Understanding Administrative Spending
Administrative spending has been in the spotlight in New Hampshire. In 2026, the legislature passed two significant bills attempting to curb the amount School Administrative Units spend and to increase transparency around admin spending. In June, Governor Ayotte signed HB 564, which requires SAUs to separately publish their administration budgets, allowing voters to approve or veto the SAU budget separately. And in August, Governor Ayotte signed HB 1300, allowing voters to limit their SAU’s spending on administration to 6% of the combined appropriations of the districts within it. It is clear that administrative spending is becoming an important policy debate in our state, but there also is a lot of confusion regarding what districts and SAUs are spending on administration and why.
To determine whether administrative spending is really such a large issue, we need to begin by understanding what administrative spending is and what patterns exist. One important question is how spending on administration correlates with district size. We can assume that larger districts spend more on administration – because they spend more in general – but how does that pattern change when you consider admin spending as a percentage of total expenditures? What are the differences between districts of similar size? And how can understanding these trends offer guidance in how to deal with administrative spending from a policy perspective?
With these questions in mind, Reaching Higher NH analyzed the correlation between total administrative spending and district size and percent administrative spending and district size. We then broke districts into size categories and performed the analyses again. Our biggest takeaway is that smaller districts will have the hardest time with any across-the-board spending restrictions. While smaller districts spend less overall on administration, they often spend a larger percentage of their budget on administrative costs, meaning that spending caps, especially those based on a percentage, would disproportionately burden very small districts. Another important takeaway, however, is that there aren’t very many clear trends. School districts spend drastically varying amounts on administration, making it difficult to impose administrative spending restrictions without understanding individual school context.
What exactly is administrative spending?
One challenge in tackling admin spending is defining it. Administrative costs exist at the school, district, and SAU level, and costs can show up in different places depending on whether you are looking at a district’s budget or its revenue and spending report to the NH Department of Education (the DOE 25). Some administrators are really instructional staff, while others count toward admin spending. And some administrative services can be housed in different places depending on the makeup of the SAU or district. Even the bills that passed the legislature this year seem to define admin spending differently.
For the purposes of this analysis, we used the DOE 25s, because they are available in a standard format for every district. We considered administrative expenditures to include General Administration, Business, and Central functions.
General Administration includes school board services, executive administration, which includes the superintendent’s office, and specific area administration, such as district curriculum coordination or specific program coordination. Business deals entirely with fiscal services such as budgeting, payroll, and auditing. Central includes planning, research, development, evaluation, information services, and staff services. Though we looked at the same lines in each district’s DOE 25, we cannot guarantee that every district reported costs in the same way. Districts may have different ideas of what constitutes various spending lines, and so some variation in admin spending could be a result of differences in reporting rather than actual spending.
There is also the issue that many of these bills, like HB 1300, deal with administrative spending at the SAU level, but data on actual spending, rather than simply budgets, is usually published at the district level. For our analysis, we used district-level data in order to get an idea of administrative spending. Our data comes from the 2025 DOE 25s and other DOE reports.
Understanding the Impact of Size
Comparing total admin spending and district size is not a particularly fair or helpful way to think about administrative spending. Obviously, districts with more students need to spend more on administration. Instead, let’s consider the relationship between enrollment and the portion of the budget districts spend on administration – this lets us compare smaller districts to larger districts more fairly. The correlation is much weaker: only 4.6% of the variation in administrative spending percentage can be explained by district size. But, most interestingly, the slope of the graph reverses. While the total admin spending graph had a steep upward slope, this graph has a slope of -0.000004. Thus, for every 100 additional students, the percentage spent on administration decreases by .04%. Given that schools are usually spending less than 10% of their budget on administration, this is a notable decrease.
