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BY NIGEL JAQUISS |
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Ben Canada is a lucky man. First, the audit of the Portland Public Schools released last week could have been a lot worse. Second, none of the shortcomings uncovered by the accounting firm KPMG is the new superintendent's fault. Finally, the audit's 230 recommendations give Canada a clear agenda. Responses to KPMG's findings from school officials and community members have been positive. "We view this as a success and something we're very excited about," says School Board Chairman Ron Saxton. Saxton and others appeared relieved that while the audit was critical of various PPS management practices, it found little room for further cost cutting. "This will help get rid of myths that there's a magic key to solving our problems," says Don McClave, chairman of the Chamber of Commerce, whose members are among the district's key constituents. "There's just not abundant waste." Canada, for his part, appears to be committed to change. He pledges "a clear, open and honest dialogue" and recently made two top-level hires to help address the district's weaknesses. Bruce Samson, former chief counsel and public-affairs officer for NW Natural, will serve the same functions for the district, providing credibility with the business community and Legislature. Jim Scherzinger, hired last week as the district's chief financial officer, served for 14 years as the Legislature's expert on school finance. "Scherzinger and Samson are incredible hires, the best Oregon has to offer," says McClave. Still, Canada's job won't be easy. Some of the audit's recommendations--such as revamping curricula to meet CIM/CAM requirements and raising teacher salaries--are long-term issues. The most eye-catching recommendation--that the district consider closing up 13 schools for a potential saving of $15.7 million per year--threatens to overshadow areas where Canada can make an immediate impact. Here are five places to start. 1. Show Us the Money: The longest single section of the 300-page audit describes the district's sloppy handling of the $196.7 million bond issued in 1995. The proceeds were supposed to be spent over seven years on construction and instructional technology. But KPMG says the district has no comprehensive plan for spending the money. For instance, $11.8 million of the bond proceeds was originally allocated to buy 10,762 classroom computers. Nearly 78 percent of the money has been spent, but only 58 percent of the computers have been bought. To meet projections, the remaining 4,510 computers must be purchased for an average price of $601, which is less than half the average price paid so far. KPMG found that the construction project's chief contractor, Heery International, formulated an inadequate plan and that its methods do not comply with industry standards. Dozens of "change orders"--charges in excess of bids--have been insufficiently documented and approved by apparently unauthorized district personnel. The auditors found that a basic explanation of how bond proceeds have been spent so far was unavailable. "When asked," the audit says, "PPS was not able to provide a document comparing the budget to actual expenditures." 2. Balance Your Checkbook: KPMG agreed with frequent complaints that the district's computer systems are outdated, a problem that hampers every function from payroll to report cards. The district has already allocated $30 million to remedy the problem. Still, technology shortcomings can't be blamed for everything. Discussing PPS financial operations, the audit notes, "it appears that some staff lack general understanding of basic accounting concepts, controls and procedures." Part of the problem is under-staffing, which has led to failures as basic as not balancing the district's checkbook. "A majority of the bank reconciliations have not been prepared since December 1997," the audit says. 3. Get on the Bus: Outsourcing services is usually done to save money, but the district pays Laidlaw Transit 50 to 100 percent more per student for busing than it costs the district to do the same work. PPS transports general-education students for an average cost of $506; Laidlaw spends $749. For special-ed students, the difference is even greater. PPS spends $1,983 per student; Laidlaw, $4,296. Laidlaw's purchase of new buses accounts for part of the difference; however, the audit found instances of poor spending practices in other areas. 4. Can We Talk? When organizations cut costs, the public-relations department is an easy target. Since 1990, PPS's communications staff has shrunk from 10 employees to two. Cuts were appropriate, but given the need for public and legislative support of the district's mission, the potential cost may exceed the dollars saved. "The Board, PIO [public information officer] and Superintendent do not meet routinely to coordinate communication efforts. As a result of these disorganized activities, PPS has lost some of its credibility," the audit says. 5. Move Out. One suggestion that will test Canada's resolve is the proposal to shut down district headquarters, the Blanchard Education Service Center, at 501 N Dixon St. The audit notes that despite the availability of numerous underutilized buildings, the district has poured money into the BESC. In the September 1996 bond expenditure, $2.1 million was allocated for BESC improvements. Then in the June 1998 budget, that allocation was increased to $5.9 million without any consultation. "By closing the BESC," the audit says, "PPS would not only reduce the amount of space maintained by staff, it would also send a message that PPS intends to implement positive changes."
originally published September 9, 1998 |