This combined expertise allows the district to continually improve its management processes through knowledge of industry best practices, academic research, current trends, and concerns in its constituent communities. The comprehensive reviews conducted by PEER committees put the considerable talent of business and community professionals at HISD’s disposal for a thorough examination, evaluation, and, if necessary, redesign of support services and programs.

Is built on the relationship between the teacher and the student;

Is decentralized and features shared decision-making;

Is focused on performance, not compliance; and

Requires a common core of academic subjects for all students."

To continue the district’s decentralization

Algenita Scott Davis Vice President and Community Affairs Officer, Chase Bank of Texas

Sylvia Garcia Controller, City of Houston

Grace Gonzales Retired, Educational Consultant

Larry Hawkins President, Unity Bank

Richard Hooker, Ph.D. Chair, Department of Educational Leadership

and Cultural Studies, University of Houston

Darv Winick, Ph.D. Member, Greater Houston Partnership

Anita Diosdado Parent and Vice President, PTA, Bonner

Elementary School Diane Johnson Parent, SDMC Committee, Bellaire High School

Margaret Stroud, Ph.D. Superintendent, Northwest District, HISD

Armando Alaniz Principal, Reagan High School

Warner Ervin Principal, Madison High School

Steve Amstutz Principal, Cage Elementary School

Sharon Robinson Principal, The Rice School/LaEscuela Rice

Committee support from the district included Chief Financial Officer, Leonard Sturm, Deputy Superintendent for Human Resources, Mike Jimenez, Director of Strategic Management and Quality Improvement, Robert Stockwell, Assistant Superintendent for Internal Audit, Robert Moore, Assistant Superintendent for Budgeting, Ron Wilson, PEER Coordinator, Helene Hutchins, and many others.

Mission

The oldcurrent system resource distribution system allocateds staff positions to schools based on the number and type of students at the school. The PEER committee sought to define a new processsystem for allocating resources to schools.

SCOPE OF ANALYSIS

Current resource allocation formula and methodology;

Current resource distribution levels;

Special school funding needs;

Facility maintenance and repair liabilities;

HISD personnel policies and procedures relating to school staffing;

TEA mandates affecting resource allocation;

Funding level comparisons to other districts;

Reports generated by the TFDD;

Community and civic group issues; and

Identification of which central office functions should remain centralized , and which should functions at central office and FMO can be decentralized, or contracted to the private sector, or possibly converted to a "user fee" structure.;

Reports generated by the Task Force on District Decentralization (TFDD) and the Commission on District Decentralization (CDD); and

The PEER Committee began its work by conducting a one-dayday-long symposium to borrow the perceptions offrom recognized leaders in education management and from administrators already operating in decentralized school districts. This forum also provided an opportunity for committee members to meet and share ideas withdeas on decentralization with members of HISD, including the sSuperintendent, s of Schools, Dr. Rod Paige, School bBoard members, districtarea superintendents, senior staff, and specialists in budgeting and finance. .

The speakers at the Symposium on District Decentralization took place on Saturday, November 14, 1998, at the Rice School/LaEscuela Rice, from 8:30 a.m. to 5:30 p.m. Symposium speakers included:

Dr. Paul Hill, Research Professor, Graduate School of Public Affairs University of Washington; Seattle, Washington

Kathleen Ware, Associate Superintendent, Cincinnati Public School System;

John Ayers, Executive Director, Leadership for Quality Education, Chicago,; and Illinois

Carolyn Busch, Education Policy Advisor to the Office of Governor of Washington. Gary Locke

(See Appendix B for papers delivered by speakers.)

Guiding Principles

The committee chairmanPEER Committee gave the principals and administrators serving on the committee the responsibility for determining what functions should remain under centralized control, and what central office functions should be further decentralized. .

Principal Focus Group

Michele Pola Principal, River Oaks Elementary School

Sharon Robinson Principal, The Rice School/La Escuela Rice

Armando Alaniz Principal, Reagan High School

Warner Ervin Principal, Madison High School

Adele Rogers Principal Holland Middle School

Administrator Focus Group

Margaret Stroud District Superintendent, Northwest District

Terry Abbott Press Secretary

Faye Bryant Deputy Superintendent for Curriculum

M. Kay DeWalt General Counsel

Mike Jimenez Deputy Superintendent for Human Resources

Sylvia Macy District Superintendent, Southeast District

Robert Moore Assistant Superintendent for Internal Audit

Susan Sclafani Chief of Staff for Educational Services

Robert Stockwell Director, Strategic Management and Quality Improvement

Kaye Stripling District Superintendent, Southwest District

Leonard Sturm Chief Financial Officer

Johnny Tates Chief Operations Officer

Does the department/function/process add value?

