Report 2005-132 Summary - September 2006

Los Angeles Unified School District:

It Has Increased Administrative Positions for Various Reasons and Although Making Progress, Its Performance Evaluation and Salary-Setting Procedures for Managers Still Need Improvement

HIGHLIGHTS

Our review of the Los Angeles Unified School District's (LAUSD) reorganizations and its procedures for evaluating performance and setting salaries for managers found that:

RESULTS IN BRIEF

The Los Angeles Unified School District (LAUSD) is the nation's second largest school district, with 727,000 students attending kindergarten through 12th grade in the 2005-06 school year. Facing concerns about poor student performance, the district reorganized its administrative structure in 2000 to place all schools into 11 local districts, which it consolidated into eight local districts in 2004 to address budgetary shortfalls. Over the last four years student performance has improved as seen in rising Academic Performance Index (API) scores each year, but LAUSD's scores still remain below statewide API scores. In addition, the governor has publicly indicated he would sign a bill for the mayor and other entities to have certain management responsibilities over LAUSD. Finally, at an estimated cost of $19.3 billion, LAUSD began a program in 1997 to build new schools and modernize existing schools to address an expected shortage of 200,000 classroom seats.

The 2000 and 2004 reorganization plans proposed reductions in support services positions at administrative and operating offices, but LAUSD has not achieved lasting reductions for various reasons. In 2000 LAUSD proposed to cut 835 support services positions at the central office, including shifting 501 of these positions to local districts and schools. However, it cut only 664 positions from the central office. Conversely, the 2004 reorganization proposed to eliminate 205 support services positions, but LAUSD actually cut 231 positions. Staffing reductions were temporary in both cases, and by December 2005 support services staffing had increased by 658 positions over December 1999 levels. LAUSD indicates that many of these additional employees were needed to manage its school construction and modernization program and to provide information technology services.

Between December 1999 and December 2005, LAUSD's support services positions increased by 12 percent, compared with a 3 percent increase in the number of employees who work at schools and interact with students, such as teachers, counselors, school custodians, and bus drivers. The cost of salaries and benefits for the first group increased by 44 percent between fiscal years 1999-2000 and 2004-05. The same costs for the second group increased by 26 percent.1

The 2000 reorganization plan also created Parent/Community Advisory Councils (advisory councils) at each local district to provide parents and community members with access to local district administrators and a way to influence district policy. Four of these eight advisory councils are no longer functioning, and LAUSD has not attempted to measure parent satisfaction with the councils that still exist. In fact, it has made only limited assessments of any results of its 2000 reorganization. Although it has updated the LAUSD Board of Education (board of education) on changes to its administrative structure since the reorganization, it has not reported the financial changes resulting from the reorganization as the board has requested. LAUSD lacks adequate performance assessment in other areas as well. Since it expanded its in-house legal staff beginning in 2001, LAUSD has reduced annual legal services costs by more than $3 million and decreased settlement and judgment costs. However, it has not fully developed the performance metrics it proposed to measure the legal expansion plan that was adopted by the board of education, so it is difficult to determine if it is meeting all the plan's goals.

We also assessed LAUSD's progress in implementing the recommendations of our July 2001 audit, Los Angeles Unified School District: It Has Made Some Progress in Its Reorganization but Has Not Ensured That Every Salary Level It Awards Is Appropriate (2000-125). Although the district has taken some corrective actions, it has not implemented or has only partly implemented most of our recommendations for establishing performance measures and improving its compensation practices.

For example, our 2001 audit reported that LAUSD had not established specific, easily measurable performance standards for certain high-level executives and managers and that the standards it did establish were vague and open to subjective results. Although LAUSD has established measurable benchmarks and goals for the superintendent, it still does not have performance benchmarks for all executives and managers, nor has it always maintained documentation of past evaluations. A January 2006 review of the district by a peer group of other school administrators found little evidence that LAUSD held its staff accountable for attaining their performance goals.

Our 2001 audit also found that the three different groups within LAUSD that set salaries of administrators—the Personnel Commission, the Human Resources Division, and the superintendent—did not have written procedures for determining salary levels for some positions, and did not always follow the written procedures they did have in place. In addition, LAUSD could not provide sufficient documentation to demonstrate that it conducted a thorough analysis for each position before setting salaries. Currently, more progress is needed to ensure transparency over salary-setting decisions. The Personnel Commission still does not have written procedures for determining salaries, and 11 of the 15 salary setting decisions we reviewed lacked documentation to support the salary recommendations. In contrast, the superintendent's process for determining salaries for certificated executives is reasonable, but it could be documented better. Also, the Human Resources Division has addressed most of our previous concerns over the salary-setting practices for certificated managers.

The number of high-level executives and managers LAUSD chooses to employ on contracts also has increased, but the reasons for these increases appear justified. Finally, our survey of comparable large school districts across the country shows that LAUSD pays higher salaries for more than half of the 27 highest-level executive and administrative positions we reviewed. Factors that may justify these larger salaries include cost of living, size of enrollment, and differences in scope and range of responsibilities.

RECOMMENDATIONS

When LAUSD makes major changes in its organizational structure with the intent of improving its operations, it should do the following to measure the effectiveness of these changes:

If LAUSD decides to continue with the advisory councils, it should:

To measure the effectiveness of key administrators directly involved in affecting student performance, LAUSD should:

Similarly, to measure the effectiveness of key administrators who oversee operating units, LAUSD should establish specific, measurable, and reasonable goals for these administrators and evaluate them in writing on their ability to meet such goals. In addition, it should retain the evaluations for a reasonable time period.

To avoid the appearance of subjectivity and lack of thoroughness in setting salaries for classified administrators, the Personnel Commission should:

LAUSD should maintain complete records to support salary determinations for executive-level administrators to show that these determinations are based on reasonable and objective criteria.

AGENCY COMMENTS

LAUSD generally agreed with our recommendations and indicated some of the steps it would take to implement them.

1 Represents regular program employees supported by LAUSD's general fund.