How The SEC Views Value-Added

The Brookings Institute, corporate shills that they are, released a report acknowledging that value added analysis of teacher performance based upon test scores is problematic and riddled with errors, then said we should use it to evaluate teachers anyway.

Now value-added analysis has been shown to have margins of error of as high as 30%.

The corporate clowns at the Brookings Institute must think a 30% margin of error in rating a teacher is just fine.

Interestingly enough, the Securities and Exchange Commission puts people in jail for those kinds of errors.

Take what just happened to Green Mountain Coffee and the "errors" they made in their earnings reports over three years:

SAN FRANCISCO (MarketWatch) — Green Mountain Coffee Roasters Inc. said Friday it made accounting errors and overstated its profit from 2007 through September 2010.

Fast-growing Green Mountain, under investigation by the Securities and Exchange Commission for its bookkeeping, said it will restate its financial statements for fiscal years 2007 through 2009. The restatement also includes the nine-month period that ended June 26, 2010.

So far, Green Mountain said the accounting adjustments will reduce cumulative net income by $6.1 million to $6.5 million, or 4 cents to 5 cents a share. The internal investigation is nearly complete.

Oops!

No matter - they were only off by $6.1-$6.5 million, which was actually a smaller percentage margin of error than some connected to teacher rankings based upon value-added analysis.

Would the corporate clowns at the Brookings Institute be okay with Green Mountain or other companies they have invested in having such a disparity between stated numbers and reality?

Doubtful - especially if that was a company included in their 401(k) stock portfolio.

So if it's not okay to have those kinds of margins of error in the reporting of corporate earnings, why is it okay to have those kinds of margins of error connected to value added reports of teachers?