district boards with reference to the funds available and make suggestions to them with reference to the warrants which should be issued. The law does not require that county superintendents do this, neither does it require that the district boards follow the suggestions of the superintendents. Loss Because of Interest Payments. Under the present law registered warrants draw interest at either six or eight per cent and such interest must be paid by the taxpayers. School warrants prove an extremely attractive investment to banks because they are often able to obtain them at a discount and therefore receive not only the discount, but also the interest. We think if effective accounting methods were established so that the amount of money available in each fund was known at all times by those who were responsible for drawing warrants that a considerable saving might be made by eliminating some of the interest charges which now accrue on these warrants. Another source of loss arises from the fact that districts sometimes carry over a large cash balance at the end of the fiscal year and permit this money to be idle for several months drawing little or no interest. In some cases this balance has been built up by districts in order that it might be used to cover the period between the close of the school year and the apportionment of the taxes for the following year. 51 Although considerable advantage may be gained by the district using the balance in this manner, it is doubtful whether it is the intent of the law that such practices be followed. Although it is probable that such balances do not exist frequently, it is thought worth while to call attention to their existence. Need for Accurate Budgets. The foregoing conditions point to the necessity for accurate estimates of expen- ditures which will be based upon the careful study of what a district needs and made by someone qualified to judge what these needs should be. The inadequacy of the existing organization appears again here. Accurate and judicious estimates of ex- penditures, allowance for tax delinquencies and the regulation of actual expenditures to keep within the budget would tend to eliminate overdrafts and do away with both the payment of interest upon warrants and the accumulation of unremunerative district funds. Another consequence of the present system of handling expenditures is the use of vouchers as security for loans. It is found that in some districts vouchers are issued to banks when it is known that money is not available in district funds. Districts consequently are required to pay interest on such vouchers, and the problem becomes sinlilar to that of registered warrants. According to the records of the State Superin- tendent most districts have not resorted to this practice, but in a few cases amounts of considerable size have been spent upon interest in a single year, and it is thought that this problem is of sufficient significance to require consideration. Need for Checking of Accounts. Under the present plan records of expenditures should be available from three sources; district boards, county superintendents and county treasurers. We find that there is no regular procedure for checking one set of accounts against another, other than that performed by the State Examiner in examining the accounts of the county superintendent and the county treasurer. We do not think that it is his practice to check the accounts of these two officei's in detail, but only as to the major balances. Discrepancies frequently exist between the records of the county Treas- urer and the county superintendent, due largely to an amount of outstanding unpaid warrants. The annual reports of the county treasurer and the county superintendent seldom agree as to the amount of expenditures, and at present the State Superin- tendent has no effective means of knowing whether the discrepancy is due to out- standing warrants, outstanding vouchers or other causes. In some counties we find that refunds of school, poll and property taxes are ordered by the board of super- visors and the county superintendent receives no report of such refunds. It is recom- mended that such a report be made regularly to the county superintendent so that he may have a correct record of expenditures from district funds. Vouchers issued and outstanding, of which no report is made to the county superin- tendent result in discrepancies between the records of the county superintendent and those of the district boards. This prevents a check between these records unless the county superintendent receives a report of all vouchers issued, and we do not find any systematic procedures for providing for such a report. Difficulty of Securing Accurate Data from District Boards. It is required that a county superintendent compile data upon district expenditures and receipts from annual reports submitted to him by district boards and not from his own accounting records. When it is realized that many districts keep no record 52 of expenditures other than voucher stubs; that others keep no records at all; that in small rural districts correct accounting is not likely to be found, the need for re- organization in the centrahzed units of control is apparent. The county superintend- ents in most cases reheve the difficulty somewhat by making their reports to the State Superintendent from their own records and ignoring in large part the reports received from district boards. Since this procedure is found necessary under the present plan, it suggests the desirabihty of eliminating all accounting by district boards and centrahzing the accounting in the office of the county superintendent. Desirability for a Broader Conception of the Functions of Accounting Records. We think it desirable that a broader conception of the function of accounting records be developed throughout the school organization. We find that in most cases records are kept purely upon a book-keeping basis and primarily for the purpose of arriving at balances. It is thought that the function of accounting in most cases ceases with the arrival at total receipts, total expenditures and balance on hand. Accounting has been rarely thought of as an aid to administrative control. In but few cases do we find a departmental classification of expenditures with a view toward arriving at an itemized departmental cost. In very few cases has it been thought worth while to keep inventory records of supplies which will show the consumption of supplies by departments or even by schools. It is also doubtful if full use has been made of the records which have been kept. This is to be explained partly by the fact that records have often been kept by persons who are not trained in accounting, and partly because of the failure to conform to standard forms and procedures. It is quite difficult to compile significant data from the reports of county superintendents upon various items of school costs for the entire State when individual reports vary both as to form and classification. Quite frequently we found that the standard form of report which had been prescribed had not been used and another form had been substituted which could be articulated more easilj^ with the accounting records kept by the one responsible for making the report. This fault is not due to the inefficiency of any particular individual, but is attributable to the lack of coordination and centralization of authority in the present plan of school organization. Illustration of the Results of Decentralization. There are numerous illustrations of the undesirable results of the present plan of decentralized control, for instance the State Department of Education has prescribed a standard form of voucher available for use by all districts, but it has no effective means of enforcing its use. As a result the standard form is used by some districts, while others have discarded it and adopted other forms which they think more suited to their needs. Some of the large urban districts believe that the standard form is not adapted to their needs and have consequently devised their own forms. As a result, some county superintendents receive vouchers of various types and not only is the handling of vouchers more difficult, but the proper classification of vouchers for filing purposes is rendered more burdensome. If standard voucher forms were used by all districts, the handling of vouchers as well as their filing for reference purposes would be greatly expedited. Another illustration of the result of decentralization is afforded by the forms used for submitting the annual estimate of expenditures which the law requires that all dis- tricts submit to the county superintendent of schools. No standard form of sub- 53 mitting these estimates is prescribed, and either the boards submit their estimates on forms of their own choosing or they use those which are recommended by the county superintendent. In one or two cases we found that the county superintendent had prescribed forms which were designed prior to the adoption of the present form of the superintendent's annual report, and as a result the classification of expenditures found on the estimates is not the same as that called for by the superintendent's report. This results in considerable inconvenience, particularly on the part of the large school districts. If standard forms for the submission of estimates were issued by a central authority which would see that they correlated with the accounting records and reports, this difficulty would be eliminated. Many other illustrations of the undesirable results of the present plan of decentralization were found by us during our survey. Need for Competent Book-keepers. Because of the present decentralized organization, it has been found impossible to secure properly trained book-keepers in many cases. In some counties the county superintendent is required to keep his own records, and it is not expected to be that he should be a qualified book-keeper. In the rural districts the keeping of records devolves upon the clerk of the board and in most cases he is untrained in book-keeping procedure. It is apparent that it is not to be expected that the rural districts can select a clerk who is so trained. It is only by a centralization of accounting control that it can be expected that accounting records can be placed in competent hands. A business concern spending less money than is spent for educational purposes in the smallest county in Arizona would not hesitate to employ trained clerks or book-keepers to keep their accounting records. In the compilation of cost figures and other statis- tical data relative to educational conditions in Arizona is considered of value, tech- nically trained help should be provided to facihtate such compilation. It is unecon- omical to collect data which will never be used or which is compiled from records that are known to be inaccurate. Books kept by a clerk who knows nothing of book- keeping or statistical procedure are not apt to provide accurate information. It is also uneconomical to have a school executive such as a county superintendent or a city superintendent to do his own book-keeping and statistical work. A superin- tendent's salary should not be spent upon a man who is occupied with clerical work a considerable part of his time. A superintendent is paid to supervise schools, not to keep books. Other Weaknesses in Present System. Although we do not desire to appear unduly critical of details, we think it desirable to touch briefly upon other administrative and accounting practices now in existence which should be corrected. The principle of double entry book-keeping has been largely neglected in the school accounting of Arizona, and the preparation of trial balances to check entries has been, therefore, impossible. There has been no standard- ized classification of accounts by county treasurers, nor has there been any uniform method of reporting receipts and balances to county superintendents. In some cases the law which requires that treasurer notify county superintendents of all amounts in county funds immediately upon the receipt of apportionments from the State fund has not been uniformly complied with. There is no regular report made to the county superintendent either upon warrants paid or upon interest paid on registered warrants although this information is quite valuable to county superintendents. There is evidence that interest moneys upon 54 warrants and upon sinking funds credited to districts have not been carefully handled. In some cases the practice has been followed of crediting interest to the county fund which properly should be charged or credited to district funds. This is obviously an inequitable method of handling interest. Duplication exists quite frequently, although in the getting of statistical data it has been decreased to a considerable degree during the past year by introduction of new report forms. There remains a considerable amount of detailed data, the com- pilation of which can be simplified by changes in the report forms and procedures which are outlined in subsequent pages. Throughout the entire school organization there has been insufficient attention paid in the keeping of accounts to show the source of money received. It is important to know not only the amount of money available, but also the source from which it comes. Heretofore there has been no record kept in the accounts of the State Superin- tendent as to the amounts received in the State fund from various sources. Appor- tionments have been based simply upon the statement of the State Treasurer as to the amount of money available. Likewise in the accounting of county superintendents there has been no uniform classification of receipts as to sovu'ce, i.e., state, county or district. Such a classification would provide significant data as to the i-espective parts played by the State, county and district in financing education. The methods of handling the county reserve fund, the use of which is prescribed by law, differ as between counties. The law states that the reserve fund shall be used for accommodation schools and any balance in the funds shall be distributed to counties showing an increase in average daily attendance. The annual report form of the county treasurer shows no separate accounting for this fund, and there is little uni- formity in the method by which it is accounted for by the various counties. Proper accounting precedure for the county reserve fund will be suggested in subsequent pages. PuEPOSE OF Foregoing Discussion. The .foregoing critical survey of the existing system for accounting control is intended to accomplish two things; (1) To show clearly the impossibility of obtaining an efficient and standardized administrative control in such a decentralized type of organization as that now maintained for the administration of the public schools of the State. (2) The urgent need for concentration of authority in the State Department of Education and in the county superintendent. If accurate data is to be obtained it must come from the records of county super- intendents equipped to keep accurate account of expenditures and not from district boards which usually are not competent to prepare and submit such data. We desire to emphasize that the weaknesses in the present accounting methods which we have suggested in the preceding discussion are not the result of the in- efficiency of any particular members of the present school organization, but is the result of the organization itself. We found uniformly that school executives felt the need for accurate accounting records and that in practically all cases they were doing their best to provide such, in fact in many cases we thought that the county and city superintendents were devoting too much attention to this problem in pro- portion to the time devoted to the supervision of their schools. We have been quite emphatic in our criticism because we feel the urgent need of bringing the present 55 situation to the attention of those who are responsible for the estabUshment of the school organization of the State. The remainder of this section of the report will be constructive and will consist largely of recommendations as to accounting reports, forms and procedures, together with instructions as to how these forms should be used. The accounting procedure recommended is built around the county superintendent and is designed to centralize accounting control in the State Superintendent of Public Instruction and the County Superintendent of Schools. Accounting for Office of State Superintendent. Recommended Records. We think that the operations of the Office of the State Superintendent of Public Instruction is of sufficient significance to make desirable the maintenance of a complete record of revenue receipts and disbursements in this office. Consequently we recom- mend that Form A be adopted with a view towards maintaining in the office of the State Superintendent a detailed record and classification of all expenditures and apportionments. We think this record is needed for administrative purposes. Form A is designed with two objects in view: (1) That the State Superintendent may at all times have a record of disburse- ments and receipts properly classified as to purpose and source respectively. (2) That the records of the office of the State Superintendent will articulate with the records of the Secretary of the Budget which will facilitate the drawing up of the regular monthly reports of expenditures called for by that executive. It is desirable that there be a centralized control of the expenditures of all the State departments and we commend the efforts of the Secretary of the Budget in that