J. OF PUBLIC BUDGETING, ACCOUNTING & FINANCIAL MANAGEMENT, 22 (4), 543-560 WINTER 2010 PUBLIC K-12 EDUCATION AS AN INDUSTRIAL PROCESS: THE SCHOOL AS A FACTORY James E. Groff, Pamela C. Smith, and Tracie Edmond* ABSTRACT. In this paper we argue that public education in the United States is essentially an industrial process organized to produce a finished product. Rising government spending on public education, and the lack of an established rubric to evaluate school performance or accountability deems our analysis relevant and timely. Viewing education as an industrial process will allow policy-makers to obtain more accurate measures of costs and develop appropriate funding mechanisms. Furthermore, regulators may use managerial accounting concepts, particularly activity based costing, to establish future school performance evaluation rubrics. INTRODUCTION The funding of public elementary and secondary education has reached a crisis point throughout the United States. Increased federal government involvement in local school funding has come with a significant cost, given the enactment of the No Child Left Behind Act of 2001. There seems to be little agreement about what the costs of education are, how expenditures are related to outcomes or how either outcomes or costs should be measured. According to ------------------------- * James E. Groff, PhD, CMA is a Professor in the Department of Accounting at the University of Texas at San Antonio. His research interests are financial reporting issues related to public entities and cost management in public education. Pamela C. Smith, PhD is an Associate Professor in the Department of Accounting at the University of Texas at San Antonio. Her research interests are in taxation and nonprofit organizations. Tracie Edmond, PhD, CPA is an Assistant Professor in the Department of Accounting at the University of the Incarnate Word. Her research interests are cost accounting issues within the nonprofit sector. Copyright © 2010 by PrAcademics Press