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CLARK COUNTY SCHOOL DISTRICT FINANCIAL MANAGEMENT REVIEW Presented to: Clark County School District Board of Trustees October 12, 2006 0 Presentation Outline • The Five W’s of MGT • Why a Financial Management Review? • MGT’s Methodology • Key Peer District Comparisons • Key Staff Survey Results • Key Community Survey Results • Commendations • Savings/Costs Overview • Recommendations for Improvement • Where do We Go From Here? • Questions? 1 The Five W’s of MGT • Nationally and Internationally Recognized Consulting Firm • President: Mr. Fred Forrer • 100+ Employees 2 The Five W’s of MGT (Continued) PK-12 Education Criminal Justice/ Public Safety PK-12 Program Evaluation Facilities Technology Higher Education State/Local Government 3 The Five W’s of MGT (Continued) Established in Tallahassee, Florida in 1974, MGT of America, Inc. has enjoyed a long and distinguished history. 4 The Five W’s of MGT (Continued) • National Firm – Tallahassee, FL – Sacramento, CA – Olympia, WA – Austin, TX • Firm Experience – Work in 50 states – Work in 5 foreign countries • Leading National Firm in Educational Consulting – School Districts – State Departments of Education – Community Colleges and Universities – Special Committees 5 The Five W’s of MGT (Continued) MGT Mission Statement The mission of MGT is to improve the efficiency and effectiveness of government, nonprofit, and other organizations serving the public. 6 MGT’s Experience Conducting Financial Management Reviews • School Efficiency Reviews of 10 Virginia School Districts: Dinwiddie, Winchester, York, Smyth, Lancaster, Clarke, Culpepper, Isle of Wight, Louisa, and Bath • Academic Auditing Services for Roanoke City Public Schools • Strategic Planning for Charlottesville City Schools • Systemwide Management Review of Fairfax County Public Schools • Management Reviews of Dallas, Midland, United, McAllen, San Antonio, San Angelo, Sherman, PSJA, La Joya, Seguin, Windham, Grand Prairie, Dripping Springs, Lancaster ISD, Culberson-Allamoore ISD, and Waco ISDs • Audited 20 Regional Service Centers Virginia Texas 7 MGT’s Experience Conducting Financial Management Reviews • Management Reviews and Salary Studies of the Alachua, Broward, Brevard, Clay, Escambia, Hamilton, Lee, and Hillsborough County School Districts, Florida • Administrative Cost and Staffing Study for the Duval County School District, Florida • Management Reviews of Baltimore City and Baltimore County Schools Performance Audits of Somerset and Hartford Public Schools Performance Study of Prince George’s County Public Schools Management Study of St. Mary’s County Public Schools NCLB Study for the Maryland DOE Florida Maryland • • • • 8 Why a Financial Management Review “Begin with the end in mind.” - Stephen R. Covey 9 Why a Financial Management Review The ultimate outcome of this study… To assist the District in identifying and redirecting resources that can be better spent on your #1 client… CCSD STUDENTS! 10 Purpose of the Review Determine if CCSD is carrying out the financial management principles of AB 580-Section 32-1 (legislation) in a manner that: 1) Encourages the increased efficiency and effectiveness of the CCSD 2) Increases public confidence that CCSD is using resources wisely 3) Increases parental satisfaction with CCSD performance 11 MGT’s Methodology • Utilized the Financial Management Principles set forth in the RFP (per AB 580) in addition to MGT’s copyrighted School District Audit Guidelines • Worked Collaboratively with the Appointed Oversight Committee OVERSIGHT COMMITTEE MEMBERS COMMITTEE MEMBER Mark Coleman JoAnn Cox Erin Cranor, Committee Chair Debbie Earl Joy Kendall Ken Lange Sheila Moulton Gary Waters REPRESENTATION CCSD/Principal MGT Project Director General Public (Assembly) General Public (Senate) Parent/Teacher Association Nevada State Education Association CCSD Board of Trustees State Board of Education 12 MGT’s Methodology • Based Upon a Very Detailed work plan and time schedule (February-October ’06) • Used Extensive Data Analyses to Document Recommendations • Analyzed District’s Self-Assessment • Surveyed Administrators, Principals, and Teachers and Benchmarked Against Other School Districts • Compared Various