- A. Executive Summary Overview
- B. Summary of Costs and Savings by Recommendation - Exhibit 3
In October 2002, Comptroller Carole Keeton Strayhorn chose Alamo Community College District (ACCD) for a Texas School Performance Review (TSPR) and agreed to bear the full associated costs.
Onsite work began on January13, 2003. After six months of work, this report identifies exemplary programs as well as areas for improvement. If fully implemented, the Comptroller's 119 recommendations could result in net savings of nearly $30.2 million over the next five years-savings that could be directed toward improving instruction.
Expanding TSPR for Higher Education Institutions
The general powers of the Comptroller enable the agency to review expenditures of state funds. In 1999, shortly after Comptroller Strayhorn took office, performance reviews of Texas Southern University and the El Paso Community College were released. These two reviews provided Texas School Performance Review (TSPR) valuable experience in the higher education arena. Rider 19 of the 2002-03 General Appropriations Act further clarified legislative intent for additional higher education reviews and the Comptroller moved forward to expand TSPR's mission to include ongoing reviews of higher education. Comptroller Strayhorn released a review of Austin Community College in November 2002 and a review of the Houston Community College System in May 2003.
TSPR, in cooperation with the Texas Higher Education Coordinating Board (THECB) and the Texas Association of State Senior College and University Business Officers, as well as individuals working in higher education institutions, began to develop a comprehensive set of audit protocols to use in higher education reviews.
Drawing upon her goal of driving more of every education dollar directly into the classroom, Comptroller Strayhorn directed TSPR staff to quickly and systematically share best practices and exemplary programs learned from these reviews with all the state's colleges and universities and with anyone else who requests such information. Best practices as well as the audit protocols can be found on the Comptroller's A+ Ideas for Managing Schools (AIMS) Database at <www.aimsdatabase.org>.
Under Comptroller Strayhorn's approach, consultants and the TSPR team will work with colleges and universities to:
- ensure students and faculty receive the support and resources necessary to succeed;
- identify innovative ways to address the college's and university's core management challenges;
- ensure administrative duties are performed efficiently, without duplication, and in a way that fosters education;
- develop strategies to ensure the college's and university's processes and programs are continuously assessed and improved;
- challenge any process, procedure, program or policy that impedes instruction and recommend ways to reduce or eliminate obstacles; and
- put goods and services to the "Yellow Pages Test": government should do no job if a business in the Yellow Pages can do that job better and at a lower cost.
Finally, Comptroller Strayhorn has opened her door to Texans who share her optimism about the potential for higher education, and she welcomes any suggestions to improve Texas colleges and universities at any time. The Comptroller believes colleges and universities deserve all the attention and assistance they can receive.
For more information, contact TSPR by calling toll-free 1-800-531-5441, extension 5-3676, or see the Comptroller's Web site at www.window.state.tx.us.
TSPR in ACCD
In September 2001, ACCD's board secretary, Jim Rindfus, requested a review alleging financial mismanagement, overspending and possible illegal activities. In May 2002, Representative John Longoria made a second request for a review of ACCD expressing concerns about potential hiring irregularities, employment practices and general accountability.
In October 2002, former Chancellor Bob Ramsey left the district after 10 years in that position. The chancellor's departure came on the heels of the indictment of two sitting board members and the former board chairman on corruption charges. Over the course of the past year, ACCD has suffered a wave of negative publicity in the local press regarding the ethical propriety of the board and administrative leadership. It was in this environment that Interim Chancellor Earnest Martinez took office on October 24, 2002, after being selected by a board that saw three new members elected to its ranks in May 2002.
In April 2003, the board unanimously voted to appoint Dr. J. Parker Chesson, Jr. to replace Dr. Martinez as the interim chancellor after he resigned amid allegations of misconduct. Dr. Chesson began serving in the role of interim chancellor on April 23, 2003 until the permanent chancellor's position is filled. On June 17, 2003, the board unanimously nominated Dr. J. Terrence Kelly as ACCD's new chancellor, and he is expected to take the reigns in September 2003.
