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Key Findings and Recommendations
TSPR examined San Angelo ISD (SAISD) operations and heard from employees, school board members, teachers, students, parents and community and business leaders. Following are the major proposals TSPR has developed to help the district address various issues:

Major Proposals

Financial Instability

  • Establish a fund balance management policy and develop administrative procedures that require reports to the board. In the past few years the board has not monitored its fund balance and has approved deficit spending. The district is not using its audited fund balance in its budgeting process. By establishing a policy and procedures on reports to the board about the fund balance, the district will be better able to keep a watchful eye on its reserves. In addition, the policy should provide the administrator clear directions as to how to increase revenue or decrease expenditures in order to meet the district’s fund balance goals and keep board members informed as to the status of the fund balance.

  • Streamline central administration to reflect a more logical grouping of related functions. The district’s current organization structure is top heavy with inadequate spans of control at several levels. Since 1995-96, the district has created eight director and executive director positions, and a deputy superintendent position – all during a time of declining enrollment. A significant number of the district’s senior management team are resigning or retiring at the end of 2000-01, providing an opportunity to achieve substantial organizational streamlining immediately and save the district more than $4.4 million over five years.

  • Implement a staffing allocation formula and reduce staffing. While the district’s student enrollment declined by more than 6 percent since 1997-98, its total staff increased by 3 percent, which equates to the hiring of one additional employee for every 16.7 students lost. Since 1997-98 central administration increased by 114.3 percent and professional support increased by 45 positions and the district lost 44.8, or 4.1 percent of its teachers. By implementing a staffing allocation formula and reducing staff to meet the allocations, SAISD could equitably and efficiently baseline administrative staffing and realize annual savings of $6.4 million per year.

Weak System of Internal Controls

  • Institute strict controls over superintendent expenses. Neither SAISD’s board, nor the business office regularly monitors superintendent expenses, policies and procedures are unclear and internal controls are weak. Receipts were not required for many expenditures and as a result, the former superintendent had to reimburse the district for some inaccurate and inappropriate expenditures. The board should immediately negotiate the terms of the future superintendent’s contract to specifically state what expenses are considered acceptable, and institute controls to ensure that the superintendent is compliant with SAISD’s Compensation and Benefits Expense Reimbursement Policy.

  • Implement adequate controls over procurement card expenditures. The district’s MasterCard bills for 1997-98 through 2000-01 show that the district spent $120,349 while only having receipts for about 66 percent of the amount spent, or $79,051. By establishing strong controls over the use of district procurement cards, the district will be able to better control purchases made with the credit cards and provide a convenient, time-saving method for making small dollar purchases.

  • Establish internal control procedures that allow the Purchasing Department personnel to monitor and address violations of purchasing policies. SAISD does not competitively bid all items or categories of items that exceed the $25,000 threshold where bids are required by law. For example, instructional supplies for $127,000 were purchased with no bid or contract in place. Aggregate purchases of goods or services exceeding $25,000 in 12 months are not tracked and bid. By developing procedures to identify purchases that are anticipated to exceed the $25,000 threshold and implementing procedures to detect improprieties of the purchasing system, the district can better ensure that it complies with all applicable state purchasing laws.

    Institute tighter controls over fixed assets. SAISD has not conducted a complete inventory of its more than $121 million in fixed assets since 1996, although district policy requires annual inventories be conducted. In April 2000, the supervisor estimated that only two-thirds of the data had been entered and not all of the information about the district’s fixed assets had been gathered. By conducting annual inventories and establishing accountability for the safekeeping of fixed assets, the district’s resources will be better protected and managed.

    Hire an internal auditor that reports directly to the Board of Trustees. The district has many internal control weaknesses. District bank accounts are not reconciled in a timely fashion, checks and balances on employees’ access to the payroll system are weak, employees are not trained adequately and there are no published procedures manuals. Hiring of an internal auditor that reports to the board will provide the district with independent monitoring of the district’s operations and alert the district to any internal weaknesses.

Lack of Planning

  • Refine and annually update the district’s strategic plan to include enrollment and financial projections. The district’s strategic plan, better known as the Systemic Mapping Plan, has not been revised since it was created in October 1998. Nor does the plan show whether the district is within initial cost estimates or tie critical factors to the district budget. While the development process was exemplary, involving the entire community in the process, the plan is not monitored and strategies have not been adjusted to ensure the success of the plan. By refining the long-range plan to match the district’s current economic constraints and evaluating the progress made during the previous year, the district will be better able to ensure that all goals are achieved with available funding.

  • Develop a comprehensive long-range facilities master plan. The current master plan the district developed in support of the 1996 bond issue does not allow the district to plan beyond the scope of the present bond, or to look at strategies other than new facilities or modernizations. In the Facilities Evaluation and Projected Needs study completed in August 1999 the district has an excellent blueprint for continuing the long-range planning process that ultimately will result in a comprehensive master plan and lead to solutions to the district’s future facilities needs.

  • Close one elementary school and adjust attendance zones to allow enrollment at other smaller elementary schools to be increased. There is a wide variation in the number of students enrolled in individual schools at the elementary level. This variation means that the district is operating some small schools, under 300 students, that are inefficient in cost-per-student. By adjusting attendance zones at the elementary school level the district can eliminate an elementary school and provide a greater balance of enrollment both in the physical plant and in the area of educational opportunities. Annual savings from closing an elementary school could produce more than $180,000 per year.

Lack of Accountability

  • Include specific performance measures in superintendent’s performance evaluation. While considerable controversy surrounded the former superintendent, the superintendent’s performance evaluation does not contain specific measures of performance to support accountability. The current evaluation form allows individual rankings to be based on perception and recollection of information received, and not on specific measures of performance. To ensure that the superintendent is evaluated fairly and held accountable by the board, clear expectations and performance measures must be used.

  • Establish policy for use of outside counsel and monitor billings by law firms. Legal fees in the district have increased 155 percent over the past three years. To date, in 2000-01, more than $195,000 in legal fees has been incurred, with $74,000 incurred in one month. By establishing a policy for use of outside counsel, the district can effectively manage its legal expenses.

  • Provide the Finance Committee with detailed financial reports. The Finance Committee is not presented with a report that compares actual expenditures and revenues to the budget. In addition, the Finance Committee has not been active in the oversight of the district’s budget monitoring process, and at regular board meetings the finance reports are buried in the consent agenda where they receive inadequate attention. Improved financial reporting will provide the board with data needed for increased oversight.