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SALT LAKE CITY — A legislative audit released Monday recommends the Utah State Board of Education determine whether a student information system should be privatized given the price tag for eliminating it could reach $7 million the first year.
The system that cost approximately $1.1 million in the 2016 budget year is available to public education entities without charge to track academic progress, attendance and other data used to determine state and federal funding.
The Legislature's Public Education Appropriations Subcommittee sought the review because a private vendor raised concerns of unfair competition from the state system known as Aspire, according to the legislative auditor general's audit.
Although the state's Free Market Protection and Privatization Board concluded in 2015 that the system "appeared to compete unfairly with private business, (its) recommendation stopped short of recommending privatization," the audit stated.
Because the State School Board "is not gaining a financial advantage and in fact spends money to maintain Aspire," the audit said it does not appear to meet the privatization board's definition of unfair competition.
The audit found that continuing to operate the system is the least expensive option. Private vendors would cost at least $2.7 million and as much as $7 million more the first year, then another $1.5 million to $1.7 millon annually.
That's a difference of spending about $7 per student now mostly on salary and benefits to state board employees, to an expense between $23 to $49 per student to transition to a private vendor, and about $16 or $17 per student after the first year.
The state's costs are expected to decrease in the current budget year to about $860,000, or just over $5 per student, because several programmers have been reassigned.
About three-quarters of charter schools and half of the state's school districts use the Aspire system, but their students account for only about a quarter of all public school students, meaning it's largely smaller education entities.
The 2016 Legislature approved allowing the collection of $4.51 per student for using the system, about two-thirds of the cost, an option available to the state board that the audit said would "eliminate the perception of unfair competition."
Other options include offering a set amount per student to education entities, similar to what Wyoming does, or simply eliminating the state system altogether. All the options are more expensive than leaving the system in place.
The recommendation made by the audit is for the state board to use the information provided "to determine whether privatization is appropriate, given increases costs, and if so, specify which option and level of funding would be appropriate."
Scott Jones, the state board's deputy superintendent of operations, said in his written response to the audit that "any change to the current structure will have a large impact to the state public education system and will be carefully evaluated."
Jones said the board was waiting for the audit results before responding to the privatization board findings.
"This is an evolving issue that will be carefully studied," he said.