Allotment-Specific and System-Level Issues Adversely Affect North Carolina’s Distribution of K-12 Resources (November 2016)

North Carolina distributes state funds for the operation of K-12 public schools through a system consisting of 37 different allotments, each of which reflects a component of the education delivery model. For example, there are separate allotments for classroom teachers, textbooks, administration, and transportation. In Fiscal Year 2014–15 the Department of Public Instruction (DPI) distributed $8.4 billion in state funds to Local Education Agencies (LEAs) and charter schools through the allotment system. The Program Evaluation Division found issues—with individual allotments and issues that span numerous allotments—ranging from unintended consequences of particular methods and formulaic policies and procedures to a lack of rationale for the factors used to determine how resources are distributed. The Division also identified deficiencies with the allotment system as a whole resulting from overall system complexity and lapses in the control environment. Based on these findings, the General Assembly should either overhaul the system for how resources are distributed by transitioning to a weighted student funding model that uses individual students as the building blocks for developing a state’s education budget, or reform the current system by addressing individual allotment deficiencies and providing direction to improve transparency and accountability.

Final Report (UPDATED NOVEMBER 23, 2016)

Report Digest

Executive Summary




Relevant Legislation:

  • Session Law 2017-57, Section 7.12 stipulates that no funds shall be transferred out of the limited English proficiency allotment category.
  • Session Law 2017-57, Section 7.23D creates the Joint Legislative Task Force on Education Finance Reform (Task Force), outlines its composition, and tasks it with studying various weighted student formula funding models and developing a new funding model for the elementary and secondary public schools of North Carolina based on a weighted student formula.