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Recently, the Anchorage School District (ASD) requested community input to assist the District and the School Board in managing their budget. The question under consideration was how to close an anticipated budget gap for FY 2011.
We at the Alaska Policy Forum attended two of the four community forums, at Wendler and Gruening Middle Schools, and provided input to the Superintendent and the School Board.
The ASD budget “shortages” that make up the gap constitute about two percent of the total operating budget. These shortages are not reductions in the current budget but are reductions in growth of the next fiscal year budget. If the School Board and the Superintendent are truly interested in ways to deliver a better value education product (best education for the best cost), the ASD needs to consider the following recommendations to achieve this goal:
? Conduct a comprehensive personnel study. Most of education is human resources. Since approximately 88 percent of the ASD operating budget is made up of personnel costs (salaries and benefits), reducing costs through personnel cuts cannot be avoided. A top-to-bottom manpower study of the District will provide the necessary information to determine which positions can be cut without impacting the educational mission.
Personnel cuts are usually an unpleasant topic. It is important that as many as possible understand all the facts before the cuts are made so the District can benefit from input. The District should make available a complete list of all positions in the ASD, categorizing positions by schools, functional account code, or work center. It should also make available the names of personnel assigned to these positions and a listing of unfilled, funded positions. All information should be made available in a structured, machine readable, electronic format.
These documents should be readily available now and used by ASD on a daily basis to effectively manage human resources. It is discouraging that these documents were not made available before the call for public input to address the two percent reduction of budget growth. This “faces & spaces” study will take time, but it is necessary to ensure value for education and the Anchorage community.
? Place the District checkbook online. Ensure transparency and accountability in management of the budget, by placing the ASD checkbook, in its entirety, online so citizens can see where the District spends its money. More importantly, if the District truly desires input on how to prioritize its spending and where to cut, it needs to make its spending and budget practices more transparent. An online checkbook would be an excellent first step. It would also raise its credibility and visibility to the community.
? Use the input of people in the system. ASD employees are the “boots on the ground” and are more knowledgeable of potential waste in the District. There may be employees who have ideas on how something can be done more efficiently. The administration and the School Board need to listen to these people and encourage their ideas. Create an atmosphere where people feel comfortable sharing ideas to run things better, and create incentives for identifying waste.
Formulate and implement a Fraud, Waste, & Abuse (FWA) policy to ensure more efficient operations. The focus on fraud and abuse should be in 1) procurement and contracting and 2) potential theft of District property. This would require that stringent equipment control policies be established and followed. Computer equipment has a great potential for fraud and misuse through theft/misallocation. A comprehensive FWA policy should also include full whistle-blower protection and incentives for identification of FWA. This would be a win-win for the District, its employees, and the taxpayers by ensuring that resources are effectively used and directed to the education process.
? Contract out support services to reduce costs. This could include food services, transportation, and other support services. The Department of Defense has been the lead Federal agency and has contracted out support services, such as lawn mowing, dining hall, security, etc for more than 20 years because it is cost-effective and adds to the mission by not diverting resources away from the core objective. To divert resources from the prime mission of the District (educating our youth) would be inefficient, at best. The current bargaining units could also compete for the contracts as well as private contractors. Competition brings efficiency, cost-cutting, and innovation to the table. The ASD and the community will win.
? All capital projects should be justified by an economic analysis (EA). Normally, an EA is performed when one needs to construct a new facility and wants to consider the advantages and disadvantages of leasing. An EA will ensure that a project is a well defined, valid operational requirement and is worthy to compete for funding with other projects and priorities. An EA should include full life cycle costs and all alternatives, including the alternative of doing nothing. We want to get the best return on our investment with limited resources.
However, an EA can and should also be used in other decision matrices. For example, ASD should use an EA to determine whether or not to build an artificial turf field, natural field, or none at all. When considering information technology, the School District should use an EA to determine if it should buy commercial off-the-shelf software or should develop its own. All these EAs should include the total costs: loaded personnel costs, costs over the life of the product, materials, and maintenance. Only through a thorough EA can leaders make the best informed decisions and allocate limited resources for the maximum benefit–the best education possible.