Amidst this ongoing leadership change, the board is also experiencing continued controversies and criminal proceedings. The District 2 board member resigned in May 2003 and subsequently he and an indicted former board member entered into a plea bargain in conjunction with the October 2002 indictments. Another board member was convicted in July 2003 on charges including bribery and money laundering and was sentenced to 12 years in jail.
As of July 2003, one vacant board position has been filled, while broader allegations continue to surface in the media and from the actual deposition of the architect who pled guilty to conspiracy to commit bribery charges for a $14.4 million construction contract.
The Comptroller contracted with McConnell Jones Lanier and Murphy LLP, a Houston based consulting firm, to conduct the review. The review team interviewed college employees, faculty, board members, business leaders and community members and conducted public forums at seven locations including all four colleges, the district's administrative offices and the two satellite campuses on January 13, 14 and 15, 2003. To obtain additional comments, the review team sent out surveys and conducted focus group sessions with various college staff and community organizations.
The review team received 384 survey responses from 233 faculty, staff and administrators and 151 students. In addition, TSPR conducted a random telephone survey of 387 area households. Details from these surveys and public forums appear in Appendices A through D. The Comptroller's Office also received letters, e-mails and phone calls from faculty, staff, students and community members.
ACCD selected several "peer colleges" for comparisons based on similarities in student enrollment, budget and other factors. The colleges selected included North Harris Montgomery Community College District (North Harris Montgomery CCD), Dallas County Community College District (Dallas CCCD) and San Jacinto Community College District (San Jacinto CCD).
Exhibit 1 shows comparative student enrollment and tax data for ACCD and selected peer colleges.
Exhibit 1 Source: Texas Higher Education Coordinating Board (THECB), Statistical Report; Legislative Budget Board (LBB); Texas Association of Community Colleges (TACC), Tax and Valuation Survey, 2001-02 through 2002-03; ACCD, Fiscal Affairs Department, Audited Financial Statements and Peer surveys and Audited Financial Statements.
Enrollment and Tax Data
ACCD and Peer Colleges
Descriptor ACCD Dallas
CCCDNorth Harris
Montgomery CCDSan Jacinto
CCDStudent Enrollment Fall 2002* 44,460 56,304 32,833 23,047 M&O Tax Rate 2001-02 $.09230 $.06 $.0742 $.10128 Debt Service Tax Rate 2001-02 $.0148 $.00 $.0313 $.13071 Total Tax Rate Per $100 Assessed Property Value 2001-02 $.1071 $.06 $.1055 $.13071 Total Property Valuation 2001-02
($ amount in millions)$53,334 $133,097 $57,541 $53,334
*Note: Enrollment includes students in credit courses only.TSPR also obtained data on community colleges in general and ACCD specifically from THECB, the state agency responsible for overseeing community colleges in Texas and the Texas State Auditor's Office.
Many of TSPR's recommendations would have no direct financial impact, but would improve the college's operations; others call for additional investments to make such improvements. Cumulative net savings from all recommendations could reach nearly $30.2 million by 2007-08.
Exhibit 3 provides a detailed list of costs and savings by recommendation.
Acknowledgments
The Comptroller's Office and McConnell, Jones, Lanier, and Murphy, LLP wish to express their appreciation to the ACCD Board of Trustees, Chancellor J. Terrence Kelly, Interim chancellor J. Parker Chesson and the many college employees and community members for their assistance and input during this review. The team would like to express a special thanks to Jo B. Tucker, Director Special Projects, who served as ACCD's liaison to the review team. Ms. Tucker arranged for office space, equipment and meeting rooms, organized meetings, responded to numerous requests and made other valuable contributions to the review team's effort.
Community Colleges in Texas
Community colleges play a vital role in Texas providing technical and vocational programs; freshman and sophomore courses in arts and sciences; continuing adult education programs; compensatory education programs; workforce development programs; adult literacy classes; and other basic skills programs.
Two-year academic programs lead to either an associate of arts or an associate of science degree and feed into baccalaureate programs at four-year institutions. Two-year technical programs result in an associate of applied science degree, while programs of shorter duration lead to occupational certificates.
