Budget Development and WSS

As our school district begins the annual process of developing a budget for the year we will hear all of the same messages that we hear every year at this time. People will go on about how the legislature has cut funding, they will claim that they want to protect the classrooms from budget cuts, and they will describe programs and initiatives that are too critical to cut.

I don't want to make folks' eyes glaze over with the tiny details of the budget, so I hope those who follow it much more closely than I do will forgive my describing it in very broad strokes. A lot of the budget isn't really available for re-allocation. There are all kinds of laws, agreements, grant restrictions and such that obligate the District to spend its money in certain ways. There is, however, some discretion. In the past, the board has sat passively and waited for the superintendent and the staff to bring them a budget proposal. That didn't work out so well, so now the Board takes a more active role in budget development and regards the budget as a governance tool. The Board has started their discussions, so now is the time for people to pay attention and speak up. Soon it will be too late.

There are actually four or five budgets, but I'm going to focus on the operating budget. The capital budget is a whole other fight, and no one pays much attention to the ASB budget, the debt service budget, or any other budget. It is important to remember that the District cannot freely transfer money between these budgets. General Fund or Operating budget money can be moved to other budgets but not the other way around. It's like blood transfusions - some can donate and some can receive, but not necessarily vice versa.

There are three or four primary spending decisions made to allocate the operating budget. The first is to fund the schools. It didn't used to be this way. The central office budget used to get done first and then any money left over was available for the schools. That was one of the things that the board changed when they first stepped in a couple years ago.

The schools get funded in three or four ways. First and primary is the Weighted Staffing Standards (WSS). This is the money that the District says is needed to fund a school regardless of which students are there. For example, each school needs a principal and a secretary. The WSS describes the staffing needs of elementary, middle, K-8, and high schools each broken out by size. An elementary school with over 450 students, for example, gets all of the same staff as one with 400 students, but it also gets an assistant principal. The WSS provides the school office staff, nurses, counselors, and it provides classroom teachers based on a student ratio formula that varies by grade. The District Leadership sets these staffing standards, but they must comply with state laws and collective bargaining agreements. This allocation is completely transparent. You can readily calculate the WSS allocation for any school if you know the projected enrollment.

Second, the District provides additional funding to low-performing schools. This money comes to the school through the District's Performance Management initiative. This money goes primarily to schools identified as Level 1 or Level 2 in the District's School Segmentation scheme. They are supposed to use it to boost student academic achievement. The District Leadership directs this money.  They decide how big the pie will be and how it will be divided. The division of this money is murkier than the WSS. Moreover, some schools spend the money differently from other schools. Some spend it on coaches. Also, the District doesn't give schools freedom to spend this money as they choose. Some schools can only use the money on a limited menu of supports, some are told how it will be spent. This was the "earned autonomy" that comes from success. The better a school's outcomes, the less money they get through this funding plan, but the more freedom they have to decide how it will be spent. The worse their outcomes, the more money they get but the District decides how it will be spent.

Third, schools get state and federal money earmarked for special needs students. This includes funding for staff to meet the needs of the students with IEPs and English Language Learners. It also includes additional funding to the school for students living in poverty, Title I funds, and LAP money from the state. The District leadership doesn't have as much control over this money as the WSS and Performance Management. They have no say in the total dollar amount and limited say in how it can be spent. In the Dr. Goodloe-Johnson administration, the District (rather notoriously) used about 30% of the Title I money to fund the Performance Management budget. That practice, when it came to light, was not well-regarded. There is some gray area about the extent to which the spending of Title I money can be directed by the district and to what extent the decisions need to be school-based.

Fourth, schools can raise some money on their own, but this funding doesn't come from the District budget and doesn't get discussed in the Budget Development process.

So the bulk of school funding decisions for the District Leadership comes down to dividing the spending they control between the amount allocated for WSS and the amount allocated for Performance Management. How much goes to all schools, and how much goes to "struggling" schools only. It is seen as a zero-sum game. Every dollar they use to fund Roosevelt through the WSS is a dollar that can't go to Rainier Beach through the Performance Management spending.

The District Leadership can make a lot of funding decisions about schools when they set the WSS and the Performance Management budgets. They can decide, for example, that every high school should have an academic intervention specialist and provide for that position through the WSS. Or they could decide that some schools don't need someone in that role and shift the funding for that position from the WSS to the Performance Management spending. They could then insist that this position be staffed with that Performance Management money. That change would save the District some money, but it would remove that staff person from the Level 3, 4, and 5 high schools.