direction and think that benefit can be obtained from the control records which he is developing. It is equally important, however, that a complete record of expendi- tures be kept by each unit which has control over them. As long as vouchers issue from the office of the State Superintendent of Pubhc Instruction, and there is no cen- trahzed financial control outside that department, it is essential to effective adminis- trative control that accounting records be maintained by the office of the State Super- intendent, for responsibility for expenditures rests in that office. The use of Form A by the office of the State Superintendent will in no way inter- fere with the present plans for centralized control of the records of the various depart- ments. Its use will not require more labor than does the use of the present records, and it will not be necessary to have one skilled in book-keeping technique to maintain it. On the other hand it will give the State Superintendent a more thorough and de- tailed statement of financial condition than is now available, and will encourage and facihtate a thorough administrative control of the expenses of the office of the State Superintendent of Public Instruction. Accounting Procedure for the Office of the State Superintendent. The following instructions explain the method of maintaining the records recom- mended for the office of the State Superintendent : Two entries shall be made for every expenditure, one being in the column indicating the purpose for which the expenditure was made, the other in the column headed 56 "Total." It will not be necessary to make double entries for apportionments to coun- ties. By making the double entry it will be possible to check possible errors at the end of each month. Care should be used to see that each expenditure is entered in its proper column. Columns 5-12 inclusive, excepting Column 11, should be self- explanatory. Items which will not properly fall in any other column should be entered in Column 11. An illustration is the contribution to the National Educational Association which occurs but once annually. It should be noted that all items included in Columns 5-12 are for administrative expenses of the office of the State Superintend- ent, and are included in the uniform classification adopted by the State Department of Arizona. Rather than discuss here each item in the classification we refer to the Book of Instructions for Classification of Expenditures and urge that the person in charge of books in the office of the State Superintendent make a careful study of those instructions which apply to the items contained in the form here recom- mended. All expenses of the State Board of Education, of conducting institutes, for printing and publications and expenditures for pensions and text-books will be entered in Columns 13-17 inclusive, the classification in these columns and the procedure here being no different from that in use until recently. Cost of printing the school laws should be entered in Column 15. It is not necessary to segregate an expenditure which occurs but once in two years. Columns 1-4 inclusive should require no explanation. Column 4 is new and is inserted to facilitate and insure accuracy in the compilation of monthly report sent to the Secretary of the Budget. "Key Number" refers to the number assigned to each expenditure in the Book of Instructions referred to above. The book-keeper should become familiar with the numbers for all expenditures and should enter each at the time the entries are made for expenditures. The compilation of the monthly report to the Secretary of the Budget will then be greatly facilitated, and accuracy be promoted. Column 3 is self-explanatory, its purpose being to show to whom salaries are paid, and for what purpose other expenditures are made. Columns 19-23 concern only receipts into the State school fund and apportion- ments made from the fund to the counties. All receipts with the exception of the $25.00 per capita school tax are to be entered in Column 21. These receipts will come from interest on loans, rentals, forest fees, fines and sales of text-books, and toll roads and ferries. It is recommended that regular reports of receipts from these sources be obtained from the State treasurer, and entries made in Column 21 at regu- lar intervals. But one entry will be required in Column 22 during the year, when the amount to be received from the State per capita levy is fixed. All apportionments to counties should be entered in Column 23, and the sugges- tion is added that a separate record of apportionments classified by counties and extending over a period of years might be found valuable. It should be noted that totals of Columns 21 and 22 less totals of Columns 18 and 23 will give the balance available in the State fund at any time. It is recommended that column totals be carried forward from page to page and that all columns be totalled at the end of each month, showing total expenditures for that month and for the fiscal year to date. It will then be possible to make monthly checks of dis- bursements against budget appropriations. The classification of expenditures set up in Form A articulates with the form of the budget and also with the uniform State classification. It is sufficiently detailed 57 Accounting Form for Office of State Superintendent of Public Instruction Form A. EXPENDITUEES Date 1 Voucher No. 2 Explanation 3 Key No. 4 A-1 Office Salaries 5 B-2 Stationery 6 B-3 Postage 7 B-5 Telephone Telegraph 8 E.9 Repairs 9 C-1 Travel 10 M Contin- gencies U. of A. 11 D-12 New Equipment 12 iwniu Form A- -Continued. RECEIPTS Board ' of Education r 13 Institutes 14 Printing & Publications 15 Pensions 16 Text Books 17 Total 18 Date 19 Explanation 20 Receipts from Indirect Sources 21 Receipts from State School Taxes 22 Apportion- ments to Counties 23 ha 58 to permit the use of the records contained therein for purposes of administrative control, yet is quite as comprehensible, and will necessitate no greater labor cost than the system at present in operation. Budgetary Procedure for Office of the State Superintendent. The Executive and Business Management Division of the Office of the State Superintendent should prepare an estimate of the expenditures of the office for each biennial period. This estimate after being approved by the State Superintendent should be submitted to the State Board of Education for approval. After approval by the State Board it should be submitted to the Legislature in the same manner as are the estimates of the other State departments. The Executive and Business Management Division should prepare_a report each month showing a comparison of actual with estimated expenditures.'' This should be submitted to the State Superintendent and a summary for each quarter should be submitted to the State Board. Accounting for the County Superintendent. Centralization of Accounting Control for County. Accounting records of all county and district expenditures should be kept by county superintendents with a view towards centralizing accounting control and the control of expenditures. The annual report of the county superintendents should be compiled directly from the records of these executives for it is improbable that accurate data can be obtained as long as district records are the primary source of information. The following suggestions are made on the assumption that the county board will control all expenditures and that the present system by which district boards issue vouchers and the county superintendent is required to issue warrants therefor in the order of receipt will be abolished. Issue of Warrants. In the issue of school warrants we recommend the following: (1) That the county superintendent issue warrants only upon the presentation of itemized invoices. A technical exception to this rule will need to be made in the case of teachers' salaries. (2) That no warrant be issued for any purpose until there is satisfactory evidence that the service for which the warrant is issued has been performed or the commodity for which issued has been received by proper authority. (3) That all invoices be checked carefully as to amount and correctness. (4) That all warrants be made out in duplicate, the duplicate copy to be at- tached to the voucher upon which it is issued, and filed in the office of the county superintendent. If disbursements are to be effectively controlled by county superintendents we believe the foregoing requirements are necessary. The County Superintendent should file the dupHcate warrants by dis- tricts to facilitate reference thereto and it is suggested that three types of district warrants be used. These should be the same in size but distinguish- able in color, one type to be used for teachers' salaries, one for other main- tenance expenditures, and the third for expenditures out of building funds. 59 Simplicity of Records Recommended. Careful consideration has been given the problem of accounting records and procedures for county superintendents not only in order to secure those which would reflect good accounting practice but also iu order to secure those which are sufficiently simple so that their maintenance will not involve excessive costs. The records recommended are as simple as is consistent with the procurement of the necessary data. Objects of Accounting System Recommended. Since by far the greater part of all school expenditures will be made through the office of the county superintendent, our .recommendations are made with the purpose of securing the following objects: (1) To require the monthly balancing of the books and the checking of the records of the county superintendent against those of the county treasurer. (2) To enforce the use of uniform books of account in which will be entered all expenditures and receipts classified by districts. (3) To secure the classification of expenditures as to the purposes for which made and receipts as to their sources. (4) To facihtate administrative control and the compilation of useful data. The accounting records of the county superintendent are designed to permit an accurate accounting for the County School fund, the County Reserve fund, and Dis- trict Maintenance and Building funds. As the accounting forms for the county superintendent are explained it will be observed that they serve both financial and administrative purposes. From them can be obtained the information which ,is at present obtained from the annual reports of county treasurers and district boards. Financial data for the entire State will come from fourteen primary sources, the offices of the county superintendents. The diversification of the present system will be eliminated, the possibihty of error decreased and complete and accurate records pro- vided for. Form of Record for County Superintendent's Office. To insure simphcity it is recommended that all accounts be kept in one volume of which all except the last twelve pages should be ruled in Form B. Ten pages of the last twelve should be ruled in Form C, while the last two pages should contain Form D. Each of these three forms should occupy a double page. Records of common and high school district funds will be entered in that section of the Journal given over to Form B, the section being divided to allow several pages for each district. The ten pages ruled in Form C will be used for the county school fund while entries to record receipts and disbursements from the county reserve fund will be made in the last two pages, ruled in Form D. Accounting Procedure — Form B. It will be observed that Form B is divided into two parts, one for maintenance fund and the other for building. It will also be recalled that three types of warrant were recommended, one for teachers' salaries, one for other maintenance expenditures and the third for building expenditures. It should be noted here that the warrant numbers of the first two will be entered in column 2, and those of the third in column 30. Maintenance and building funds are separate and distinct from each other and are kept in Form B. All items having to do with building funds, either receipts or dis- bursements, will be entered to the right of column 29. All other entries will be made to the left of column 29, under the head of maintenance. 60 Maintenance Funds. We shall discuss first maintenance expenditures, classified into administrative, instructional, operating, repairs and upkeep, and miscellaneous; and further sub- classified on a functional basis, to show the precise purpose for which expenditures are made. The number of every warrant issued for teachers' salaries or other mainten- ance expense will be recorded in column 2 and the date on which issued, in column 1. The amount of the warrant will be entered first in the column indicating the purpose for which the expenditure is made, and secondly in column 21, headed "total." Column 21 will, therefore, be a warrant register showing all maintenance warrants in the order issued. The total of column 21 should at all times equal the total of columns 3-20, inclusive. Should a discrepancy occur at any time between these two totals the error can be easily located and the correct entry determined from the file of warrants. Em- phasis should be placed upon the fact that two entries are made for every warrant issued; the omission of an entry will throw the columns out of balance and will be detected when columns are totaled and checked. Turning to the expense classification, under administrative expenses column 3 will include only salaries of administrative officials, comprising chiefly school superin- tendents, assistants and clerks. In column 4 will be entered all expenses incurred in the offices of administrative officials, such as stationery, supplies, postage, repairs, etc. Column 3 will include all expenses incurred in enforcing school attendance in districts having an average daily attendance of over two thousand. Compulsory education expense for all other districts is paid out of the county school fund, and is provided for in Form C. Under the heading "Instructional" all salaries of supervisors, principals and assis- tants should be entered in column 6. Salaries of all teachers will be entered in column 7, while all expenditures for school supplies, including kindergarten and manual training and for supplementary textbooks will go in column 8. Taking operating expenses in order, all expenditures for janitor service, chiefly consisting of salaries and supplies, will be entered in column 9. Heat, light, power and water are combined in column 10, there being no particular purpose in segregating the four. Rent and insurance are classified as operating costs in preference to the existing classification as fixed charges. The classification used in Form B is upon a functional basis, its object being to show the purposes or objects for which expenditures are made. To classify rent and insur- ance as fixed charges is to depart from the functional basis without object. Miscel- laneous operating expenses which do not properly fall under headings 9-12, inclusive, are to be entered in column 13. Column 14-19, inclusive, should be clear. Expenditures for repairs and upkeep are segregated as between grounds, buildings and equipment. Column 17 will include salaries of librarians as well as expenses incident to the maintenance of libraries. Column 19 refers only to expenses incurred in transporting children to and from school. It does not include traveling expenses of school officials. In column 20 will be entered any expenses which do not properly fall elsewhere. There should be but little occasion to use this column as the classification provides for practically all expenditures for maintenance. It is suggested that the amount of interest paid on warrants be entered in column 22, and that a report be obtained at the end of each month from the county treasurer showing all interest paid, classified by districts. Entries can be made when this report is received, and are essential to bring the accounts of the county superintendent into balance with those of the county treasurer. This report will be discussed below. 