Accountability and Micromanagement: Decentralized Budgeting in Massachusetts School Districts

INTRODUCTION The purpose of this paper is to identify, describe, and explain patterns of decentralized budgetary control among Massachusetts school districts and thereby contribute to administrative, education, and budget reform theory. The development of strategies to reduce micromanagement has long been a major theme in public administration theory, with special applicability to budgeting (Behn, 1995; Rubin, 2010). As a critical, highly visible administrative function, budgeting is often micromanaged by elected officials in order to reduce the risk of embarrassment from shortfalls, misdirected resources, and waste, as well as to bind managers to policy (Schick, 1966; Rubin, 2010). Decentralization themes generally include strategies to increase efficiency and effectiveness through distribution and/or redistribution of responsibility for management decisions within an administrative hierarchy (Hayek, 1945; Anthony, 1965; Simon, 1976) and strategies to increase managerial creativity, entrepreneurship, and public value (Gulick, 1983; Osborne & Gaebler, 1992; Moore, 1995). These themes are also present in the education literature, although a major focus over the past thirty years has been on strategies to use decentralization as a means to achieve education reform (Brown, 1987). Decentralization reforms, known generally as school-based management and budgeting, stress the importance of citizen, parent, and teacher involvement in school-level management and budget decisions. Decentralization strategies that include external stakeholders in school level decisions are explicit system-changing, political strategies to redistribute decision-making to the school level and thereby solve the problem of micromanagement (Wohlstetter and Buffett, 1991; Goertz & Stiefel, 1998). Reform advocates maintain that school principals, in collaboration with parents, teachers, and community stakeholders, are in the best position to make decisions that will positively affect student performance and that to be effective, the ability to make budget decisions should be aligned with responsibility for educational outcomes. Decentralization does not, however, relieve school boards of their legal responsibilities and of their accountability to the electorate. While they may be supportive of reform goals in general, elected school board members may view decentralization as a risky proposition. As a result, they may elect to approach decentralization selectively rather than comprehensively (Brown, 1987). Selectivity, in turn, is likely to be shaped by the political, social, and economic environments in which officials make budget decisions (Schick, 1966; Rubin, 1996). As normative theory, decentralization of budgetary control in any governmental organization, including school districts, raises important questions that can be addressed through empirical research. How much budgetary responsibility, control, and flexibility do elected officials delegate to middle or operating level managers? Does decentralization follow prescribed or unique patterns? How do elected officials ensure that managers with increased budget flexibility will pursue objectives consistent with policy? Does the inclusion of stakeholders and constituencies in decision-making reduce micromanagement? This article addresses these questions using Massachusetts school districts as cases in point. Research methods include correlation analysis, confirmatory factor analysis, and multiple regression. Data are derived from a survey of members of the Massachusetts Association of School Business Officials and from Massachusetts Department of Elementary and Secondary Education data banks. School districts are local governments with elected boards and professional management. They employ some fifty-six percent of local government employees in the United States and consume twenty percent of total state and local expenditures (U.S. Census Bureau 2006 & 2007). As such, they represent an important, fertile field for public administration research. …