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State board staff report early rollout of Maryland’s minimum school funding tracking system; FY25 set as baseline
Summary
MSDE and AIB presented the new school-level budget and expenditure reporting system required under state law, said FY25 is the baseline year, and described data submissions, remaining LEA issues, and next steps for FY26 planning.
Maryland State Department of Education staff and the Aid to Instructional Board (AIB) consultant briefed the Education Transformation and Finance Committee on the rollout of a new school-level budget and expenditure reporting system for tracking minimum school funding, and said fiscal year 2025 will serve as the baseline year for compliance work.
MSDE staff said the system, implemented with PowerSchool as an implementation partner, was required by the Education Article provision MSDE cited and went live in July 2023 for beta testing. The department said the system collects school-level budget and monthly expenditure data by program — including foundation, compensatory education, multilingual education, special education, pre-K, comparable wage index and college- and career-readiness programs — and that LEAs must submit monthly files by the 15th for prior-month data.
"The system was up and running in July of 2023 as was required, and the 2023–24 year was considered a beta year," an MSDE presenter said. MSDE staff said the first full reporting year for baseline purposes is FY25 and that final audited FY25 data will be due Oct. 15 following the fiscal year close.
MSDE and the AIB consultant described two technical caveats in interpreting early-year data: (1) the FY25 submissions MSDE reviewed covered July through November and many LEAs’ actual spending ramps up later in the fall, so the dataset looked like three months of effective spending rather than five calendar months; and (2) some LEAs journal certain expenditures (for example, workforce development board allocations) at year-end rather than allocating them across months. The AIB consultant therefore analyzed the file set using a three-month equivalent to get a more realistic baseline picture.
MSDE said the system automatically computes per-pupil funding targets and 75% program allocations at the school level and compares those calculated amounts to school budgets; the analysis shows many schools exceed the minimum funding calculation while others still fall short. The policy requires LEAs to cut by 50% the number of students attending a school that does not meet the minimum by FY26 and to meet the requirement statewide by FY27; AIB has released waiver language LEAs can file if necessary.
MSDE reported that, at the time the presentation slides were prepared, 19 LEAs had timely February submissions and three others had data issues; MSDE later said all but one LEA had submitted files as of the Monday before the meeting and that the remaining LEA expected to submit during the open submission period. MSDE staff said implementation partners, PowerSchool and MSDE technical teams, are providing weekly check-ins and targeted technical assistance and that MSDE will issue lessons-learned materials and additional training over the summer to support FY26 reporting.
Committee members asked for a deeper data dive at a future meeting to see school-level detail. MSDE staff agreed to prepare a clearer slide presentation that uses a single control number for public briefings and said staff would coordinate with AIB and local LEAs as they finalize FY25 audited submissions.
Ending: MSDE said FY25 will serve as the baseline year, noted system limitations in early reporting months, and outlined steps to increase LEA support and data transparency ahead of FY26 budget planning.
