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Central Administration Efficiency in Seattle Public Schools

Central Administration Efficiency in Seattle Public Schools. Meg Diaz 10/7/2009. Board Executive Summary. The lack of consistency between the budgets presented to the board and public and the budgets filed with OSPI masks excessive growth in Central Administration

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Central Administration Efficiency in Seattle Public Schools

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  1. Central Administration Efficiency in Seattle Public Schools Meg Diaz 10/7/2009

  2. Board Executive Summary • The lack of consistency between the budgets presented to the board and public and the budgets filed with OSPI masks excessive growth in Central Administration • The Superintendent’s Proposed Operating budgets are inconsistent with the F-195 budget reports filed with OSPI • The total amounts of the budgets are the same; categories within the budgets are substantively different. The 2008-09 budget presented to SPS board lists “Core Administration” as composing 2.8% of the total operating budget, $15.3M, while the budget filed with OSPI reveals Central Administration as composing 8.1% of the total operating budget, $45.1M • Many administrative costs (Supervision of Instruction, Supervision of Nutrition, Supervision of Transportation and Supervision of Buildings) have been assigned to other categories without explanation. All other districts examined report these costs as Central Administration • SPS’ Central Administration costs have increased steadily for a decade, despite declining enrollment • Central administration FTEs have increased 48% since 1998. Enrollment in the same period has declined 7.5% • Central Administration cost growth is 96% in the last decade, well out of line with growth in the overall operating budget and other budget sectors • Growth trend has not abated since State Auditor called attention to top-heavy administrative structure • Seattle’s administrative burden compares unfavorably to other large districts in the state which are growing more efficient not less • Other large districts now face similar demographic complexity & faster rates of change, but have curtailed administrative growth more effectively than SPS • Seattle’s Central Administration is large when compared with similarly-sized districts nationally as well

  3. Categories in SPS proposed budgets are inconsistent with what has been filed with OSPI Classification of Administrative Spending 2008-09 SPS Budget • OSPI budget reports show $30M more is being spent on Central Administration than the board-presented budget suggests • The two budgets come to the same total, $556M • There were notable discrepancies in 3 areas of the budgets presented to the SPS board vs. the budgets filed with OSPI. • Teaching Support & Other Support are larger in the SPS Proposed Budget than in the F-195 budget filed with OSPI • “Core” Administration in the SPS Budget is significantly smaller than Central Administration in the OSPI budget • The disparity in the way administrative spending is accounted for clouds the financial picture • “Core” Administration is not a category in OSPI budget filings for any district in the state • No other district examined reports substantively different category numbers to OSPI than they present to the board and public • SPS offered no explanation in the proposed operating budgets from 2006-07 through 2009-10 to clarify why budget categories differ from those filed with OSPI • The current administration inherited the practice but has not produced a budget with greater clarity $556M $556M Difference +$30M - $25M - $5M -- Operating Budget (%) -- –Sources: OSPI F-195 Budget reports, Superintendent’s Proposed Operating Budgets for 2006-2007 through 2008-09

  4. Unexplained re-categorization of budget categories reduces transparency and masks loss of operational efficiency 2008-09 Administrative Spending by Category +$1.6M = $45.1M +$2.3M +$1.0M +$24.9M Administrative Spending ($M) $15.3M $15.3M “Core” Administration by Category Additional Administrative Spending Areas The categories not included in “Core” Administration are part of Central Administration in OSPI budget reports because the administration or supervision of a district-wide function – e.g. transportation – is a Central Administration cost even if the operation of it is not –Sources: OSPI F-195 Budget reports, Superintendent’s Proposed Operating Budget for 2008-2009

  5. Closer examination of OSPI budget reports reveals that the Central Administration segments most out of line with budget growth are the categories not included in “Core” Administration Regardless of how these administrative functions are categorized, a rigorous, transparent examination should address whether continued elevated spending in these segments is necessary while schools and students contend with cutbacks and increased class sizes Central Administration Growth Central Administration Growth: 6.4% Compound Annual Growth, 1999-2000 to 2008-09 (%) Operating Budget Growth: 4.4% Central Administration segments shifted to Teaching Support all exhibited sustained high growth * Public Relations is new to the budget as of 2006-07 and has been excluded from Central Administration categories. It would be a statistical outlier and its growth would appear outrageous (16.4% CAGR) in a misleading and unfair way. Many other districts in the state have added PR to their Central Administrations. –Sources: OSPI F-195 Budget Reports, 1999-2000 through 2008-09