This is the discussion that is starting now. This is the time to chime in on it. It will soon be too late. If you wait, and don't come to the District with input on WSS and Performance Management spending until they have proposed numbers in front of them, they will tell you that it is too late to make any meaningful changes. The budget train must arrive at the station on time - without fail. They will not stop or slow that train because you didn't get on. All aboard!


David said…
Thanks for the details on the process, Charlie.

Could you elaborate a bit more on the funds for central administration? That has been an issue in the past, analyses from Meg Diaz, for example, that an unusual percentage of the SPS budget goes to admin instead of classrooms. That still remains an issue?
Charlie Mas said…
David, as you note, there are others such as Meg Diaz who follow the budget, including the central administration spending, much more closely than I do.

Washington school districts typically spend about 6% of their operating budget on central administration. Seattle Public Schools used to spend 9% of their budget in this accounting category. They tried to defend this practice for a while - claiming that Seattle is different from other districts - then they tried to hide the number - reporting one number to the state and another number to the Board and the public. This deception involved playing games with labels - central administration versus central office. Then they tried to shift the expenses from central administration to the schools.

That's pretty much where things stand right now. A math coach, whose salary once appeared as a central office expense, is still working, but now the salary expense is attributed to the school rather than the central administration. There has been no cut, but by changing the job title or the ledger entry the central administration budget has shrunk and the school budget has increased.

While this appears deceptive, and was certainly presented at one time in a deceptive way, the math coach actually does work at the school, not at the central office. On the other hand, was the math coach hired by the principal? Does the principal supervise the math coach? To what extent is the math coach actually an employee of the school? I don't know. I'm asking.

There are other folks who do know and can answer.

I'm sure there are schools where the math coach is seen as a highly valued and fully integrated member of the school staff. I'm sure there are other situations as well.

There are also math coaches who spend most of their day teaching students and there are math coaches who spend most of their day teaching teachers. Does that have an influence over whether you regard them as school staff or central administration staff?

Honestly David, this is an area where I have, at best, a vague sense of the concerns, but no detailed knowledge. Given the diversity of situations all across the district, I'm not sure that anyone could say with confidence what spending is a teaching expense and what is a professional development expense.

So far as I know, there has been no effort to determine the effectiveness of coaches either as a professional development method or as a support for student academic achievement. The District spends a lot of money on this but has no measure of what they get for it.
Dorothy Neville said…
Charlie, that's a good big picture explanation. Let me go further and explain the current situation. The Weightedness of the WSS is a FRL allocation, calculated on a per student basis. Every school gets it. When the Performance Management idea came in, the FRL allocation was cut to help pay for it (as well as the Title 1 money, as you point out). So for several years, the FRL allocation was cut, one year 15%, one year 19%. That hurts. It's all Robin Hood philosophy. It might be interesting to know the source of this money. I asked Mr Harman if this was in the state apportionmnent dollars and he said no, the FRL allocation is all from levy dollars.

OK, onto budget development process. Each year there is a WSS team of staff and principals (and maybe Ed directors, not sure), about a dozen people who meet in the Fall to check compliance with WSS and to look into tweaking the model. They aren't looking at the amount of funding, but the overall structure of the model. This is the team that Fall 2010 proposed fixing some flaws in the WSS that underfunded schools for Special Ed kids and some other issues, such as K8 inequities. Last year the school board approved those changes, those enhancements added about $3.2M to the cost of the WSS. (Later in the Spring, when the budget was getting tight, the WSS got cut by about $5M and that's when the line item for elementary school counselors went away. Some schools still elected to keep a counselor through their discretionary funds though.)

Fall 2011 the WSS team was looking at some things having to do with core staffing, the amount of administrative help a school gets based on size. Right now in elementary, the 451st student comes with $170K. Should that be smoothed out a bit and how?

So, Mr Harman felt that he almost had consensus on a proposal to be brought forward at the January Budget Worksession. However, that fell apart the day before. Instead of bringing a proposal, four principals from the WSS team came to that meeting and said they just couldn't take the cuts anymore. Without more FRL dollars and without some assurance of stability, they just could not function and serve their students. So they would not approve any of the possible modifications of the model. Instead, they wanted a 25% increase in FRL allocation (worth about $1.5M and they wanted $3M spread regionally in a mitigation fund so that the ed directors could smooth out core staffing issues, perhaps by providing a needy school with enrollment right under the cut off with extra help. (There has been a mitigation fund but for reasons involving capacity and enrollment predictions that fund has dwindled down to almost nothing.) These principals said that the 25% increase in FRL allocation would not be enough, but would at least be a symbolic gesture of support. At that meeting, everyone said that the principals' push was unprecedented. (Anyone watching the last Board meeting, this is what KSB was referring to during her board comments.)

