STATE AUDIT: JCPS spending more on administration, less on students

LOUISVILLE, Ky. (WDRB) – Jefferson County Public Schools spends more money on administration – and less on instruction – than similarly sized school districts, leaving the vast majority of teachers dipping into their own pockets for classroom needs, a sweeping review by Kentucky Auditor Adam Edelen’s office has found.


Compared with five peer districts, JCPS pays employees at its central office a “significantly higher average salary,” while spending the smallest share of its budget on teaching students, Edelen’s team of auditors found.

In all, teaching costs make up 53 percent of the Louisville district’s budget of just over $1 billion – the lowest percentage among its peers in Texas, Maryland, North Carolina, Georgia and Florida. Most of those school systems spend at least 60 percent on instruction.

“This appears to indicate JCPS places less emphasis and resources for teacher staffing than the five other peer districts and JCPS may employ an excessive number of administrative or non-teaching staff,” Edelen’s office found.

At the same time, nearly 94 percent of JCPS teachers surveyed in the report said they use their own money on classroom items – and nearly three of four teachers said they did so because of a lack of resources, their students' needs or other administrative issues.

"Folks, a teacher should have the prerogative to use personal resources in the classroom, but no teacher should feel obligated because they have a lack of funding," Edelen said Wednesday morning as he unveiled the 301-page review at JCPS headquarters.

The audit resulted in 45 findings and more than 200 recommendations across six categories that included overall governance, policies, the district’s internal audit process and information technology systems. JCPS Superintendent Donna Hargens and the Jefferson County Board of Education requested the audit.

Among its findings:

- The district has more central-office staff earning more than $100,000 a year than at comparable school systems.

- The seven-member school board may benefit from adding two additional members due to the size and complexity of JCPS.

- The JCPS board generally doesn’t have the “level of understanding” to independently examine and approve the district’s budget.

- Unlike at other districts, JCPS' internal audit work is overseen directly by the superintendent.

The audit was the largest ever conducted by a Kentucky state auditor and provides a "road map for reform," Edelen said. In addition, he said his team's investigation uncovered "no evidence of a culture of corruption" in the district's central office.

In a 2-page response to Edelen’s audit, Hargens said the district “acknowledges the findings” and will complete a point-by-point response in the next two months.

But she noted the district is already taking steps to address some of the issues, such as increasing money going toward “instructional costs” and “instructional staff support,” as well as reducing central office staff and freezing administrative salaries.

Brent McKim, president of the Jefferson County Teachers Association, said Edelen's audit is consistent with what teachers have reported to the union.

"We are hopeful that the school board and the superintendent will use this information to re-allocate our priorities (and) get more teachers into our classrooms so we can lower class size and help every kid succeed," McKim said.

JCPS spends less on teaching costs

The Louisville school district includes more than 100,000 students and roughly 6,400 teachers among 155 schools, making it the 27th largest public school system in the U.S. last year, according to the audit.

But JCPS hasn’t established a group of peers that it can consistently use to measure itself.

Edelen’s auditors chose five school systems to help analyze JCPS. They included Austin Independent School District in Austin, Texas; Baltimore County Public School in Baltimore, Md.; Charlotte-Mecklenburg Schools in Charlotte, N.C.; Cobb County School District in Marietta, Ga.; and Pinellas County Schools in Largo, Fla.

Compared with those districts, JCPS had the smallest percentage of teachers among overall staff – 43 percent – and a higher share of instructional aides. The audit noted that some experts have found that “the use of instructional aides in classrooms was less effective at improving student achievement than having smaller class sizes allowing for more individual student instruction by teachers.”

Overall, JCPS had the lowest ratio of students to staff – less than 7-to-1.

“This fact, along with JCPS having the lowest percentage of teachers and almost ranking at the bottom in comparison to the student-to-teacher ratio of other peer districts, may indicate that JCPS has too many administrative or non-teaching staff,” the audit found.