Community colleges respond to the employment needs of citizens, agencies, businesses and industry through customized and contract workforce instruction, courses for professional certification or licensure and general continuing education opportunities. The colleges work cooperatively with local public schools to provide greater educational options for high school students through school-to-work and tech-prep programs. School-to-work programs provide students opportunities for early career exploration and counseling. Tech-prep programs allow high school students to receive college credit for high quality technical courses. In addition, concurrent course enrollment programs allow advanced students to complete courses for concurrent credit in high school and college.
Community colleges represent the largest segment of Texas higher education. In its publication, Enrollment Forecasts 2000-2015 Texas Institutions of Higher Education, THECB predicts that community college enrollment will reach 1.2 million students by 2015. The increased number should include 96,000 new community college students.
According to a enrollments figures, THECB estimates community college enrollment at more than 500,000 in fall 2002. Out of Texas' 50 community college districts, 39 reported record enrollment for fall 2002 reflecting an increase of 66,750 students from enrollment in fall 2000; just two years earlier. In addition, more than 250,000 individuals enrolled in workforce training programs. THECB attributes the increased enrollments to the state's slow economic growth.
Community colleges receive funding through a combination of state appropriations, which are based on a contact or instructional hour formula, as well as property taxes, tuition and fees.
ACCD in Profile
The Alamo Community College District (ACCD) is the state's second largest community college district and the tenth largest in the country, serving nearly 49,000 students in four independently accredited colleges, San Antonio College (SAC), Palo Alto College (PAC), St. Philip's College (St. Philip's) and Northwest Vista College (NVC). Additionally, classes are offered at East Kelly Air Force Base through St. Philip's Southwest Campus, at Northeast Campus in downtown San Antonio and 27 off-campus locations including local businesses and military bases.
In 2002-03, ACCD's enrollment reached 48,984, which included non-credit, continuing education, adult literacy and semester hour credit students. ACCD offers instruction through four colleges, two campuses, a satellite location and 27 off-campus locations and serves students in Bexar County, its taxing district, as well as students from the district's service area including Atascoscosa, Bandera, Comal, Guadalupe, Kendall, Kerr and Wilson counties. From 1997-98 through 2001-02, 7 percent of ACCD's total tax levy came from students who live outside the system's taxing district and pay higher fees than in-district students. ACCD serves an ethnically diverse student population including 41 percent Anglo, 49 percent Hispanic, 9 percent African American and 1 percent other.
ACCD's courses include general education (university transfer), workforce programs, customized training for businesses, continuing education and developmental education. The district offers 86 majors for associate degrees in arts and sciences and 161 areas of study for associate degrees in applied sciences or workforce certificates.
In 2002-03, ACCD employed 5,803 individuals, including 3,097 faculty (1,289 full-time and 1,808 part-time); 42 administrators; 323 professional - non-faculty, 806 technical/clerical (upper-level); 1,334 part-time temporary; and 201 full-time temporary.
ACCD provides excellent academic and workforce development programs, is committed to student success and is centralizing services to create a more efficient system.
ACCD is facing the following challenges:
- stabilizing governance;
- strengthening management oversight;
- reorganizing operations and staffing for efficiency and effectiveness;
- enhancing contract oversight and compliance; and
- improving student services and instructional delivery systems.
Stabilize Governance
Develop a board Code of Conduct and enforce policy for board member training including participation in annual ethics training. Board members do not have a process of self-monitoring or evaluation. Board members are inappropriately involved in the day-to-day operations of the district, are not meeting state requirements for orientation and professional training and have stated that they did not understand their roles and responsibilities. In addition, district policy defining board duties is contradictory, fueling the board's inappropriate interactions with employees, departmental reorganizations and hiring practices. By developing a Code of Conduct including succinct governance policies and a self-evaluation process, while enforcing state training requirements including ethics, the board's individual and corporate conduct can be improved and micromanagement reduced.
Implement a formal districtwide strategic planning process to establish effective mission and vision statements, goals, objectives and performance measures. ACCD does not have an effective districtwide strategic planning process or long-range plan linked to the budget, although individual colleges develop strategic plans. Between 1995 and 2000, the district had a Strategic Planning Committee that developed a broad strategic plan, last updated in fall 2001; however, the board chair said there is no initiative to update the plan and prior to 2001-02, the board was unaware of the existence of a strategic plan. Using the board's vision to guide implementation of a formal districtwide strategic planning process and providing regular progress reports to the board should enable the district to more effectively monitor identified strengths, weaknesses and opportunities for improvement for all colleges.