61 All district tax refunds ordered by the board of supervisors and paid by the Treasur- er will be entered in column 23. Under the present system the county superintendent has no record of such refunds and it will therefore be necessary for him to receive a report of their amount from the treasurer. This information will be included in the monthly report of the treasurer to the county superintendent, heretofore mentioned. A record of the refunds is necessary to bring the two sets of books into balance. It should be noted that no double entry is made for tax refunds and interest on warrants, column 21 being used only to record actual disbursements or the face value of all maintenaance warrants issued. Illustrations may serve to clarify procedure. Suppose Warrant No. 218 for $30.00 is issued to pay a light bill for District 9. The bookkeeper will open the journal to District 9, enter the date in column 1, the warrant number, 218, in column 2, the amount $30.00 in column 10 and gain in column 21. After filing the duplicate warrant with the invoice, the accounting for the transaction will be complete. The procedure in accounting for receipts into the maintenance fund is analagous to that of handling expenditures, two entries being made for each item of receipts. The amount of all receipts will be entered in column 28, this column, therefore, serving much the same purpose as column 21 for expenditures. All receipts from the county school fund apportionments will also be entered in column 25, entries in this column being necessary only when apportionments are made to districts. Amounts received from district levies will be entered in column 26, entries being made at the end of each month upon receipt of the monthly report from the county treasurer. Miscellaneous receipts coming from no regular county district source will be entered in column 27. A total of columns 25, 26 and 27 should at all times equal the total of column 28, and if any discrepancy exists it may be easily traced. It is recommended that at the end of each month after all entries for receipts, refunds and interest have been made from the report of the county treasurer mentioned above and shown in Form E, all columns, 3-28, be totalled and checked for clerical error. Totals for the month and totals for the fiscal year to date should be entered. Ready comparisons can then be made with district budgets at monthly intervals, and expenditures can be restricted where in excess of the budget figures. By deducting the total of columns 21, 22 and 23 from that of column 28 the balance on hand at the end of the month may be obtained. This balance should be entered monthly. Should overdrafts upon district maintenance funds prove to be numerous, the addition of another column, numbered 29-a, in which entries are made whenever a district has a deficit or overdraft at the end of the month, would be justified. The use of red ink would thus be obviated, and balances aftd deficits clearly difi'erentiated. Building Funds. Accounting procedure for the building fund is in every respect similar to that for maintenance All warrants drawn on building funds will be entered in column 31, column 30 being reserved for the date of their issue. A functional classification of building expenditures is set up in columns 32-36, and should need no further explana- tion. AH capital expenditures not properly included in columns 32-35, inclusive, will be entered in column 36. Interest paid on building fund warrants, a report of which is obtained monthly, should be entered in column 38. As in the case of maintenance, two entries will be made for every expenditure, the amount of everjr building warrant issued being entered in column 37. This column will, therefore, be in effect a register of building fund warrants, and its total should 62 at all times equal the totals of columns 32-36, inclusive. To illustrate the accounting procedure for recording expenditures from building funds: Warrant No. 1012 is drawn, in amount $800.00, to pay for desk equipment for a new building in District 7. The bookkeeper opens the journal to District 7, enters the date in column 30, the warrant number, 1012, in column 31, the amount, 1800.00, in column 35 and again in column 37. After filing the duplicate warrant with invoice attached the accounting for the transaction is complete. The same procedure is recommended for the handling of receipts, two entries being made for each item, one in column 41, the other in column 39 or 40 depending upon whether the money is received from the sale. of bonds or assessment. Entries of receipts will be made at the end of each month upon receipt of the regular monthly report from the county treasurer. At the end of each month totals will be taken of all columns, checked for error, columns 37 and 38 will be deducted from total of column 41 and the balance entered in column 42. Procedures at the end of each month are analagous for maintenance and building funds. Objects of Form B. • The construction of Form B has been explained in considerable detail but a brief summary of the objects of its use may be of value. It will give a classification of all expenditures by districts and by purposes for which expenditures are made, thus making possible an effective and centralized administrative control. By its provisions for double entry it will provide a check upon clerical errors and promote accuracy. The file of duplicate warrants will pi'ovide a further check and will be readily available for reference. By taking monthly totals and balances, the condition of all district funds will be known at regular and frequent intervals. Also comparison with budget figures will be greatly facilitated. A classification of receipts will be available which will permit the obtaining of data of considerable importance as to the sources of school funds. Finally, the transposition of financial data into the annual report of the county superintendent will be greatly simpHfied. Form B will articulate with the annual report and it will be necessary merely to transfer into the proper columns of the annual report the totals for the year ending June 30th contained in Form B. Accuracy will be assured because of the centralization of all expenditures, and the monthly report from county treasurers to superintendents, with subsequent entries into the books of the latter of interest, receipts and refunds will bring the books of the county superin- tendent and county treasurer into balance at the end of each month. Report of County Treasurer to County Superintendent. The monthly report of county treasurers, referred to above, should be based upon Form E. The report is designed to show: (1) Interest paid on warrants during the month; (2) Tax refunds for which warrants are issued by the board of supervisors and which are paid by treasurers; (3) Total receipts during the month; (4) Balances on hand during the month; (5) Warrants paid during the month. Interest, tax re- funds, receipts and balances will be shown in Form E. classified by districts and by funds. The hst of warrants paid will be attached to Form E and submitted in typed columnar form, warrants being classified as to districts and as to funds out of which paid. Warrants should also be reported. It is recommended that these two types of warrant be of distinctive color. At the foot of Form E should be entered the receipts during the month into the county school fund, and the amount of any refunds of county taxes. Thus it is made possible to check the accounting records for county school reserve funds. The county superintendent will immediately upon receipt of the treasurer's 63 Accounting Form for Office of County Superintendent DISTRICT FUNDS Form B (Left Hand Page) EXPENDITURES Date Warrant No. A HMINISTHATn' B Salaries Office Expense Compulsory Education Expense 3 4 5 Form B (Left Hand Paee) — Continued. Repairs & Upkeep other Expense of Operation Grounds Buildings Equipment 13 14 15 16 FoEM B (Right Hand Page) — Continued. Instructional Salaries of Teachers Supplies & Text-Books Operation Janitors' Salaries & Supplies Heat, Light, Power & Water 10 11 Insurance fRiffht Hand Page) g 3 MiSCELL ANEOUS < C5 Ijibrary Expense Health Service Transpor- tation Other Total Interest on Maintenance Warrants Tax Refunds g 5 17 18 19 20 21 22 23 B RECEIPTS EXPEND Date State & County District Levy Other Sources Total Balance Date Warrant No. Land Buildings Improve- ments & Alterations Furniture & Apparatus 24 25 26 27 28 29 30 31 32 33 ♦34 35 Form B (Right Hand Page)- — Continued. ITURES RECEIPTS Other Capital Outlay Total Interest on Building Warrants Sale of Bonds Assess- ments Total Balance 36 37 38 39 40 41 42 64 report, check against his own lists of warrants issued, the warrants reported as paid. It will thus be possible to find the total of unpaid warrants drawn upon each district fund, and upon the county funds. Interest, receipts and refunds should then be entered according to above instructions, charging these items against the proper funds. Balances should then be determined for all funds, the amount of unpaid warrants added, and the resulting figures checked with the balances reported by the county treasurer. Should any discrepancies exist, steps should be at once taken to locate the error and correct it. The locating of errors will be facilitated by the use of the double entry system of accounts and the duplicate warrant file. Accounting for County School Fund — Form C. All accounting for disbursements and apportionments out of the county school fund, as well as for receipts into that fund will be entered in the pages of the journal based upon Form C. Accounting procedure for the county school fund is very similar to that for district funds and will not be set forth in detail. Form C is designed to show: (1) All expenses of the county superintendent's office, classified in detail upon a functional basis; (2) Expenditures for compulsory education, which are made from the county fund for all districts except those having an average daily attendance of over 2,000; (3) Expenses of the county board of education; (4) County tax refunds for which warrants are issued by the board of supervisors; (5) apportionments to districts; (6) receipts into the county fund classified as to source; (7) Balance on hand at the end of each month. As indicated above, it is thought practicable to distinguish between warrants drawn upon the county fund and those drawn upon district funds. The numbers of all warrants drawn upon the county school fund will be entered in Column 2. The amount of each warrant will be entered twice, as in the case of district funds, first in the column indicating the purpose for which the warrant is issued, and secondly in column 14. The latter column will, therefore, show total expenditures for all purposes. In the case of county tax refunds, entries of which are made monthly from the report of the county treasurer, and apportionments to districts, which should be made four times a year immediately after state apportionments to counties are made, only one entry will be made, in columns 15 and 16, respectively. Receipts will be handled upon a double entry basis, the amount thereof being entered first in Column 18, 19 or 20, depending upon source, and secondly in Column 21, the latter colunn showing total receipts from all sources. Column 20 probably requires explanation. The State school laws require that "if at the end of the school year there remain an}"- part of the reserve fund unexpended, then the county superintendent shall place any remaining portion in the County School Fund and apportion the same in the usual manner of apportioning the County School Fund." In other words, there is no provision in the law for carrying over a balance in the reserve fund at the end of the year. We find that the law has been more or less disregarded on the point, that the reserve fund has been used for various miscellaneous purposes, that it has not always been kept separate in the accounts from other funds, and that, therefore, it has not been as a rule utili zed as intended . Column 20 is provided in order that any balance in the reserve fund at the end of the school year may be transferred to the County School Fund and recorded as a receipt therein. This balance will be obtained from the accounting records of the County Reserve Fund kept in the last two pages of the Journal in Form D, and explained below. Receipts from State apportionments will be entered four times annually upon receipt of the legally required notice of apportionments from county treasurers. Receipts from county taxation should be entered monthly upon 65 Accounting Form for Office of County Superintendent COUNTY SCHOOL FUND Form C. EXPENDITURES Date Warrant No. Explanation Salaries Stationery Postage Telephone & Telegraph Repairs Travel New Equip- ment Other Office Expense 1 2 3 4 S 6 7 8 9 10 11 i" Form C— -Continued. Cumpulsory Education Expense County Board Expense Total Expend- itures County Tax Refunds Apportion- ments to Districts Date State Fund County Assess- ment County Reserve Fund Total Balance 12 13 14 15 16 17 18 19 20 21 22 66 receipt of the monthly report from the county treasurer. The same procedure at the end of each month for taking totals, determining balances and checking with the county treasurer, which was recommended in the case of district funds, should be followed in the accounting for the County School Fund. Accounting for County Reserve Fund — Form D. Form D, in which the last two pages of the journal will be ruled, is designed to provide a separate accounting for the County Reserve Fund. According to the present school law this fund shall be disposed of in two ways: (1) For accommodation schools (2) Apportioned to districts. All monej' paid out upon warrant for accommodation schools will, therefore, be entered in Column 4, the warrant number being entered in Column 2. This is the only expenditure made from the Reserve Fund, Columns 5 and 6 being provided to record the apportionment of reserve funds to districts and the return of the reserve fund balance to the County School Fund at the end of the school year. An entry will be required in Column 6 only once annually, the entry being made in Column 20 of Form C at the same time. All receipts will be entered in Column 7, and the balance at the end of the year to be returned to the County School Fund will be determined by deducting totals of Columns 5 and 6 from the total of Column 7. This amount being entered in Column 6, totals of Columns 4, 5 and 6 will equal Column 7, and the Reserve Fund will show no balance at the end of the year. Need for Uniform Accounting Records for County Treasurers. The mechanism for recording financial data in the office of county superintendents has been outlined in considerable detail. It will be observed that the system advocated aims to centralize the recording of all data and promote the accuracy of that data by providing the means for, and enforcing a monthly check of the accounts of the county superintendent against those of the county treasurer. In the above recommendations it is obiously assumed that county treasurers have set up correct accounting pro- cedures for the recording of receipts, balances and expenditures. While no attempt is made in this report to outline an accounting system for county treasurers, we desire to lay stress upon the need for uniform and accurate records if the system recom- mended for county superintendents is to function fully. Treasurers should keep a loose-leaf ledger in which accounts are set up for all district maintenance and building funds, as well as for the County School Fund and the County Reserve Fund. The classification of funds must be on the same basis as that of county school superin- tendents. Balances in all funds must be taken daily, that information as to the condition of all funds may be instantly available. Paid warrants should be filed, and classified by districts and funds upon which they were drawn. The ledger of the county treasurer should also contain accounts for all bond interest and redemption funds, interest and redemption being segregated, and individual accounts being set up for each common and high school district. Interest on sinking funds should be credited to the particular district redemption fund for which the sinking fund is set up. Summary. To briefly summarize, the accounting system for the county unit will record all expenditures made from, and receipts into district and county funds, classified by common and high school districts. Expenditures are classified to show the purpose for which made, and receipts, to show the source from which obtained. A regular monthly 67 Accounting Form for County Superintendent COUNTY RESERVE FUND Form D. ■ Date Warrant No. Explanation Accommodation Schools Apportioned to Districts ■ Returned to County Fund Receipts nen km.'Mp' Monthly Report of County Treasurer of.. County to the County Superintendent of Schools for the Month ending Form E District Number H. S. No. 1 Etc. Interest Paid on Warrants Maintenance 1 Building Tax Refunds 3 Receipts of Month Maintenance 4 Building 5 Balance Maintenance 6 Building 7 Interest paid on County Warrants Receipts into county school fund during month.. Refund of county taxes during month. 