The purpose of this study was to examine the relationship between selected budgetary expenditures for facilities and debt service and building conditions in the Commonwealth of Virginia. One research question and three sub-questions for selected school divisions were used to investigate this topic. The major data components used in this study were provided by the Virginia Department of Education. Twenty -two school divisions in the Commonwealth of Virginia were selected for the study, based on a previous study conducted by Crook (2006). Crook identified and classified selected school divisions as standard or substandard pursuant to the responses of principals who responded to the Commonwealth Assessment of Physical Environment (CAPE) assessment instrument. The line items of "facilities and debt service" were analyzed over a five year period for fiscal years 2000-2005.

An independent t-test drawn from SPSS software was used to determine statistical significance between combined per-pupil expenditures for facilities and debt service. A comparison of the (1) means of total expenditures in the facilities and debt service line items, (2) total per-pupil expenditures, and (3) annual per-pupil expenditures was used to determine statistical significance. Analysis of the VEA measure of fiscal capacity and effort was conducted to ascertain the similarity of the two groups of school divisions.

The findings of the study indicate that an analysis of total expenditure and per-pupil spending during the fiscal years of 2000-2005 reveal strong statistical significance in spending between school divisions with buildings classified as satisfactory and unsatisfactory in the line items of facilities and debt service. Analysis of five year total expenditure mean revealed there was strong statistical significance found in the two financial line items. Analysis of yearly per-pupil expenditures revealed that there was no statistical significance in the budget line item of facilities. Statistical significance was found in the financial line item of debt service during the academic year of 2000-2001 with a p value of (.025).