Evergreen Solutions Financial and Performance Review of the

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					Financial and Performance Review of the
     Burke County School System


           FINAL REPORT




             April 12, 2010
Financial and Performance Review of the
     Burke County School System


             FINAL REPORT




                     Submitted by:




             Evergreen Solutions, LLC
        2852 Remington Green Circle, Suite 101
              Tallahassee, Florida 32308




                    April 12, 2010
TABLE OF CONTENTS                                                                                          Burke County Public Schools


                                                                                                                                     PAGE

EXECUTIVE SUMMARY ........................................................................................................... i


CHAPTER 1: INTRODUCTION........................................................................................... 1-1

    1.1 Scope of Study............................................................................................................... 1-1
    1.2 Methodology ................................................................................................................. 1-1
    1.3 Overview of the Report ......................................................................................................1-2


CHAPTER 2: FISCAL RESOURCES IN BURKE COUNTY PUBLIC SCHOOLS ....... 2-1

    2.1 Financial Data Review .................................................................................................. 2-2
    2.2 School System Expenditures and Revenues ................................................................. 2-7
    2.3 School System Staffing ................................................................................................. 2-9


CHAPTER 3: FINANCIAL MANAGEMENT ..................................................................... 3-1

    3.1 Organization and Financial Management ..................................................................... 3-3
    3.2 Budgeting .................................................................................................................... 3-14
    3.3 Purchasing ................................................................................................................... 3-24
    3.4 Asset and Risk Management ..................................................................................... 3-27
    3.5 School and Day Care Funds ...................................................................................... 3-30


CHAPTER 4: REVIEW OF NON-FINANCIAL MANAGEMENT AND
           OPERATIONS ................................................................................................ 4-1

    4.1     Central Administration.................................................................................................. 4-1
    4.2     Human Resources ....................................................................................................... 4-41
    4.3     Transportation ............................................................................................................. 4-50
    4.4     Child Nutrition ............................................................................................................ 4-59
    4.5     Facilities ...................................................................................................................... 4-72
    4.6     Security and Safety ..................................................................................................... 4-93


CHAPTER 5: FISCAL IMPACT OF RECOMMENDATIONS ........................................ 5-1




          Evergreen Solutions, LLC
                           EXECUTIVE SUMMARY




Evergreen Solutions, LLC
                            EXECUTIVE SUMMARY
In January 2010, the Burke County Board of County Commissioners contracted with Evergreen
Solutions, LLC to conduct a Financial and Performance Review of the Burke County School
System. This review included a detailed analysis of all of the school system’s financial
management functions, including accounts payable, payroll, internal allocation of resources,
internal controls, impact of federal and state reporting requirements, use of grant funds, and
procurement. The study also included a review of other operations in Burke County Public
Schools, including organization and management, human resources, transportation, food service,
facilities, and safety and security.


SCOPE OF STUDY
To fulfill the requirements of the contract with Burke County for the financial and performance
review, Evergreen Solutions:

   •   developed a detailed set of information about the status of each BCPS fund source;

   •   developed a summary report of the status of district financial resources by fund source
       (federal, state, and local dollars);

   •   analyzed Burke County funding of Burke County Public Schools and the processes
       involved; and

   •   utilized findings to recommend strategies for improvements in the use of funds in Burke
       County Public Schools.


METHODOLOGY
Evergreen’s approach and methodology for conducting this review included the following
components:

   •   reviewing existing reports and data sources, including independent financial audits,
       annual budget and expenditure reports, budget guidelines and procedures, accounting
       procedures, salary schedules, organizational charts, staffing ratios, school board policies,
       strategic plan, and annual performance reports;

   •   conducting a diagnostic review and interviews with Board of Education members,
       County Commissioners, Burke County Manager and staff, BCPS Superintendent, and
       other BCPS administrators and staff;

   •   collecting additional reports and data from sources inside and outside the school system;

   •   conducting a formal on-site review with a team of four consultants; and

   •   preparing draft and final reports.


       Evergreen Solutions, LLC                                                               Page i
Executive Summary                                                          Burke County Public Schools


OVERVIEW OF THE REPORT
The final report for this study consists of the following five chapters:

   •   Chapter 1:      Introduction
   •   Chapter 2:      Fiscal Resources in Burke County Public Schools
   •   Chapter 3:      Review of Financial Operations and Management
   •   Chapter 4:      Review of Non-Financial Management and Operations
   •   Chapter 5:      Fiscal Impact of Recommendations

Chapters 3 and 4 contain findings, commendations, and recommendations for specific
operational areas, and are provided in the following sequence:

   •   a description of the operation in Burke County Public Schools;
   •   a summary of our study findings;
   •   a commendation or recommendation for each finding; and
   •   estimated costs or cost savings over a five-year period, which are stated in 2010 dollars.


OVERVIEW OF FISCAL RESOURCES IN BURKE COUNTY PUBLIC SCHOOLS
Evergreen consultants documented and analyzed the revenue and expenditure activities of the
school system by fund source (state, federal, and local) and function. This information is
valuable as a foundation for discussing primary financial issues currently facing Burke County
Public Schools. An analysis of this recent financial information on the school system can serve
as the basis for assessing operations and practices, and for developing future program and
operational decisions.

There are three major revenue sources that comprise the BCPS budget⎯ state, federal, and local
(county) funds. According to the most recent data from the state, the State of North Carolina
provided 68.9 percent of the funding for Burke County Public Schools in 2007-08. Federal
funding accounted for 11.7 percent of the total, and Burke County contributed about 19.4 percent
of the school system’s operating budget. Salaries accounted for 67.9 percent of all funds
expended by the district in 2007-08. Additionally, the following percentages represent total
expenditures for each category:

   •   Benefits: 17.3 percent
   •   Purchased Services: 6.8 percent
   •   Supplies and Materials: 7.4 percent
   •   Instructional Equipment: 0.6 percent

Within the context of local funding, highlights include:

   •   Local funding accounts for $16.3 million of the revenue in 2009-10. Burke County
       appropriations increased $164,127 or 1.2 percent from 2008-09 to 2009-10. Local
       revenues recorded by BCPS slightly decreased overall from 2008-09 to 2009-10 (0.3
       percent).



        Evergreen Solutions, LLC                                                               Page ii
Executive Summary                                                        Burke County Public Schools


   •   Local funds accounted for 12.5 percent and 5.7 percent of administrator and teacher
       funding, respectively, during 2008-09. In total, local funding accounted for 15.2 percent
       of staff funding.

   •   Local funds expended on salaries were $773.82 per pupil in 2007-08. This is $214.79
       more than the $559.03 per pupil that was spent in 2006-07.

   •   Local funds expended on benefits were $208.80 per pupil in 2007-08. This accounts for
       approximately 15 percent of the total funds spent on benefits.

Within the context of state funding, highlights include:

   •   BCPS had approximately 1,453 positions funded by the state in 2008-09. Of these
       employees, 56 were administrators and 1,003 were teachers.

   •   BCPS increased the number of state-funded positions by approximately 10 percent from
       2007-08 to 2008-09. This was largely due to the addition of 165 state-funded teaching
       positions.

   •   State salary expenditures were $4,282.82 per pupil in 2007-08. Compared to 2006-07,
       this is an increase of $163.73. State salary expenditures account for 76.4 percent of total
       salary expenditures.

   •   State benefit expenditures were $1,069.64 per pupil in 2007-08. State benefit
       expenditures account for 74.9 percent of total benefit expenditures.

Within the context of federal funding, highlights include:

   •   BCPS receives about 7.8 percent of its staffing funding from federal sources.

   •   Federal funding for personnel remained relatively stable from 2006-07 through 2008-09;
       ranging from 7.0 percent to 8.0 percent. For the most current school year in which data
       was available, federal funds accounted for 7.8 percent of funding for personnel.

   •   Per pupil federal salary expenditures were $548.98 in 2007-08. This represents an
       increase of $29.61 from the previous year.


MAJOR FINDINGS, COMMENDATIONS, AND RECOMMENDATIONS
This executive summary highlights commendations and recommendations. Additional findings,
commendations and recommendations, and the details supporting the major recommendations
included in this executive summary, are contained in Chapters 3 and 4 of the full report.


Major Commendations

Burke County Public Schools is commended for:

   •   improving cost efficiency and effectiveness for both employees and the district by
       mandating direct deposit of employee checks;


        Evergreen Solutions, LLC                                                            Page iii
Executive Summary                                                          Burke County Public Schools


   •   addressing excessive workers’ compensation costs and reducing claims through training
       and safety inspections;

   •   efforts to control and reduce accidents, injuries, and claims leading to lower insurance
       premiums;

   •   recognizing and aggressively addressing inequities in instructional technology
       opportunities for its students;

   •   examining areas in which the school system can capitalize on economies of scale for
       purchases;

   •   establishing high goals for strategic planning, outreach to the community, and the
       transparency of planning processes;

   •   recognizing the merits of creating a Foundation for BCPS and for the community as a
       whole;

   •   creating an effective enterprise program with before-school, after-school, and summer
       school programs to generate revenues despite economic challenges;

   •   enacting effective measures that should continue to reduce its costs for substitute
       teachers;

   •   achieving a complete and consistent high level of efficiency in the Transportation
       Department;

   •   sustaining a diligent preventive maintenance and bus inspection program;

   •   contributing positively to its Child Nutrition Incentive Program;

   •   staffing its Maintenance Department at a level that is within the recommended best
       practice range;

   •   effectively staffing custodial services as well as maintaining exceptional cleanliness of its
       facilities;

   •   implementing an Energy Education Program to assist with achieving a major reduction in
       energy use and cost as well as maintaining its energy consumption profile that has been
       largely in line with nationally-recognized benchmarks;

   •   maintaining a substantive, timely and useful array of policies and procedures in the area
       of security and safety; and

   •   installing surveillance cameras on its entire fleet of school buses.




       Evergreen Solutions, LLC                                                               Page iv
Executive Summary                                                        Burke County Public Schools


Major Recommendations

The major findings and recommendations related to improvements in the efficiency and overall
management of Burke County Public Schools are presented in this section.

