WA education funding system at grave risk of ‘catastrophic failure,’ audit says
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- A third-party review found the 17-year-old system at high risk of catastrophic failure.
- The audit says OSPI will receive $16 million starting in the 2025–27 biennium.
- OSPI depends on one vendor and few employees and lacks documented controls for the system.
The IT system that the state’s public education agency uses to divvy out funding to Washington districts and schools is at great risk of “catastrophic failure,” according to a new state performance audit.
The Office of the Washington State Auditor said in a news release this week that the 17-year-old complex IT system is outdated. The Office of Superintendent of Public Instruction (OSPI) depends on one vendor and a few employees to make sure the system is dependable, accurate and secure, but the agency “lacks documented controls,” the release says.
Managers within the public schools agency knew of the system’s challenges, and OSPI has taken some steps to improve the process, the audit found. But a third-party firm engaged by the agency in 2024 to review the system underscored certain vulnerabilities and weaknesses, finding that it was at a “high risk for ‘catastrophic failure,’” the audit says.
State Auditor Pat McCarthy said in the news release that running such a system is difficult, but that it requires more vigilance until a replacement can be made.
“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,” she continued.
OSPI spokesperson Katy Payne told McClatchy via email that the agency has been asking for money from the Legislature since 2020 to upgrade the system. After a recent legislative investment, OSPI is finalizing a contract to install a new one that will be ready to go by the beginning of the 2028-29 school year, she said.
“Overall, the State Auditor’s recommendations reinforce OSPI’s concerns and the urgency around our request for legislative funding for a new apportionment system,” she said.
The audit says that over four fiscal years and starting in the 2025-27 biennium budget, OSPI will receive $16 million “to rebuild or replace portions of the core and feeder systems suite.”
OSPI allocates federal and state dollars to districts based on data like enrollment, staffing needs and operating costs, per McCarthy’s office. The Legislature set aside $30 billion for public education in the 2023-25 biennium.
The apportionment system is a suite of OSPI software applications that compute the amount of dollars due to each school district, educational service district and tribal and charter school, the news release says.
First built in 2008, the software infrastructure used by OSPI is strained by more complicated funding formulas and bigger datasets, according to the State Auditor’s Office (SAO). The same infrastructure is shared by all agency systems, meaning “an outage in one system can limit access to others,” the auditor’s website says.
This marks the first audit of the agency’s apportionment system, according to the SAO.
The news release highlighted multiple key findings, including that:
- Running calculations for apportionment demanded nearly 120 layers of calculation detail and close to 130 input values.
- The system’s core depends on eight feeder systems, “all of which are supported on the same infrastructure.”
- Many of the controls expected for such a complex and vast IT system were lacking.
- A handful of people effectively hold up OSPI’s apportionment calculation; they rely on institutional memory and personal experience to conduct the work.
- Since changing up old software code is challenging and formulas for funding often change, staff came up with manual processes that spiked the possibility of errors and that were inefficient.
The State Auditor’s Office outlined a number of recommendations, including for OSPI to devote the resources and time needed to implement all security requirements from WaTech, which operates Washington’s core technology services.
OSPI was also advised on its staffing problems, with recommendations such as identifying and training backups for every worker’s responsibilities.
OSPI appreciates that the auditor’s office noticed that, despite its unreliable system, it has been able to accurately dole out district funds, Payne said.
“In the meantime,” she continued, “while the new system is being developed, we are implementing a variety of process changes, checks, and balances to ensure the continued accuracy of payments from the existing system.”
This story was originally published May 21, 2026 at 5:30 AM with the headline "WA education funding system at grave risk of ‘catastrophic failure,’ audit says."
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