  6. Supervision of Instruction – the largest segment, at $24.9M – is filed under Teaching Support instead of Central Administration Teaching Support – Supervision Costs vs. Direct Support 2008-09 Teaching Support $71.4M $24.9M • Over 1/3rd of Teaching Support costs – and growing – go to administrative supervision • As of 2008-09, Supervision of Instruction comprised 4.8% of the total operating budget – over one third the cost of the teaching support being supervised • Supervision of Instruction is growing as a percentage of Teaching Support, from 33% in 2006-07 to 41% in the 2009-10 Proposed Operating Budget • These facts are not clarified in the budget presented to the board & public • No explanation is provided for the departure from OSPI categories of Central Administration & Teaching Support, or the continued growth • In contrast, other districts’ budgets conform to OSPI guidelines - = Administrative Spending ($M) $46.5M –Sources: OSPI Budget F-195 reports, Superintendent’s Proposed Operating Budget for 2008-2009

  7. Supervision of Instruction has more than doubled in the span of five years Supervision of Instruction Increases • Supervision of Instruction has increased by 129% since 2004-05 • It is a principal driver of 72% increase in Central Administration • In 2009-2010 Supervision of Instruction represented 5.6% of the total operating budget, $31M a year • Even subtracting the approximately $6M of reserve ARRA funds allocated to the category, $25M a year is 4.5% of the total operating budget • Teaching activities (incl. negotiated pay increases) have increased by only 22% in the same period • Class sizes are up across the district due to budget cuts • Principal’s office has increased by 19% • For 2009-10, SPS budgeted as much for Supervision of Instruction as for every single principal in the district Supervision of Instruction Costs ($M) School Year –Sources: OSPI F-195 Budget Reports, 2005-05 through 2008-09

  8. As a result of decade-long growth, Seattle has the highest administrative burden of any district examined Central Administration Burden Seattle has the highest administrative burden in the state, and it continues to grow Central Administration Spending (% of Total Operating Budget Annual Average School Year Seattle’s central administration was the least efficient of the largest districts in the state –Sources: OSPI Budget F-195 reports for Seattle, Spokane, Kent, Lake Washington, Federal Way, Bellevue, Tacoma, Evergreen (Clark), and Vancouver school districts, 2000-01 through 2008-09

  9. Central administration staff has continued to grow through enrollment declines and the state auditor’s report calling attention to overstaffing Central Staffing Growth 2000-01 2008-09 % Change • The 2008 state auditor’s report highlighted administrative overstaffing as early as 2003-04 • “SPS has 39% more executives, managers and supervisors per student than the average.” – State Auditor’s Report, 2008 • The report estimated that if unchecked, Central Administration overstaffing would cost SPS $10.5M over five years • SPS’ response was that it faces unique challenges that justify higher levels of administrative staffing • “[SPS] is unlike any other district reviewed… in terms of scale and complexity.” – SPS’s response to the State Auditor’s report • SPS’s response to the State Auditor also indicated that the Strategic Plan includes “the periodic evaluation of administrative staffing levels that is appropriate.” • SPS stated that the Strategic Plan “includes strategies to strengthen our leadership and systems, with the expectation of future efficiency gains.” • Central Administration staffing has increased since the State Auditor’s report • Nearly 50 additional administrative staff have been added since the period reviewed in the report • Understanding how SPS compares to other districts may help inform what level of administrative staffing premium is justified Central Administration FTEs 308 395 17.4% Enrollment 44,731 42,551 -5.1% Classroom Teachers 2,841 2,675 -4.3% Enrollment Growth v. Administrative Staff – 2000-01 to 2008-09 – Central Admin FTEs Cumulative Change (%) Enrollment Period reviewed in auditor’s report –Sources: OSPI F-195 Budget Reports and OSPI School Report Cards, 2003-04 through 2008-09, “Performance Audit Report: School District’s Administrative and Support Services: Edmonds, Evergreen, Federal Way, Kent, Lake Washington, Puyallup, Seattle, Spokane, Tacoma and Vancouver, Report No. 1000013.” Washington State Auditor, Brian Sonntag, September, 2008