Review of Financial Operations and Management

   •   Burke County Public Schools should consolidate and reorganize all financial functions
       under a Chief Financial Officer and advertise for the position. The consolidation of all
       financial-related functions will provide better coordination of these functions and provide
       better oversight of financial processes and procedures. The relocation of financial
       functions from departments with program responsibilities will provide managers of those
       programs to have more time for their core functions. Transferring the purchasing
       operation from the Child Nutrition/ Purchasing Department and separating these two
       functions will allow Child Nutrition managers to concentrate on actions needed to
       improve the program’s financial position (Recommendation 3-1).

   •   The district should determine the total cost for its Child Nutrition Program and take
       actions to increase fees or reduce operating costs to enable the fund to reimburse the
       Local Current Expense Fund for all support and indirect costs. Calculating the total cost
       of operating the BCPS Child Nutrition Program, and the costs incurred by the Local
       Current Expense Fund that are not reimbursed, will provide BCPS managers and the
       School Board with financial data that will enable better management of district funds.
       When total costs are known, decisions can be made either to increase fees to fund the
       total costs (whereby the Local Current Expense Fund can be reimbursed) or the operating
       costs of the program can be reduced to achieve the same goal (Recommendation 3-7).

   •   Burke County Public Schools should develop a Board Policy for day care funds,
       centralize accounts, allocate total costs, and transfer fund balances at the end of each year
       that exceeds target operational amounts to the Local Current Expense Fund (i.e., the
       funding source for general operations of the district). Centralizing day care funds will
       provide better oversight to the monies in this account and help ensure these funds are
       expended only for day care costs. A Board policy should standardize how and what
       funds can be expended for and provide a source of revenue for the Local Current Expense
       Fund (Recommendation 3-16).


Non-Financial Management and Operations

   •   The Superintendent’s span of control should be reduced to enable him to focus on
       broader districtwide responsibilities. Burke County Public Schools should adopt
       Evergreen’s proposed executive organizational structure. The proposed positions of
       Executive Director of Accountability and Planning, Chief Financial Officer, Executive
       Director of Human Resources, and School Community Engagement Officer should be
       advertised (Recommendation 4-1).




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Executive Summary                                                         Burke County Public Schools


   •   Burke County Public Schools should eliminate the Instructional Coaches and add Content
       Coordinators to work under the Assistant Superintendent for Curriculum and Instruction.
       Creating Content Coordinators to work closely with other instructional leaders in the
       district will achieve the goal to provide a cohesive, seamless system for teaching and
       learning throughout the K-12 sequence. Specific content areas which should have
       coordinators include Mathematics, Reading, Language Arts, Science, Social Studies,
       Arts, Physical Education/Athletics, and Career Technical Education/Workforce
       Development (Recommendation 4-2).

   •   The Superintendent should reorganize the Department of Curriculum and Instruction to
       better align staff with similar roles and responsibilities, and consolidate grant-funded
       positions. Implementing these changes will enable the Executive Director of Student
       Services to better focus on the support nature of that role. Consolidating all health and
       safety-related responsibilities under one coordinator should better assure that all activities
       and decisions are cohesive (Recommendation 4-3).

   •   Burke County Public Schools should create an Office of Accountability and Planning.
       Currently, there is a lack of clarity regarding the data functions in the Offices of
       Technology and Student Accountability. With the addition of the position of Executive
       Director for Accountability and Planning, the Assistant Director should be eliminated.
       The part-time Administrative Assistant for Textbooks should be converted into a full-
       time position serving as the Administrative Assistant to the Executive Director as well as
       having responsibility for textbooks (Recommendation 4-5).

   •   Burke County Public Schools should immediately increase day care rates for before-
       school, after-school, and summer school programs, monitor comparative costs annually,
       and continue to raise rates incrementally toward state reimbursement rates. BCPS is not
       competitive with other regional programs or local private child care providers. Costs have
       increased considerably in the past nine years, but revenues have not. Reimbursement by
       the state is capped by the rates that BCPS charges for its programs. By not increasing
       rates, BCPS is limiting its income for the program and its reimbursement rate from the
       State of North Carolina (Recommendation 4-8).

   •   The district should combine its two alternative schools to maintain a teacher/student ratio
       of no more than 1:15. By combining the two schools and reducing teaching staff by five,
       class sizes for 180-220 students with the combined enrollment would range from 1:12 to
       1:15. This action would reduce transportation and operating costs for an entire facility
       and program, and eliminate the staff costs of operating two separate programs
       (Recommendation 4-11).

   •   The Board of Education should continue to review and revise Board policies, eliminating
       those that reiterate state laws and regulations, eliminate hard copies, and post polices on
       the BCPS Web site. A revision of the Board Policy Manual is long overdue. Once it is
       completed, annual reviews and updates should be conducted. Containing redundant state
       requirements unnecessarily adds length to the Policy Manual. Once policies are reviewed
       and streamlined, the Manual will be more user friendly and likely accessed more




       Evergreen Solutions, LLC                                                               Page vi
Executive Summary                                                      Burke County Public Schools


       frequently by staff and the public. The Policy Manual should be accessible online
       (Recommendation 4-12).

   •   Burke County Public Schools should continue to reduce the number of assistant principal
       months in BCPS to the number of months funded by the North Carolina Department of
       Public Instruction (DPI). Reducing school administrators to equal DPI allocations will
       allow BCPS to redirect those additional funds toward classroom instruction
       (Recommendation 4-14).

   •   The Board of Education should implement a process that ensures a cost-benefit analysis
       of legal costs originating with the district before undertaking legal actions. BCPS should
       discuss and determine how much money it is willing to support in legal expenses with the
       Burke County over increased funding as well as future lawsuits. The implementation of
       this recommendation should result in an organized, ongoing process designed to control
       legal expenses. Once legal action has begun, the Board should monitor expenditures and
       regularly discuss the merits of its continuation versus costs to the district in terms of
       dollars, public good will, and distraction from its core educational mission
       (Recommendation 4-15).

   •   Job descriptions are an essential management tool for specifying minimum qualifications,
       knowledge, skills and ability requirements, and essential job functions. The BCPS
       Human Resources Department should develop job descriptions for each position, and tie
       them directly to performance evaluations. The Executive Director of Human Resources
       should work with district staff to update BCPS job descriptions. (Recommendation 4-
       19).

   •   Burke County Public Schools should create an employee attendance incentive program to
       award employees at six-week, semester, or at the end of the year with bonuses for perfect
       attendance. Such action has helped other school districts reduce substitute teacher costs.
       In so doing, these districts have kept teachers in classrooms and helped focus more
       concertedly on improving student achievement. BCPS should create a committee of
       administrators and teachers to examine programs in other districts and develop one
       tailored to BCPS needs and resources (Recommendation 4-23).

   •   Burke County Public Schools should develop and implement a labor productivity
       improvement program for its Child Nutrition Department. Although many campuses
       meet or exceed meals per labor hour (MPLH) guidelines, there is room for improvement
       in labor productivity in the Child Nutrition Department. Initially, the Child Nutrition
       Department should set quarterly productivity improvement goals for the seven schools
       most in need of improvement, based on the MPLH productivity guidelines
       (Recommendation 4-27).

   •   Burke County Public Schools should obtain severe need lunch reimbursement eligibility,
       and maintain severe need breakfast reimbursement eligibility for BCPS students. Severe
       need lunch reimbursement eligibility may require a few years to accomplish, since the
       “second preceding school year” is the qualifying measure. Because reimbursement at
       severe need levels is higher than regular reimbursements, it is highly desirable to have



       Evergreen Solutions, LLC                                                            Page vii
Executive Summary                                                       Burke County Public Schools


       BCPS qualify for the maximum possible reimbursement from federal funds
       (Recommendation 4-28).

   •   Burke County Public Schools should set a meal price policy indexed to the USDA
       reimbursement rates. The school system should arrive at a benchmark price for its meals
       for 2010-11, and then set an index against which future price increases will be set. BCPS
       should consider the new benchmark paid price profile for 2010-11 displayed in Chapter
       4. The meal price structure should be tested for profitability, as it will be the benchmark
       from which future price increases should be put into effect. By indexing this benchmark
       price structure to changes in the reimbursement rate for free or reduced meals from
       USDA, a logical and fair pricing process can be implemented by the school system
       (Recommendation 4-29).

   •   Burke County Public Schools should prepare a “Five-Year Facilities Master Plan 2011-
       2015”, update it annually, use it as the official planning guide, and measure progress
       against the plan. The Five-Year Facilities Master Plan for 2011-2015 should be
       established as a living document that guides all facilities planning, design, and
       construction activities of the district (Recommendation 4-34).

   •   The BCPS central office is currently housed in several separate facilities. BCPS should
       consolidate all central office functions into one building in a geographically central
       location (Recommendation 4-35).

   •   Burke County Public Schools should consolidate at least two pairs of elementary schools,
       combine the alternative schools, and remove portables, due to low utilization. This
       consolidation should be addressed in detail in the recommended Five-Year Facilities
       Master Plan, and specific consolidation and related proposals should be part of the
       planning process. The closing of schools is frequently an emotionally-charged issue, and
       should therefore follow the public participation aspects of facilities master planning
       delineated under Recommendation 4-34. Only when the general public understands that
       school closings and other consolidation efforts have been considered carefully and
       deliberately, can BCPS achieve broader acceptance and support (Recommendation 4-
       36).

   •   The BCPS School Board should review its facilities use policy once a year in order to
       make any changes reflecting charges, facilities available for use, procedures, or any other
       aspects of the policy. While it is not expected or necessary that changes to the policy are
       made every year, an annual examination of the policy’s provisions will ensure that the
       policy reflects the most current situation in the school system. BCPS should take
       advantage of SchoolDude’s availability for analyzing optimum income strategies for
       facilities use, and for making strategic recommendations. Above all, the policy must be
       consistently and uniformly implemented at all BCPS facilities (Recommendation 4-37).




       Evergreen Solutions, LLC                                                           Page viii
      Executive Summary                                                         Burke County Public Schools


      FISCAL IMPACT OF RECOMMENDATIONS
      Some of these recommendations can be implemented immediately, while others may take
      months or years to implement. Exhibit 1 provides the summary for Evergreen’s
      recommendations that have a fiscal impact. A detailed fiscal summary chart is provided in
      Exhibit 5-2 of the full report.