Does the department/function/process keep risk low (limit exposure)?

Can the department/function/process resources be equitably distributed?

Does the department/function/process generate or produce economy of scale advantages?

1. Does the department/function/process add value?

2. Does the department/function/process keep risk low (limit exposure)?

3. Can the department/function/process resources be equitably distributed?

4. Does the department/function/process generate or produce economy of scale advantages?

Administrators defined "school-based" as follows:

the resource or money for service resides with the school;

and cost-effective alternative service providers must be e available.

(See Appendix D for administrators recommendations on central office; and decentralized functions.) Committee recommendations on what district functions should be school-based and those thatwhich should remain centralized are based on a consensus reached between principals and administrators regarding the status of district departments and functions.) (Appendix B, Tables 1 and 2)

The third focus group included other cCommittee members familiar with the district financial resources. Leonard Sturm, HISD Chief Financial Officer, The CFO, the Ron Wilson, bAssistant Superintendent for Budgeting officer, and members of their staffs . This group conducted a detailed examination of the 1998-99 HISD school budget and demonstrated financial modeling of budget allocations for committee members. Several scenarios were presented showing different iterations of per pupil allocation per pupil allocation. The most significant iterations were: :actual versus average salaries, special education included in allocations versus not included, and studentpupil weights corresponding to state formula weights. .

The net effect of these analyses was to show that a weighted per pupil allocation would result in a significant redistribution of of some district funds among schools, ultimately leading to greater equity in school funding. The basic premise of per pupil allocation is that funding should follow student needs, rather than as compared to staffing formulas.

(See Appendix E for budget and financial documents.)

In order to address the equity issues, the committee was faced with developing a student based budgeting system that utilized student weights to determine school resource allocations. Peer Committee member Dr. Richard Hooker, is Chair of the Department of Education and Cultural Studies at the University of Houston, is a recognized expert on the Texas school finance system. On February 19, 1999, Dr. Hooker conducted a training workshop on state allocation funding formulas during a regular committee meeting to help committee members better understand the educational funding process. Dr. Hooker’s presentation included a discussion of the weights used by the state to allocate funds to school districts. He described the intent of the formulas and some challenges presented by various resource allocation alternatives. Ultimately, the PEER committee decided to use the state weights in its resource allocation formulas. It was determined that these were already well established and by adopting them, the committee dodged the politically charged process of creating new student weights. The weights recommended by the committee appear in Recommendation 3.1in Appendix B.

In order to understand and communicate the entire resource allocation process, the committee developed a Resource Distribution Model (see Figure 1). Strategic Management staff systems consultant, Scott Krchnak, provided additional support to the PEER Committee by constructing a resource distribution model and by providing research on current trends in decentralization.

The resource distribution model provides a framework for the entire decentralization process. (see figure 1). The outer circle of the figure represents the total district budget derived from all sources of revenue. , The total district budget depicted in the model is equivalent to the HISD General Fund. T and the inner-rmost circle, actual schools budget, represents the portion of the total budget that is currently allocated to the schools and can be expended at the principal’sir discretion. The middle circle, potential schools budget, represents the portion of the total district budget that could be is potentially available for direct allocation to the campuses after funding for necessary central services and functions has been redirected to schoolssubtracted. The process of decentralization can be graphically represented by an outward expansion of the actual schools budget circle, illustrating a shift of resources from central control to individual school control. .

The PEER committee found that other decentralized school districts around the country keep the following kinds of functions and services s that are typically found in the total district budget (centralized services) and not allocated to schools include:

The Resource Distribution Model also illustrates that the role of central office consists primarily of four critical functions: goal setting, critical staffing, resource allocation, and monitoring school performance.

The total district budget depicted in the model is equivalent to the HISD General Fund.

The potential schools budget represents allocations for functions and activities that are currently being performed centrally but can potentially be devolved to the campus level. Examples of these kinds of activities include:

The level of decentralization can be expressed as a ratio of actual schools budget to potential schools budget (e.g., actual schools budget = 890% of potential schools budget); this measure can be a valuable tool to measure the effectiveness of decentralization implementation.

The resource distribution model further addresses another crucial area of decentralization - the method by which funds are allocated to individual schools. Inside the actual schools budget segment are percentages which indicate amounts allocated through a weighted pupil formula. A weighted pupil formula is designed to ensure that funding more closely follows actual student need and to facilitate districtwide funding equity.