68 check is provided between the records of county superintendent and county treasurer, made possible by a monthly report from the latter to the former. The need for uniform accounting for county treasurers is shown and suggestions made as to the procedure to be followed. In short, our recommendations are aimed to obtain two ends — centralization and accuracy. Budgetary Procedure for Counties. Purposes. A system of budgetary control for the schools of each county is recommended for two reasons: (1) To serve as a check upon expenditures, its use in this case being as an instru- ment of control. (2) To serve the same purpose for which the existing budget system is intended, that is, to enable the county superintendent to determine how much money will need to be raised by the county and how much will be raised by district levies. Method of Estimating Expenditures. It is recommended that the county superintendent prior to the beginning of each school year submit to the superintendent of schools in each district having a superin- tendent, and to the high school principal of each high school district, a blank form upon which will be entered the estimated school expenditures for the coming year. He will submit the same form to the local director of each rural school district for the same purpose. The expenditures on the estimate form will be classified in the same manner as in Form B. The county superintendent, assisted by the Assistant Superintendent will study all estimates carefully, comparing them with the actual expenditures for the preceding year and making any changes which he deems expedient. He will thus determine final budget figures for all districts, at the same time drawing up an estimate of expendi- tures out of the County School Fund. Estimated figures thus arrived at shall be entered upon Form F, which should need but slight explanation. It will be noticed that the expense classifications of Form B, Form F and the forms received from dis- tricts articulate. The districts are arranged in numerical order down the side of Form F, and three spaces are provided for each item of expense of each district. Control of Estimates. The estimated expenditures will be entered in the upper space at the beginning of the school year, as soon as budgets are completed. Six months later, as soon as totals are taken in the superintendent's books on December 31, these totals will be entered in the lower space. Provision is thus made for checking expenditures against estimated expenditures at the end of the first six months of the year. On June 30, at the end of the year, total expenditures for the year will be entered in the second space provided, thus affording an immediate comparison between actual and estimated expenditures for the entire year. A definite attempt should be made to keep actual expenditures within the budget else one purpose of budgetary control will be defeated. It has already been recom- mended that in the accounting procedure of the county superintendent totals of all expenditures be taken monthly, as well as a cumulative total for the year to date. Even though these totals are entered in Form F but twice during the year, they should 69 Form F. Budget Form for Office of County Superintendent ADMINISTRATIVE INSTRUCTIONAL Districts Salaries 1 Office Expense 2 Compulsory Education 3 Salaries of Principals, Etc. 4 Salaries of Teachers 5 Supplies Text Books 6 Janitor's Expense District No. 1 Estimated Actual June 30 Section A Actual Deo. 31 District No. 2. Etc. Estimated Actual June 30 Actual Dec. 31 High School District No. 1 Etc. Estimated Actual June 30 Actual Dec. 31 Office Salaries 1 Stationery 2 Postage 3 Telephone & Telegraph 4 Repairs 5 Travel 6 New Equipment County School Fund Estimated Section B Actual June 30 Actual Dec. 31 Form F— -Continued. OPERATION REPAIRS & UPKEEP MISCELLANEOUS Heat, Light, Water & Power 8 Rent 9 Insurance 10 Grounds 11 Buildings 12 Equipment 13 Library Expense 14 Health Service 15 Transpor- tation 16 Other Expense 17 Back Indebt- edness 18 Other Office Expense 8 Compulsory Education 9 County Board Expense 10 70 be checked against budget figures at regular montlily intervals to see whether expendi- tures are too heavy. Form F of course shows total estimated expenditures for the year, but the proportion of totals which should be disbursed at any time during the year can be readily approximated. Stress is again placed upon the need for fully utilizing the information given in Form F if the budget system is going to serve its more useful purpose. Budgetary Procedure for Board of Supervisors. We have no occasion to recommend changes in the budgetary procedure now enforced by boards of supervisors with a view toward determining the amounts to be raised by county and by district levies. The average daily attendance in each district multiphed by the per capita county levy of $45.00 — $80.00, less the amount to be received from State apportionments, will give the amount to be raised by county tax, while the estimated expenditures of each district less the amount raised for each district by county tax will give the amount to be raised by special district levies. This pro- cedure is now in force in the State and is quite adequate as it stands. We have previous- ly suggested the possibilities of using aggregate attendance instead of average daily attendance as the basis for apportionment. Summary. Our recommendations upon budgeting are, therefore, confined chiefly to the method of estimating district expenditures. The system now in operation is, in many districts, dependent for its effectiveness upon guesswork rather than upon a careful, .systematic study of actual conditions and needs. The suggestions made above are intended to eliminate the haphazard element from the present method of estimating expenditures, and to thoroughly systematize budgeting, incidently providing devices by which budget figures may be used to advantage to control actual expenditures. Accounting for City School Superintendents and High School Principals. It has been noted already that records of receipts into and expenditures out of all funds will be kept by county superintendents. The accounting records of the county superintendents will, therefore, be the source of all financial data which is needed for official purposes. It is impracticable, however, for county superintendents to exercise effective control over the internal operations of the city school system or of a high school. We, therefore, suggest that for purposes of internal control city school systems and high schools keep records of all expenditures designed to show the purpose for which made and the unit or department responsible for their incurrence. Relation of City Superintendents to Purchase of Supplies. Ad already explained, all expenditures will be under the control of the county superintendent. In the case of cit}'- districts, however, problems arise which are not met with elsewhere. In many cases it will be necessary for the city schools to secure small quantities of supplies, the purchase of which it is not practicable to have made by the county superintendent. It is desirable, therefore, to establish a procedure by by which these purchases and disbursements can be handled efficiently and at the same time with the greatest possible convenience. Method of Handling Supplies. In order to facilitate the purchasing of minor supplies it is suggested that at the beginning of the school year the citj' superintendent submit to the county superin- 71 tendent an estimate of the amount of such supplies which will be needed during the next year. The particular classes of supplies which should be included in this estimate will be determined by the regulations of the County Board of Education. It is im- portant that the amount of these supplies be kept at the minimum since the purpose of centralizing purchasing control in the hands of the County Superintendent is to secure the purchase of supplies in large quantities with the consequent saving resulting therefrom. The estimate submitted by the City Superintendent when approved by the County Superintendent will be submitted to the County Board of Education and will then constitute authority to the City Superintendent to purchase the amount of supplies for which it calls. In some cases it may be found expedient to permit the City Superintendent to pay for some of these supplies. In this case the County Board may provide for the establishment of a Working Cash Fund for the use of the County Superintendent. The City Superintendent will present a monthly statement to the County Superintendent showing a comparison between the estimate of purchases and the actual purchases made. All purchases,, other than those which the County Board permits the City Superintendent to pay for out of the Working Cash Fund, will be paid for by the County Superintendent upon invoices approved by the City Superin- tendent and submitted by him to the County Superintendent for payment. Accounting Procedures for the Office of the City Superintendent. It is recommended that the City Superintendent keep a record in accordance with Form G. It will be noticed that it is the purpose of this form to accomplish the following objects: (1) To make it possible to arrive at the total expenditures for maintenance of individual schools. (2) To segregate the expenses of the city superintendent's office. Form G is a ledger with accounts set up for the cit}^ superintendent's office and for the various maintenance expenditures. All the latter accounts are sub-divided to show the expenditures for each school under the jurisdiction of the City Superintendent. It will be necessary to allow several pages for each account. In order to facilitate this it is recommended that a loose leaf form of ledger be employed. In order to make possible the maintenance of this record it will be necessary that the City Superintendent receive a copy of all invoices for purchases made for the city schools by the County Superintendent. It is recommended that the County Super- intendent require that all vendors submit duplicate invoices for all purchases made for the city schools and high schools. One copy of the invoice, when approved by the County Superintendent will be forwarded to the City Superintendent for his record. Entries will be made in Form G when checks are issued and invoices are received, two entries being made for each expenditure. Many disbursements will be directly chargeable against individual schools or against the City Superintendent's office, the only exception being in the case of supplies purchased in quantity and distributed to the schools as needed. Supplies when purchased for the use of an individual school, and therefore directly chargeable against it, will be entered on Page 3 or Page 4 depend- ing upon whether they are office or school supplies. Supplies when purchased in quantity for later distribution and therefore not directly chargeable to any individual school at the time of purchase will be entered in either Column 1 or Column 3 on Page 2. When these supplies are distributed to schools the cost of the amount distributed will be entered in either Column 2 or Column 4 of Page 2 and again in the proper column on Page 3 or Page 4 depending upon whether they are office or school supplies. The 72 account with supplies will thus show at all times the undistributed inventory of school and office supplies. All expenditures, whether made by check or warrant, will be recorded first in the proper account and secondly on Page 10 in the Register of Expenditures which shows all cash disbursed in the order in which checks are issued. The date and check number, if disbursement is by check, will in all cases be entered with the amount of the expen- diture in the columns provided. If the foregoing recommendations are adopted by city school superintendents and records are accurately kept according to the instructions given it will be relatively simple to arrive at maintenance costs of individual schools within a city unit as well as the way in which those costs were incurred simply by adding the totals of the various expense columns for each school. The expenditures thus recorded will also be of value as an aid to the operations of budgetary control if the City Superintendent deems it expedient to work out a budget system for individual schools. Relation of High School Principal to Purchase of Supplies. As previously explained, the County Superintendent should purchase all the supplies needed by high schools excepting minor items which cannot be conveniently purchased in quantity. The high school principal should be granted authority to purchase these in the same manner that the City Superintendent is permitted to pur- chase the same kind of items. The high school principal should submit an estimate of such supplies to the County Superintendent and this estimate should be handled in the same manner as recommended for the estimate of the City Superintendent. It is essential that the apportionment of all supplies and the purchase of those supplies which are purchased directly by the high school should be centralized in the office of the high school principal. All requisitions should come to the principal and all purchases which are permitted by the rules of the County Board to be made by the school should be purchased by him. Department heads or teachers should not have authority to make purchases direct. Accounting Procedure for High Schools. High school principals can employ accounting records which are primarily the same as those recommended for the County Superintendent. The same form of ledger can be used, the only difference being in the expense classification. The classification of expense will vary for schools of different sizes depending upon the degree of control which it is desired to exercise over the apportionment of supplies. If a thorough- going control is to be exercised an account should be set up for each item of supplies used. The sub-classification will be by departments or by teachers rather than by schools as in the case of the City Superintendent's record. A separate account for supplies used in the principal's office will be necessary. Also a general account for supplies similar to that on Page 2 of Form G, will be needed to record supplies purchased for later apportionment and not yet chargeable direct to departments. Double entries should be made in all cases, the second entry being in the Register of Disbursements, the procedure being the same as in the case of the City Superintendent. Column totals will at any time give the total disbursements for each item of supplies used by each department. Department costs can thus be computed and compared and from the data thus compiled control can be exercised over depart- mental expenditures in the future. 73 Ledger Form for City School Superintendent ADMINISTRATIVE EXPENSES— CITY SCHOOL SUPERINTENDENT Form G-1. Date Check Number Salaries Stationery Telephone & Telegraph Postage Other Office SuppHes & Expense 1 2 3 4 5 6 7 1 SUPPLIES Form G-2. Date Office Supplies School Supplies Received Distributed Received Distributed 1 2 3 4 OFFICE SUPPLIES Form G-3. Date Chk. No. School No. 1 School No. 2 School No. 3 School No. 4 School No. 5 SCHOOL SUPPLIES AND TEXT-BOOKS Form G-4. Date Chk. No. School No. 1 School No. 2 School No. 3 School No. 4 School No. 5 Form G-5. SALARIES OF PRINCIPALS, SUPERVISORS AND TEACHERS Date Chk. No. School No. 1 School No. 2 School No. 3 School No. 4 School No. 5 74 JANITORS' SALARIES AND SUPPLIES Form G-6. Date Chk. No. School No. 1 School No. 2 School No. 3 School No. 4 School No. 5 HEAT, LIGHT, POWER, WATER, RENT AND INSURANCE Form G-7. Date Chk. No. School No. 1 School No. 2 School No. 3 School No. 4 School No. 5 REPAIRS AND UPKEEP Form G-8. Date Chk. No. School No. 1 School No. 2 School No. 3 School No. 4 School No. 6 MISCELLANEOUS EXPENSE Form G-9. Date Chk. No. School No. 1 School No. 2 School No. 3 School No. 4 School No. 5 Form G-10. REGISTER OF CHECKS ISSUED AND INVOICES RECEIVED Date Check No. Amount Account Charged 1 2 3 4 Date Check No. Amount Account Charged 75 Control of Inventory. For schools designed to keep an inventory of supplies on hand it is recommended that a card file be kept with a card for each item of supplies similar to Form H. When- ever supplies are received the number of units will be entered in Column 2 on the proper card and total on hand in Cohimn 4. Whenever apportionments are made the number of units apportioned will be entered in Column 3 on the proper card and the total remaining on hand in Column 4. The card file kept in this manner will at all times give the amount of each item of supplies on hand. It maj' be found desirable to add another column in which to show the department to which supplies are apportioned. Figures should be entered at the top of each column showing the quantity to order when the supplies run low and the minimum to which supplies can be allowed to drop before ordering new supplies. In determining these amounts such factors as time needed for delivery, rate of consump- tion and quantity discounts should be taken into consideration. Possible Modifications of the Foregoing Procedure, It may be possible that all schools will not desire to maintain as complete an analysis of their expenditures as that which is recommended in the foregoing discus- sion. In those cases where a simpler analysis is desired it will be easy to modify the procedure recommended to suit the needs of the occasion. It is thought, however, that city superintendents and high school principals will find it desirable as rapidly as expedient to maintain an analysis of expenditures by schools and departments, respectively. In some cases such an analysis is now maintained and those superin- tendents and principals which have used such an analysis are unanimous in the belief that it is well worth the cost thereof. Reports. Relation of Reports to Records. If the information contained in accounting records is to be used to the greatest advantage it must be presented by means of proper reports. The State Department of Education has given considerable attention to the preparation of reports and the reports now in use are in many respects satisfactory. The chief difficulty has been in collecting the data which are needed for the proper preparation of the reports desired. Our recommendation in this section are confined mainly to suggesting changes in the form of reports which will make them articulate with the records which we have recommended. In some cases we have recommended the addition of information which we think desirable. Under the revised plan of organization there will be no need for the annual report of district boards to county superintendents stating receipts and disbursements during the year. This information will be obtained directly from the records of county super- intendents. Annual Report of County Superintendent to State Superintendent. The form of the financial section of the annual report of county superintendents to State Superintendent (Pages 12-20 in the present report form), has been changed to articulate with the accounting records kept by the county superintendent. The report of maintenance funds should be made in Form K. It will be noticed that this form is the same as that used in the county superintendents' records. Figures can, 76 Form for Supplies Inventory Form H. Item Quantity to Order. MlNIMUM- Date Amount Received Amount Apportioned Balance on Hand Annual Report of County Treasurer to State Superintendent of Public Instruction _ County Receipts and Expenditures of School Moneys FOR Year Ending June 30, 1923. Form J. Balance June 30, 1922 Received During Year Trans- ferred Appor- ■ tioned Expendi- tures dur- ing Year Balance June 30, 1923 County School Fund $ 10,000 $ 40,000 25,000 15,000 $ 3,000 $ 80,000 $ 10,000 8 3,000 From State From County School Tax: From County Poll Tax. From County Reserve Fund County Reserve Fund 9,000 3,000 4,000 2,000 District Maintenance Funds Common School 10,000 8,000 100,000 125,000 85,000 129,000 25,000 High School 4,000 District Building Funds 11,000 9,000 81,000 74,000 88,000 78,000 4,000 High School 5,000 Bond Interest Funds 6,000 3,000 47,000 34,000 43,000 36,000 10,000 High School 1,000 Bond Redemption Funds Common School 10,000 4,000 38,000 31,000 42,000 31,000 6,000 High School 4,000 I, _ , County Treasurer for the County of hereby certify that the above and foregoing is a full, true and correct statement of the school accounts of said county for the year ending June 30, 1923, as the same appears on the books of my office. Treasurer of County. 