                                                   Exhibit 1
                                           Fiscal Impact Summary

                                                     Years                                 Total 5-Year    One-Time
    Cost Savings                                                                            (Costs) or     (Costs) or
                          2010-11      2011-12      2012-13      2013-14      2014-15        Savings        Savings

TOTAL SAVINGS             $2,394,575   $3,151,655   $5,247,275   $6,297,575   $6,297,575    $23,388,655            $0

TOTAL COSTS               ($304,359)   ($274,359)   ($274,359)   ($274,359)   ($274,359)    ($1,401,795)    ($127,500)

TOTAL NET SAVINGS         $2,090,216   $2,877,296   $4,972,916   $6,023,216   $6,023,216    $21,986,860     ($127,500)

TOTAL FIVE-YEAR NET SAVINGS MINUS ONE-TIME SAVINGS                                                         $21,859,360




              Evergreen Solutions, LLC                                                               Page ix
                              CHAPTER 1:
                           INTRODUCTION




Evergreen Solutions, LLC
                                   1.0 INTRODUCTION
In January 2010, the Burke County Board of County Commissioners engaged Evergreen
Solutions, LLC, to conduct a performance and financial review of Burke County Public Schools
(BCPS). The overriding objective of this study was to assist Burke County Public Schools in
continuing to succeed and improve in its primary mission⎯the education of all students.

According to statistics provided on Burke County Public Schools by the North Carolina
Department of Public Instruction Web site, approximately 14,032 students were educated in
BCPS in 2007-08 school year. In 2007-08, the district consisted of 30 schools and employed
1,667 full-time staff, including 1,038 teachers. BCPS reported total per pupil expenditures of
$8,254 (which represents a state rank of 83 out of 115 school districts).


1.1       SCOPE OF STUDY
To fulfill the requirements of the contract with Burke County for the performance and financial
review, Evergreen Solutions:

      •   developed a detailed set of information about the status of each district fund source;

      •   developed a summary report of the status of district financial resources by fund source
          (federal, state, and local dollars);

      •   analyzed Burke County funding of Burke County Public Schools and the processes
          involved; and

      •   utilized findings to recommend strategies for improvements in the use of funds in Burke
          County Public Schools.


1.2       METHODOLOGY
Evergreen’s approach methodology for conducting this study included the following components:

      •   reviewing existing reports and data sources, including independent financial audits, annual
          budget and expenditure reports, budget guidelines and procedures, accounting procedures,
          salary schedules, organizational charts, staffing ratios, School Board policies, strategic
          plan, technology plan, and annual performance reports;

      •   conducting a diagnostic review and interviews with Board of Education members, County
          Commissioners, Burke County Manager and staff, BCPS Superintendent, and other BCPS
          administrators and staff;

      •   collecting additional reports and data from sources inside and outside the district;

      •   conducting the formal on-site view with a team of four consultants; and

      •   preparing draft and final reports.


          Evergreen Solutions, LLC                                                               Page 1-1
Introduction                                                                 Burke County Public Schools


Diagnostic Review

A diagnostic review of Burke County Public Schools was conducted in January 2010. Evergreen
consultants interviewed central office administrators and Board members concerning the
management and operations of Burke County Public Schools.

On-Site Review

A team of four consultants conducted the formal on-site review of Burke County Public Schools
during the week of February 21, 2010. Prior to conducting the on-site review, each team
member was provided with an extensive set of information about BCPS operations. During the
on-site work, team members conducted a detailed review of the structure and operations in their
assigned functional areas.


1.3       OVERVIEW OF THE REPORT
The final report for this study consists of the following five chapters:

      •   Chapter 2.0:   Fiscal Resources in Burke County Public Schools
      •   Chapter 3.0:   Review of Financial Operations and Management
      •   Chapter 4.0:   Review of Non-Financial Management and Operations
      •   Chapter 5.0:   Fiscal Impact of Recommendations

Chapters 3 through 4 contain findings, commendations, and recommendations for specific
operational areas, and provide the following sequence:

      •   a description of the operation in Burke County Public Schools;
      •   a summary of our study findings;
      •   a commendation or recommendation for each finding; and
      •   estimated costs or cost savings over a five-year period which are stated in 2010 dollars.

Throughout the report, Evergreen has made relevant comparisons between Burke County Public
Schools and a selected group of North Carolina peer school systems. This peer group included the
school districts of:

      •   Buncombe County
      •   Catawba County
      •   Cleveland County
      •   Henderson County
      •   Iredell-Statesville County

Exhibits 1-1 and 1-2 provide a brief comparison of the peer school systems. Exhibit 1-1 displays
the ratio of students per staff and students per school at BCPS and the peer school districts. As can
be seen, BCPS has a ratio of 7.4 students per staff and a ratio of 464.7 students per school. In
comparison to the peer districts, this figure is low. Peer districts average 7.9 students per one staff
member and 586 students per school. While the student per staff ratio is only slightly higher among
peer school districts, the students per school ratio at peer districts is 26.1 percent higher than at
BCPS.


          Evergreen Solutions, LLC                                                             Page 1-2
Introduction                                                                                 Burke County Public Schools


                                                Exhibit 1-1
                                      Overview of Peer School Systems
                                           2008-09 School Year
                                  Total S tudent   Total Number                     S tudents     S tudents Per
               S chool District   Population***     of S chools* Total S taff**     Per S taff        S chool
         Burke County                13,941             30            1,887            7.4            464.7
         Buncombe County             25,724             40            3,177            8.1            643.1
         Catawba County              17,560             28            2,027            8.7            627.1
         Cleveland County            16,496             29            2,230            7.4            568.8
         Henderson County            13,282             22            1,696            7.8            603.7
         Iredell-Statesville         21,291             35            2,729            7.8            608.3
         S ix-District Average       18,049             31            2,291            7.9            586.0
        Source: North Carolina Department of Public Instruction Web site, 2010.
        *Includes Combined Schools
        **Full-time positions only
        ***First Month: 2008-09 school year

Exhibit 1-2 displays the percentage of minority students, percentage of special education students,
and the per pupil expenditure at each peer district. The number of minority students was greatest
in Cleveland, Iredell-Statesville, and Catawba Counties, at 34 percent, 28.6 percent, and 26.4
percent respectively. BCPS was only one percentage point behind the district average of 27
percent. Additionally, the exhibit shows that 17.5 percent of BCPS students are served by special
education programs. This is 4.2 percent higher than the average, and 4.6 percent higher than the
next highest percentage (13.1 percent in Buncombe County).

Per pupil expenditures at BCPS are $8,254 whereas the average among peer counties is $8,185.
The two counties with higher per pupil expenditures are Buncombe and Cleveland counties, with
per pupil expenditures of $8,432 and $8,666, respectively. BCPS ranks 83 among the 115 school
districts in regards to per pupil expenditures. Chapter 2, which follows, contains additional peer
school district comparisons.

                                                Exhibit 1-2
                                      Overview of Peer School Systems
                                           2008-09 School Year
                                                        Percent S pecial
                                  Percent Minority        Education             Per Pupil        S tate Rank for
               S chool District       S tudents           S tudents*          Expenditure**      Expenditures**
        Burke County                    26.0%                17.5%                $8,254               83
        Buncombe County                 20.8%                13.1%                $8,432               73
        Catawba County                  26.4%                12.6%                $7,896              103
        Cleveland County                34.0%                12.6%                $8,666               67
        Henderson County                26.0%                12.0%                $8,034               97
        Iredell-Statesville             28.6%                12.2%                $7,830              106
         S ix-District Average           27.0%                13.3%              $8,185                88
         Source: North Carolina Department of Public Instruction Web site, 2010.
        *Unduplicated count of children ages 3-21 as of December 1, 2008.
        **Based on 2007-08 school year



         Evergreen Solutions, LLC                                                                                  Page 1-3
                                             CHAPTER 2:
                                    FISCAL RESOURCES IN
                           BURKE COUNTY PUBLIC SCHOOLS




Evergreen Solutions, LLC
                    2.0 FISCAL RESOURCES IN
                 BURKE COUNTY PUBLIC SCHOOLS

Chapter 2 describes the economic and financial environment of Burke County Public Schools
(BCPS). The chapter is divided into the following three major sections:

       2.1     Financial Data Review
               2.1.1 Average Daily Membership, Per Pupil Expenditures, and Per Pupil Capital
                      Outlay
               2.1.2 State, Federal, Local, and Total Per Pupil Expenditures
               2.1.3 County Appropriations

       2.2     School System Expenditures and Revenues
               2.2.1 Total Federal, State, and Local Expenditures
               2.2.2 Federal, State, and Local Expenditures by Category
               2.2.3 General Fund (Local Funds) Revenues

       2.3     School System Staffing
               2.3.1 State-Funded Staff
               2.3.2 Federal-Funded Staff
               2.3.3 Local-Funded Staff
               2.3.4 Salary and Benefits

An analysis of economic and financial information provides a basis for assessing operations and
practices, and for developing future program and operational decisions. This chapter provides an
analysis of resources provided to BCPS. The revenues and expenditures are organized by
funding source (state, federal, and local) and function. The information contained in this chapter
provides the foundation for discussing financial issues facing Burke County Public Schools.

Background data for Chapter 2 were compiled from the following sources:

   •   the State of North Carolina Department of Public Instruction (DPI) Web site containing
       published Statistical Profiles for 2007, 2008, and 2009;

   •   the State of North Carolina Department of Public Instruction Financial and Business
       Services; and

   •   the BCPS Financial Summary for the 2008-09 and 2009-10 school years.

Each presentation looks at the data with slightly different objectives. All data used in this
analysis are presented in exhibits identifying the source and any calculations performed.
Chapter 2 reviews data that the State of North Carolina has collected and is the basis for
comparisons to other school systems in the state. State reporting timelines, mid-year financial
transfers, and differences in the grouping of financial data by Burke County Public Schools and
the North Carolina Department of Public Instruction produce certain instances where financial



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Fiscal Resources in Burke County Public Schools                            Burke County Public Schools


data are not aligned. Additionally, numerical rounding can produce minor differences between
and among financial reports.