The PEER Committee concluded its work by emphasizing to the district that the real issue is not simply centralization versus decentralization, but whether the entire system will truly support teachers and students in achieving the highest attainable academic success. Any management process that does not add value to this goal should be realigned to support these aims. With over 50 recommendations from the PEER committee, HISD began the hard work of implementation

Implementation of the PEER committee’s recommendations began in the fall of 1998, after the board adopted all recommendations into policy. The superintendent of schools created an implementation steering committee, chaired by Chief Financial Officer, Leonard Sturm, and co-chaired by Chief of Staff for Education Services, Susan Sclafani. The steering committee is charged with developing a three-year implementation plan and an annual action plan. The steering committee created six action teams charged with the development of specific action plans for the PEER committee recommendations. The action teams are:

Although we are proud in HISD of our general progress toward a fully decentralized school system, there is still much left to do. For further information, please contact: Robert Stockwell, Director, Strategic Management and Quality Improvement, Houston Independent School District, 3830 Richmond Avenue, Houston, Texas, 77027. Phone: 713-892-6497, Fax: 713-892-6534, E-mail: rstockwe@houstonisd.org

Membership Roster

City of Houston Chief Administrative Officer, Al Haines, chaired the fifteen-member committee. Harold Hook, President and Founder of Main Event Management Corporation, served as Committee Advisor. Other committee members with recognized expertise in their fields are identified below:

Margaret Stroud, Ph.D. Superintendent, Northwest District, HISD

Committee support from the district included Chief Financial Officer, Leonard Sturm, Deputy Superintendent for Human Resources, Mike Jimenez, Director of Strategic Management and Quality Improvement, Robert Stockwell, Assistant Superintendent for Internal Audit, Robert Moore, Assistant Superintendent for Budgeting, Ron Wilson, PEER Coordinator, Helene Hutchins, and many others.

The PEER Committee found that the district is vitally interested in and willing to undertake the difficult work of redesigning its management structures and processes to create the best school district in the country. The Committee applauds the district’s commitment to this goal and in that spirit offers the following recommendations. The district is , encouragedand recommends to adoptHISD the principles outlined in the recommendations below and also to undertake the recommended actions necessary for full outlined in the following recommendations in pursuit of this goal.implementation.

1. Purpose of Decentralization

1.1 The purpose of decentralization is to align responsibility and authority by giving schools more control over decision-making in order to increase student achievement.

1.2 The proposed decentralization will be phased in incrementally over a three year period. Because of the complexity of the issues surrounding the implementation of a weighted pupil resource allocation process and the fundamental cultural and procedural changes required, the district should adopt a philosophy of incremental implementation.

1.3 HISD should pursue greater equity in funding as a goal of the proposed decentralization.

1.4 HISD schools should be responsible and accountable for student achievement; the school’s budget plan should be tied to the school’s academic achievement plan.

1.5 The school principal should retain the final decision-making authority within district guidelines, and with appropriate input from school staff and the school SDMC.

1.6 Individual schools should be able to make their own decisions as if they are independent, semi-autonomous entities.

 

 

 

 

 

APPENDX B

2. Percentage of Total District Budget Included in Actual School Budgets

2.1 The district should set a three-year goal of budgeting 80% of all funds to schools, excluding which excludes funds for construction, debt services, and all other capital items.

2.2 District offices will be funded on a weighted pupil basis.

2.23 For the near future, the functions listed in TABLE 1 should remain centralized. However, these functions should be reexamined each year for possible further decentralization. While these components may remain centralized, the introduction of new technology, such as SAP and Peoplesoft into the district, provides an enormous opportunity to move operational components to the schools.

2.34 The district should strive to make the functions in TABLE 1 "service centers" accountable to schools. Even though these "shared services" remain centralized or under centralized control, the school principal should have the maximum possible decision-making authority for each.

2.4 Accountability of these "service centers" should include:

appropriate measures of performance;

appropriate measures of customer satisfaction; and

pay at risk strategies for the responsible managers.

2.5 The district should establish a means for alternative (external) service delivery to ensure customer satisfaction.

2.6 The district should establish procedures for monitoring internal customer satisfaction with internal and external service delivery.

 

2.7 This process should include a formal review committee to monitor and report internal customer satisfaction.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX B

TABLE 1: Core District Functions to Remain Centralized

2.5 Accountability of these "service centers" should include:

appropriate measures of performance;

appropriate measures of customer satisfaction; and

pay at risk strategies for the responsible managers.

2.6 The district should establish a means for alternative (external) service delivery to ensure customer satisfaction.

2.7 The district should establish procedures for monitoring internal customer satisfaction with internal and external service delivery.APPENDIX B

2.8 This process should include a formal review committee to monitor and report internal customer satisfaction.

2.89 The district should establish a key strategic development committee consisting of principals and other key representatives identified by the Superintendent to conduct a thorough analysis of each of the functions listed in TABLE 2. The district team should determine for each function:

What portion of the resources assigned to this function should remain centralized?

