This is a study designed to determine whether the 1988-89 method of distributing state pupil transportation funds in Virginia met generally accepted standards of quality for such distribution methods, and whether the method of distributing pupil transportation funds served to enhance fiscal equalization in Virginia by properly taking into account cost factors that vary among the Commonwealth1s local school districts?

Relevant literature was examined to identify generally accepted standards of quality for pupil transportation funding formulae and to identify cost factors that are generally accepted as exerting an influence on the costs of operating a local pupil transportation program. Second, information and data were gathered to provide measurements of generally accepted evaluative criteria and generally accepted cost factors that had previously been identified.

It was concluded that the Virginia pupil transportation funding formula, as proposed by the Joint Legislative Audit and Review Commission and adopted by the General Assembly, meets generally accepted standards for efficiency, objectivity, and reliability, but fails to meet standards for simplicity and equity. It was also concluded that the Virginia pupil transportation funding formula does not enhance fiscal equalization through proper consideration of cost factors that vary among local school districts in Virginia.

Five recommendations were offered. First, the current Matrix System method of recognizing costs for purposes of state pupil transportation fund distribution should be replaced by one of three formulae developed through the study, all three of which are substantially more accurate than the Matrix System in approximating existing costs. Second, an effort should be made to provide a comprehensive but understandable description of the method of state pupil transportation fund distribution in Virginia. Third, the methods used in the body of the study should be duplicated by a state agency with ready access to accurate and current data pertaining to pupil transportation costs and cost factors in Virginia. Fourth, the Pupil Transportation Division of the Virginia Department of Education should be more directly involved in the administration of state pupil transportation funds. And fifth, the practice of basing current pupil transportation fund distribution on data more than one year old should be discontinued.