Getting the Business: District Management Practices Under Fire

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The public school system in Montgomery County, Md., an affluent Washington suburb, enjoys a national reputation for academic excellence. Last year, 41 of its students were National Merit Scholars and three won the Westinghouse Science Talent Search competition.

But when it comes to managing the 113,570-student district, Montgomery County has less to brag about. A report released last month concludes that its administrative practices are cumbersome and inefficient.

"The quality of service in the administrative-support operation,'' it says, "is not of the caliber most parents and taxpayers expect of a world-class school system.''

The report highlights what has become a pressing concern nationwide: school districts' outdated management practices. In an era when "reinventing government'' has become a clarion call, school administrators are increasingly aware they can no longer do business the old-fashioned way.

Some districts, including Montgomery County, have not yet fully automated routine processes, such as payroll. And many do not have integrated computer systems that can give managers--including principals--timely financial information on which to base decisions.

"Governments in general, and school systems in particular, have traditionally run on paper,'' observed Lawrence S. Herman, a partner at KPMG Peat Marwick, the accounting firm. "More and more districts are trying to get tighter control of their finances, and they are finding they don't have the systems to give them the information they need.''

Making long-term investments in automation and information technology has not been a high priority for many school boards, which prefer to spend money on personnel, programs, and services that directly affect classrooms. Taxpayers' mistrust of bureaucracy also has made it difficult for officials to push for improving support functions.

"People will pay to have potholes filled and schools built,'' said Brian Porter, the spokesman for the Montgomery County schools, "but to make sure that the payroll gets out on time is an obscure intricacy of government that no one really cares about.''

Pushing Paper

In Montgomery County, it took the Corporate Partnership on Managerial Excellence, which teamed professionals from 16 local corporations with top district officials, to make the case that the district needs to improve its administrative operations.

In its report, the partnership points out that the school system is one of the largest employers in Maryland, with nearly 14,000 workers and an annual budget of $800 million. But it still performs many routine tasks by hand, some of which could be done with commercial computer software.

Thousands of index cards, for example, are used to keep staff members' salary and employment histories. Paychecks are issued using an ad hoc combination of manual, semiautomated, and automated functions that takes almost 50 hours to complete--just for half of the employees.

The 965 buses that transport 70,200 students each day are routed by hand, using maps and handwritten timetables.

The purchasing system also is not fully computerized; it takes more than 50 steps to order items from the district's warehouse.

In the long run, the report warns, these outdated practices are costing money and "weakening the infrastructure'' of the district.

"We have not invested in administrative revitalization and improvements, except in the most limited sense,'' Superintendent Paul L. Vance said in praising the partnership's recommendations. "Up to now, there has been little, if any, support for the administrative side of our house.''

'Sahara Desert'

More and more, outside critiques like the one in Montgomery County are focusing not on districts' student achievement, but on the state of district management. The picture that has emerged is not encouraging.

Management reviews of the District of Columbia schools and the Los Angeles Unified School District, for example, found that the districts lacked management-information systems to provide data for routine decisionmaking, including accurate personnel counts.

An assessment of the Providence, R.I., district, sponsored by the local Public Education Fund, complained that data accumulate in files scattered throughout the school system, but are "not used for analysis in an integrated or systematic manner.''

And in Cincinnati, following the recommendations of a business task force, the district is developing a new management-information system. (See Education Week, May 19, 1993.)

Without the competitive pressures that have spurred many businesses to invest in information technology, many districts have not felt the need for more precise information, noted Philip Piele, the director of the ERIC Clearinghouse on Educational Management at the University of Oregon. And most school administrators, he added, have not had coursework in such technology and in how to use it.

While some districts are doing a good job with information technology, he said, "mostly, it's the Sahara Desert.''

Impetus for Change

But a number of factors are changing that situation. Foremost is the continuing budget crunch that has forced school boards to examine every dime spent. The movement to push decisionmaking down into schools and spread it among a larger group of people, including teachers and parents, also means that schools need detailed financial information.