  10. Despite declining enrollment since 2000, Seattle’s central office growth has been higher than any large district in the state Central Office & Enrollment Growth …Except Seattle, where administrative growth is the highest among large districts despite declining enrollment and increasing class size Across the state, administrative spending has grown more efficient, or at least moves closely with enrollment growth… Enrollment growth Enrollment decline Central office growth Central office reduction Classroom teachers Classroom teachers have grown ahead of enrollment growth and improved administrative efficiency, decreasing class size… Classroom teachers move closely with enrollment changes… • The growth of SPS’s Central Administration is difficult to explain, particularly when contrasted with declines in classroom teachers and enrollment • Despite gains this year, enrollment remains lower than 2000-01 levels while central office staff has increased by nearly 20% and continues to rise –Source: OSPI F-195 Budget reports and OSPI School Report Cards for Spokane, Tacoma, Kent, Evergreen (Clark), Lake Washington, Vancouver, Federal Way, Bellevue and Seattle School districts, 2000-01 through 2008-09

  11. Seattle is no longer as different as it once was from other districts in terms of size and complexity Comparison of District Demographics– 2008-09 – Aggregate Percentage of District Students • SPS’s student population is far from homogenous, which can increase administrative complexity • 56.6% of students are not white • 41.3% of students are eligible for free and reduced lunch • 14.2% of students use special education services • 11.7% of students are “transitional bilingual” while an even higher portion (24%) come from homes where English is not the first language • However, Seattle is not unique with regard to the challenges posed by serving large, diverse student population • Districts facing similar challenges are still able to manage themselves more efficiently than Seattle *These stacks do not add to 100%, as a single student can belong in multiple – or zero – categories. –Source: OSPI School Report Cards for Spokane, Tacoma, Kent, Evergreen (Clark), Lake Washington, Vancouver, Federal Way, Bellevue and Seattle School Districts, 2008-09

  12. Other districts have also faced much more rapidly shifting demographics than Seattle over the past ten years Racial Demographic Changes, 2000-2009 District Enrollment (%) • The diversity often spoken of as a hallmark of SPS is now a hallmark of western Washington, not just Seattle • Seattle remains one of the most racially diverse districts in the state • Many other large districts facing significant demographic shifts have continued to administrate themselves more efficiently –Source: OSPI School Report Cards for Spokane, Tacoma, Kent, Evergreen (Clark), Lake Washington, Vancouver, Federal Way, Bellevue and Seattle School districts

  13. Other districts have also faced more significant growth in free & reduced lunch population, while Seattle has remained relatively stable Free & Reduced Lunch (FRL) Demographic Changes– 2000-01 to 2008-09 – District Enrollment (%) • Seattle has undergone less demographic upheaval in the last 10 years than any other large district, but still had the most growth in its Central Administration • Seattle is still larger than other districts, but no longer notably more complex • In 2000 Seattle had the 3rd-highest FRL level among the state’s largest districts, but by 2008-09 that had changed • Every other large district examined saw larger FRL changes than Seattle –Source: OSPI School Report Cards for Spokane, Tacoma, Kent, Evergreen (Clark), Lake Washington, Vancouver, Federal Way, Bellevue and Seattle School districts

  14. Seattle remains the least efficient district in the state in terms of students per central administrator; efficiency has fallen 18% since 2000-01 vs. 6% gains elsewhere Students per Central Office Administrator 2000-01 average: 173 students per administrator 2008-09 average: 183 students per administrator Students per Central Office Administrator Enrollment (2008-09) 27,675 26,945 26,026 24,801 22,866 21,313 21,207 16,466 42,551 *Average is for districts examined, not for all districts in state –Source: OSPI F-195 Budget reports for Spokane, Tacoma, Kent, Evergreen (Clark), Lake Washington, Vancouver, Federal Way, Bellevue and Seattle School districts, 2000-01 through 2008-09

  15. Compared to similarly sized districts around the country, Seattle’s central administration is still out of proportion Comparison to Other Comparable Urban Districts Central Office Share of Operating Budget (%) Enrollment (2008-09) 56,388 37,033 40,648 42,551 49,230 -Sources: Boston Public Schools Budget, Minneapolis Public Schools Budget, St. Paul Public Schools Budget, Anchorage Public Schools Budget, OSPI F-195 Budget reports for Seattle, National Center for Education Statistics