Let's jump to last Wednesday's February Budget Worksession. Mr Harman announced that staff recommends doing away with the performance management dollars and using the $1.6M that is planned for next year's performance management and instead use that to increase the FRL allocation as asked. As for the 3 million dollars in mitigation money, they cannot recommend that because we don't have the money. However, it's not completely out of the question or off the table.
Dorothy Neville said…
Charlie, there are almost no coaches funded centrally anymore. As for coaches or specialists funded at the school level, that would all be WSS or Title or performance management. So there wasn't new money to "shift" costs of coaches.
Dorothy Neville said…
When Meg uncovered the 9% central administration spending, although the district was claiming 6%, she did it by looking at the OSPI required budget, the F195. This format required all districts to follow the same coding of jobs, so the centrally based coaches (over 100!), a strategy that MGJ pushed, showed up on the F195 but hidden in the district formatted budget. Staff will say that they were not trying to obfuscate but were actually trying to make "core" staffing more transparent, but it sure backfired.

Anyway, that method showing the budget is out of favor. I suggest looking directly at the F195, the same source that Meg used. You can find it on the OSPI website which is NOT easy to do! I would find it then the very next day forget how to find it again. It's Finance -> School Apportionment -> Reports -> District Reports.

The reports show that the budgeted percent of central admin has gone down from over 9%. Last year it was budgeted at 6.25% but the actual was 7.1% (The actuals show up on the F196). The reasons for going over budget include all the severance packages we paid last year. Not just MGJ and Kennedy, but Chan and another person whose name escapes me, Labor Relations?

This current school year the percent for central admin in the budget is 5.98%

Other school districts in Washington have hovered around 6% and with the economy crashing, they have also dropped. However, the consensus with them is that going well below 6% is unsustainable to handle the tasks that need to be handled centrally.

What I hear from management is that there is still a hiring freeze and there are still significant work underway to examine departments and positions to become more lean and efficient.
Catherine said…
First off, hats off to people who can wade through those budgets and not run screaming from the building.

My question: Has any investigation been done on what I'll call partially funded programs? For example, the state says to get this $100K, you have to do a+b+c. Well the cost of doing a+b+c is $150K, so it's costing the district more than the funded money to do something. IF that something doesn't directly benefit the classroom, is there an opportunity to tell the state thanks but no thanks? Or at least a push to start a discussion with the state (at a more specific level than education is being underfunded) "you have to adjust your requirements or pay more"?
Dorothy Neville said…
Catherine, excellent question. Reminds me of the Federal TIF grant that provided over ten jobs downtown and not much actual incentive grants to teachers. Plus we are committed to expanding it on our own dime. I believe that part of our problem is that there isn't a culture and policy for Risk Management in EVERY decision. The A&F committee is working to change that. Richard Staudt of Risk Management is now a regular staff attendee at those meetings and work is underway to implement risk management and fiscal assessment into everything. We are not there yet.

Do you have any specific examples of the grants/programs you have in mind? If so, we can find out more details on them.
David said…
Thanks, Dorothy, the details and thoughts are useful.

I think an easy way to cut through the complexity and obfuscation is to look at the percentage of the budget that goes directly for a teacher standing in front of a classroom. The goal of SPS is to educate children. Education happens in the classroom. Anything not spent on a teacher in front of children is overhead and should have to be justified.

Do we know the percentage of the budget spent on teachers in front of classrooms? And how that differs from the norm for other districts?

Looking at the F195 document to which you refer (at http://www.k12.wa.us/safs/rep/fin/1112/17001195.pdf), it appears that "teaching activities" were $310M of a $532M budget, or 58%.

The same document for Bellevue (http://www.k12.wa.us/safs/rep/fin/1112/17405195.pdf) shows they spend 106M of 165M on "teaching activites", which is 64%.

Is there a reason Seattle spends 6% less of their budget on teachers in front of a classroom than Bellevue? If we could close that 6% difference and operate more like Bellevue, that would work out to an additional $32M for teaching activites. $32M is a lot of money for a lot of teachers that could be standing in front of a lot of classrooms. By my estimate, that works out to an ability to hire 290 additional teachers, which is a 10% increase in teachers and 10% smaller class sizes.