77 Form for Annual Report on District Maintenance Form K. — Left Hand Page. Administrative Instructional Dist. No. 1 District Name 2 Salaries 3 Office Expenses 4 Compulsory Education Expense 5 Salaries of Supervisors, Principals 6 Salaries of Teachers 7 Suppliep Text Books 8 Form K^ — Left Hand Page — Continued. EXPENDITURES Operation Repairs & Upkeep Janitor's Salaries & Supplies 9 Heat, Light Power & ■ Water 10 Rent 11 Insurance 12 Other Operation Expense 13 Grounds 14 Buildings 15 78 Funds from County Superintendent to State Superintendent Form K — Right Hand Page. Miscellaneous Equipment 16 Library Expense 17 Health Service 18 Transportation 19 Other 20 Total Maintenance Expenditures 21 Interest on Warrants 22 Form K — Right Hand Page — Continued. RECEIPTS Balances Tax Refunds ■23 Outstanding Warrants 24 State & County 25 District Levy 26 Other Sources 27 Total Maintenance Receipts 28 29 therefore, be taken direct from the various district records kept by the county super- intendents and entered in the annual report. The amounts of the outstanding main- tenance warrants for each district at the end of the year, which information will be obtained from the treasurer's report to the county superintendent should be entered in Column 24. These amounts deducted from the balance in maintenance funds reported by county treasurers in Column 6 of form J should check with the balance shown in Column 29 of the superintendent's report obtained by deducting total expenditures from total receipts. The form of report of building funds will also be changed to articulate with the records of the county superintendent. It will be noticed that Form L is almost identical with the building fund section of Form B, Columns 14, 15 and 16 being added to obtain data regarding buildings and bonded indebtedness which does not appear in the accounts. As in the case of the maintenance fund report, a total of the column show- ing the amount of outstanding warrants, deducting from the balance in building funds reported by the treasurer in Column 6 of Form J should check with the balance shown in Column 13 of Form L. As' we favor the elimination of special funds for manual training, kindergarten, etc., there would of course be no reason for retaining pages 16 and 17 of the present form of annual report. As we consider separate records of the county school fund and county reserve fund desirable, we suggest that the last two pages of the annual report be based upon Form M, in which separate reports will be made of these funds. Section A of Form M will give a detailed analysis of the expenses of the county office as well as a statement of the condition of the county fund. The same procedure may be followed as in the case of building and maintenance fund reports in checking against the treas- urer's report. From Section B of Form M can be obtained an analysis of the reserve fund, showing whether or not it has been correctly treated. Briefly summarizing Forms K, L and M will give all the information desired as to all funds within the county, classified by districts. From these reports may be obtain- ed accurate data as to total expenditures for all purposes, total receipts from all sources, and balances on hand in all funds. Report of County Treasurer to State Superintendent. Considerable change has been made in the form of the annual report of county treasurers to the State Superintendent for two purposes: (1) To segregate all funds; (2) To clarify and organize the data presented in the report. The report recom- mended is shown in Form J, and it is easy to see how our first purpose has been accom- plished. Column 3 and 4 perhaps require explanation. The school law requires that if any balance remains in the county i;eserve fund at the end of the year it shall be returned to the county school fund. Column 3 provided to record such transfer and also to record any transfers made between districts. It is not desirable to show either transfers or apportionments as expenditures, so Column 4 is provided in which to record apportionments. Entries in this column will be confined of course to the county school and county reserve funds. In the case of all district funds Columns 3 and 4 will not have to be utilized unless money has been credited or charged against the wrong district, thus necessitating a transfer. Amounts are entered in the various columns for illustrative purposes. Thus for county school fund Column 6 should equal the difference between Columns 1, 2 and 3 and Columns 4 and 5, the $3,000 in Column 3 being a receipt from the reserve fund 80 Form for Annual Report on District Building Funds from County Superintendent to State Superintendent Form L. EXPENDITURES District No. 1 Land 2 Buildings 3 Improvements & Alterations 4 Furniture & Apparatus 5 Other Capital Outlay 6 Total Building Disbursements 7 Interest on Building Warrants 8 Form L — Continued. RECEIPTS Outstanding Warrants 9 Sale of Bonds 10 Assessment 11 Total Building Receipts 12 Balances 13 Bonded Indebtedness 14 No. of School Building 15 No. of Class Rooms in Use 16 81 Form for Annual Report on County School Fund and County Reserve Fund from County Superintendent to State Superintendent COUNTY SCHOOL FUND tM M. EXPENDITURES Balance First of Year 1 Salaries 2 Stationery 3 Postage 4 Telephone & Telegraph 5 Repairs 6 Travel 7 New Eqmpment 8 Other Office Expense 9 Compulsory Education 10 A RECEIPTS unty oard 11 Total 12 County Tax Refunds IS Outstanding County Warrants 14 Apportioned to Districts 15 State Fund 16 County Assessment 17 County Reserve Fund 18 Total IQ Balance End of Year 20 IM M- COUNTY RESERVE FUND -Continued. EXPENDITURES RECEIPTS Accomodation Schools 1 Apportioned to Districts 2 Returned to County School Fund 3 4 B A. Total Average Daily Attendance 1. Kindergartens 2. Night Schools 3. Accomodation Schools B. Give the District No. or Nos. for 1. All districts lapsed (not consolidated) 2. Newly organized (not consohdated) 3. Consolidated (a) Nos into No.. 4. Closed unavoidably 5. New Buildings erected in districts 6. Only rented Buildings were used in Districts... 82 at the end of the year. The county reserve fund should show no balance, Column 2 being equal to Columns 3, 4 and 5. For all other funds Column 6 should equal the difference between Columns 1 and 2, and Column 5. The report will give total expenditures out of and total receipts into each type of fund, together with all balances. As previously explained, amounts for the county school fund, county reserve fund and maintenance and building funds can be checked against the annual report of county superintendents. Report of State Superintendent to Legislature. The biennial report of the Superintendent of Public Instruction to the State Legislature is required by law to include the following information: (1) Condition and amount of all school funds. (2) Number and grade of schools in each county. (3) Average daily attendance for preceding two years. (4) Amount of funds raised by county and district. (5) Expenditures for teachers and buildiiigs. In view of these legal requirements and the desirability of reporting certain other data it is recommended that the following suggestions be adopted as to the contents of the report: A detailed statement of financial condition covering all school funds shall be drawn up for each county and for the entire State, based upon Form N. It will be noted that all funds are segregated, and that the miscellaneous item has been eliminated from the statement. Form N will give in summarized form a complete statement of receipts, expenditures and balances in all school funds. The following data shall also be reported for each county and for the entire State for each of the two preceding years: School Population and Attendance. (1) Enrolled in Common Schools. (2) Enrolled in High Schools. (3) Attending Private Schools. (4) Average daily attendance, Common Schools. Average daily attendance, High Schools. (5) Percentage of total enrollment in average daily attendance. School Districts and Schools. (1) Number of School Districts. (2) Number of School houses built in past year. (3) Number of School houses owned. (4) Number of School houses rented. (5) Number of High Schools. (6) Number of Grammar Schools. (7) Number of Primary Schools. Teachers. (1) Number of male teachers employed. (2) Average salary paid male teachers. (3) Number of female teachers employed. (4) Average salary paid female teachers. (5) Number of teachers holding life certificates. (6) Number of teachers holding primary certificates. (7) Number of teachers holding secondary certificates. 83 In addition to the foregoing, it is considered desirable to report other significant data in the form of tables. It is important that all data reported and the form in which it is reported be uniform from year to year in order to facilitate comparisons. Data for a single year standing by itself has as a rule but slight significance, but when compared with the same data for other years will indicate definite trends. Lack of uniformity in tabular computations destroys comparabihtj'- and eliminates the possibility of observing tendencies. We suggest that the following information be reported each year: (1) Per capita cost of high school maintenance by districts. (2) Per capita cost of common school maintenance by districts. This information is of obvious importance and is one of the few indices of the efficiency of an educational system. There being no profit and loss test to apply, it is necessary to fall back upon cost per unit as one means of estimating results. (3) Per capita cost of teachers by counties. This data is important for comparison with costs of other states to show the unit cost of instruction. (4) Percentage of total expenditures for instruction to total maintenance expen- ditures, by counties. This information is important in order to determine whether operating and admin- istrative costs of conducting the schools are becoming excessive. (5) Valuation of school property per child in average daily attendance, by counties. Valuation figures of any degree of accuracy are not now available, owing to the unsatisfactory results obtained when valuation was left to district boards. It is recommended that all school property be valuated by the State Tax Department and that adequate records of depreciation and new construction be kept thereafter. This information on valuation per child will serve to indicate to some degree whether schools are overbuilt in some sections of the State. (6) Proportions of total maintenance funds raised from State, county and district sources, by counties. This table will show what part the State and county are playing in financing the public schools. When conditions are similar to those in Arizona particularly. State and county should contribute as liberally as possible to the support of the school system. (7) Text-book costs and losses, as well as the other text-book data given in the 1920 report, by counties or if possible by districts. (8) Data showing per capita costs of rural schools, and per capita costs of urban schools. This information may show one of two things: (1) Excessive costs in one as compared with the other; (2) The need for greater expenditures in rural districts. (9) Age-grade data obtained from annual reports of teachers and principals. Comparison of the data over a period of years should indicate a definite trend either favorable or unfavorable. (10) Enrollment by grades by counties, and percentage of average daily attendance to enrollment. (11) Number of pupils in each grade of grammar and high schools for each one hundred pupils in the first grade. This should include the number 84 graduating from grammar and high school. The data will indicate clearly the trend in school mortahty. The foregoing recommendations as to the data which should be included in the State Superintendent's report is not intended to be exhaustive, but only suggestive. It does, however, include that data which is of greatest importance and significance, and from which accurate judgment can be formed as to the efficiency and productivity of the State school system. (N) Form for report of State Superintendent to Legislature on State and Counties. Balance on Hand July 1 1922 1923 County School Fund ------- District Maintenance Funds ----- District Building Funds ------ Bond Interest Funds ------ Bond Redemption Funds ------ Total - Receipts During Year Maintenance Funds, From State From County From District Taxes From Other Sources - Building Funds Sale of Bonds Bond Interest Funds - Bond Redemption Funds Total Receipts including Balances Expenditures During Year From County School Fund Maintenance Funds Building Funds Bond Interest Funds - Bond Redemption Funds Total Expenditures Balance June 30 County School Fund District Maintenance Funds District Building Funds - Bond Interest Funds - Bond Redemption Funds Total Conclusions and Recommendations. Inadequacy of Existing System. To summarize briefly our conclusions as to the accounting organization'of the State School System, we attribute the inadequacy of the present system fundamentally to the lack of coordination and centralization in the keeping of accounting records and the reporting of statistical data. The function of accounting has in most cases been narrowly conceived, and procedure has typically been left in the hands of inexperienced 85 clerks. There has been slight use of accounting records as a means of exercising control over expenditures; records have been kept primarily from the purely financial view- point. County Control. To coordinate the entire system of records and reports, to assure the keeping of complete and accurate records adapted to purposes of control, and to make possible the compilation of useful and reliable data, we have recommended a system of account- ing which centers around the county superintendent. We have suggested that all records of county and district funds be kept by him and that all purchasing be central- ized in his office. From his records may be obtained not only a statement of the con- dition of all funds, but also a summary of classified expenditures which may be used to excellent advantage in exercising control. Separate accounting for all funds, to comply with the school laws, has been provided for, and the means provided in the form of a monthly report from the county treasurer, whereby the accounts of the latter official may be regularly checked with those of the county superintendent. A budgetary procedure has been outlined whereby expenditures can be accurately estimated, and the forms have been suggested whereby actual expenditures can be compared with estimated, and the former restricted if the occa.sion demands economy. State Superintendent. An accounting system for the State Supei'intendent of Public Instruction has been outlined and the need shown for an accurate record of expenditures classified according to purpose. Form A was designed to show not only administrative costs of the office of the State Superintendent, but also the total amounts expended out of the State fund for nil purposes. City Superintendents and School Principals. Suggestions have been oifered for accounting records for the use of city superin- tendents and school principals by which they may be able to control expenditures, and by means of the information obtained from which they may efficiently magage the individual schools or departments under their jurisdiction. A method of inventory control has been suggested and the centralization of all purchasing strongly urged. It has been shown that there is no very great need for complete accounting records in individual school units; that a record of disbursements for purposes of control will suffice. Reports. Regarding the reporting of data, changes have been made in the annual reports of county treasurers and county superintendents so that each articulates with the records kept by those two officials, and the records of one may be checked against those of the other. Recommendations have been made concerning the contents of the State Superintendent's report to the Legislature. The system of accounting herein outlined will make possible the compilation of all data needed for this report, will greatly reduce the possibility of error in compiling that data, and, if properly administered, will make possible an efficient control of expenditures and a complete record of financial conditions at all times. 