Data Points of CCSD with Peer School Districts 13 MGT’s Methodology • Diagnostic Visit • Obtained Input from Parents, Students, Board Members, Community and Business Leaders Through Interviews, Survey, and 6 Public Meetings • In-Depth Visit: – Interviewed over 75 central office staff – Visited 68 schools – Analyzed Preceding 6 Years of Audits – Conducted Telephone Interviews with 12 Community Leaders/Elected Officials – Audited 10 School District Functions (8 required and 2 additional) 14 MGT’s Methodology • Draft and Final Reports (CCSD staff verified the accuracy of the findings and provided a written response) • Each Recommendation includes a finding, recommendation, best practice, five-year fiscal impact and corrective action plan 15 Selected Peer District Comparisons TOTAL STUDENTS 2003-04 TOTAL NUMBER OF SCHOOLS 2003-04 TOTAL STAFF 2003-04 PER PUPIL REVENUE 2002-03 PER PUPIL OPERATING EXPENDITURE 2002-03 PER PUPIL CAPITAL EXPENDITURE 2002-03 Clark County, NV 270,529 289* 21,049 $7,379 $5,774 $1,868 Broward County, FL 272,835 264 26,909 $7,515 $6,239 $1,403 San Diego Unified, CA 137,960 185 13,911 $10,778 $8,482 $3,153 Houston Independent, TX 211,499 308 25,507 $8,061 $7,236 $908 Miami-Dade County, FL 371,785 375 36,585 $7,971 $6,956 $627 Philadelphia, PA 189,779 263 22,554 $10,408 $7,554 $349 62,103 102 6,775 $7,115 $6,120 $1,017 216,641 255 21,899 $8,461 $6,909 $1,332 SCHOOL DISTRICT Washoe County, NV PEER DISTRICT AVERAGE Source: NCES, Common Core of Data (CCD) public school district data, 2006. *Although NCES reports 295 schools for the 2003-04 school year, documentation provided by the district reports 289 schools. Note: Fiscal data (including per pupil count used in this table) from 2002-03 school year. When compared to the selected comparison school districts, CCSD has: • 3rd highest number of students and schools for 2003-04; • 3rd lowest number of staff for 2003-04; • 2nd lowest per pupil revenue for 2002-03; • the lowest per pupil operating expenditure for 2002-03; and • 2nd highest per pupil capital expenditures for 2002-03. NOTE: The 2005-06 per pupil amount is $6,010.00. 16 Selected Peer District Comparisons TOTAL STUDENTS CLASSROOM TEACHERS (FTE) STUDENTS PER TEACHER *SCHOOL ADMINISTRATORS (FTE) SCHOOL ADMINISTRATORS PER 1,000 STUDENTS Clark County, NV 270,529 13,483 20.1 741 2.74 Broward County, FL 272,835 14,264 19.1 629 2.31 San Diego Unified, CA 137,960 7,421 18.6 369 2.67 Houston Independent, TX 211,499 12,277 17.2 1,162 5.49 Miami-Dade County, FL 371,785 18,887 19.7 910 2.45 Philadelphia, PA 189,779 10,194 18.6 500 2.63 Washoe County, NV 62,103 3,614 17.2 186 3.00 PEER DISTRICT AVERAGE 216,641 11,449 18.6 642 3.04 SCHOOL DISTRICT Source: NCES, Common Core of Data (CCD) public school district data, 2006. *NOTE: School Administrators are staff members whose activities are concerned with directing and managing the operation of a particular school, including principals, assistant principals, other assistants; and those who supervise school operations, assign duties to staff members, supervise and maintain the records of the school, coordinate school instructional activities with those of the education agency, including department chairpersons. When compared to selected comparison school districts, CCSD has: • the 3rd highest number of classroom teachers; • the highest amount of students per teacher; • a higher number of school administrators than the district average; and • a lower number of school administrators per 1,000 students than the district average. 17 17 Clark Staff Survey Participants Response Rate of: • Central Office Administrators.........66.4% • Principals/Assistant Principals................49.4% • Classroom Teachers....5.0% 18 Selected Survey Results • The majority of each group feel the quality of education in the district is improving or staying the same. • At least 80 percent of administrators and principals rate the overall quality of special education in CCSD as excellent or good. 19 Selected Survey Results • Most of the respondents in each group agree that the schools have materials and supplies necessary for instruction in basic skills programs. • More respondents in each group agree that lessons are organized to meet students’ needs and that the curriculum is broad and challenging. • At least 65 percent of each group rates the teachers’ work in meeting the students’ learning needs as good or excellent. 