Does Oversight Matter? Understanding the Impact of Fiscal Accountability on District Finances and Student Achievement

Brittany Vasquez

The Great Recession illuminated a growing problem in public education: an increased number of school districts are experiencing financial troubles. Fiscal distress has forced some school districts to cut payroll, default on loans, and, in the most extreme cases, led them to seek bankruptcy or to dissolve. In response, since the early 1990s nearly all U.S. states have passed laws that permit increased oversight of and intervening power into district financial management aimed at counteracting distress. State interventions are a form of accountability, that is, fiscal accountability. The goal of accountability in education is to incentivize improvement on some metric through rewards and sanctions; fiscal accountability, more specifically, aims to increase transparency and to maintain the fiscal condition of school districts. Most research on accountability in education has focused on test-based accountability. Evidence on the adequacy and effectiveness of fiscal accountability policies, in contrast, remains elusive. This is particularly problematic as the recent COVID-19 pandemic has brought new forms of budget strain as state revenue and enrollment declined, especially for districts serving larger proportions of racially marginalized students. My study addresses this critical knowledge gap by providing the first national causal estimate of fiscal accountability policies on school district finances, fiscal health, and student outcomes. An evaluation of fiscal accountability policies has previously been difficult due to data and methodological limitations. I use an original dataset containing the universe of laws authorizing state intervention for fiscal reasons, and leverage variation in the timing of adoption in an event-study framework.

About Brittany Vasquez

Brittany Vasquez is a Ph.D. Candidate in Public Policy and Sociology at the University of Michigan. She is a Rackham Merit Fellow, an IES Fellow in Causal Inference in Education Policy Research, a predoctoral trainee with the Population Studies Center, and a Student Fellow with the Stone Center for Inequality Dynamics. Prior to her doctoral studies, Brittany received her B.A. in Sociology from Wake Forest University. Her initial interest in educational inequality began while tutoring in local elementary schools, but it was during an introductory course on education policy and an eventual minor in Education that she became determined to pursue a research career. Her experiences interning with the Minneapolis Foundation and the Z. Smith Reynolds Foundation, and later working in a Boston charter school enriched her perspective on educational issues. While at Michigan, she has assisted and collaborated on several projects with the Education Policy Initiative. Most recently, she co-authored an NBER working paper on the crime-reducing effects of increased public school funding. In other work funded by UM?s Poverty Solutions, she is collaborating on an evaluation of the inclusion of Medicaid as a direct certification program for the National School Lunch Program. Her primary research interests center on educational inequality and the effects of state and federal policies, particularly as related to school finance. Brittany?s dissertation evaluates two interventions to deal with fiscal constraints in education: increased state oversight through fiscal accountability policies and increased autonomy through charter schools.