2.1     FINANCIAL DATA REVIEW
The State of North Carolina has 115 school districts⎯Wake County being the largest with an
average daily membership (ADM) of 133,215 in FY 2008 and total per pupil expenditures of
$8,119, and Tyrrell County being the smallest with an ADM of 558 and total per pupil
expenditures of $16,273. For the 2007-08 school year, BCPS was the 28th largest district with an
ADM of 14,032. For 2007-08, BCPS ranked 83rd in per pupil expenditures (PPE) and 82nd in the
per pupil capital outlay five-year average (PPCO).

The most recent North Carolina Statistical Profile contains confirmed 2007-08 data including per
pupil expenditures and per pupil capital outlay. This profile was released shortly after we
initiated this study. This state publication allowed comparisons to be made among school
districts with the latest available data.


2.1.1 AVERAGE DAILY MEMBERSHIP, PER PUPIL EXPENDITURES, AND PER
      PUPIL CAPITAL OUTLAY

Exhibit 2-1 provides average daily membership, per pupil expenditures, and per pupil capital
outlay for BCPS and five comparison school systems for the 2005-06 thru 2007-08 school years.
As can be seen, Henderson County is the smallest of the six districts, while Buncombe County
and Iredell-Statesville are the largest in comparison to the other school districts, ranking 11th and
17th respectfully. As the exhibit shows, the variance in per pupil expenditures among the school
districts is relatively small, with the greatest difference existing between Iredell-Statesville and
Cleveland County, with PPE’s of $7,830 and $8,666, respectively.

As can be seen, the BCPS PPE ranking declined from 2005-06 to 2007-08; BCPS had a PPE
rank of 104 in 2005-06, 96 in 2006-07, and 83 in 2007-08. BCPS also moved down in PPCO
ranking from being 61 in 2005-06 to 82 in 2007-08. Additionally, BCPS per pupil expenditures
increased from $6,976 in 2005-06 to $8,254 in 2007-08, with a slight decrease in ADM of
approximately 1.6 percent over the same period.

Analyzing alignment with statewide averages provides an overview of how BCPS compares to
all school districts within the state. BCPS has improved its alignment with the average statewide
PPE over the three-year period, decreasing from an 8.2 percent deviation from the average
statewide PPE in 2005-06 to a 3.1 percent deviation in 2007-08. Inversely, BCPS’s deviation
from the statewide PPCO five-year average increased over the same three-year period.

Exhibit 2-2 compares the change in ADM in Burke County Public Schools and the peer school
districts over a three-year period. As can be seen, three of the districts—Iredell-Statesville,
Catawba, and Henderson—experienced a growth rate greater than two percent (5.1 percent, 2.8
percent, and 2.5 percent, respectively). In contrast, the Buncombe County student enrollment
grew by 0.5 percent while both Burke and Cleveland County student enrollments declined by 1.6
percent and 1.8 percent, respectively.


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Fiscal Resources in Burke County Public Schools                                             Burke County Public Schools


                                           Exhibit 2-1
                   Final Average Daily Membership, Per Pupil Expenditures, and
                                     Per Pupil Capital Outlay
                              2005-06 through 2007-08 School Years

                                                                                             Per Pupil Capital Outlay
                              Average Daily Membership Total Per Pupil Expenditures               Five-Year Avg
                                 Number            Rank          Number           Rank          Number        Rank
        S chool District                                                 2007-08
  Burke County                      14,032         28             $8,254           83            $290             82
  Buncombe County                   25,367         11             $8,432           73            $652             43
  Catawba County                    17,475         24             $7,896           103           $821             33
  Cleveland County                  16,580         25             $8,666           67            $322             78
  Henderson County                  12,887         30             $8,034           97            $207             102
  Iredell-Statesville               21,236         17             $7,830           106           $570             47
  S ix-District Average             17,930                        $8,185                         $477
  S tatewide Average                                              $8,522                         $849
                                                                         2006-07
  Burke County                      14,055         28             $7,599           96            $385             71
  Buncombe County                   25,418         11             $7,859           78            $699             30
  Catawba County                    17,332         24             $7,416           102           $763             26
  Cleveland County                  16,760         25             $8,112           70            $313             81
  Henderson County                  12,792         30             $7,682           89            $208             102
  Iredell-Statesville               20,792         17             $7,174           108           $510             49
  S ix-District Average             17,858                        $7,640                         $480
  S tatewide Average                                              $8,017                         $786
                                                                         2005-06
  Burke County                      14,263         28             $6,976           104           $433             61
  Buncombe County                   25,236         10             $7,473           74            $718             31
  Catawba County                    17,004         24             $7,028           101           $663             34
  Cleveland County                  16,878         25             $7,698           65            $321             76
  Henderson County                  12,578         30             $7,441           79            $212             100
  Iredell-Statesville               20,201         18             $6,813           107           $691             32
  S ix-District Average             17,693                        $7,238                         $506
  S tatewide Average                                              $7,596                         $763
   Source: Data obtained from Table 29 of NC Statistical Profiles 2007, 2008 and Table 28 for 2009.

                                                  Exhibit 2-2
                                      Average Daily Membership Change
                                    2005-206 through 2007-08 School Years



                              ADM Change from      Percent   ADM Change from      Percent    ADM Change from        Percent
        School District       2005-06 to 2006-07   Change    2006-07 to 2007-08   Change     2005-06 to 2007-08     Change
Burke County                        -208            -1.5%           -23            -0.2%           -231              -1.6%
Buncombe County                      182             0.7%           -51            -0.2%            131               0.5%
Catawba County                       328             1.9%           143             0.8%            471               2.8%
Cleveland County                    -118            -0.7%          -180            -1.1%           -298              -1.8%
Henderson County                     214             1.7%            95             0.7%            309               2.5%
Iredell-Statesville                  591             2.8%           444             2.1%           1,035              5.1%
                      Average        165            0.8%             71            0.4%             236              1.2%
Source: Created by Evergreen Solutions, February 2010.




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Fiscal Resources in Burke County Public Schools                                                     Burke County Public Schools


2.1.2 STATE, FEDERAL, LOCAL, AND TOTAL PER PUPIL EXPENDITURES

Exhibit 2-3 displays per pupil expenditures (PPE) by state, federal, and local funding sources for
BCPS and the comparison school districts. As can be seen, from 2005-06 to 2007-08, the BCPS
total PPE increased by $1,277.50, which was more than the statewide average change of
$925.51. From 2006-07 to 2007-08, Burke County’s total PPE increased by $655.03, which was
more than the statewide average change of $504.24. This shift over the three-year period moved
Burke County Public Schools from 104 to 83 in state PPE ranking.

Further analysis was conducted by comparing BCPS to peer districts. As can be seen, state and
federal expenditures in BCPS were greater than the peer district average during 2007-08.
However, during the same year, local expenditures in BCPS were lower than the peer average of
$1,877.91 by $274.41, or 14.6 percent. Historically, the state and federal PPE for BCPS have
been higher than both the statewide average and the peer district average whereas the local PPE
has been lower than both the statewide and peer district average figures.

                                                Exhibit 2-3
                       State, Federal, Local and Total Per Pupil Expenditures (PPE)
                                  2005-06 through 2007-08 School Years
                                         State                    Federal                       Local                    Total
                                   PPE           Rank       PPE             Rank          PPE           Rank      PPE            Rank
           School District                                                         2007-08
Burke County                    $5,689.78         72      $960.54           53          $1,603.50        72     $8,253.82         83
Buncombe County                 $5,526.20         89      $728.61           91          $2,176.71        28     $8,431.52         73
Catawba County                  $5,468.53         93      $570.01           103         $1,857.45        46     $7,895.99        103
Cleveland County                $5,897.67         60      $897.10           59          $1,871.71        45     $8,666.48         67
Henderson County                $5,451.14         96      $781.13           84          $1,801.30        50     $8,033.57         97
Iredell-Statesville             $5,274.85        106      $598.21           102         $1,956.81        40     $7,829.87        106
Six-District Average            $5,551.36                 $755.93                       $1,877.91               $8,185.21
Statewide Average               $5,616.02                 $830.49                       $2,075.15               $8,521.66
                                                                                   2006-07
Burke County                    $5,445.11         69      $907.18           56          $1,246.50        95     $7,598.79         96
Buncombe County                 $5,180.93         89      $712.92           92          $1,965.60        26     $7,859.45         78
Catawba County                  $5,132.58         97      $601.81           102         $1,682.08        50     $7,416.47        102
Cleveland County                $5,508.58         64      $911.92           54          $1,691.69        49     $8,112.19         70
Henderson County                $5,164.43         91      $813.86           76          $1,704.05        47     $7,682.34         89
Iredell-Statesville             $4,886.44        110      $647.09           97          $1,640.17        53     $7,173.70        108
Six-District Average            $5,219.68                 $765.80                       $1,655.02               $7,640.49
Statewide Average               $5,273.88                 $809.49                       $1,934.05               $8,017.42
                                                                                   2005-06
Burke County                    $4,990.02         74      $829.46           71          $1,156.84       100     $6,976.32        104
Buncombe County                 $4,802.49         93      $744.22           86          $1,926.14        28     $7,472.85         74
Catawba County                  $4,818.74         90      $626.39           100         $1,582.74       55      $7,027.87        101
Cleveland County                $5,174.12         57      $846.39           62          $1,677.88        45     $7,698.39         65
Henderson County                $4,923.23         79      $832.95           69          $1,684.71        41     $7,440.89         79
Iredell-Statesville             $4,621.60        104      $636.19           98          $1,554.78       60      $6,812.57        107
Six-District Average            $4,888.37                 $752.60                       $1,597.18               $7,238.15
Statewide Average               $4,903.60                 $819.41                       $1,873.14               $7,596.15
Source: Data obtained from Table 24 of NC Statistical Profiles 2007, 2008, and 2009.