20 Selected Survey Results • A greater percentage of administrators and principals agree that the Board of Education members’ work at setting or revising policies is good or excellent while 67 percent of teachers feel their work is fair or poor. • Between 53 percent and 75 percent of respondents in each group believe that staff development opportunities for teachers are good or excellent. 21 Selected Survey Results • The majority of respondents in each group agree that CCSD is an exciting, challenging place to work. • Each group believes CCSD officials enforce high work standards. • At least 74 percent in each group feel they have the authority to adequately perform their job responsibilities. • The majority of respondents in each group feel their salary level is not adequate for their level of work and experience. 22 Selected Survey Results • At least 69 percent in each group agree they have adequate facilities in which to conduct their work. • All three groups show less positive opinions with regard to parent participation. 23 Selected Survey Results • A greater percentage of administrators and principals agree that funds are managed wisely to support education in CCSD, while the majority of teachers disagree. • The majority of principals and teachers feel the transportation and food service programs need improvement. 24 Selected Survey Results • When asked how the operational efficiency in CCSD could be improved: – At least 82 percent of each group responded with increasing the number of teachers. 25 Clark Community Survey Selected Survey Results Responses from all community members were combined and results show that: • Most respondents in the community survey have favorable opinions toward local education funding. • More than 80 percent of respondents favor increased funding through impact fees paid by developers. • 76 percent would support bonds to build more schools or renovate old schools. • Half of the respondents were not in favor of increasing property taxes to build smaller schools. 26 Clark Community Survey Selected Survey Results All survey participants were divided by the region of residence. Responses were similar across the regions. For example: • The majority of respondents in each region does not believe CCSD spends education funds wisely. • The majority of respondents in all regions agree that the district ensures proper maintenance and cleanliness of the schools. • The majority of respondents in all regions agree that the district provides adequate and updated instructional technology for the classroom. 27 Clark Community Survey Selected Survey Results Survey data was also disaggregated by respondents who have children in CCSD and those who do not. Results show that: • Both parents and non-parents agree the district needs more funding and additional buildings. • Parents believe the community understands the financial resources and needs of CCSD, while non-parents do not. • Parents feel CCSD performs well for the funding it receives, while non-parents do not. 28 Selected Best Practices (Total #77) • CCSD’s staff do an impressive job of developing and presenting the district’s budget document (Chapter 3.0) • CCSD’s method of allocating campus funding and establishing carryover allocations should serve as a best practice for schools nationwide (Chapter 3.0) • CCSD’s Budget staff does a commendable job of training and assisting schools and departments in understanding the development and administration of their budgets (Chapter 3.0) 29 Selected Best Practices • CCSD has done a commendable job of managing its finances to increase its reserve balances (Chapter 3.0) • CCSD is commended for acquiring and implementing SAP, an Enterprise Resource Planning (ERP) system. (Chapter 4.0) • CCSD is commended for maintaining collaborative purchasing arrangements with other governmental entities. (Chapter 4.0) 30 Selected Best Practices • CCSD is commended for establishing an aggressive land acquisition program (Chapter 5.0) • CCSD is commended for its sophisticated use of prototype designs (Chapter 5.0) • The Clark County School