Strengthen Management Oversight
Reorganize the central administration. ACCD's central organizational structure is duplicative in some cases and does not provide logical alignment and adequate expertise for key functional areas of the district's operations. For example, the risk management function has moved three times in three years with current oversight by the chancellor; and technology management is duplicative at each of the colleges with no coordination of services. The Human Resources Department, with far-reaching responsibilities districtwide, is itself unorganized and inefficient; and Internal Audit staff administer elections which is inherently a conflict of interest with the internal audit function. Reorganizing the district's central and departmental management, appropriately staffing key functions, eliminating duplicative administrative positions and creating a vice-chancellor of Fiscal Affairs at the executive level would help the district streamline operations, logically align functions and ensure consistent services districtwide.
Establish in-house legal services to reduce routine legal costs. ACCD averaged legal costs of $583,163 per year from 1998-99 through 2001-02 and the hourly rates have increased by 4 percent during the same time. The district is plagued with lawsuits, many of which are employee grievances or lawsuits settled prior to trial. ACCD consequently hires counsel for both special and routine matters. By hiring two full-time attorneys and a legal secretary to handle routine legal matters, the district should realize net savings of more than $1.6 million over five years.
Prepare a districtwide facilities master plan. ACCD lacks a long-range facilities master plan and strategic facilities plan that defines facility improvements and growth needs as well as potential capital outlay. Additionally, the district does not have a long-range plan that coordinates maintenance and operations for facilities and considers the geographic location of each college and the administrative facilities. Developing a districtwide facilities master plan will ensure that ACCD proactively defines, plans and is prepared to fund future facility, maintenance and operations improvements and growth needs for all college facilities. It is estimated that this can be accomplished with a one-time cost of $403,264.
Reorganize Operations and Staffing for Efficiency and Effectiveness
Eliminate the central stores inventory and require all departments to use the contracted online ordering services. The district's central warehouse stocks and provides office items for departmental use, although the district maintains a contract for these items available on a just-in-time basis. The district has a local office supply contract providing online ordering service and a two-day delivery period with the same vendor that provides the warehouse materials. The elimination of the central stores inventory and mandatory use of the online ordering system will enable to district to reduce staff, free warehouse space for other purposes and save the district more than $19,000 a year.
Reorganize central and college-level Information Services management creating a service-oriented organization model and establish formal Service Level Agreements. The district has four Information Technology departments that operate autonomously without college-level or central Information Systems coordination. There is also no districtwide strategic technology direction nor a practice or methodology to measure performance and service delivery. Reorganizing the Information Services Department to centralize the planning, service and accountability functions and establishing formalized Service Level Agreements will enhance immediate and long-term communication and services provided to users districtwide and will result in more than $1.4 million in savings over five years.
Eliminate the mailing of Continuing Education course schedules. Each of ACCD's four colleges produces and mails separate Continuing Education course schedules. In total, ACCD prints more than 353,000 Continuing Education course schedules a year and mass mails more than 262,000. ACCD could realize net savings of $224,554 by replacing course schedule mailings with postcard mailers sent each semester and directing potential students to either request a hardcopy or go directly to the ACCD Web site for registration and class schedule information.
Centrally coordinate all grant proposals. Although the district employs a director of Public Funding to secure major grants for ACCD, each college has a Resource Development Office that works independently to secure grant funding for its own college. Each college president can also approve grant proposals, effectively bypassing the director of Public Funding and unknowingly competing against another college within the district for grants. Centralizing oversight for all competitive grants would ensure that all grant proposals are tracked, completed on time and are consistent with the district's goals.
Enhance Contract Oversight and Compliance
Develop a comprehensive contract management plan and assign contract management and monitoring responsibilities. Contract management and monitoring of district contracts are fragmented because no one position or department is responsible for financial and operational performance oversight. Moreover, committees at each campus are responsible for contract oversight, but neglect to do so; therefore contract enforcement does not ensure that the contractors meet all contractual obligations. A formal process that assigns contract management responsibilities and requires contract performance data to be compiled and reported to the Acquisitions and Administrative Services Department will not only ensure that the district is receiving the services that it is paying for but also identify and document compliance issues early so that corrective action can be taken in a timely manner.