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Fiscal Resources in Burke County Public Schools                                              Burke County Public Schools


Exhibit 2-4 presents the change in PPE by funding source for each school system. As the
exhibit shows, local PPE in BCPS increased by $89.66 from 2005-06 to 2006-07, which
represented a 7.8 percent increase. From 2006-07 to 2007-08, local PPE in BCPS increased by
$357.00, or 28.6 percent. The local PPE increased for BCPS by a net percentage of
approximately 38.6 percent over the three-year period, while the statewide net percentage
increased by 12.2 percent. Over the same three-year period, the state PPE for BCPS increased by
a net 14 percent compared to the statewide average PPE increase of approximately 14.5 percent.
Federal PPE for BCPS changed by 15.8 percent, whereas the statewide average increased by a
net of 1.4 percent.

                                               Exhibit 2-4
                                 Changes in Per Pupil Expenditures (PPE)
                                  2005-206 through 2007-08 School Years

                                     S tate                     Federal                 Local               Total
                                           Percent                   Percent                 Percent             Percent
                                 PPE       Change           PPE      Change       PPE        Change     PPE     Change
         S chool District                                       Change from 2006-07 to 2007-08
Burke County                   $244.67      4.5%         $53.36        5.9%     $357.00       28.6%    $655.03    8.6%
Buncombe County                $345.27      6.7%          $15.69       2.2%     $211.11       10.7%    $572.07    7.3%
Catawba County                 $335.95      6.5%         ($31.80)     -5.3%     $175.37       10.4%    $479.52    6.5%
Cleveland County               $389.09      7.1%         ($14.82)     -1.6%     $180.02       10.6%    $554.29    6.8%
Henderson County               $286.71      5.6%         ($32.73)     -4.0%      $97.25       5.7%     $351.23    4.6%
Iredell-Statesville            $388.41      7.9%         ($48.88)     -7.6%     $316.64       19.3%    $656.17    9.1%
S ix-District Average          $331.68      6.4%          ($9.86)     -1.7%     $222.90       14.2%    $544.72    7.2%
S tatewide Average             $342.14      6.5%         $21.00        2.6%     $141.10       7.3%     $504.24    6.3%
                                                                Change from 2005-06 to 2006-07
Burke County                   $455.09      9.1%         $77.72        9.4%      $89.66       7.8%     $622.47    8.9%
Buncombe County                $378.44      7.9%         ($31.30)     -4.2%      $39.46       2.0%     $386.60    5.2%
Catawba County                 $313.84      6.5%         ($24.58)     -3.9%      $99.34       6.3%     $388.60    5.5%
Cleveland County               $334.46      6.5%          $65.53       7.7%      $13.81       0.8%     $413.80    5.4%
Henderson County               $241.20      4.9%         ($19.09)     -2.3%      $19.34       1.1%     $241.45    3.2%
Iredell-Statesville            $264.84      5.7%          $10.90       1.7%      $85.39       5.5%     $361.13    5.3%
S ix-District Average          $331.31      6.8%          $13.20       1.4%      $57.83       3.9%     $402.34    5.6%
S tatewide Average             $370.28      7.6%          ($9.92)     -1.2%      $60.91       3.3%     $421.27    5.5%
Source: Created by Evergreen Solutions, February 2010.



When comparing BCPS to the six-district average, BCPS realized a greater increase in total PPE
than the other school districts. From 2005-06 to 2006-07, the PPE in BCPS increased by 8.9
percent, compared to the 5.6 percent average for peer districts. BCPS also saw a larger increase
in PPE than its peers from 2006-07 to 2007-08, with an increase of 8.6 percent compared to the
district average of 7.2 percent. The exception was Iredell-Statesville with a PPE increase of 9.1
percent.


2.1.3 COUNTY APPROPRIATIONS

Local revenue is directly related to county appropriations. Per Pupil Appropriation (PPA)
measures how much a county contributes per pupil to operate its school district. Per pupil
appropriations for the past three years in BCPS and the peers are shown in Exhibit 2-5. As can



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Fiscal Resources in Burke County Public Schools                                        Burke County Public Schools


be seen, statewide, BCPS has moved from ranking 86 in PPA to 88, with a 2.8 percent increase
in 2006-07 and a 2.7 percent increase in 2007-08. BCPS had a lower percentage increase among
the six peer districts and was four (4) percentage points lower than the state average for 2007-08.
In contrast, 2005-06 reflected that the percentage increase in BCPS was the second most among
the peers and larger than the statewide average increase of four (4) percent.

The average PPA in BCPS for the three-year period is $943; this is $336 (26.3 percent) less than
the peer district (without BCPS) average of $1,278 and $628 (40 percent) less than the statewide
average of $1,571. The peer district average appropriation for the three-year period is $25.4
million, whereas the BCPS average is just $13.3 million during the same three-year period. The
$13.3 million is calculated by averaging the total appropriation to BCPS for the three-year
period. The $25.4 million dollar is calculated by averaging the peer district appropriation
amounts (see the “Amount” column in Exhibit 2-5) for all three years.

                                        Exhibit 2-5
                County Appropriations and Supplemental Taxes for Education
                          2005-06 through 2007-08 School Years

                                                                                     Per Pupil        Percent
                                                                              Appropriation Change Increase from
                                        Amount          PPA         Rank          from Prior Year    Prior Year
             S chool District                                              2007-08
    Burke County                      $13,580,000       $968         88                 $25             2.7%
    Buncombe County                   $43,829,784      $1,728        24                 $105            6.5%
    Catawba County                    $24,010,760      $1,374        52                 $147           12.0%
    Cleveland County                  $19,026,043      $1,148        71                  $20            1.8%
    Henderson County                  $18,521,651      $1,437        43                  $74            5.4%
    Iredell-Statesville               $29,932,382      $1,410        48                  $98            7.5%
    S ix-District Average            $24,816,770       $1,344                           $78             6.0%
    S tatewide Average                                 $1,670                           $105            6.7%
                                                                           2006-07
    Burke County                      $13,260,163       $943         85                 $26             2.8%
    Buncombe County                   $41,241,568      $1,623        24                 $130            8.7%
    Catawba County                    $21,266,939      $1,227        59                  $19            1.6%
    Cleveland County                  $18,897,643      $1,128        67                  $15            1.3%
    Henderson County                  $17,436,794      $1,363        42                  $20            1.5%
    Iredell-Statesville               $27,271,419      $1,312        46                  $37            2.9%
    S ix-District Average            $23,229,088       $1,266                           $41             3.1%
    S tatewide Average                                 $1,565                           $88             6.0%
                                                                          2005-06*
    Burke County                      $13,072,948       $917         86                 $58             6.8%
    Buncombe County                   $37,667,684      $1,493        26                 $61             4.3%
    Catawba County                    $20,543,012      $1,208        51                  $92            8.2%
    Cleveland County                  $18,782,427      $1,113        64                  $29            2.7%
    Henderson County                  $16,891,418      $1,343        35                  $43            3.3%
    Iredell-Statesville               $25,757,723      $1,275        43                  $40            3.2%
    S ix-District Average            $22,119,202       $1,225                           $54             4.7%
    S tatewide Average                                 $1,477                           $57             4.0%
    Source: Data obtained from Table 30 of NC Statistical Profiles 2007, 2008 and Table 29 for 2009.
    * change from prior year data calculated using data available, but not displayed from 2004-05.




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Fiscal Resources in Burke County Public Schools                                    Burke County Public Schools


2.2     SCHOOL SYSTEM EXPENDITURES AND REVENUES
Expenditure and revenue information allow benchmark data to be compiled and analyzed so that
comparisons can be made between BCPS and the peer districts. The following subsections show
expenditures for BCPS and the peer districts as well as present revenue sources in BCPS
provided by the district. Unlike previous exhibits, the exhibits in this section do not provide
comparisons to statewide averages because this information was not available for the data
presented.


2.2.1   FEDERAL, STATE, AND LOCAL EXPENDITURES

There are three major revenue sources that comprise the BCPS budget. These include federal,
state, and general (local) funds. BCPS realizes slightly more state and federal expenditures than
the peer average of 67.9 percent and 9.2 percent, respectively.

Exhibit 2-6 illustrates the total expenditures by source in BCPS and the peer school districts. As
shown, local expenditures in BCPS are lower than all peer school districts at 19.4 percent of total
expenditures, which is 3.6 percent lower than the peer school average of 23 percent.


                                        Exhibit 2-6
                  Comparison of Expenditure Sources in Peer School Districts
                           2005-06 through 2007-08 School Years
                                                 Federal     S tate        Local      Total
                      S chool District                                2007-08
             Burke County                        11.7%       68.9%         19.4%      100.0%
             Buncombe County                      8.7%       65.5%         25.8%      100.0%
             Catawba County                       7.2%       69.3%         23.5%      100.0%
             Cleveland County                    10.3%       68.1%         21.6%      100.0%
             Henderson County                     9.7%       67.9%         22.4%      100.0%
             Iredell-Statesville                  7.6%       67.4%         25.0%      100.0%
             S ix-District Average               9.2%        67.9%         23.0%      100.0%
                                                                      2006-07
             Burke County                        11.9%       71.7%         16.4%      100.0%
             Buncombe County                      9.1%       65.9%         25.0%      100.0%
             Catawba County                       8.1%       69.2%         22.7%      100.0%
             Cleveland County                    11.2%       67.9%         20.9%      100.0%
             Henderson County                    10.6%       67.2%         22.2%      100.0%
             Iredell-Statesville                  9.0%       68.1%         22.9%      100.0%
             S ix-District Average               10.0%       68.3%         21.7%      100.0%
                                                                      2005-06
             Burke County                         11.9%      71.5%         16.6%      100.0%
             Buncombe County                       9.9%      64.3%         25.8%      100.0%
             Catawba County                        8.9%      68.6%         22.5%      100.0%
             Cleveland County                     11.0%      67.2%         21.8%      100.0%
             Henderson County                     11.2%      66.2%         22.6%      100.0%
             Iredell-Statesville                   9.4%      67.8%         22.8%      100.0%
             S ix-District Average                10.4%      67.6%         22.0%      100.0%
            Source: NC Statistical Profiles Part II, 2010.



