An Examination of Budgetary Inefficiency in Education Using Data Envelopment Analysis

The generally weak association between educational spending and performance is a source of ongoing debate. This study examined size, type and source of educational operating expenditures as potential explanators of this weak relationship. Using Data Envelopment Analysis (DEA) and publicly available input-output performance metrics, budgetary efficiency was measured across school districts. Budgetary inefficiency was found to be significantly and positively associated with (1) budget size (2) administrative overhead and (3) local revenue accountability. These findings offer a partial explanation for the weak relationship traditionally found between educational spending inputs and performance outcomes. The results are suggestive of how school districts might improve their budgetary goal setting, performance auditing and resource allocation practices.