District’s energy conservation program incorporates a comprehensive approach that produces significant savings. (Chapter 5.0) 31 Selected Best Practices • The Clark County School District is commended for implementing ongoing and aggressive efforts to recruit teachers (Chapter 6.0) • CCSD is commended for adopting a personal leave policy that rewards teachers for near perfect attendance and reimburses them when personal or universal leave is not used in a given year (Chapter 6.0) 32 Selected Best Practices • The Clark County School District Board is commended for adopting and applying a governance system that clearly focuses on providing leadership in promoting high student achievement (Chapter 7.0) • The CCSD administration and Board of School Trustees are commended for obtaining certification with ISO 9001:2000 by meeting these rigorous standards. (Chapter 7.0) • The CCSD Legal Services Department is commended for providing cost-effective, client-centered services (Chapter 7.0) 33 Selected Best Practices • The establishment of Region Offices in 2001 has been beneficial to CCSD campuses and parents. (Chapter 7.0) • The Clark County School District is commended for adhering to policies and agreements to help ensure cost containment for health care programs (Chapter 8.0) 34 Selected Best Practices • CCSD is commended for providing a comprehensive wellness program that includes initiatives designed to encourage healthier living by district employees (Chapter 8.0) • The Transportation and the Human Resources Departments are commended for their innovative joint recruiting effort to resolve the problem of bus driver shortages (Chapter 9.0) 35 Selected Best Practices • CCSD is commended for using the EDULOG system and maximizing the benefits of this investment to achieve greater efficiencies and cost effectiveness in student transportation scheduling (Chapter 9.0) • CCSD is commended for the improvement in student achievement for all student subgroups over the past four years (Chapter 11.0) 36 Selected Best Practices • The CCSD’s Curriculum and Professional Development Division is commended for providing a comprehensive program of training and orientation to new teachers. (Chapter 11.0) • CCSD is commended for exemplary practices of compliance and monitoring the delivery of services to students with disabilities and the successful resolution of due process cases and complaints filed against the district (Chapter 11.0) 37 Selected Best Practices • CCSD is commended for its exemplary Career and Technical Education Program (Chapter 11.0) • CCSD is commended for providing challenging opportunities for students who are gifted, talented, and high achieving (Chapter 11.0) • CCSD has established a technology leadership team and has solid communication between technical and instructional technology functions (Chapter 12.0) 38 Selected Best Practices • CCSD has implemented a fast and robust Wide Area Network that has been recognized in nationwide educational publications (Chapter 12.0) • The Clark County School District’s stringent nutritional policy places it at the forefront of the national movement to improve the nutritional value of food served at school (Chapter 13.0) 39 Selected Best Practices • The Food Service Department keeps labor costs low in comparison to revenue and in alignment with industry best practice standards (Chapter 13.0) 40 SAVINGS/COSTS OVERVIEW CHAPTER-BY-CHAPTER SUMMARY OF POTENTIAL SAVINGS (COSTS) ANNUAL SAVINGS (COSTS) CHAPTER REFERENCE 2007-08 CHAPTER 3: PERSONNEL AND HUMAN RESOURCES CHAPTER 4: PURCHASING AND WAREHOUSING CHAPTER 5: FACILITIES MANAGEMENT CHAPTER 7: DISTRICT ORGANIZATION AND MANAGEMENT 2008-09 2009-10 2010-11 2011-12 $40,435 $580 $5,830 $11,343 $17,131 $218,012 $218,012 $218,012 $218,012 $218,012 TOTAL FIVE YEAR SAVINGS (COSTS) ONE-TIME SAVINGS (COSTS) $75,319 $0 $1,090,060 $0 $75,380,000 $75,800,000 $74,720,000 $73,640,000 $72,560,000 $372,100,000 $0 $214,745 $214,745 $214,745 $214,745 $214,745 $1,073,725 ($183,036) CHAPTER 9: TRANSPORTATION $1,420,500 $1,420,500 $1,420,500 $1,420,500 $1,420,500 $7,102,500 $94,000 CHAPTER 11: EDUCATIONAL SERVICES DELIVERY $3,346,680 $3,351,780 $3,351,780 $3,351,780 $3,351,780 $16,753,800 CHAPTER 12: COMPUTERS AND TECHNOLOGY $0 $58,484 $157,537 $157,537 CHAPTER 13: FOOD SERVICE* $0 NET SAVINGS (COSTS) $157,537 $531,095 ($5,000) $9,602,109 $14,464,171 $15,086,089 $15,086,089 $54,238,458 $0 $80,620,372 $90,666,210 $94,552,575 $94,100,006 $93,025,794 $452,964,957 TOTAL NET SAVINGS (COSTS) LESS ONE TIME SAVINGS (COSTS) $0 ($94,036) $452,870,921 * Reserve Fund for Food Service 41 SAVINGS/COSTS OVERVIEW (Cont’d) 42 Savings/Costs Overview (Cont’d) • The MGT audit summary shows the distribution of the potential $453 million savings and costs as a percentage of the potential dollars • The largest percent of savings and costs are in the Capital Projects Funds category resulting in substantial dollars available for new and renovation of old schools • Food Service Funds, at 12%, can only be expended in food service related activity 43 Savings/Costs Overview (Cont’d) • Federal and District Project Funds, totaling $16.7 million or 3.7%, are restricted to those categories; however, those focused on students with disabilities, NCLB, and other student learning related areas can impact improving student achievement • Savings in the General Fund category represent 0.8% or $3.7 million and do not provide significant resources for redirection to improving student learning • It is important to note that savings in the Capital Projects Funds are substantial and provide the district an opportunity to revisit many important school construction and renovation needs 44 RECOMMENDATIONS FOR IMPROVEMENT (Total #86) 45 45 CCSD EDUCATIONAL SERVICES DELIVERY 46 46 Key Recommendations • Conduct an analysis of district practices in the areas found to highly correlate with student achievement and devise strategies to address areas that are not being practiced effectively in CCSD (Recommendation 11-3) • Identify the key issues related to students’ failure to attain a high school diploma and address them through a strategic plan of graduation enhancement (Recommendation 11-4) • Reorganize the Student Support Services Division and the Education Services Division to create greater efficiency of fiscal resources, oversight, and program implementation (Recommendation 11-5) 47 Key Recommendations • Conduct a comprehensive review of evaluation procedures and special education service delivery for students with autism (Recommendation 11-7) • Implement research-based alternatives rather than traditional special education referral practices (Recommendation 11-9) 48 CCSD FINANCIAL MANAGEMENT 49 49 Key Recommendations • Centralize the organizational structure of the district’s accounting functions by placing all accounting-related staff positions within the Accounting Department (Recommendation 3-1) • Develop a comprehensive training program and a change management plan for deploying the new ERP system at the schools and within departments (Recommendation 3-2) • Conduct annual budget “kick-off” sessions for all district administrators responsible for developing and administering a budget (Recommendation 3-7) 50 CCSD PURCHASING AND WAREHOUSING 51 51 Key Recommendations • Streamline the bid process by eliminating unnecessary steps in the processing of purchase orders (Recommendation 4-3) • Update the vendor database annually by deleting firms no longer in business, eliminating those firms who are no longer interested in doing business with the district, and making any other corrections or adjustments that are needed (Recommendation 4-4) • Reorganize the Department of Purchasing (Recommendation 4-8) 52 CCSD FACILITIES MANAGEMENT 53 53 Key Recommendations • Institute a formal value engineering process (Recommendation 5-3) • Decentralize maintenance services into three locations that correspond to the major geographical zones of the school system (Recommendation 5-5) • Increase the number of custodians to a custodian-per-square-foot ratio of one per 25,000 square feet on a graduated basis (Recommendation 5-8) 54 CCSD PERSONNEL MANAGEMENT 55 55 Key Recommendations • Develop a written recruitment plan, including a mission statement, goals, objectives, budget requirements, a needs assessment, an analysis and evaluation of past efforts, statistical analysis of recruitment efforts, and strategies for future efforts (Recommendation 6-3) • Examine the qualifications and