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Fiscal Resources in Burke County Public Schools                                                    Burke County Public Schools


2.2.2     FEDERAL, STATE, AND LOCAL EXPENDITURES BY CATEGORY

Exhibit 2-7 displays expenditures by category as a percentage of total expenditures. This exhibit
shows that, for 2007-08, BCPS expended approximately 67.9 percent of funds on salaries, which
was only slightly higher than the peer average of 67.1 percent. Further information on salary and
benefit expenditures is provided in Section 2.3. In order to describe the revenue for Burke
County Public Schools in detail, Evergreen consultants separated expenditures into state, federal,
and local funds in the following subsections.

                                                Exhibit 2-7
                        Comparison of Total Expenditures by Category in Peer Districts
                                  2005-06 through 2007-08 School Years

                                                                    Purchased      S upplies and   Instructional   Other
                                          S alaries      Benefits    S ervices       Materials      Equipment      Objects
                   S chool District                                              2007-08
          Burke County                     67.9%          17.3%       6.8%             7.4%            0.6%         NA
          Buncombe County                  68.3%          16.8%       5.6%             8.0%            1.3%         NA
          Catawba County                   66.4%          16.1%       6.5%             9.6%            1.4%         NA
          Cleveland County                 66.5%          16.8%       7.0%              8.7%           1.0%         NA
          Henderson County                 67.1%          16.6%       6.4%              8.9%           1.0%         NA
          Iredell-Statesville              66.3%          16.6%       6.1%             10.8%           0.2%         NA
          S ix-District Average            67.1%          16.7%       6.4%             8.9%            0.9%
                                                                                 2006-07
          Burke County                     68.4%          16.7%       6.1%             7.7%            0.6%         0.5%
          Buncombe County                  69.7%          16.3%       5.5%             7.1%            0.7%         0.7%
          Catawba County                   67.5%          15.8%       6.3%              8.4%           1.6%         0.4%
          Cleveland County                 66.7%          16.0%       6.4%              9.7%           0.7%         0.5%
          Henderson County                 67.5%          16.1%       6.6%              8.4%           0.9%         0.5%
          Iredell-Statesville              68.2%          16.2%       5.9%              8.7%           0.4%         0.6%
          S ix-District Average            68.0%          16.2%       6.1%             8.3%            0.8%         0.5%
                                                                                 2005-06
          Burke County                     67.7%          16.6%       6.2%             8.2%            0.7%         0.6%
          Buncombe County                  68.9%          16.4%       5.3%             8.0%            0.6%         0.8%
          Catawba County                   66.5%          15.6%       6.7%              9.0%           1.7%         0.5%
          Cleveland County                 65.9%          15.7%       7.0%             10.1%           1.0%         0.3%
          Henderson County                 66.0%          15.7%       7.4%              9.4%           0.9%         0.6%
          Iredell-Statesville              67.4%          16.3%       5.8%              9.5%           0.4%         0.6%
          S ix-District Average            67.1%          16.1%       6.4%             9.0%            0.9%         0.6%
        Source: NC Statistical Profiles Part II, 2010.



2.2.3 GENERAL FUND (LOCAL FUNDS) REVENUES

Local funding accounts for $16.3 million of the revenue in Burke County Public Schools in
2009-10. Exhibit 2-8 lists the local revenue sources as prepared in the 2009-10 Local Current
Expense Budget on the BCPS Web site. This exhibit compares the last two fiscal years and
shows changes in the fiscal resources contributing to total local revenue.

As shown, BCPS appropriations increased $164,127 or 1.2 percent from 2008-09 to 2009-10.
Local revenues recorded by BCPS slightly decreased overall from 2008-09 to 2009-10 (0.3
percent). Other local revenues include fines and forfeitures, interest earnings, and e-rate
reimbursements.


           Evergreen Solutions, LLC                                                                                        Page 2-8
Fiscal Resources in Burke County Public Schools                                         Burke County Public Schools


                                                   Exhibit 2-8
                                           BCPS Local Revenue Sources
                                         2008-09 and 2009-10 School Year

                                                                                       Increase or (Decrease)
                                                                                        from Previous Year
                                                           2008-09        2009-10       Dollar
                       Revenue Source                      Budget         Budget       Amount       Percentage
        County Appropriation                              $13,870,000    $14,034,127    $164,127          1.2%
        Charter Schools                                      $120,000       $120,000          $0          0.0%
        Contracted Services Nurses                           $200,000       $210,000     $10,000          5.0%
        Fines and Forfietures                                $700,000       $700,000          $0          0.0%
        Sales and Use Tax Refund                              $80,000       $100,000     $20,000         25.0%
        Medicaid Reimbursement                               $130,000       $140,000     $10,000          7.7%
        Federal Revenue - ROTC                               $125,000       $135,000     $10,000          8.0%
        Tuition                                                $4,000         $5,000      $1,000         25.0%
        Rental of School Property                             $15,000        $30,000     $15,000        100.0%
        Interest Earned on Investments                        $85,000        $80,000     ($5,000)        -5.9%
        Miscellaneous Revenue                                  $6,000        $12,000      $6,000        100.0%
        Miscellaneous Revenue - Parking Security              $30,000        $30,000          $0          0.0%
        E-rate Reimbursement                                   $5,000        $15,000     $10,000        200.0%
        Workers' Compensation Reserve                        $130,000       $130,000          $0          0.0%
        Insurance Settlements - School Property                $3,500         $3,500          $0          0.0%
        Indirect Cost Allocated                              $260,000       $280,000     $20,000          7.7%
        Indirect Cost - Child Nutrition Program              $200,000       $240,000     $40,000         20.0%
        Fund Balance Appropriated                             $350,000             $0 ($350,000)       -100.0%
        Total Revenue from Local Sources                   $16,313,500 $16,264,627       -$48,873        -0.3%
      Source: Burke County Public Schools "2009-10 Local Current Expense Budget", December 2009.




2.3      SCHOOL SYSTEM STAFFING
Exhibit 2-9 presents selected data items on BCPS staffing, including full-time administrators
and teachers, as well as the breakdown by funding source. In 2008-09, state funding provided 77
percent of total BCPS staff, local funding provided 15.2 percent, and federal funding provided
7.8 percent.

BCPS administrators comprise 3.4 percent of the full-time staff while teachers comprise 61.8
percent. As reported to the State of North Carolina, the number of administrative positions
decreased by eight from 2006-07 to 2007-08, and increased by ten from 2007-08 to 2008-09; this
equates to a net increase of two administrative positions. Local fund support for these positions
decreased from ten positions in 2006-07 to eight positions in the following two years.
Alternatively, the number of locally-funded teacher positions increased from 21 positions in
2006-07 to 66 positions in 2008-09. Since the state-collected data only include full-time
positions, a district’s decision to use a significant number of part-time positions in any capacity
could skew these totals.


         Evergreen Solutions, LLC                                                                               Page 2-9
Fiscal Resources in Burke County Public Schools                                          Burke County Public Schools


                                               Exhibit 2-9
                                      Burke County Public Schools
                                     Three-Year Staffing Summary
                               2006-07, 2007-08, and 2008-09 School Years

                                         2006-07                          2007-08                            2008-09
                                      Administrators      Change       Administrators        Change       Administrators
         Administrators           Full-Time    % Total             Full-Time    % Total               Full-Time    % Total
State                                51         82.3%       (5)       46         85.2%         10        56         87.5%
Federal                                1           1.6%     (1)         0           0.0%       0           0           0.0%
Local                                 10          16.1%     (2)         8          14.8%        0          8          12.5%
Total                                 62         100.0%     (8)        54         100.0%       10         64         100.0%
% Total Full-Time Employees         3.5%                             3.2%                               3.4%
                                          2006-07                          2007-08                            2008-09
                                      Total Teachers                   Total Teachers                     Total Teachers
             Teachers             Full-Time     % Total            Full-Time     % Total              Full-Time     % Total
State                                867          88.7%    (29)       838          80.7%      165       1,003         86.0%
Federal                               90           9.2%    10         100           9.6%       (3)        97           8.3%
Local                                 21           2.1%    79         100           9.6%      (34)        66           5.7%
Total                                978         100.0%    60        1,038        100.0%      128       1,166        100.0%
% Total Full-Time Employees        54.9%                            62.3%                              61.8%
                                          2006-07                          2007-08                            2008-09
                                          Total Staff                      Total Staff                        Total Staff
               Staff              Full-Time     % Total            Full-Time     % Total              Full-Time     % Total
State                               1,350         75.8%     (32)     1,318         79.1%      135       1,453         77.0%
Federal                              131           7.4%      3        134           8.0%       13        147          7.8%
Local                                301          16.9%     (86)      215          12.9%       72        287          15.2%
Total                               1,782        100.0%    (115)     1,667        100.0%      220       1,887        100.0%
% Total Full-Time Employees        100.0%                           100.0%                             100.0%
Source: Created by Evergreen Solutions, February 2010.



2.3.1 STATE-FUNDED STAFFING

Burke County Public Schools receives approximately 77 percent of its staff funding from the
State of North Carolina. State educational funds are allocated using formulas to determine the
appropriate amount of funding in various categories. According to the North Carolina
Department of Public Instruction (Source: http://www.ncpublicschools.org/docs/fbs/allotments/general/2008-
09policymanual.pdf), some of the formulas used to fund North Carolina school systems include:

    •    Central Office Administration - Provides funding for salaries and benefits for central
         office administration. County school systems with an average daily membership (ADM)
         range of 10,000 – 14,999 receive a base amount of $600,000, plus $90,000 for each
         additional 5,000 students. This category is used to pay for personnel including:

              Superintendent
              Directors/Supervisors/Coordinators
              Associate and Assistant Superintendents
              Finance Officers
              Child Nutrition Supervisors/Managers
              Community Schools Coordinators/Directors
              Athletic Trainers
              Health Education Coordinators


          Evergreen Solutions, LLC                                                                        Page 2-10
Fiscal Resources in Burke County Public Schools                             Burke County Public Schools


            Maintenance Supervisors
            Transportation Directors

    •   Classroom Teachers - Provides guaranteed funding for salaries for classroom teachers.
        To qualify as a classroom teacher and to be charged against this allotment, an individual
        must spend a major portion of the school day providing classroom instruction and must
        not be assigned to administrative duties in either the central or school offices. If a local
        education agency (LEA) decides to employ a math/science/computer teacher, this
        individual does not have to spend a portion of the school day providing classroom
        instruction.