At the same time, a broader push is under way among educators to embrace Total Quality Management. That popular business-management approach, which stresses such principles as decentralization and customer satisfaction, depends on employees' having an array of accurate and timely data at their fingertips. (See Education Week, March 11 and March 18, 1992.)

"How can you manage if you don't know where the money is or how much is getting to schools?'' asked Bruce S. Cooper, a professor of educational administration and urban policy at Fordham University who has helped dozens of districts track where and how they spend their money. (See Education Week, March 17, 1993.)

In his research, Mr. Cooper has worked with a wide range of districts, including those that keep financial records by hand and one advanced enough that administrators at the school site can pull up data and analyze expenditures.

"You find districts that don't even have the technology in place to track the money,'' Mr. Cooper said. "They don't know where teachers are working, and they don't attach fringe benefits to salaries to figure out their costs.''

But even when districts have managed to automate basic business functions, many still use centralized mainframe computers that are not widely accessible. These mainframes were generally installed in the 1970's. In the 1980's, with the advent of the personal computer, districts turned their attention to installing instructional technology.

Now, explained John Philipo, the executive director of the Center for Educational Leadership and Technology, a consulting firm in Marlborough, Mass., districts are realizing that administrative and instructional technology need not--and should not--be kept separate.

Mr. Philipo, whose firm is helping to design Kentucky's pioneering school-technology system, said that state's system will include data on teaching and learning, plus management information about personnel and payroll, food services, transportation, special education, purchasing, and the like.

"Only when we link all that together,'' he said, "can administrators sit at their desks and make the decisions they are paid to do.''

But in most school districts, such a vision is far from a reality.

Tracking Work Orders

Ed Grant, a member of the Dallas school board who calls himself the district's "patriarch of technology,'' said budget cuts have stymied efforts to put a management-information system in place there.

Mr. Grant said the district is planning to move away from its mainframe computer to a more decentralized computer system that will allow principals and teachers to have access to data.

The district also needs to create a computerized system for processing work orders. Last year, Mr. Grant said, principals sent 1,200 work orders into the central office, but the district has "no idea how many were even performed.'' If the system were automated, a principal could file a work order by computer and then track its progress electronically.

"Everywhere you look,'' Mr. Grant said, "we are people- and paper-heavy.''

The Los Angeles district, a $3.9 billion operation, has spent $20 million on an integrated financial system that, for the first time, links its accounting, budget, and purchasing systems.

A spur to making that investment was a consent decree requiring the district to equalize spending among schools, said Jonathan Copley, who led a review of the district's management by the accounting firm Arthur Andersen & Company.

"They had known for some time that they needed to do it,'' he said. "That legal decision gave them the excuse they needed. ... They absolutely had to get information which gave them financial information on a school-by-school basis.''

A pilot group of 36 Los Angeles schools that are involved in site-based management are now being trained to build their budgets using the new system. They also can order, by computer, directly from the district's warehouse or from vendors.

"They can go online and track their budget for the first time and see what they have in any account,'' said Gracie Jones, the administrator of the information-technology division.

The district plans to begin training groups of 200 schools next year on the new financial system.

'Real-Time Answers'

In Plano, Tex., groups of administrators from throughout the district have been meeting to talk about their technology needs and plan a new system that will link administrative and instructional uses.

The district's existing mainframe computer is "very slow and laborious,'' said Gil Noble, the assistant superintendent for technology.

"In schools, as in business, there is an absolute need for real-time answers,'' he said. "We're still into the 'batch' mentality of running things overnight and coming back in the morning.''

In thinking about using technology to streamline routine administrative tasks, he said, employees have proposed having job applicants sit down at a terminal to answer questions stored on a data base.

They also have suggested creating a purchasing system that would move requests for materials and supplies to various managers electronically, allowing them to sign off on the purchases immediately.

Similarly, teachers could use the system to order equipment and supplies and track their purchases.