86 STATE OF ARIZONA SECTION IV Statistical Data and Procedures. Introductory Relation of Expenditures to Results. In Section I it has been emphasized that to secure efficient financial administration it is necessary to provide among other things (a) that services and supplies be purchased at the lowest price consistent with the procurement of a satisfactory product and (b) that the services and supplies are used efficiently after they are procured. In making a survey, such as that which serves as a basis of this report, there are two methods by which evidence may be obtained to judge whether these two essentials are attained. The first method is by personal inspection and the second is by gathering and inter- preting statistical data which shows expenditures and the results thereof. As explained in the letter of transmittal, we visited schools in every county in the State in order to see the results of expenditures insofar as these results are evidenced by plant and equipment. We also interviewed school executives and teachers in all parts of the State in order to get the benefit of their opinions. The result of our observations are stated in the preceding sections of this report. In addition we attempted to gather statistical data to show the results of school expenditures and the cost of school opera- tions. It is the purpose of this section of the report to present the data which we were able to obtain, and to explain what the data indicates. Difficulty of Securing Data. We had great difficulty in securing accurate data because there had been no system- atic method of collecting and compiling statistical information with reference to school expenditures or operations until the recent establishment of the Bureau of Research and Statistics in the office of the State Superintendent. This Bureau has collected some significant information, but it covers only recent periods and is incomplete in many cases. The Bureau has had difficulty in getting reported to it the information which it desires, because there is no definite procedure established for the collection of such data and the present organization of the public school system is such that it would be difficult to enforce a procedure if it were established. Much of the data which were available were inaccurate. In many cases items reported on the same report were contradictory. We have to content ourselves, therefore, with pre.senting information with reference to a few significant phases of school operations. We are forced to omit several im- portant statistical tables and graphs which appeared in our original outHne because complete information was not available or that which was available was plainly inaccurate. In the latter part of this section we suggest various kinds of information which we think should be gathered and the procedure which we think desirable for obtaining it. 87 Difficulty of Judging Information with Reference to School Operations. It is difficult to judge the results of the operations of a public school system because these results are intangible and there is no definite standard by which to judge them. In business administration we judge results largely in terms of profit and loss, but this test will not apply in school administration for the public schools are not operated for profit. The most significant test of the efficiency of the operations of the public school system is the value of the pubhc service rendered in terms of the dollars spent. An increase in disbursements is not itself an indication of lack of efficiency or lack of economy. Every new function assumed by the public schools either voluntarily or by legislature enactment carries with it an increase in disbursements covering the cost of this function. For example, the introduction of vocational courses in the pubhc schools with the consequent cost of equipment required therefor resulted in an increase in school costs, but the service resulting therefrom is thought by most school adminis- trators to more than compensate for the cost. The employment of additional super- visors for rural schools would increase expenses but would, in our opinion, bring results which would make such an expenditure a real economy. An increase in dis- bursements, comparatively, may indicate only that there has been an increase in the effectiveness of the discharge of pubhc duties. On the other hand a decrease in dis- bursements, comparatively, may not represent economy or efficiency in any sense. Disbursements may be decreased to the positive detriment of the pubhc service. All of this is axiomatic but it is worth while in beginning any survey of pubhc activities to remind ourselves that comparisons of disbursements as well as many other comparisons are not necessarily proper tests as to the efficiency of those responsible for the administration of these activities. It should be remembered, therefore, in studying the tables which follow that the comparisons presented are not intended to be used as a final test of economy or efficiency, but merely as a means of roughly indi- cating the tendencies in school administration. Standards Used in This Report. In the interpretation of the data given in the following pages, we have made use of the following standards: (1) Index Number for State School Systems developed by Dr. L. P. Ayres. (2) Data with reference to School Finances and Operations in ten western states which are judged comparable to Arizona. (3) Data with reference to School Finances and Operations in the different counties of the State. The purpose for which each of these is used will be apparent in the following. Purpose for Which Data Is Presented. The data and discussion given in the following pages is intended primarily to show three things: (1) Results of school operations for the State as a whole and the conclusions to be derived therefrom. (2) Results of school operations in the different counties of the State and the conclusions to be derived therefrom. (3) Sources of school revenues and conclusions to be derived therefrom. Although the statistical data in most cases is not sufficiently complete to make it possible to draw definite conclusions, significant indications can be discerned. General Educational and Financial Trends. Basis of Ayees Index Number. Two years ago Dr. L. P. Ayres devised an index number to be used by State school systems in measuring their progress from year to year and in comparing their attain- ments with those of other states. This index number was obtained for each state by striking an average of ten components each giving evidence of general school efficiency. Five of the components are educational in character and five are financial. The descriptive list follows: (1) Per cent of school population attending school daily. (2) Average days attended by each child of school age. (3) Average number of days schools were kept open. (4) Per cent that high school attendance was of the total attendance. (5) Per cent that boys were of girls in high school. (6) Average expenditure per child in average attendance. (7) Average expenditure per child of school age. (8) Average expenditure per teacher employed. (9) Expenditure per pupil for purposes other than teachers' salaries. (10) Expenditure per teacher employed for salaries. It will be noted that the first five of these components are concerned with attendance and general school efficiency, while the last five relate to financial progress. It is thus possible to compare the progress of a state along educational and financial lines by using the respective groups of components indicated above. Application of Ayres' Index to Arizona. Table 1 and Diagram 1 show the educational and financial trends in Arizona during the j'ears 1890 to 1918. A drop occurs for both components during the decade 1890- 1900, but is followed by a considerable rise for the next ten years. It is interesting to note that these graphical trends sharply reflect the historical development of schools in Arizona. The period 1887-1899 has been characterized by educational historians as one reaction, while the years 1899-1912 mark an era of steady growth. For the years 1910-18 a continuous rise in both components is indicated by the curves, the financial trend crossing the educational during this period. The condition shown is typical of that in other states. Unusual conditions brought about by the war made financial demands upon the schools out of proportion to general educational progress. With the present readjustment in salaries and building expenditures it is likely that the two curves will again approach one another in the next few years. Comparison of Expenditures and Attendance. The contrast between educational growth and school expenditure is again brought before us in Table 2 and graphically represented in Diagram 2. The curves indicate very clearly that school attendance kept pace with expenditure during the first three years of the war, but that after 1917 costs mounted out of proportion to the growing school population. The years 1919-1920 reveal the sharpest increase in expenditure due to large salary increases and generous building outlay during that period. Data for the last two years indicates that the peak has been reached in expenditure. Table • 3 shows a drop in outlay costs from the previous year, but a substantial increase in maintenance costs. The total expenditure is greater than for 1920 but diminishing 89 in comparison with the War period. Salary cuts during the last year will undoubtedly bring about a drop in the expenditure curve for 1922. Although the tendency shown by Diagram 2 is quite marked, it is explainable under the conditions. It is in conformity with the trend in all states which attempted to maintain their schools in an efficient condition during the years of 1918-1920. It will be interesting to watch this graph during the next few years as a readjustment of prices takes place. If we remain permanently on a higher price level this will, of course, materially affect the results shown by this graph. It is also probable that the State will constantly increase its expenditures per capita for school purposes. TABLE 1 Educational and Financial Components of Ayres' Index Number for Arizona 1890-1918* Year Sum of Five Educational Components Sum of Five Financial Components 1890 1900 1910 1918 178 170 238 302 150 132 218 360 *From "An Index Number for State School Systems," by L. P. Ayres. TABLE 2. Average Daily Attendance and Total School Expenditures in Arizona 1913-1920* Children Thousands of Year In Average Daily Dollars Expended Attendance for Education 1913-14 29,912 $2,1.36 1914-15 31,555 2,574 191.5-16 34,257 2,667 1916-17 39,656 2,869 1917-18 41,522 3,679 1918-19 41,359 3,937 1919-20 46,420 6,339 *From Reports of the State Superintendent. 90 400 300 200 100 ■ / f / f f f / y f f """"'---- 1690 1900 1910 1918 DIAGRAM 1. Trends of Educational and Financial Components of Ayers Index Number for Arizona, 1890-1928. 91 300 200 100 J / (^2J. CNDf\NC£ ■ ^ 1914 1915 1916 1917 1918 1919 1920 DIAGRAM 2. Percentage Increases in Average Daily Attendance and Total School Expen- diture for Arizona. 1914-1920. 92 Comparison of Educational Conditions in Arizona With Those in Other Western States. States Chosen for Comparison. As previously stated, one standard by which to judge the educational results of a state is the result obtained in other states. In developing this standard for Arizona, it is thought the following states of the Western Division of the United States are sufficiently similar in educational matters to be used as a basis of comparison : Mon- tana, California, Washington, Utah, Colorado, Nevada, Idaho, Oregon, Wyoming and New Mexico. It is, of course, realized that the educational conditions in some of these states must of necessity be quite different than are the same conditions in Arizona, but in all com- parisons of this nature allowances must be made for such differences, and it is thought the following comparisons are suggestive even though not conclusive. Comparison of States by Ayres' Index. Table 4 presents these states in the order of their rank according to Ayres' Index Number in 1918. It will be noted that Arizona occupies third place, a position which it also holds when all forty-eight states are ranked in order. Arizona stood fourteenth among all the states of the Union in 1890, thirty-second in 1900, eighteenth in 1910, and third in 1918. As measured by Ayres' Index Number, Arizona has made remark- able progress. Her gain during the period 1910-1918 was more rapid than that of any other Western state. Expenditures Per Thousand Dollars of Taxable Wealth. Expenditures for school purposes per thousand dollars of taxable wealth are given for Arizona and the Western states in Table 5. These data represent conditions ten years ago. It will be noted that at that time Arizona ranked seventh in expenditures. If a similar comparison were to be made for the current period, it is likely that Arizona would appear earlier in the list since expenditures in Arizona have increased materially during recent years. Teachers' Salaries. Teachers' salaries include about two-thirds of the total expenditure for the support of the public schools in most states. This important item thus furnishes a good index of comparison among states. Table 6 shows that Arizona is third among Western states in the expenditure for elementary teachers' salaries in small cities for the years 1921-22. It also ranks high in comparison with all the states of the Union since the median yearly salary in Arizona is $1,414.00 as compared with $1,097.00 for the United States. Tables 7 and 8 show median yearly salaries for one and two room rural teachers for the last year. Arizona ranks second in both of these tabulations. It pays only $14.00 a year less than California for its one room rural teachers. For both tables the median yearly salary for Arizona is over $1,200.00 the amount usually regarded by educators as a desirable minimum. The great majority of Arizona teachers are well paid, therefore, judged by the salaries paid in other states. We think this is a desirable situation and one which the State should strive to maintain. Because of the undesirable hving conditions in many counties, Arizona will find it necessary to continue to pay high salaries if it expects to maintain the standard of its schools. It is important to realize that a school cannot be better than its teacher and that an increase in school funds paid for teachers salary usually results in economy. 93 TABLE 3. Expenditures for Maintenance and Outlay in Arizona 1913-1921* Year Maintenance Outlay Maintenance and Outlay- 1913-14 81,212,116 $ 490,427 Si, 702,543 1914-15 1,509,633 599,477 2,109,110 1915-16 1,515,576 469,031 1,984,607 1916-17 1,686,157 425,489 2,111,646 1917-18 2,017,474 725,088 2,742,562 1918-19 2,314,573 358,205 2,672,778 1919-20 3,146,109 1,502,689 4,648,798 1920-21 4,448,884 1,105,262 5,554,146 *From Reports of the State Superintendent. Tables do not include expenditures for "Miscellaneous Purposes," and "From County School Funds" which include from one third to one quarter of the total expenditure. TABLE 4. Ayres' Index Numbers for States in the Western Division 1918* State Index Number Montana 76 California 71 ARIZONA 66 Washington 64 Utah 61 Colorado 59 Nevada 59 Idaho 59 Oregon 58 Wyoming 57 New Mexico 53 *From "An Index Number for State School Systems," by L. P. Ayres. 94 Expenditure per TABLE 5. 1,000 of Wealth in Arizona and Ten Western States 1912 Assessed Valuation of Property Subject to Ad Valorem Taxation Expenditure for Schools Excluding Debt Paid Rank In Expenditure Per $1,000 of Property Assessed States Total Per $1,000 of Property Assessed ARIZONA $ 140,338,191 2,921,277,451 422,330,199 167,512,157 346,550,585 101,087,082 72,457,454 905,011,679 200,299,207 1,005,086,251 180,750,630 $ 1,321,631 23,978,621 6,527,569 2,959,124 3,354,934 625,562 1,112,840 6,095,111 3,626,686 10,526,931 997,022 $ 9.42 8.21 15.46 17.67 9.68 6.19 15.36 6,73 18.11 10.47 5.52 7 California 8 Colorado 3 Idaho 2 Montana 6 Nevada 10 New Mexico 4 Oregon 9 Utah 1 Washington 5 Wyoming 11 TABLE 6. Median Salaries of Elementary Teachers in Cities from 2,500 to 10,000 for Western States 1921-1922* State Median Yearly Salary Wyoming Montana. ARIZONA California Idaho Washington New Mexico Colorado. Oregon Utah United States... 1455 1414 1404 1305 1288 1270 1214 1128 1118' $1097 *From the Research Department, N. E. A. 95 TABLE 7. Median Salaries of One Room Rural Teachers in Western States 1921-1922* State Median Yearly Salary California $1257 ARIZONA 1243 Washington 1104 Washington 1104 New Mexico 1084 Nevada 988 Montana 966 Idaho : 918 Colorado 874 Oregon 862 Utah 844 Wyoming 755 United States $744 *From the Research Department, N. E. A. TABLE 8. Median Salaries of Two Room Rural Teachers in Western States 1921-1922 State ' Median Yearly Salary California „ $1323 ARIZONA 1269 Nevada ! 1167 Washington 1136 Montana 1112 New Mexico 1086 Idaho ■ 1047 Colorado -.. 