        Teachers are allotted by the state based on the number of students (based on allotted
        ADM) and rounded to the nearest one-half position on these ratios:

                          Grades              Number of Students for
                                              One Teacher Allotment

                          K-3                            18
                          4-6                            22
                          7-8                            21
                          9                             24.5
                          10-12                        26.64


    •   Instructional Support Personnel (Certified) - Provides funding for salaries for certified
        instructional support personnel to implement locally designed initiatives which provide
        services to students who are at risk of school failure as well as the students' families. It is
        the intent of the General Assembly that the positions must be used first for counselors,
        then for social workers and other instructional support personnel who have a direct
        instructional relationship to students or teachers to help reduce violence in the public
        schools. These positions are allotted on the basis of one per 200.10 allotted ADM. The
        positions are then multiplied by the LEA's average salary plus benefits. These positions
        cannot be used as administrators, coordinators, supervisors, or directors.

    •   Non-Instructional Support Personnel - Provides funding for non-instructional support
        personnel and associated benefits. These funds may be used at the central office or at
        individual schools. Funds are allotted on the basis of dollars per allotted ADM. These
        funds may be used for:

            Clerical Assistants
            Custodians
            Duty Free Period
            Liability Insurance
            Substitutes
            Textbook Commission - Clerical Assistant




        Evergreen Solutions, LLC                                                             Page 2-11
Fiscal Resources in Burke County Public Schools                            Burke County Public Schools


    •   School Building Administration - Provides funding for salaries including benefits for
        principals and assistant principals with this allocation:

            Principals: Each school with 100 or more pupils in final ADM and/or seven or more
            full-time state allotted/paid teachers and instructional support personnel (based on
            prior year sixth pay period) is entitled to 12 months of employment for a principal.

            Assistant Principals: One month of employment per 80 allotted ADM, rounded to
            the nearest whole month. The total months are then multiplied by the LEA's average
            monthly salary (based on prior year 6th pay period plus LI) plus benefits.

    •   Teacher Assistants - Provides funding for salaries and benefits for regular and self-
        contained teacher assistants. Funds are allotted based on allotted ADM in grades K-3.
        Benefits are included.

    •   Other formulas used to determine school system funding include:

            ABC Incentive Awards
            Academically or Intellectually Gifted
            At-Risk Student Services/Alternative Schools
            Children With Disabilities
            Small County Supplemental Funding

The State of North Carolina maintains a statewide salary schedule for instructional certified staff;
most revenue received from the State is used for compensation. The state allotment formulas
generate a base allotment for many positions within a school system.

Exhibit 2-10 provides a comparison of state-provided, full-time employees in BCPS and the
comparison districts. As Exhibit 2-10 shows, BCPS student per full-time employee ratio in
2006-07 is 10.4 (14,055 ADM divided by 1,350 full-time employees). In comparison to each of
the peer districts, this figure is approximately in the middle. The different staffing ratios for each
district are the result of the unique characteristics of that district’s student population being
applied to the state allocation formula.

In 2007-08, the comparison district average ADM was 18,709 with 1,824 full-time employees.
This results in a student to full-time employee ratio of 10.3, which is somewhat below that of
BCPS. In order for BCPS to achieve a ratio exactly on the average of its peers, the district would
either have to gain staff or lose students. If BCPS hired approximately 50 new full-time staff
members, this would yield a new student to full-time employee ratio of 10.3 [(14,032 students) /
(1,318 + 50 staff)]. Alternatively, if the district lost 457 students, the resulting ratio would again
be equal to the average of the peers [(14,032 – 457 students) / (1,318 staff)].




        Evergreen Solutions, LLC                                                            Page 2-12
Fiscal Resources in Burke County Public Schools                                          Burke County Public Schools


                                              Exhibit 2-10
                                     Comparison District Analysis
                                      State-Supported Employees
                               2006-07, 2007-08 and 2008-09 School Years

                                               2006-07                    2007-08                       2008-09

                                                         State                     State                        State
                                      Average Daily    Provided Average Daily    Provided Average Daily       Provided
           School District            Membership      Employees Membership      Employees Membership         Employees
Burke County                             14,055         1,350      14,032         1,318        NA              1,453
  Students per Employee                                       10.4                      10.6
Buncombe County                          25,418         2,373      25,367         2,400        NA                 2,356
  Students per Employee                                       10.7                      10.6
Catawba County                           17,332         1,572      17,475         1,628        NA                 1,610
  Students per Employee                                       11.0                      10.7
Cleveland County                         16,760         1,697      16,580         1,665        NA                 1,680
  Students per Employee                                        9.9                      10.0
Henderson County                         12,792         1,211      12,887         1,253        NA                 1,213
  Students per Employee                                       10.6                      10.3
Iredell-Statesville                      20,792         2,091      21,236         2,174        NA                 2,080
  Students per Employee                                        9.9                       9.8
Comparison District Average              18,619         1,789      18,709         1,824         0                 1,490
  Students per Employee                                       10.4                      10.3                              0.0

Full-Time Employee Change
Required for Burke County Staffing
to Equal Comparison District
Average Student per Full-Time
Employee                                                   0.3                       50.0         NA              N/A
Burke County Staffing at
Comparison District Average
Student per Full-Time Employee          14,055.0         1,350.3   14,032.0         1,368.0       N/A             N/A
Difference from Comparison District
Average Daily Membership
                                        4,564.0        439.0        4,677.0         456.0         N/A              N/A
Comparison District Average              18,619        1,789        18,709          1,824         0.0             1,490
Source: Created by Evergreen Solutions, February 2010.



Exhibits 2-11 and 2-12 provide a similar analysis for administrators and teachers allocated by
the state formula. Exhibit 2-11 shows that, in 2006-07, BCPS had one full-time administrator for
every 276 students. In comparison, the average in the peers was one full-time administrator per
291 students. Exhibit 2-12 shows that, in 2006-07, BCPS had one full-time teacher for every
16.2 students. The average of the comparison districts is one full-time teacher per 16.7 students.




         Evergreen Solutions, LLC                                                                          Page 2-13
    Fiscal Resources in Burke County Public Schools                                             Burke County Public Schools


                                                       Exhibit 2-11
                                               Comparison District Analysis
                                             State-Supported Administrators
                                         2006, 2007-08, and 2008-09 School Years

                                                      2006-07                        2007-08                  2008-09
                                                                  State                       State                    State
                                          Average Daily         Provided    Average Daily Provided Average Daily Provided
             School District              Membership             Admin      Membership       Admin     Membership     Admin
Burke County                                 14,055                51          14,032          46         NA            56
  Students per Employee                                               275.6                      305.0
Buncombe County                              25,418                91          25,367          81         NA            82
  Students per Employee                                               279.3                      313.2
Catawba County                               17,332                61          17,475          62         NA            60
  Students per Employee                                               284.1                      281.9
Cleveland County                             16,760                60          16,580          63         NA            62
  Students per Employee                                               279.3                      263.2
Henderson County                             12,792                39          12,887          20         NA            47
  Students per Employee                                               328.0                      644.4
Iredell-Statesville                          20,792                69          21,236          75         NA            73
  Students per Employee                                               301.3                      283.1
Comparison District Average                  18,619                64          18,709          60         0.0           65
  Students per Employee                                               290.9                      310.8                       0.0

Full-Time Employee Change Required
for Burke County Staffing to Equal
Comparison District Average Student
per Full-Time Employee
                                                                  -2.7                       -0.8          N/A          N/A
Burke County Staffing at Comparison
District Average Student per Full-Time
Employee
                                            14,055.0              48.3        14,032.0       45.2          N/A          N/A
Difference from Comparison District
Average Daily Membership                     4,563.8              15.7         4,677.0       15.0          NA           N/A
Comparison District Average                 18,618.8              64.0        18,709.0       60.2          0.0          64.8
Source: Created by Evergreen Solutions, February 2010.




              Evergreen Solutions, LLC                                                                            Page 2-14
Fiscal Resources in Burke County Public Schools                                         Burke County Public Schools


                                                  Exhibit 2-12
                                        Comparison District Analysis
                                           State Supported Teachers
                                  2006-07, 2007-08, and 2008-09 School Years

                                                    2006-07                   2007-08                       2008-09
                                             Average        State                     State                         State
                                              Daily       Provided Average Daily    Provided Average Daily        Provided
                School District             Membership    Teachers    Membership    Teachers Membership           Teachers
Burke County                                  14,055         867        14,032         838        NA               1,003
  Students per Employee                                          16.2                      16.7
Buncombe County                               25,418       1,522        25,367       1,463        NA                  1,477
  Students per Employee                                          16.7                      17.3
Catawba County                                17,332         958        17,475         969        NA                   969
  Students per Employee                                          18.1                      18.0
Cleveland County                              16,760       1,088        16,580       1,067        NA                  1,059
  Students per Employee                                          15.4                      15.5
Henderson County                              12,792         739        12,887         782        NA                   776
  Students per Employee                                          17.3                      16.5
Iredell-Statesville                           20,792       1,267        21,236       1,405        NA                  1,220
  Students per Employee                                          16.4                      15.1
Comparison District Average                   18,619       1,115        18,709       1,137         0                  1,100
  Students per Employee                                          16.7                      16.5                               0.0

Full-Time Employee Change Required for
Burke County Staffing to Equal Comparison
District Average Student per Full-Time
Employee                                                       -25.5                     14.9        N/A               N/A
Burke County Staffing at Comparison
District Average Student per Full-Time
Employee
                                             14,055.0         841.5     14,032.0        852.9        N/A               N/A
Difference from Comparison District
Average Daily Membership
                                              4,563.8         273.3     4,677.0         284.3        NA                N/A
Comparison District Average                  18,618.8         1,114.8   18,709.0        1,137.2       0.0             1,100.2
Source: Created by Evergreen Solutions, February 2010.


2.3.2 FEDERAL-FUNDED STAFFING

The most recent figures show that Burke County Public Schools receives 7.8 percent of its
staffing funding from federal sources. Exhibits 2-13 through 2-15 compare federal staffing.
Exhibit 2-13 reviews total district staffing provided through federal funds. In 2007-08, BCPS
had one federally-funded, full-time employee position per 105 students. This ratio was lower
than the comparison district average of one position per 119 students. In order to achieve the
comparison average, BCPS would need to reduce its number of federal positions by 15.8 full-
time employees.