incentives for hiring substitutes to enable CCSD to increase its substitute pool (Recommendation 6-4) • Continue to examine beginning teacher salaries as well as all other teacher salaries in comparison to those of competitor school districts and make adjustments as budget allows (Recommendation 6-5) 56 CCSD DISTRICT ORGANIZATION AND MANAGEMENT 57 57 Key Recommendations • Restructure the executive organization of CCSD and realign functions (Recommendation 7-10) • Fully implement the guiding elements to provide increased empowerment to the Region Office administrators (Recommendation 7-11) • Develop and implement a district-wide sitebased decision-making policy to assist the Central Office, Region Offices, and campuses with the following areas of responsibility: planning, budgeting, curriculum, staffing patterns, staff development, and school organization (Recommendation 7-12) 58 Key Recommendations • Develop and implement a district-wide strategic planning process (Recommendation 7-14) • Develop a plan to stabilize school-level administration turnover and provide a career path for assistant principals and deans (Recommendation 7-16) 59 CCSD EMPLOYEE BENEFITS 60 60 Key Recommendations • Create a location on the CCSD Web site where current and prospective employees can review benefits offered by the school district (Recommendation 8-1) 61 CCSD TRANSPORTATION 62 62 Key Recommendations • Complete the review of the internal audit report of transportation billings and take the recommended corrective actions to capture all reimbursable costs (Recommendation 9-2) • Implement a 14-year bus replacement policy (Recommendation 9-5) • Eliminate excess spare buses from the inventory (Recommendation 9-6) 63 CCSD COMPUTERS AND TECHNOLOGY 64 64 Key Recommendations • Move all help desk operations to one central location and cross-train staff on all applications (Recommendation 12-1) • Analyze the total technology-related budget in order to make benchmark comparisons (Recommendation 12-3) • Incorporate in the CCSD Technology Plan timelines, financial resources, and staff positions assigned responsibility for elements of the plan (Recommendation 12-4) • Discontinue use of the GroupWise e-mail system (Recommendation 12-9) 65 CCSD FOOD SERVICES 66 66 Key Recommendations • Implement a customer satisfaction survey to determine the reasons behind the low levels of CCSD satisfaction regarding food service (Recommendation 13-1) • Implement an annual report card on the Food Service Department of CCSD (Recommendation 13-3) • Require all school-based cafeteria programs to maintain financial sustainability for food services operations (Recommendation 13-6) • Pursue the utilization of cashless vending machines to dispense reimbursable meals (Recommendation 13-7) 67 Recommendations or Informal Findings that Could Require Legislative or State Level Policy Actions 1) Propose the enactment of state legislation requiring developers to provide land for new schools 2) Amend the Aversive Intervention statute (NRS 388.522 et seq) to provide for self-report on violations 3) Eliminate Budget Development/Action redundancy 4) Detailed Capital Project Reports, if to be required, should address unmet capital needs rather than a detailed report on met needs 5) Determine if state requirements for licensing substitute teachers should be amended by the Nevada Commission on Professional Standards in Education 6) Lunch After the Mid-Day Recess Period - impact of legislation should be reviewed during the 2006-07 school year to determine if legislative action is warranted 68 Where Do We Go From Here? • The District has 2 years to implement the Corrective Action Plans • District is responsible for providing a progress report in 2008 and a final report in 2009 • The Legislative Auditor is responsible for a follow-up component to the review of the District to determine the CCSD’s compliance and progress 69 CCSD Should: • Prioritize an implementation calendar • Appoint an Advisory Committee to monitor implementation and report progress to the Board of Trustees • Each recommendation should have a point person to oversee implementation & report progress. • Establish a method for monitoring progress (including a PC-based tracking system) 70 QUESTIONS? 71