State’s school funding IT system outdated and at risk of failure, audit finds

The IT system used to distribute funding to Washington’s 300 schools and districts, serving 1 million students, is both critical to public education and extremely complex.  

The Office of the Washington State Auditor has completed the first comprehensive review of this 17-year-old IT system, operated by the Office of Superintendent of Public Instruction (OSPI). Our Office found it is outdated and at risk of failure. OSPI lacks documented controls and relies on a single vendor and a few long-term employees to ensure the system is complete, accurate, secure and reliable. 

“Operating such a complex system is inherently challenging, but until a replacement is complete, the serious risks we’ve identified demand added vigilance,” said State Auditor Pat McCarthy. “I encourage OSPI to treat our recommendations with the highest sense of urgency as it moves forward with plans to upgrade the state’s essential school funding system.” 

OSPI is responsible for allocating state and federal funds to school districts based on data all schools are required to report, such as enrollment. A suite of OSPI software applications comprising the apportionment system calculates the amount of funding due to each school district, educational service district, charter school and tribal school.   

When passing the two-year state budget, the Legislature adjusts educational funding formulas, but it can also change the funding model every year in any number of ways. In the 2023-2025 biennium, it allocated $30 billion for public education.  

While the State Auditor’s Office routinely audits individual school districts, this new report details the first audit of the apportionment system’s processes and programming. Among the audit’s findings: 

• The core of the system is 17 years old and relies on eight feeder systems, all of which are supported on the same infrastructure 

• Performing apportionment calculations required 128 input values and 119 different layers of calculation detail 

• Because funding formulas frequently change and modifying old software code to accommodate changes is difficult, staff have devised manual workarounds that are both inefficient and increase the risk of errors 

• OSPI lacks many of the robust controls expected for such a large, multifaceted IT system, including some that would prevent accidental or intentional modification of data 

• Without fully documented procedures, OSPI relies on a handful of people to manage different portions of the apportionment calculation, who in turn rely almost entirely on their personal experience and memory to perform the work 

The audit found OSPI managers were aware of the system’s difficulties, and the agency received funding in the current budget to work on improvements. However, a firm engaged by OSPI to review the system in 2024 described weaknesses and vulnerabilities in the entire apportionment suite, concluding it was at a high risk for “catastrophic failure.” 

The full audit report, including detailed explanations of the system as well as recommendations, can be found on the State Auditor’s Office website: Examining the Accuracy of School Funding Systems at OSPI performance audit.

Media questions: Assistant Director of Communications Adam Wilson, Adam.Wilson@sao.wa.gov, 564-999-0799.