What resources should be retained centrally in each functional area to fulfill legal and other district requirements?

What alternative service providers could be utilized at the discretion of the principal?

What would the new decision-making process be?

Who would be accountable for what?

What new control systems would be needed to effectively and efficiently manage the function or activity?

2.910 The principal-focused management of schools would have three views of the role of central administration:

providing services to schools;

providing accountability to the public (board and government) for school performance; and

If a central office function doesn’t add value, it shouldn’t exist, or the district should take steps to provide for more effective use of resources.

2.101 The resources identified in TABLE 2 should be distributed to the schools on a weighted pupil basis and included in the actual school budgets.

2.112 The district should develop appropriate procedures for the expenditure of these resources to allow maximum principal discretion, while ensuring adequate controls and protections.

 

 

 

 

 

 

 

 

APPENDIX B

TABLE 2: Potential School-Based Functions to Be Decentralized

APPENDIX B

3. School Budgets Based on Weighted Pupil Allocation

3.1 The district should revise the school budgeting process to exclude staffing formulas and should include a weighted pupil allocation formula based on state student weights (listed below) until more appropriate weights can be developed.

Resource Room (FTE) 3.00

Self-contained, mild (FTE) and moderate,

Vocational Adjustment Class (FTE) 2.30

3.2 The district should fund schools with dollars based on a formula thatwhich adds average-daily-attendance and average daily membership divided by two.

 

3.3 3.3 Weighted pupil allocations should be applied to all students.

3.44 The determination of weights should be done by committee and will vary based on services rendered. The Board of Trustees should evaluate and approve recommended weights.

3.55 The committee determining weights should establish specific criteria so that weights can be applied to any students. Specific criteria will afford any school the opportunity of qualifying some of their special population students for these additional weights. If other schools havea school has an adequate clustering of comparable students and can demonstrate comparable educational services, the special weights can be applied. at other schools.

 

 

4. Other Resource Distribution ConsiderationsSpecial School Allocations

The committee recognizes that acceptance of recommendation 3.1, above, will require the district to address some situations not covered by the state student weights. The committee recommends that additional weights be determined by the district to provide for additional program opportunities for students. In all cases, funds should be budgeted based upon actual student use. Careful consideration should be given to each new weight created. The committee discourages the creation of a new weight for each and every program area.

 

5. Other School Based Budgeting and Planning Requirements

5.1 5.1 Principals and school staffs should be required to develop long term academic and budget plans beyond the annual planning/budgeting cycle.

5.2 Schools should be required to address district-wide goals and objectives in their annual and long-term plans.

5.3 5.3 Schools should be required to budget actual staff salaries.

5.4 5.4 School staffing configurations should be determined at the school, within the weighted pupil allocation, and with no requirements for teacher/student ratio except state law.

5.5 District guidelines should be developed for school budget reserves, surpluses and deficits.

5.6 Schools should be required to maintain a prudent reserve in their budgets as described by district guidelines.

5.7 5.7 Schools should be allowed to carry over all surpluses, within limits of district guidelines.

5.8 5.8 Schools should be required to carry over deficits, as set forth in district guidelines.

 

 

6. Implementation

6.1 The implementation should occur over a period of three years. Because of the complexity of the issues surrounding the implementation of a weighted pupil resource allocation process and the fundamental cultural and procedural changes required, the district should adopt a philosophy of incremental implementation.

6.2 6.2 The implementation should occur over three yearsIn the first year the district should look for "quick wins, " or resources currently retained centrally, that could be distributed to schools on a weighted pupil basis. The money retained centrally to pay substitute teachers or other relief personnel is one such example.

6.3 The district must allow its new operating systems (SAP, PeopleSoft, etc.) time to be fully installed and reach an appropriate level of stability and effectiveness. Once these systems are firmly in place, they will greatly enhance the budget decentralization process.

.

6.43 The district must evaluate the management capacity at individual schools and in other parts of the district, and develop a plan to provide the necessary expertise.

6.54 The committee recommends that the district’s implementation plan include a means to monitor implementation through performance measurement, feedback, and corrections mechanisms.

 

The PEER Committee concludes its work by emphasizing to the district that the real issue is not simply centralization versus decentralization, but whether the entire system will truly support teachers and students in achieving the highest attainable academic success. Any management process that does not add value to this goal should be realigned to support these aims.

*     *      *     *     * 
Paper presented at the Lone Star Conference on
PUBLIC EDUCATION REFORM IN TEXAS - COMPREHENSIVE PROGRESS REPORT December 7th and 8th, Austin, Texas. Contact information for the Lone Star Foundation 10711 Burnet, Suite 333, Austin, Texas 78758 (Telephone 512-339-9771).

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