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According to the Michigan Association of Public School Academies, 295 charter schools serve more than 10% of Michigan’s students.[17] Given the differences between district- and charter-run schools in facilities and governance, among other things, we conduct an expenditure analysis by school type to identify if these sectors allocated their Covid relief differently. Since there were systematic differences in how these different types of schools reported their Covid relief spending, this analysis provides a clearer picture of how both sectors — conventional school districts and charter schools — allocated their respective resources.
Compared to conventional school districts, charter schools reported using a larger portion of their Covid relief on purchased services and supplies. For the three school years starting in 2019, 2020 and 2021, charter districts spent 69% on purchased services and 16% on supplies. Only 4% went to labor costs.
Many of these differences can be explained by the way charter schools operate. Instead of hiring their own staff, most charter schools pay a management company to handle their staffing needs. The related expenses, including employee compensation, gets categorized as a purchased service. This is a limitation of the spending data that makes it difficult to tell if charters allocated their resources differently than school districts.
Isolating data for conventional districts shows that they spent a slightly larger share on labor costs than the overall data suggest. Over the three years analyzed, districts spent 52% of their pandemic relief on labor. They spent the same portion as charters on supplies — 16%. This analysis also shows that districts spent only 15% on purchased services, which is more than they typically spend, but not as much of an increase as the aggregated data suggest.
It is possible to dig deeper into the data to see how charter schools categorized their purchased service spending of Covid relief. We compared the way charter schools allocate regular funds and Covid aid within the purchased services category during the 2021-22 school year. Specifically, we analyze how funds are apportioned within the purchased services subcategory, called professional technical services. This covers 95% of spending by charter schools on purchased services.
Charter schools reported allocating 49% of their regular education funds on instructional services, 23% on management services and 11% on “other.” For Covid-related grants, 71% were used for instructional services, 5% for management services and 10% for “other.” Instructional services are performed by professionals who provide learning experiences for students, including teaching and paraprofessional activities. Management services are provided to assist management in a broad policy area or general operation of the school system. Charters devoted a greater proportion of pandemic relief for instructional services and a smaller portion for management services. This suggests that charter schools focused a sizable portion of their Covid relief on addressing learning losses and other achievement gaps that may have been caused by school closures and instructional interruptions during these pandemic years.
Further evidence to this effect shows up in how charter schools categorized the portion of spending that went to purchased instructional services. Charters designated a larger share of Covid relief (8%) for compensatory education than they did with regular education funds. This suggests that, in the face of major disruptions in the classroom, charter schools shifted some of their spending focus to addressing the learning gaps brought on by the pandemic.