Why does Seattle spend less, as a percentage of budget, on "teaching activities" than Bellevue? And can we reclaim that 6% to hire more teachers in front of classrooms?
Dorothy Neville said…
David, yes, the goal is to increase the percent in the Teaching Activity category. That 58% in that report was the actual for 09-10, look to the right for the 11-12 budget and you will see it is supposed to be 64%. Again, part of that is because central admin has gone down, but I am not sure that's the whole story.
Dorothy Neville said…
Can I (almost) answer Mr Bill here? From the Friday Open Thread:
Speaking of budget woes, has anyone else heard that facilities maintenance has run out of money? It seems that some of their vendor accounts are over ninety days past due and the workers can't buy materials and parts to do their assigned repair work. So, after all the bad press about how far behind the District is in maintaining its schools, where has the basic maintenance funding gone? Is this more Seattle School District slight of hand? Perhaps a case of robbing Peter to pay Paul?

---Mr. Bill

I actually do not know the answer to this. I have not heard about it. What I do know is that the A&F committee has exerted some authority and is paying much more attention to the capital budget. Evidently the Operations Committee used to handle this and it was only cursorily looked at in A&F. So yesterday at the monthly finance A&F meeting, a contingent of capital budget folks came and there as a long discussion of capital finance reporting. Mostly the committee is trying to learn about them and also providing feedback on the format of the information. Good back and forth between committee members and Kathie Technow on this. Not perfect, but a very good start and a very good idea for A&F to pursue. Adds to their workload, unfortunately, but needed. And if what you hear is true, Much Needed!

I do know that Transportation is over budget and projects a 2 million dollar shortfall. The board was Not Happy to hear this Wednesday. They were, however, happy with the level of data and transparency into the issue, but Not Happy at all with the problem.
mirmac1 said…
When is that "zero-based budgeting" process going to get underway? That is the only way CA can SERIOUSLY right-size JSCEE.
David said…
Ah, thanks, Dorothy. Looks like you're right that the budget is trying to get to the same level as Bellevue, 64%, in 2010-2011 and in 2011-2012.

It will be interesting to see if they hit that when the actual numbers come out. And it would be good to double check to make sure they didn't use a different definition of "teaching activities". But good to see the latest budgets are trying to do the right thing. Thanks again for the pointer to the document and your correction to my first interpretation of it.
Dorothy Neville said…
On the OSPI forms F195 and F196, they cannot use different definitions of Teaching Activities or anything else. The auditors would catch that, most likely. I am not 100% clear on what counts as Teaching Activities, Teaching Support, etc, but I am fairly confident that the different Washington districts are coding things the same way.
David said…
You're right, Dorothy, and, sorry, I shouldn't be so paranoid, I'm sure "teaching activities" are well defined.

In fact, looking at it a bit more, the spending in the "teaching activities" category is almost entirely "27 | Teaching". I'm no expert, but it appears that is officially defined here as:

Include expenditures of instructing pupils in a teacher-pupil learning situation where
the teacher is regularly in the presence of the pupils or in regular communication with
pupils (such as with distance learning and running start) in a systematic program designed to assist pupils in acquiring new or improved knowledge, skills, and understandings. Include expenditures for textbooks under this activity. Also include the direct expenditures for classroom teachers, teachers’ aides, teachers of homebound, teachers of institutionalized, correspondence teachers, and others assigned to instruct pupils regularly in a teacher-learning situation, and their secretaries, clerks, and other assistants. Include expenditures for training teachers for their teaching functions.

I guess that last line gives a twinge of paranoia again. I don't know if they could have just shifted coaches, for example, from central admin to teaching using that. But, right, I'm probably being too paranoid, it's probably all above board.

Thanks again for the discussion and details, Dorothy. Hopefully others are finding it useful too.
Dorothy Neville said…
You are welcome, David and I appreciate the chance to explain what I know and find more topics to pursue. Certainly the line about "professional development" there is something to dig into, and I will.

You are right to be paranoid! Certainly the district under previous administrations has acted in ways to earn your paranoia and distrust. But it's appropriate now to temper the paranoia with evidence that the current executive team is changing priorities and becoming more transparent. I think we are moving from a time when paranoia was always called for to a time where Trust But Verify is more appropriate.