Revise board policy and written procedures for facilities construction and professional service contract selection. ACCD lacks clearly written procedures and policies regarding the contracting process for capital improvements. As evidenced by criminal proceedings, three former board members and an architect were engaged in some level of bidding and contract award improprieties. ACCD Facilities staff evaluate and rank proposals prior to submitting a recommendation for vendor selection to the board. Board policy, however, states that evaluation results be submitted to the board unranked. Additionally, the Facilities Department does not have written procedures and processes with respect to monitoring the quality of professional services received from vendors. By revising existing policies and developing detailed procedures for obtaining professional services for capital improvements, the district should avoid any perceived contracting improprieties and ensure it receives the best professional and cost-effective services.
Establish specific detailed reporting guidelines to monitor bookstore contract performance. Neither ACCD nor the Texas Book Company capture and report essential data to evaluate the bookstores' performance. In addition, TSPR survey results from students, faculty, staff and administrators indicated that adequate books and supplies are not always available in the bookstore. By monitoring performance and adding reporting measures to the contract will ensure that the colleges receive all stipulated revenues and that the bookstores are more responsive to customer needs.
Improve Student Services and Instructional Delivery Systems
Establish a policy to direct allocation of resources for student services based on standardized criteria, such as enrollment. ACCD does not allocate student services equitably among the colleges. Budgeted resources for student services range from $87 per student at SAC to $129 per student at Palo Alto College. By establishing board policy, the allocation of revenues and resources for student services will be equitably distributed among the district's colleges based upon enrollment.
Increase average class size across the district. The average 2001-02 ACCD class size for full-time faculty declined from 1998-99 levels. Enrollment maximums are based upon classroom size, availability of equipment and requirements of programs regulated by accrediting agencies. By continuously evaluating each section individually for appropriateness and conservatively raising the average class size from 18.3 to 20 students for full-time and adjunct faculty would require fewer full-time faculty and adjunct faculty for savings of more than $25.5 million over five years.
Establish reasonable deadlines and cancel registrations of students who do not pay tuition and fees on time. ACCD allows too much time for early registrants to pay tuition and does not require a deposit. Students are allowed to register for courses up to four months prior to a semester, often tying up valuable classroom slots and dropping before the tuition payment deadline without a penalty. In fall 2001 and spring 2002, nearly one-third of early registrants were dropped for non-payment of tuition affecting the accuracy of course enrollment projections. By establishing reasonable payment deadlines and canceling student registrations earlier for non-payment, the district should increase paying students' access to prime classroom slots and increase the accuracy of course enrollments projections.
Upgrade the district Web site to include e-Portal access to program and course information. The district does not have a centralized database for students to obtain information about programs and courses offered through any of the colleges, although the district has the technological capabilities through its Web site and e-Portal access. Each college lists programs and courses by name; however, the program names vary by college and details about the programs and courses are not accessible. By using the district's e-Portal access and centralized Web site, students, staff and the general public will be able to access program and course information consistently and efficiently.
Exemplary Programs and Practices
TSPR identified numerous "best practices" in ACCD. Through commendations in each chapter, this report highlights model programs, operations and services provided by ACCD administrators, faculty and staff members. The Comptroller encourages other colleges and universities throughout Texas to examine these exemplary programs and services to see if they can be adapted to meet their own needs. TSPR's commendations include the following:
ACCD successfully implemented workforce development partnership with the San Antonio business community. ACCD has a lengthy history of working with business and industry to develop and improve the skills of the area workforce through on-the-job training, acquisition of state-of-the-art equipment and volunteer mentors and teachers. The district has a One Stop Employer Clearinghouse that connects employers to ACCD training and workforce resources in the aerospace, information systems and security industries. These collaborations provide opportunities for ACCD to introduce students to career opportunities, integrate classroom and work-based learning, build educational programs that prepare students for successful careers and re-train workers in need of skills improvement.
