Minnesota spends more for education than most states and has increased its financial commitment steadily over the past 15 years. Because of the state's dominant role in education funding, legislators have enacted measures requiring all local school districts to follow uniform financial accounting and reporting standards (UFARS). Since 1980, the legislature has required districts to maintain multidimensional accounting records and provide computerized financial data regularly to the State Department of Education through regional computer centers. This evaluation reexamines data that the Minnesota Department of Education maintains on each district's expenses for the 1987-88 school year. The accuracy of 107 expenditure items related to common programs, services, and activities was evaluated. The evaluation showed that: (1) 45 percent of the UFARS expenditure items tested had been misreported to the Department of Education; (2) some administrators reported their expenses in general categories, while others were inclined to use finer breakdowns; (3) total expenses for regular instruction had been reported incorrectly in about one-third of Minnesota's school districts; and (4) only 10 percent of expense categories (food service) in school district profiles could be used reliably for comparison purposes. The report next analyzes reasons for problems, state spending variations, and total operation expenses ($4,243 per pupil). Expenditure trends are noted for instruction, administration, and other expense categories. Recommendations for reducing costs and improving data collection are provided. Two appendices include the administrators' survey instrument and 16 tables of statistics on school district spending. (MLH)