Unfortunately, it's too late in some ways, since previous administrations overspent downtown and used way too many one-time dollars to fill budget gaps. So now our reserves are low and much of the one-time dollars are gone. Are the current folks in charge doing the best that they can? I am not sure, I don't think they would claim they are there yet, but I do believe that they are doing better and their goals are to improve further.
Catherine, you hit on a REALLY big point. Here's an example:

LEV, Stand, and others constantly harp on Washington State "losing" Race to the Top money (one "reason" is we don't have charters).

When you get a load of money that comes with huge oversight responsibility, it behoove any district to say, what is the cost-benefit ratio and where will we come out in the end?

This happened with some of the Gates money. Very limited uses and a lot of paperwork. TIF had a lot of oversight (as Dorothy stated).

Ohio and Texas have backed off of RTTT money for this reason. Hawaii is in danger of losing it because they have not met all the requirements.

I"m not saying money shouldn't come with oversight strings but there should be a careful, careful assessment of what the workload will be like and what outcomes you perceive are worth having from that extra work (or, how else could you get the same results).
Dorothy Neville said…
Mirmac, fascinating and fleshes out a dataset provided to the board in January. Thanks for the pointer. Some of the growth is probably needed and appropriate, but how much? I am not sure 21 is appropriate, but I do know that if we want professional competent people in senior management we do need more than 4 executive level management. I sure know a few positions I would cut if I were in charge. (Not saying anything about the people, but the positions. ie, We got an Exec Director of Strategic Planning first on Gates money, why do we still have one on general fund money?)
Sorry, forgot Mr. Bill's question on maintenance.

I sat through the work session on maintenance and I don't think they have ran out of money (it looked like that on paper but it really isn't so). I don't know if Mr. Bill has direct knowledge of parts not available or vendors not paid.

The district is making an effort to do better in this area. This got touched on at the BEX Oversight Committee meeting this morning. We are basically treading water to keep up (although some of the capital dollars for capacity management work has shaved off some major maintenance issues).

But we are not staffing or spending on maintenance as we should and there's just no denying that.
Anonymous said…
Dorothy, thank you. Fabulous level of detail and deep knowledge.

Charlie, excellent description of school funding. One additional funding source that supports schools with high FRL is the Family and Education Levy support for after school activities, family support workers, etc. Those are additional things that do not appear on the allocations, and can make it hard to compare school funding for that reason as well.

This is the time of year that BLT's start talking about school budgets. If you are interested in school budget allocations or in school funding in general, all are invited to attend SCPTSA's budget training on Monday 2/13 (whether or not your school has a PTA). Here is the blurb from the District website:

The Seattle Council PTSA invites community members from all schools to learn more about your school's budget process. Whether or not your school has a PTA, please join us at our next Seattle Council PTSA General Meeting where we will discuss the nuts and bolts of school budget allocations. School Board President, Michael DeBell, Sherry Carr, School Board Chair for Audit and Finance, and Cathy Thompson, Assistant Superintendent for Teaching and Learning, will be at the meeting to answer questions.


Kathy said…

I understand school allocations are distributed based a three year enrollment average. Can you direct me to documents verifying this information?
Dorothy Neville said…
Kathy, glad your brought that up. I have asked Mr Harman and Mr Boesche and both said that wasn't true, allocations are based on current enrollment. To make sure I asked the right question is there some data that looks that way? I can double check.
Catherine said…
Dorothy and Melissa
thx for answering - I don't have any current examples - over the years I have helped various staff compile various reports and when I would ask "to what end" I sometimes got really scary answers. I agree in oversight of grants/programs, but there's a point at which... it's just not worth it. The USDA program would be one I"d look at. One organization for whom I helped with an analysis discovered that it was spending 1/3 more in staff time completing the required reports and dealing with the overhead of their requirements, than the value of the subsidy received. (fore each $700 subsidy, it cost us $1000 in straight staff time - not including benefits) Now maybe it scales differently or the rates are different now, but wow was that an eye opener.
Anonymous said…
A couple of cool details ...

1.) .071 - .0625 = .0085

.0085 Times 1/2 a billion = $4,250,000 !!

funny how that big number and dinky percentage stuff creates all kinds of opportunities!

maybe we'd be better off with just running the whole show on cash out of brown paper bags with no record keeping - at least we'd KNOW why so much disappeared.

2.) 'Include expenditures for training teachers for their teaching functions.'

it sure would be difficult to hire a bunch of snitches and sneaks to fan out through the district making sure that garbage reform math was wrecking our kids chances at learning basic math skills ... and label the work of the snitches as "training teachers" ...

Kathy said…

It was hear-say. Thanks.

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