ADA and ADM: Definitions, differences and downsides

Kentucky School Advocate
November 2023

By John Powell
KSBA Staff Attorney

This school year, Kentucky’s state funding formula returned to using the previous year’s daily student attendance numbers after three years of allowing districts to instead use pre-pandemic attendance figures. With major shifts in enrollment, student attendance habits and the sunsetting of federal emergency funds, many boards face financial uncertainty. This has brought the discussion of “ADM vs. ADA” back to the forefront.

Most state funding for districts is allocated through the SEEK formula, based on student attendance (ADA) rather than membership or enrollment. What is ADA and ADM?

ADA, or average daily attendance, is an average of the daily count of enrolled students who are actually in attendance for all or part of a school day. Therefore, the ADA does not include students who are absent, whether excused or unexcused.

ADM, or average daily membership, is an average of the total number of students enrolled in the district as of each given day. Because it is unlikely that any school will have perfect attendance for even a single day, a district’s ADM figure is always higher than its ADA figure.

Why are some leaders supportive of basing the SEEK formula on ADM rather than ADA?

Since the SEEK formula was created in 1990, there has always been discussion of the pros and cons of allocating funds based on ADA vs. ADM, both among local school leaders and policymakers in Frankfort. This change would have to be made by the General Assembly. A recent Legislative Research Commission report found that approximately seven states base funding on ADA, while approximately 21 states use ADM. One reason for using ADA is that it automatically creates a direct incentive for districts to focus on getting students in class, which is vital for learning. However, proponents of using ADM counter that a district must plan, and pay for, staffing and operations based on full enrollment regardless of daily attendance, and that enrolled students who are absent present their own costs to a district for efforts to find them and get them back in class.

In these discussions, we often hear about “winners and losers.” What does that mean?

If the same total amount of funding was    allocated through the SEEK formula based on ADM, rather than ADA as it is now, districts that currently have relatively lower rates of actual attendance would realize more of a benefit in increased funding as compared to districts that already have very high rates of daily attendance. In other words, if the ADA is already close to 100% of membership, then switching to that higher membership number won’t be as much of an increase as a district moving from a low daily attendance rate up to the full membership count. Depending on the many other factors of SEEK, a given district may not see an increase at all from moving from ADA to ADM.

Would shifting to ADM automatically result in more state funding for schools?

No. The base per-pupil amount and the total overall amount of state funding for all districts that is allocated through the SEEK formula are set by the General Assembly in each two-year state budget. Amounts may be increased or decreased by the legislature, and therefore basing the formula itself on ADM vs. ADA does not mean the total amount of funding, or the amount for any given district, would increase.  

Read more: In case you missed it, check out KSBA’s September cover story, “Drop in attendance, end of COVID funds bring tough budget choices.”

Training opportunity: KSBA’s webinar, “Why Did We Get Less SEEK Money?” is available as a self-study course good for one hour of state-mandated Finance training credit for school board members. Visit ksba.org/Self-StudyCredit.aspx for more information.