The system also would allow managers to know immediately what money has been spent, rather than waiting until the books have been updated, Mr. Noble explained.

"Schools are becoming a big business,'' he said. "Our operating budget is $155 million. Just ask some business owner if he or she wants to know what their books are two or three days later--I doubt they'd find that desirable.''
Service, Not Controls

In Baltimore, where nine public schools are now managed by an alliance of private companies, principals can track purchase orders at computers on their desks.

The nine schools are hooked into KPMG Peat Marwick's financial-accounting system in Montvale, N.J. The system also allows the schools to examine their budgets, compare their actual expenditures with their budgets, manage their accounts, and compute salary information. Information on warehousing, maintenance, and food service is stored on another data base managed by Johnson Controls World Services, which maintains the school buildings.

While contracting out the management of public schools to private companies continues to generate opposition, Mr. Herman of Peat Marwick said more and more school boards are expressing interest in the use of automation and methods of controlling expenditures common in the business world.

"School boards today want to know how to control their money. They say, 'Tell us what is being spent and find ways of saving money,''' Mr. Herman said. "Governments have tended to emphasize controls and preventing you from doing wrong. Today people are saying, lo and behold, let's talk about providing services and meeting kids' needs.''

Companies Lend Expertise

It is a sign of the times that business leaders, who have long been concerned about the academic quality of schools, are increasingly volunteering to help districts update their administrative services as well.

In Providence, a committee of top district officials and representatives of large corporations is now working to create a human-resources system using up-to-date business practices. The effort addresses complaints that the district does not recruit the best-qualified teachers and fails to regularly evaluate its employees.

An assessment of the district by the Providence Public Education Fund also found that it has a "woefully inadequate data-collection system.'' The district, the report says, could not provide such information as the average teacher salary or teacher-attendance rate at each school.

The group also is pressing for the district to develop much more detailed information on student achievement, including whether graduates go on to college, information about the impact of numerous suspensions on students, and breakdowns of test scores and grades by ethnic group and race.

Central administrators, especially, "do not know enough about their schools,'' the report says.

"For a system to be effective,'' said Daniel D. Challener, the director of the study, "it has to make data-driven decisions, not decisions based on anecdotal information.''

Providence businesses also have been lending their expertise on data management and public relations to the district. The involvement of businesses should make it easier for the superintendent and school board to persuade the city to pay for a new information system, Mr. Challener said.

'Prepared To Testify'

In Montgomery County, the businesses that were involved in the Corporate Partnership on Managerial Excellence included large national corporations such as Bechtel, Martin Marietta, and Marriott. The local telephone and power companies also participated.

"Business wants to roll up its sleeves and participate and feel that they're doing something,'' said Lawrence A. Shulman, a former member of the Maryland Board of Education who organized the partnership's nine-month study.

Because they have gained firsthand knowledge of the system's needs, Mr. Shulman said, the companies are "prepared to testify'' before other political bodies to help see that the administrative improvements are made.

Mr. Vance, the district's superintendent, said some of the partnership's recommendations are being adopted immediately, including adding a candidate-tracking system in personnel, computerizing the transportation system, and allowing employees to have online access to the payroll.

No More Privileged Information

In another Washington suburb, meanwhile, school administators in Fairfax County, Va., are realizing that "administration and instruction are more and more, at the school level, overlapping,'' Dolores Bohen, the assistant superintendent for communications, said.

The district plans to hire a consulting firm to help with "systems planning'' to make sure that people in the organization have access to the data they need, whether it relates to personnel and budgets, demographics, or instructional technology.

Connecting such data and giving people easier access to it are the major issues the district hopes to tackle, Ms. Bohen said.

In Fairfax County, Plano, and many other districts, administrators are increasingly finding that they need systems that will spread data out among a much larger group of people than in the past.

"That's one of the big changes in paradigms,'' Mr. Noble of Plano said. "Information is no longer the privilege of the few. It is the necessity of the many.''

Vol. 13, Issue 07

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