  16. Sources • OSPI F-195 forms, 1997-8 through 2008-09 for the following districts: Seattle, Spokane, Tacoma, Kent, Evergreen (Clark), Lake Washington, Vancouver, Federal Way, Bellevue and Shoreline. These forms can be located online at : http://www.k12.wa.us/safs/reports.asp • “Performance Audit Report: School District’s Administrative and Support Services: Edmonds, Evergreen, Federal Way, Kent, Lake Washington, Puyallup, Seattle, Spokane, Tacoma and Vancouver, Report No. 1000013.” Washington State Auditor, Brian Sonntag, September, 2008. This report can be found online at :http://www.sao.wa.gov/auditreports/auditreportfiles/ar1000013.pdf • OSPI Accounting Manual for School Districts, 2008-09 http://www.k12.wa.us/safs/INS/ACC/0809/am.asp, and 2009-10, http://www.k12.wa.us/safs/INS/ACC/0910/am.asp • National Center for Education Statistics, www.nces.ed.gov. • St Paul School District budget reports, http://www.businessoffice.spps.org/BudgetReport.html • Minnesota Department of Education, School Finance and Staffing Trends and General Fund Revenue Trends 1996-2006 • Government Auditing Standards, July 2007 Revision, Comptroller General of the United States, http://www.gao.gov/govaud/govaudhtml/index.html • Governmental Accounting Standards Board, http://www.gasb.org/, most usefully “Characteristics of Information in Financial Reporting,” November 2008 • Minneapolis School District 2009-10 Budget documents, http://financeandbudget.mpls.k12.mn.us/Budget_Documents.html • Annual Financial Report of Minneapolis Public Schools, Special School District No. 1, Minneapolis, Minnesota, Year Ended June 30, 2008, http://financeandbudget.mpls.k12.mn.us/uploads/Minneapolis_Public_Schools-Financial_Statements-YE_6-30-08.pdf • Anchorage School District, 2008-09 Adopted Financial Plan. Sections I-VI, http://www.asdk12.org/depts/budget/0809/ • St Paul 2008-09 Adopted Budget, Summary, http://www.businessoffice.spps.org/BudgetReport.html • St Paul Public Schools FY10 Budget Reduction: Additional Central Administrative Reduction Proposal, Committee of the Board, March 24, 2009, http://www.spps.org/uploads/AdminReduct_3-24-09_COB.pdf • Boston Public SchoolsFiscal Year 2009 Budget, http://www.bostonpublicschools.org/files/BudgetBookFY09.pdf • Spokane Public Schools Budget information, http://www.spokaneschools.org/1733101212151725113/site/default.asp • Tacoma Public Schools Budget Summaries and Charts, http://www.tacoma.k12.wa.us/information/departments/finance/Budget/Pages/BudgetSummariesandCharts.aspx • Kent Public Schools budget information, http://www.kent.k12.wa.us/info/budget/ • Evergreen Clark School District budget information, http://www.egreen.wednet.edu/AboutEPS/Pages/2009Budget.aspx • Lake Washington School District budget information, http://www.lwsd.org/About/Budget-Info/Pages/default.aspx • Vancouver Public Schools Budget Facts, http://portalsso.vansd.org/portal/page?_pageid=153,2178396&_dad=portal&_schema=PORTAL • Federal Way Public Schools Budget Information, http://www.fwps.org/info/budget/resources.html • Bellevue Public Schools Budget Information, http://www.bsd405.org/default.aspx?tabid=330 • Shoreline Public Schools budget documents, http://www.shorelineschools.org/budget/budget_09-10/ • Overview of Findings, McKinsey & Co., January 2008, http://www.seattleschools.org/area/strategicplan/mckinsey_report.pdf • Excellence for All, 2009 Report to the Community, Superintendent Maria Goodloe-Johnson, 2009, http://www.seattleschools.org/area/strategicplan/2009_Annual_Report.pdf • Excellence for All, Strategic Plan, June 2008, full text, summaries and appendices, http://www.seattleschools.org/area/strategicplan/adoptedplan.html • “Framing Seattle Public School’s Budget” Don Kennedy, June 2009, http://www.seattleschools.org/area/board/08-09agendas/060309agenda/budgetpresentation.pdf

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