Edelen’s office reviewed how the other school systems and JCPS spent money during 2010-11 and found the Louisville district spent $568 million on teaching costs – or 53 percent of that year’s overall budget.

Each of the other districts put a greater chunk of their budgets into instruction, with all but Austin (58 percent) spending at least 60 percent. The highest (68 percent) was in Cobb County, Ga.

Instead of spending on teaching costs, JCPS appears to be prioritizing “student and staff support” and operations costs, auditors found. JCPS spent 15 percent of its budget on support costs – a category not defined in the report – compared with just 8 percent in Cobb County, for example.

Edelen’s office recommended JCPS reevaluate its staffing and funding priorities.

Headquarters employees paid “significantly higher”

Employees who work at JCPS’ “central department” – and not at the schools themselves – earn higher average salaries than at other districts reviewed by the auditors.

Only three districts – Charlotte, Cobb County and Austin – responded to auditors’ request for salary information, but all three reported paying their headquarters’ employees less than at JCPS.

The average salary in Louisville was $64,503; the next highest was $58,637 in Cobb County.

JCPS also reported 150 employees at the central office earned more than $100,000 a year. By comparison, there were 53 such employees in Charlotte, 39 in Austin and 33 in Cobb County, the audit found.

Edelen’s office recommends that JCPS conduct a salary review, starting with the positions that make more than $100,000 a year.

JCPS board lacks “depth of understanding”

One of Edelen’s findings is that JCPS’ seven-member board is not big enough, and that its members lack the expertise needed to deal with complex issues such as the system’s nearly $1.2 billion annual budget.

“Board members generally do not appear to have a depth of understanding to actively examine or question the budget effectively” without overly relying on JCPS staff, the audit found.

Edelen said his auditors were unable to get answers out of JCPS staff as to some of their own questions about the district’s budget, including why actual spending in certain categories was consistently well-below budgeted amounts the last three years.

“The difficulty and amount of time involved in receiving information regarding the budget process… illustrates the obstacles Board members could potentially have” in developing their own understanding of the budget.

Edelen suggested JCPS pursue a change in state law that would allow it to add two “at large” members to the board. Rather than representing a specific portion of Jefferson County, these members would be focused on district-wide issues.

Edelen said the additional seats could be reserved for members with credentials in areas like accounting or finance, noting that current JCPS board members are “not required to have any financial expertise to be elected, even though they are statutorily required to control and manage school funds.”

Edelen also said the board needs to delegate more work to committees made up of a handful of members. In addition the policy committee – the only sub-group the board currently has – Edelen recommends adding audit and budget committees.

Lax oversight of contractors

Examining the details of how JCPS handles funds, Edelen found district processes lacking when it comes to paying professional service contractors and construction change orders, or contract changes that add costs as construction projects unfold.

Edelen’s office examined a sample of 29 professional service contracts from 2011 to 2013 and found “reimbursements made to two contractors without receipts to support the original expense, a payment made to a contractor based on an altered invoice, and payments made to two contractors for services performed before the related contracts were approved.”

Edelen found one instance in which JCPS staff altered an invoice so that a contractor providing architectural project management would get paid faster.

JCPS’ Department of Facility Planning changed the $943 invoice to show the services were completed in June, not July as submitted by the contractor, before sending the invoice to JCPS’ accounts payable department, Edelen found.

“Altered invoices provide no assurance that transactions are properly accounted for and increase the risk of noncompliance with contract terms,” the audit says.

Edelen’s office also examined records for six 2013 capital construction projects – representing about $62 million, or 40 percent of JCPS’ capital construction budget – and found “poor documentation and lax oversight.”

In one instance, an “architectural/engineering” consultant submitted the same $1,055 invoice twice and was paid twice. Edelen’s office said the consultant first submitted the invoice in February, then again about a month and a half later, before either invoice was reviewed or paid. JCPS paid the consultant’s second invoice in April, then made a duplicate payment in August for the original invoice.

The audit does not identify the contractors.

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