A potential reason for the negative is that larger districts are spending more money overall, but they are also able to be more efficient from an administrative perspective, as many administrative costs are quasi-fixed. The concept of quasi-fixed costs is an important one when we’re talking about education spending. Items such as food and materials correlate directly with a student: having an additional student to feed or needing an extra textbook costs more. However, other costs don’t change just because of a few additional students. For example, you need a school building whether you have 100 students or 150, but those 50 additional students might require a few more instructional staff. The same goes for administration. Many school districts, of varying sizes, have one superintendent and one business administrator, but for some districts that don’t spend very much overall, paying those people is a significant portion of their budget.
For example, consider two NH districts, which we will call District A and District B. District A has 657 students, while District B has 183, yet they spend very similar amounts on administration. In 2025, District A spent $784,496 and District B spent $781,511 on administration. Both are single-town districts and only have elementary school students, though in one, those students are split into two schools. District A also has the advantage of being in a multi-district SAU, allowing them to share administrative staff with other districts, and spend less on superintendent and business administrator salaries. Since District A has so many more students, they spend significantly more overall, spending $16,811,747 as compared to District B’s $7,985,822. Therefore, District A spends 4.67% of their total expenditures on administration, while District B spends 9.79% of their total expenditures on administration.
Breaking it Down By District Size Category
To check these patterns, we zoomed in to look at groups of similarly sized districts. If we look at a single size category, rather than all districts together, it is easier to see the negative correlation between ADMR and percent admin spending. For example, consider these graphs showing ADMR vs. admin spending percentage for small and large districts.
Small districts have a slope of -0.00009, so an increase of 100 kids is correlated with an average 0.9% decrease in administrative spending percentage for small districts. The R2 of .1715 means that 17.15% of the variation between districts in percent admin spending can be explained by district size. Large districts have a slope of -.00001, so an increase of 100 kids is correlated with an average 0.1% decrease in administrative spending for large districts. The R2 of 0.167 means that for large districts, 16.7% of variation in percent admin spending can be attributed to district size.
These graphs demonstrate both a stronger correlation and a stronger downward slope than the graph for districts of all sizes. It is therefore clear that larger districts can manage to spend less of their overall budget on administration, while smaller districts struggle to do so. This is further illustrated by the average percent admin spending by district size category.
As you can see, very small districts spend, on average, a full percentage point more of their total expenditures on administration. This is an important finding, because it illustrates the burden that administrative spending caps would have on small districts. Some of these very small districts don’t even have their own schools, so they spend very little total. Much of their spending is paying someone to manage tuitioning and transporting students to other districts. In contrast, very large districts spend a good deal smaller percentage on administration, since they can take advantage of fixed costs spread over many students.
It is also important to note that even once we break districts down by size group, there is a very large range for each group. Very small districts can spend as little as 1.69% of their expenditures on administration and as high as 18.1%. Large districts range from 2.11% to 13.81%. This means that while it may be easier for larger districts to spend a smaller percentage on administration, there are still district-specific qualities that determine how much they spend.
The Takeaway
These data raise serious questions about the fairness of imposing a spending cap across the board. Restrictions on total spending obviously would not work, since total administrative spending is highly correlated with district size. However, restricting administrative spending by percentage is also unfair because it places a harsher burden on small districts. The data demonstrate that burden in a number of ways. For one, the fact that there is a negative correlation between percent admin spending and district size shows that it is easier for larger districts to spend less of their overall budget on administration. In addition, the average percent admin spending decreases significantly from very small districts to very large districts, further illustrating the fact that small districts have to spend more on administration compared to other spending categories. This reality remains true even when you compare single districts. Returning to our example from earlier, District A and District B were able to spend a similar amount on administration, but District A spent way more overall, meaning that they could spend a much lower percentage of their budget on administration.
It is hard to come up with a solution that would reduce administrative spending while being fair and achievable for all districts. There is a wide range of administrative spending even within district size groups, so any policy approach to admin spending must take specific school context into consideration. It is possible that excess administrative spending is a problem, but blanket spending caps are not the solution.