1023 Oregon 972 Utah 875 96 Comparisons Among Counties. Significance of Comparisons by Counties. One of the fundamental principles on which a democratic school system is based is that all children in the State shall have as nearly equal educational opportunities as possible. While school costs do not give an altogether accurate measure of this opportunity, they nevertheless give a con- venient and useful index of the degree to which various communities are capable or wiUing to provide this equal opportunity. In the following pages the following com- parisons for the counties of the State of Arizona are shown: (1) Expenditures per child in average dailj^ attendance. (2) Average monthly salaries of urban and rural teachers. (3) Expenditures per $1,000 of taxable wealth. (4) Contributions to and from State school fund. Expenditures Per Capita (Average Daily Attendance.) Tables 9 and 10 show per capita expenditures for the fourteen counties of Arizona in 1921. Extreme differences are at once apparent. The expenditure per child in Apache County is only $66.00 as contrasted with $170.00 expenditure in Gila County. This comparison may be questioned because of the lack of urban schools in Apache County. Gila employed 113 teachers of the urban class in 1921, while Apache employ- ed none. But even making allowance for this source of difference it is apparent that the students in Apache County are not receiving the educational advantages that are received by the students in Gila County. Even in the adjoining county of Navajo almost twice as much is spent per capita as in Apache. If a boy chances to be born on the wrong side of the border line of these two counties, he is hkely to be forced to go through life with a greatly inferior training to that received by his more fortunate neighbor who is across the border line. Inequalities in educational opportunities cannot be eliminated, but they should be minimized as much as possible. Average Monthly Salaries of Urban and Rural Teachers. Table 11 shows a comparison between salaries of rural teachers in the several counties. This table is a fairer comparison of the educational situation in the several counties than are Tables 9 and 10. This table shows that the inequality noted in the previous tables still exists. Men rural teachers in Apache County receive a monthly salary of $132.00 as compared with $188.00 in Gila, while rural women teachers in Apache have received $119.00 as contrasted with $142.00 for Gila County. In order to give fair comparisons, Graham and Mohave counties should likewise be contrasted with the other counties on the basis of rural costs. Diagram 3 shows the average monthly salaries of urban and rural teachers for the State as a whole. This average can be used as a standard of comparison in judging the salaries of the individual counties. Expenditures Per $1,000 of Taxable Wealth. Table 12 shows the expenditures per $1,000 of wealth in Arizona counties. It is interesting to compare this table with Tables 9, 10 and 11. It is apparent that some of the counties are not properly meeting their educational opportunities and that others are not able to maintain a high standard in education in comparison with others even though spending more in comparison to its wealth than are those counties that have a higher expenditure per capita. 97 TABLE 9. Total Maintenance Expenditure per Child in Average Daily Attendance in Arizona Counties 1921 County Total Maintenance Expenditure* Pupils in Attendance in Grade and High School Expenditure Per Child in Average Attendance Apache Cochise Coconino.... Gila.. Graham. Greenlee Maricopa.... Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma. Arizona B 68,713 1,035,686 172,162 673,806 168,428 342,328 1,484,452 69,114 229,183 461,369 286,486 153,127 445,352 157,913 1,046 8,025 1,113 3,975 2,474 2,030 14,976 755 1,878 5,264 1,855 1,686 3,062 2,002 $5,748,119 50,141 8 66 129 155 170 69 169 99 92 122 88 154 91 145 79 $115 *From the County Treasurer's Report 1921. TABLE 10. Expenditure Per Child in Average Daily Attendance in Arizona Counties 1921 County Expense and Outlay Pupils in Attendance in Grade and High School Expenditure Per Child in Average Daily Attendance Rank in Pupil Expenditure Apache.... Cochise $ 73,464 1,403,539 172,162 810,019 250,216 494,423 2,644,562 77,255 267,546 688,885 468,559 205,076 507,967 396,663 1,046 8,025 1,113 3,975 2,474 2,030 14,976 755 1,878 5,264 1,855 1,686 3,062 2,002 $ 70 175 155 204 101 244 177 102 142 131 253 122 166 198 14 6 Coconino 8 Gila 3 Graham 13 Greenlee 2 Maricopa 5 Mohave 12 Navajo 9 Pima 10 Pinal Santa Cruz 1 11 Yavapai 7 , Yuma 4 Arizona $8,460,335 50,141 $169 98 Table 13 shows the valuation of taxable property per child in average daily atten- dance for the several counties. This table brings out very clearly the difference in financial abilities of the different counties. It shows very clearly that if there is to be an approach to equality of educational opportunities in the various counties that liberal state aid must be rendered. It is more than probable that if statistics of the same nature were available for the several districts in the different counties that a similar need for county aid to the several districts would be shown. Contributions To and From State School Fund. Table No. 14 shows the contributions of each county to the State School fund together with the amount which it receives from the fund and the excess or deficit of contributions over receipts. It also shows the amount of the tax rate which would be necessary if each county raised by local taxation an amount equal to that which is now receives by means of the State fund. This table further illustrates the need for a continuance of the State fund if it is assumed that education is a State function and that there should be a serious attempt to equalize educational opportunity. The adequacy of the present State fund will be discussed subsequently. TABLE 11. Average Monthly Salaries of Urban and Rural Teachers in Arizona 1920-1921* Urban Rural County Men Women Men Women No. Salary No. Salary No. Salary No. Salary Apache 25 1 2 5 20 3 4 3 2 9 1 $240 300 308 259 244 206 299 197 277 278 250 220 14 HI 95 236 19 105 36 29 79 25 $184 158 160 147 182 152 165 152 156 166 140 11 8 2 6 13 6 42 8 11 5 10 1 8 6 $132 153 255 188 166 158 201 141 152 139 148 125 166 161 36 127 32 69 79 19 342 35 42 42 63 24 93 43 $119 Cochise 138 Coconino 130 Gila 142 Graham. 129 Greenlee... 138 Maricopa. 154 Mohave 144 Navajo Pima 121 139 Pinal 146 Santa Cruz 119 Yavapai 123 Yuma. 126 Arizona 75 $251 969 $169 137 $170 1046 $140 * Adapted from a report by Bureau of Research and Statistics. 99 Urban men Urban women Rural men DIAGRAM 3. Rural women Average Monthly Salaries of Urban and Rural Teachers in Arizona. 1920-21. 100 TABLE 12. Expenditure for School Purposes per $1,000 of Wealth in Arizona Counties 1921 Assessed Valuation Expense and Outlay Rank in Expenditure Per $1,000 of Property Assessed County Total* Per $1,000 Property Assessed Apache Cochise Coconino Gila Graham. Greenlee Maricopa Mohave Navajo Pima Pinal Santa Cruz $ 8,776,318 143,525,605 20,128,235 124,067,362 12,480,418 24,911,059 116,826,456 20,113,636 11,393,701 56.001,132 52,809,912 12,013,806 107,909,313 21,064,333 $ 73,464 1,403,539 172,162 810,019 250,216 494,423 2,644,562 77,255 267,546 688,885 468,559 205,076 507,967 396,663 1 8.37 9.78 8.55 6.53 20.05 19.85 22.64 3.84 23.48 12.30 8.87 17.07 4.71 18.83 11 8 10 12 3 4 2 14 1 7 9 6 Yavapai Yuma 13 5 Arizona. 1732,021,286 88,460,335 $11.56 *From the County Treasurer's Report 1921. TABLE 13. Assessed Valuation per Child in Average Daily Attendance 1921* County Assessed Valuation Pupils in Attendance in Grade and High School Valuation Per School Child Rank in Valuation Per School Child Apache $ 8,776,318 143,525,605 20,128,235 124,067,362 12,480,418 24,911,059 116,825,456 20,113,636 11,393,701 56,001,132 52,809,912 12,013,806 107,909,313 21,064,333 1,046 8,025 1,113 3,975 2,474 2,030 14,976 755 1,878 5,264 1,855 1,686 3,062 2,002 $ 8,390 17,885 18,085 31,212 5,045 12,271 7,801 26,641 6,067 10,639 28,469 7,126 35,241 10,522 10 Cochise 6 Coconino 5 Gila Graham Greenlee 2 14 7 Maricopa Mohave Navajo 11 4 13 Pima Pinal 8 3 Santa Cruz 12 Yavapai Yimia 1 9 Arizona. $732,021,286 50,141 $14,600 *From a report by Bureau of Research & Statistics. 101 TABLE 14. Relation to $25.00 Per Capita Fund Assuming that Institutes, Pensions, Text Books, and State Department Expenses Are Met from Other Income 1921* County Contributions to State Funds Receipts Gain Loss Equal- ized Tax Rate Apache Cochise Coconino Gila Graham Greenlee Maricopa Mohave Navajo Pima Pinal Santa Cruz $ 15,042 245,691 34,472 212,472 21,435 42,620 200,063 34,472 19,555 95,895 90,379 20,558 184,770 ' 36,101 $ 26,199 200,564 27,828 99,405 61,799 50,768 374,428 18,928 46,882 131,620 46,380 42,118 76,590 50,016 $ 11,157 40,364 8,148 174,365 27,327 35,725 21,560 13,915 $ 45,127 6,644 113,067 15,544 43,999 108,180 4.20 1.97 1.95 1.13 6.99 2.87 4.52 1.32 5.81 3.31 1.24 4.95 Yavapai — Yuma 1.00 3.35 Arizona $1,253,525 $1,253,525 $332,561 $332,561 2.41 *From a table prepared by State Department of Education. TABLE 15. Sources of School Revenue in Arizona 1913-1921* Amount Received From: Per Cent Received From: Year State Fund County Taxes District State County District 1913-14 1914-15 1915-16 1916-17 $475,529 460,852 478,572 567,421 613,287 935,751 878,339 999,520 $ 734,947 695,959 1,008,441 1,050,335 1,047,046 1,328,420 1,584,572 2,070,148 $ 613,529 716,533 949,953 968,430 1,297,880 1,714,053 2,618,289 3,478,268 26.1 24.6 19.6 21.9 20.7 23.5 17.3 15.3 40.3 37.2 41.4 40.6 35.4 33.4 31.2 31.6 33.6 38.2 39.0 37.5 1917-18 1918-19 43.9 43.1 1919-20 51.5 1920-21 53.1 *From reports of the State Superintendent. Receipts from the sale of bonds are not included. 102 Revenue Receipts and Control. Sources of School Revenue. Table 15 and Diagram 4 show sources of school revenues in Arizona for the period 1913-1921. It is important to notice that the proportion of revenue received from both State and County sources has been decreasing in recent years and that income from district taxes shows a considerable increase. This general tendency is found in the majority of states at the present time. This tendency is due in part to the rapid rise in prices during recent years which has necessitated large increases in school expenditures and since the amount of revenue to be received from the State funds is usually not flexible, an increase in local taxes has been necessary. The increase in district taxes is usually regarded with disfavor by school administrators because it tends to increase the inequality of educational opportunities. A readjustment of prices will tend to offset to some extent the tendency shown by Diagram 4, but the increase in school expenditures as the school assumes more respon- sibilities will no doubt more than offset the effect of price readjustment. It is apparent, therefore, in view of the foregoing statements and of the statistical data presented on preceding pages with reference to the different counties that the State of Arizona cannot afford to decrease the amount of State support to schools below the amount of the minimum now required by law. It is also apparent that in the years to come it will be necessary to increase the present appropriations to this fund if the State is to continue to pay its present proportion of the burden of maintaining the schools of the State. The present law wisely gives the legislature the authority to make such increases when it sees fit. 103 state County District 1914 1915 1916 1917 1918 1919 1920 1921 DIAGRAM 4. Per Cent of School Revenue from State, County and District Sources for Arizona. 1914-1921. 104 Total State School Revenue Per Child Enrolled. Total state school revenue per child enrolled in Arizona and the ten Western States, previously mentioned, is shown in Table 16. It will be noted that Arizona occupies fourth place in the list and receives $12.64 per child. Considering the present industrial development of the State, this is a favorable comparison. Control of Revenues. As explained in Section I, the chief problem in the financial administration of the public schools of the State is not in the procurement of more funds but rather the more efficient use of those now available and that to secure this it is necessary to have a more efficient system of organization. In the preceding sections of this report the organiza- tion which we think desirable has been explained. We think that a centralized control of school funds is desirable and that the establishment of this type of organization is desirable even though the administrative costs are increased thereby. The savings in other expenses will, in our opinion, more than offset the increase in administrative costs. In this connection Diagram 5 is interesting in showing a comparison between the expenses of the State Department of Education and of the County Superintendents and the total expenditures for school maintenance. It is very apparent that the former are very small in comparison to the latter and it should be obvious that a very small increase in the efficiency of the administrative units of the organization can easily result in large savings in connection with the total disbursements. Diagram 6 is interesting in showing that the salaries of county superintendents have failed to keep pace with the increase of teachers salaries. This indicates the possibility that less has been done to maintain the efficiency of the administrative units of the school organization than to maintain the efficiency of the teaching force. It also gives force to our previous argument that the salaries of county school superin- tendents should be increased. 105 TABLE 16. Total State School Revenue Per Child Enrolled 1921* State State Revenue Per Child Enrolled Nevada $26.43 Wyoming 17.66 Utah 17.33 ARIZONA. 12.64 Washington 12.61 California ! 12.47 Montana _: _ 9.02 New Mexico 7.92 Idaho... 5.76 Colorado 5.50 Oregon 3.11 United States S7.54 *From U. S. Bureau of Education. Total Maintenance $5,748,119 County Superintendent $60,363 State Board $20,872 Diagram 5 Comparison of Total Maintenance, County Superintendent's Expenses, and State Board. 1921. . 106 Per cent 200 _ 175 t 150 1 1 125 1 1 1 1 ,^^j^ ?j^^>^^^-^ ^^■^^ " / 100 ^^^ 1916 1917 1918 1919 1920 1921 DIAGRAM 6. Percentage Increases in Salaries of Teachers and County Superintendents for Arizona. 1916-1921. 107 Statistical Reports and Procedures. Need for Statistical Reports and Procedures. The need for statistical data with reference to school cost and operations has been emphasized frequently in this report. If accurate and comprehensive data are to be provided in such form that they can be used satisfactorily, it is necessary that proper procedures for their collection and record be established, and a systematic series of reports prepared for their presentation. Types of Educational Statistics. Effective school administration requires two types of statistical information: (a) Financial statistics of income, expenditure and material equipment; (b) Quantity of data regarding children to be educated, teachers employed and educational results accomplished. The first type of data is of importance in judging the efficiency with which the school funds are used. Waste and poor administration of funds are not infrequent and indicate methods of accounting prevent an analysis of results which would make possible their elimination. In previous sections of this report we have recommended the form of organization which we think desirable for the public schools of Arizona, and have outlined the accounting methods which we think should be employed by this organization. The second type of statistical data, although in the main non-financial in character is nevertheless as important for school economies as that which is derived from the accounting records. Children in public schools are necessarily dealt with in classes, and groups. Problems of non-attendance, non-promotion and grade progress are surely of as great importance as are the financial aspects of school work. Financial losses and waste need to be detected and eliminated through good methods of account- ing and control. Educational losses and maladjustments are even less easy to detect and remedy because of the lack of uniform and continuous record systems. Child accounting needs to be improved as well as financial accounting if the public schools are to be administered efficiently. It is the purpose of the following pages to indicate some of the most important information of this kind which we think should be available with reference to the schools of Arizona and to indicate the possible procedure by which this information may be collected. Defects in Present Records. Our survey indicates to us that adequate statistics with reference to school opera- tions is not available in many cases for the use of school officials. Numerous illustra- tions of this lack of information came to our attention. Not only was information lacking in many cases, but even in those cases where it was obtainable it often was not available until so long after the completion of the performance of the operations to which it referred that it was of little service in exercising administrative control. Another difficulty arises from the fact that it is often presented in such form that it is not readily understandable by many of those to whom it should be of the most service. It is our belief, therefore, that careful attention should be given to the method of collecting and presenting such information and that procedure should be worked out which will facilitate the gathering of such data so that the desired infor- mation will be available in the proper form at the proper time. Information Which Should Be Available. It is impossible in the scope of a report such as the present one to indicate all the 108 various kinds of statistical data which should be compiled. The most that can be done is to indicate the kinds of data which are considered most significant with the hope that the administrative officers can use these types as a basis for developing the other kinds which they may need. We think that the most significant data from the viewpoint of administrative control may be roughly classified in the following manner : (1) The School Census. This is important as a basis for distributing funds and in making comparisons between private, public and parochial schools. It also furnishes a basis for a steady improvement in attendance. Such information should be available to every truant officer, principal, superin- tendent, and in summary to the general public. (2) School Enrollment and School Attendance. Average daily attendance and aggregate attendance are now so commonly used as a basis for distribut- ing funds that they are required in nearly all schools in the country. The rate of attendance to enrollment is also a good measure of the holding power of the school at various levels. Forms for collecting this data should be uniform and simple. Enrollment and attendance may be indicated by grade and sex in a brief monthly report. (3) Age of Pupils. While the age of pupils as an isolated piece of information is of little importance, it is nevertheless of much importance when related to other facts such as census, attendance, graduation, nationality, etc. Age- grade and age-progress tables should be compiled by each teacher both for the purpose of studying his own problems and also for furnishing information to city, county, and State administrative officers. If properly tabulated such data can easily be compiled by any population area required. At the present the State department is securing some valuable data of this type. (4) Promotion. Data properly gathered and compiled will reveal the grades and ages at which the greatest non-promotion occurs. Such facts are extremely important to teachers and to administrators. Where local problems are involved (such as the Mexican), a tabulation would bring out very clearly the critical places where non-promotion is most prevalent. It is only on the basis of such data that intelligent plans may be made for segregation and other measures for solution of such problems. (5) School Mortality. Some of the methods of life insurance have been carried over with success to the field of education. One of these is the con- struction of "Mortality Tables" to indicate at what ages and grades pupils drop out of schools. This information is of great use to principals and superintendents in planning courses -and providing for material equipment of various types. It is also of interest to the general public. (6) Teachers. The facts regarding the teaching staff which should be gathered generally should include: sex, grade or class, certificate, preparation, salary, and length of service in and out of the state or locality. Such data makes possible the formulation of a definite policy by the state board of education with regard to the improvement in teacher service. Comparative tabulations by districts and counties will prove of great use to county superintendents in the administration of their schools. Finally, summary statistics prepared bjf the state department will facilitate comparisons with other states and furnish objective evidence of educational progress. 