Audit & Finance Committee Review of Central Administration Levels November 5, 2009 Duggan Harman, Executive Director of Finance

Excellence For All

Every stneíenr achieving, everyone eßeconnmble



Executive Summary

• Seattle Public Schools is committed to making continuous improvements in operations to focus maximum resources on instruction

• Detailed analysis shows that Seattle Public Schools Central Administration Costs are at 6% - in line with other districts

• Central Administration costs are flat, comparing 1998 to 2009

• Errors have been made on the coding of job functions to specific categories and budget book categories did not align with OSPI

• Moving forward:

– New budget policy means reporting will be consistent with OSPI reporting structure – Continued analysis of job coding to ensure all positions are categorized correctly – SPS continues to examine all functions and programs to ensure that maximum funds

are directed to instruction and the budget development process prioritizes academics and Excellence for All initiatives

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Review of Findings

• Identification of Errors in Reporting

• Actions to Correct the Errors

• Impact of the Corrections

• Next Steps

• Executive Summary

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Core Administration and Teaching Support

Although totals for the 2008-09 Seattle Budget Book and that year’s state F-195 budget report are identical, the SPS budget book differentiates core administration; a Seattle term designed to call out traditional business administrative costs. (board of directors, superintendent’s office, business offices, human resources and public relations)

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Cere Administratien With Management fer Support Activities (SPS Budget Beek uf. Cembinecl Administratiun

$13 Other Support

"SPS ACTIVITY' _ F-195 ACTIVITY

Other Support



Revised Policy and Procedure

New Budget Policy Introduced Last Month A new Superintendent’s Procedure (G 01.00 SP) accompanies the revised budget policy introduced at the October 21st Board meeting.

This procedure calls for the adopted budget to be “reported in a form consistent with the reporting structure required by the Office of the Superintendent of Public Instruction (OSPI)”

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2008-2009 Central Administration: Errors in Coding

Analysis by SPS reveals past practice of coding some functions to supervision (Activity 21), instead of teaching (Activity 27). This practice resulted in reporting to OSPI of $45.1 M in Central Administration Costs – this number was overstated by $11.7 M. Items miscoded to Central Administration include:

111.5 FTE of instructional coaches for $10.3M, and A $1.46 million contract for Special Education service to eligible pre-school students

Total Central Administration FTE reported to OSPI = 395.5 After adjusting for miscoding, Total Central Administration FTE = 284 Revised Central Administration Total = $33.4M

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Central Administration Costs Below State Average

*

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Central Adminiatraticsn Casts as sa % nf Gperating Budget

for Wasßhingtmn State Dißtrieats with 20,000 Students mr More (after cmrrected ßmding uf teaching activities)



Result of Correctly Coding Appropriate Staff to Teaching Activity (Code 27)

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SP5 àctivitï, F-195 and SPS Recode



Budget Book Administrative Costs (Past Practice)

“Core” v. “Central” To distinguish “core” central administration from the management of services, SPS reported in its Budget Book the cost of managing services as part of those services.

Example: Transportation Manager reported in Transportation rather than Central Administration

As per the Superintendent’s Procedure (addressed in slide 4), SPS’ 2010 – 2011 Budget Book will identify these costs as central administration consistent with the State’s F-195 report.

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Central Administration FTE FY 1998 compared with FY 2009

Once the adjustments are made by correctly coding appropriate staff to Teaching Activity (refer slide 5), Central Administration FTEs have increased by 6 FTE or 2.0% over this period.

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