ACCD has established collaborative relationships with the military bases in San Antonio and provides for the unique needs of military personnel and their dependents. Application, registration and enrollment services as well as some classes are provided on base by ACCD faculty. Providing these services on an outreach basis ensures convenient higher education opportunities are available to military personnel and their families.
ACCD's budget instruction manual provides a useful resource to assist budget managers with developing and monitoring their budgets. ACCD's Budget Office publishes an informative and useful instruction manual for the district's budget managers. The publication entitled, "Budget Management Information for Budget Managers," helps budget managers with developing, monitoring and processing their budgets. The manual is especially useful as a helpful reference for new budget managers.
ACCD uses sweep accounts to effectively manage cash balances and maximize interest earnings. Before acquiring sweep accounts, the treasurer had to manually move funds in and out of the district's operating accounts each day and monitor pledged collateral requirements for remaining balances. Sweep accounts are designated accounts in which funds are automatically swept to zero and invested on a nightly basis and then returned with any earned interest the following morning. As of February 2003, remaining cash balances are minimized using the sweep account, which also reduces the amount of pledged collateral needed to insure the funds. ACCD's sweep account facilitates cash management while maximizing interest earning.
The Acquisitions and Administrative Services Department maintains accurate and detailed records to document competitive bid requirements. The Acquisitions and Administrative Services Department has developed a checklist of all documents required to be maintained in the bid files that it uses to ensure all items have been placed in the file. The review team examined six randomly selected bid files, noting no major exceptions to the bid file requirements. Items are organized in the files in the order that they appear on the checklist, which makes it very easy to locate documents.
ACCD operates a user-friendly, comprehensive Web site that provides students and the community with useful resources and information. ACCD maintains a comprehensive Web site that posts detailed information for current and prospective students about academic and workforce departments, registration, catalogs and schedules, financial aid, academic calendars, Texas Academic Skills Program (TASP) information and continuing education. Additionally, the Web site posts board agendas and minutes, press releases, frequently asked questions, a link to the ACCD e-portal and links to each college's homepage. Maintaining a user-friendly Web site provides another avenue for ACCD to communicate with its students and the community.
ACCD entered into an interagency agreement with Texas A&M University (TAMU) Experimental Research Station's Energy Systems Lab to evaluate its energy management activities and identify savings. In a proactive move to evaluate and identify potential energy management savings, ACCD entered into a two-year agreement with Texas A&M University to evaluate its facilities and utility costs from January 2002 through November 2004 including installation of meters to capture actual energy readings and measure savings after equipment improvement or new equipment installation. ACCD expects savings of $511,364 annually.
Savings and Investment Requirements
Many of TSPR's recommendations would result in savings and increased revenue that could be directed to improve classroom instruction. The savings identified in this report are conservative and should be considered minimums. Proposed investments of additional funds usually are related to increased efficiencies, savings or improved productivity and effectiveness.
TSPR recommends 119 ways to save ACCD nearly $34.9 million in gross savings over a five-year period. Reinvestment opportunities would cost the college nearly $4.7 million during the same period. Full implementation of all recommendations in this report could produce net savings of nearly $30.2 million by 2007-08.
Exhibit 2
Summary of Net Savings
TSPR Review of Alamo Community College District
Year Total 2003-04 Initial Annual Net Savings/(Costs)
2004-05 Additional Annual Net Savings
2005-06 Additional Annual Net Savings
2006-07 Additional Annual Net Savings
2007-08 Additional Annual Net Savings
One Time Net Savings/(Costs)$2,314,029
$7,287,032
$7,182,603
$7,069,522
$6,956,441
($615,664)TOTAL SAVINGS PROJECTED FOR 2003-2008 $30,193,963 A detailed list of costs and savings by recommendation appears in Exhibit 3. The page number for each recommendation is listed in the summary chart for reference purposes. Detailed implementation strategies, timelines and estimates of fiscal impact follow each recommendation in this report. The implementation section associated with each recommendation highlights the actions needed to achieve the proposed results. Some items should be implemented immediately, some over the next year or two and some over several years.
TSPR recommends the ACCD board ask college administrators to review the recommendations, develop an implementation plan and monitor its progress. As always, TSPR staff members are available to help implement these proposals.
EXECUTIVE SUMMARY