109 (7) Buildings and Equipment. Information regarding the valuation, con- dition, and seating capacity of school buildings should be included in each annual report. The shifting population in Arizona makes it highly desirable that facts regarding the seating capacity and to what extent occupied in the schools should be in the hands of the county superintendent early in the school year so that possible readjustments may be made. In one of the two room rural schools visited by the survey staff, one room was overcrowded while the other was occupied to half of its capacity. By shifting one of the grades the superintendent made an equitable division of the pupils, an adjust- ment to which the teachers would not have agreed by themselves. Many such changes may be made on personal inspection of the schools, but a preliminary seating capacity report by the teacher would aid greatly. Adequate statistics with reference to valuation of school property and expenditures for build- ing purposes should also be available. Such statistics are not available at the present time. (8) Text-book and Library Reports. These reports have not been carefully and systematically made in the schools of Arizona. It is hoped that the new plan for handhng texts discussed earlier in this report will make possible more economical distribution and checking of school books. If the work is properly planned it should not be necessary to order books more than twice a year. The large order should be planned by the teacher in the spring so that estimates could be approved, orders sent, and books received in time for the opening of the schools in the fall. If the ordering is left until the close of school many teachers leave their positions and the whole matter is frequently neglected until classes begin the next year. A complete report of the texts and library books should be made in connection with the yearly statistical report. Responsibility for Preparation of Reports. Nearly all of the data listed above must be secured from the individual teacher or principal. Most of it, however, can be incorporated on a single tabulation sheet similar to the one now employed. Such information is usually gathered at the end of the school year. It is desirable, however, that the report be required at least a month before the end. Teachers frequently leave with no reports made out or only partially and carelessly tabulated. It is recommended that the last check of the teacher's salary be withheld until all reports have been submitted to the county superintendent in acceptable form. Special types of data are required for the larger schools and such reports are best made under the direction of the city superintendent. The individual yearly teacher report, however, might well be sent directly to the state department. Financial information will necessarily be obtained from the county officers. It is desirable that the county superintendent's report be so modified as not to duplicate the information sent directly by the teacher to the state department. School census data may be submitted in a separate report. Tabulation of Data. With the present Division of Statistics and Research in the State Department it should be possible for one agency to collect, tabulate, and prepare statistical material on a uniform basis. With a larger clerical force than is now available such reports 110 could be readily drawn up and submitted at once to the proper administrative officers. Mimeographed forms would serve verj^ well for the statistical information. Later formal reports could then be readily made up when required. Such a procedure would place information in the hands of superintendents and principals at a time when it is most useful. The handHng of all data through one office would secure uniformity and economy in dealing with such material. It would also centralize the responsibility for preparation of forms, collection of data, and final reporting. Essential Feature of Statistical Reports. Most school reports are so detailed and involved as to be almost uninteUigible to the average reader. Large masses of unrelated data are frequently placed together with little attempt at summarization or graphical representation. A centralized and carefully trained statistical staff can prepare tables and diagrams in such a way as to be easily interpreted wherever they happen to be required. As pointed out above, it is generally desirable to issue a number of preliminary statistical tables to the administrative officers who need the information and later to compile these into formal reports. The biennial report of the State Superintendent should continue its present information and incorporate whatever new facts seem desirable. The continuing statistics will make possible historical comparisons of progress on a uniform basis. Reports prepared directly for the public should be extremely simple in nature and include summaries and simple graphs and diagrams to facilitate interpretations of the facts presented. Whether or not all data gathered by the State Department is to be put in the form of reports depends upon the nature and use to be made of the information. Useless or "embalmed" statistics should never be prepared. The common fault in gathering the primary data is to collect a good deal more than can ever be used for immediate purposes. This does not necessarily mean, however, that such data is to be wasted. The original tabulation forms or summaries and reports should be preserved in such a way that they may be available for research or survey work. The collection of such information is very expensive if conducted through private agencies and often an unnecessary tax on the time and good nature of teachers and principals who are requested to respond to private question blanks. If research students and others interested in statistical data could be sent directly to the records of the State Depart- ment for their information an enormous saving of time would be effected for all con- cerned. Bureau of Statistics and Research. Arizona has made a good beginning in creating the office of a Director of Statistics and Research. This department should be enlarged by the addition of a trained staff with an adequate filing and record system. It is highly important that immediate cooperation be secured from county superintendents and teachers. To this end the use of frequent bulletins and form letters is recommended in order to acquaint them with the policies and plans of the bureau. We have not attempted to discuss statistical procedures in detail for we think this can be done properly only by the staff of the bureau, which will need to take into consideration current needs and the nature of the organization through which the procedures are to be carried out. Ill STATE OF ARIZONA SECTION V. Summary of Conclusions and Recommendations. Summarizing our discussion in the preceding pages, we offer the following con- clusions and recommendations: I — General Conclusions with reference to Financial Administration. (1) We discovered no evidence of any intentional improper expenditure of school funds. (2) We found frequent evidence of uneconomical expenditures of school funds, due largely to the inefficient form of the organization which is responsible for financial administration. (3) It is our belief that a change in the form of the school organization is neces- sary to secure efficient financial administration. II — Organization. (1) The State Superintendent of Public Instruction, County Superintendents of schools, City superintendents of schools and High School principals are uniformly trying to render efficient service, but are greatly handicapped because of a lack of authority and because of the lack of coordination between the activities of the various units of the school organization. (2) A reorganization of the State school system is necessary, and we recommend that it should involve the following: (a) The abolition of the present State board of education and the sub- stitution therefor of a board of seven members appointed by the Governor with the approval of the Senate. The term of office of the board members should be eight years with not more than two members appointed during any biennial period. The members of the board should serve without pay, but receive their necessary expenses. The board should have increased powers and should have control of the Normal schools and the State University as well as the pubhc schools. (b) The appointment of the State Superintendent "^.f Public Instruction by the board at such a salary as it may see fit. The Superintendent should continue in office as long as he renders efficient service. He should have increased powers as outlined in this report. We recom- mend that an amendment to the Constitution be adopted in order that the State board and the State Department of Education may be reorganized in the manner which we recommend, but we offer an alternate plan by which our recommendations maj^ be carried out in 112 substance even though an amendment to the Constitution may not be obtainable. (c) The reorganization of the Office of the State Superintendent to provide for an functional classification of activities and to provide sufficient assistants to perform properly the increased responsibilities which we recommend that this office should assume. (d) The abolition of the present system of district school organization and the establishment of county unit plan of organization. To accomplish this we recommend the abolition of the district board of trustees and the election of a county board of education which will have control of the schools of the county and will appoint a county superintendent of schools who will supervise the schools of the county. Provisioiis are made for the maintenance of city schools and county high schools and the delegation of certain authority to the executive officers of these units of organization. (e) The concentration of the business affairs of the county in the hands of the county board of education and the appointment of an assistant county superintendent who will act as secretary and business manager for the board and assume responsibility for all accounting and clerical procedu.'es in the office of the county superintendent. Ill — Revenue Receipts and Disbursements. (1) We think that the present sources of school revenues are satisfactory. We recommend that the policy of liberal State aid be continued in order to secure a more nearly equality of educational opportunities in the various counties of the State. (2) In order to secure a more effective control of disbursements we recommend the following. (a) That the State Department of Education and the county superin- tendent of schools be given more direct control of disbursements and that the offices of these respective school executives be organized in such a manner that this control can be exercised effectively. (b) That a centralized control of building and equipment expenditures be established. That all building plans be approved by the State Superintendent, and that all contracts for buildings and equipment be made by the county board. (c) That all teachers be employed by the county board on the recom- mendation of the county superintendent. (d) That all text-books be purchased by the county board of education on the request of the county superintendent. It is recommended that the present plan of having texts adopted by the State Depart- ment of Education be continued, but a change in procedure for their adoption is recommended. It is also recommended that the State depository at Phoenix be abolished, and that each county will purchase the books which it needs direct from the publishers according to the prices stipulated in the contract of the publishers with the State board. This method is recommended in order to eliminate muchof the routine now involved in purchasing texts, and also to eliminate the cost of maintaining the State depository. It is contended that 113 the State depository is paid by the pubKshers, but it is apparent that the pubhshers take this cost into consideration in making contracts with the State board. (e) That all supplies be purchased by the county board upon the recom- mendation of the county superintendent except the minor supplies which may be purchased by State superintendents and high school principals in such cases as the rules of the county board permit. IV — Accounting. (1)^ The present accounting procedures are inadequate for proper financial administration. (2) This inadequacy is due largely to a lack of uniformity and the lack of cen- tralization of authority for accounting procedures. (3) We recommend that the accounting methods and forms which are outlined in Section III of this report be adopted in order that these conditions may be remedied. (4) We recommend that the State Superintendent be given authority to enforce proper accounting methods and procedures by being permitted to withhold the apportionment of State funds on counties which do not comply with the prescribed methods and procedures. V — Statistical Data and Proceduees. (1) The statistical data which is now available with reference to the school operations is inadequate for judging properly their efficiency or to judge properly with reference to the financial administration of the schools. (2) Such data as we were able to obtain indicates the following : (a) That the public schools of Arizona have made decided progress during the past twenty years and that they now compare favorably with the schools of the ten states of the Western Division of the United States. (b) That this progress is due in a considerable degree to the liberal State aid given to the counties and the county aid given to the individual districts which has made possible the payment of salaries which in turn have attracted well qualified teachers. (c) That comparative data with reference to school expenditures in the various counties indicate that the State must continue to render liberal aid if there is to be anything approaching equality of educational opportunities in the various counties of the State. (d) That Arizona is now contributing liberally to the support of its schools in comparison to the support given in other Western states, and that the principal need now is not so much the increase of school revenues as it is the setting up of the form of school organization which will bring about an effective expenditure of the revenues now available. It is not meant by this statement to imply that the present amount of school revenues should not be increased. It is, of course apparent that these must increase as the school population of the State in- creases and as new educational responsibilities are assumed. 114 (e) That a well formulated procedure should be estabhshed for the col- lection and presentation of the statistical data which is needed in the administration of public schools, and that we commend the action of the State Superintendent of Public Instruction in the estabhshment of a director of research and statistics in her office, and recommend that this division be retained with enlarged duties and responsibihties. 115