          Evergreen Solutions, LLC                                                                          Page 2-15
Fiscal Resources in Burke County Public Schools                                           Burke County Public Schools


                                            Exhibit 2-13
                                    Comparison District Analysis
                       Total Full-Time Employees Supported by Federal Funds
                             2006-07, 2007-08, and 2008-09 School Years

                                                   2006-07                 2007-08                      2008-09

                                                           Federal    Average     Federal                Federal
                                          Average Daily    Provided    Daily      Provided Average Daily Provided
              School District             Membership      Employees Membership   Employees Membership Employees
Burke County                                 14,055          131       14,032       134         NA         147
  Students per Employee                                         107.3                  104.7
Buncombe County                              25,418          506       25,367       229         NA         220
  Students per Employee                                          50.2                  110.8
Catawba County                               17,332          127       17,475        82         NA          87
  Students per Employee                                         136.5                  213.1
Cleveland County                             16,760          206       16,580       203         NA         171
  Students per Employee                                          81.4                   81.7
Henderson County                             12,792          137       12,887       140         NA         128
  Students per Employee                                          93.4                   92.1
Iredell-Statesville                          20,792          153       21,236       134         NA         112
  Students per Employee                                         135.9                  158.5
Comparison District Average                  18,619          226       18,709       158          0         144
  Students per Employee                                          82.5                  118.7                    0.0

Full-Time Employee Change Required for
Burke County Staffing to Equal
Comparison District Average Student per
Full-Time Employee                                           39.5                    (15.8)       N/A             N/A
Burke County Staffing at Comparison
District Average Student per Full-Time
Employee                                    14,055.0         170.5   14,032.0        118.2        N/A             N/A
Difference from Comparison District
Average Daily Membership                     4,563.8          55.3    4,677.0         39.4        N/A              N/A
Comparison District Average                 18,618.8         225.8   18,709.0        157.6        0.0             143.6
     Source: Created by Evergreen Solutions, February 2010.



Federal funds are not as structured and controlled like the state funds. There is more flexibility
as can be seen in the analysis of the administrative staff. Not all districts choose to charge
administrators to federal programs.

Exhibit 2-14 reviews total administrative staffing provided through federal funds. In 2007-08,
BCPS had no federally-funded administrative position for its 14,032 students.




         Evergreen Solutions, LLC                                                                            Page 2-16
Fiscal Resources in Burke County Public Schools                                                    Burke County Public Schools


                                                   Exhibit 2-14
                                          Comparison District Analysis
                                    Administrators Supported by Federal Funds
                                      2006-07, 2007-08, 2008-09 School Years

                                                      2006-07                      2007-08                       2008-09

                                           Average                                  Federal
                                            Daily    Federal Provided Average Daily Provided    Average Daily Federal Provided
              School District             Membership Administrators   Membership Administrators Membership Administrators
Burke County                                14,055           1           14,032         0            NA               0
  Students per Employee                                  14,055.0                      NA
Buncombe County                             25,418           24          25,367         2            NA               2
  Students per Employee                                   1,059.1                   12,683.5
Catawba County                              17,332           2           17,475         1            NA               1
  Students per Employee                                   8,666.0                   17,475.0
Cleveland County                            16,760           1           16,580         1            NA               1
  Students per Employee                                  16,760.0                   16,580.0
Henderson County                            12,792           2           12,887         2            NA               2
  Students per Employee                                   6,396.0                    6,443.5
Iredell-Statesville                         20,792           3           21,236         4            NA               2
  Students per Employee                                   6,930.7                    5,309.0
Comparison District Average                 18,619           6           18,709         2             0               2
  Students per Employee                                   2,909.2                    9,354.5                        0.0

Full-Time Employee Change Required
for Burke County Staffing to Equal
Comparison District Average Student per
Full-Time Employee
                                                                3.8                          1.5           N/A             N/A
Burke County Staffing at Comparison
District Average Student per Full-Time
Employee                                   14,055.0             4.8     14,032.0             1.5           N/A             N/A
Difference from Comparison District
Average Daily Membership                   4,563.8              1.6      4,677.0             0.5           NA              N/A
Comparison District Average                18,618.8             6.4     18,709.0             2.0           0.0             1.6
Source: Created by Evergreen Solutions with, February 2010.



Exhibit 2-15 reviews total teacher staffing provided through federal funds. In 2007-08, BCPS
had one federally-funded teacher position per 140 students. This ratio was lower than the
comparison district average of one teacher position per 327 students. In order to achieve the
comparison average, BCPS would need to reduce its number of federal positions by 57 full-time
employees.




           Evergreen Solutions, LLC                                                                                  Page 2-17
Fiscal Resources in Burke County Public Schools                                                Burke County Public Schools


                                                Exhibit 2-15
                                       Comparison District Analysis
                                   Teachers Supported by Federal Funds
                                 2006-07, 2007-08, and 2008-09 School Years

                                               2006-07                      2007-08                        2008-09

                                                      Federal    Average            Federal                      Federal
                                     Average Daily    Provided    Daily             Provided Average Daily       Provided
           School District           Membership       Teachers Membership           Teachers   Membership        Teachers
Burke County                            14,055           90       14,032              100         NA                97
  Students per Employee                                    156.2                         140.3
Buncombe County                         25,418          102       25,367               65         NA                 61
  Students per Employee                                    249.2                         390.3
Catawba County                          17,332           78       17,475               58         NA                 66
  Students per Employee                                    222.2                         301.3
Cleveland County                        16,760           63       16,580               60         NA                 56
  Students per Employee                                    266.0                         276.3
Henderson County                        12,792           55       12,887               44         NA                 41
  Students per Employee                                    232.6                         292.9
Iredell-Statesville                     20,792           28       21,236               59         NA                 31
  Students per Employee                                    742.6                         359.9
Comparison District Average             18,619           65       18,709               57          0                 51
  Students per Employee                                    285.6                         327.1                              0.0

Full-Time Employee Change
Required for Burke County
Staffing to Equal Comparison
District Average Student per Full-
Time Employee                                            (40.8)                       (57.1)         N/A             N/A
Burke County Staffing at
Comparison District Average
Student per Full-Time Employee
                                      14,055.0         49.2          14,032.0          42.9          N/A             N/A
 Difference from Comparison
 District Average Daily
 Membership                            4,563.8         16.0           4,677.0          14.3          N/A             N/A
 Comparison District Average          18,618.8         65.2          18,709.0          57.2          0.0             51.0
Source: Created by Evergreen Solutions with data from NC Statistical Profile Part II, 2010.


2.3.3 LOCAL-FUNDED STAFFING

Funding from local programs account for approximately 15 percent of BCPS staff funding.
Exhibits 2-16 through 2-18 compare local staffing in a similar manner as state and federal
staffing were reviewed. Exhibit 2-16 reviews total district staffing provided through local funds.
In 2007-08, BCPS had one locally-funded full-time position per 65 students. This ratio was
higher than the comparison district average of one local position per 43 students. In order to
achieve the comparison average, BCPS would need to increase its number of locally-funded
positions by 109 full-time employees.




          Evergreen Solutions, LLC                                                                               Page 2-18
Fiscal Resources in Burke County Public Schools                                               Burke County Public Schools


                                                   Exhibit 2-16
                                         Comparison District Analysis
                                      Total Staff Provided by Local Funds
                                     2006-07, 2007-08, 2008-09 School Years

                                             2006-07                 2007-08                2008-09
                                                    Local                    Local                  Local
                                     Average Daily Provided Average Daily Provided Average Daily Provided
           School District           Membership Employees Membership Employees Membership Employees
Burke County                            14,055       301       14,032         215       NA           287
  Students per Employee                                  46.7                     65.3
Buncombe County                         25,418       450       25,367         677       NA           601
  Students per Employee                                  56.5                     37.5
Catawba County                          17,332       361       17,475         356       NA           330
  Students per Employee                                  48.0                     49.1
Cleveland County                        16,760       399       16,580         425       NA           379
  Students per Employee                                  42.0                     39.0
Henderson County                        12,792       277       12,887         288       NA           355
  Students per Employee                                  46.2                     44.7
Iredell-Statesville                     20,792       252       21,236         412       NA           537
  Students per Employee                                  82.5                     51.5
Comparison District Average             18,619       348       18,709         432        0           440
  Students per Employee                                  53.5                     43.3                    0.0

Full-Time Employee Change
Required for Burke County
Staffing to Equal Comparison
District Average Student per Full-
Time Employee                                          (38.5)                        108.7          N/A          N/A
Burke County Staffing at
Comparison District Average
Student per Full-Time Employee
                                      14055          262.5           14032            323.7         N/A          N/A
Difference from Comparison
District Average Daily
Membership                           4,563.8         85.3           4,677.0           107.9         N/A          N/A
Comparison District Average         18,618.8         347.8         18,709.0           431.6         0.0         440.4
Source: Created by Evergreen Solutions with data from NC Statistical Profile Part II, 2010.



Exhibit 2-17 reviews total administrative staffing provided through local funds. In 2007-08,
BCPS had one locally-funded administrator position per 1,754 students. This ratio was higher
than the comparison district average of one administrative position per 628 students. In order to
achieve the comparison average, BCPS would need to increase its number of locally-funded
administrative positions by 14.4 full-time employees.

Exhibit 2-18 reviews total teacher staffing provided through local funds. In 2007-08, BCPS had
one locally-funded teacher position per 140 students. This ratio was lower than the comparison
district average of one teacher position per 273 students. In order to achieve the comparison
average, BCPS would need to decrease its number of local positions by 49 full-time employees.




         Evergreen Solutions, LLC                                                                              Page 2-19
Fiscal Resources in Burke County Public Schools                                                Burke County Public Schools


                                               Exhibit 2-17
                                      Comparison District Analysis
                                 Administrators Supported by Local Funds
                                2006-07, 2007-08, and 2008-09 School Years

                                               2006-07                       2007-08                        2008-09

                                       Average         Local                         Local       Average           Local
                                        Daily         Provided Average Daily        Provided      Daily           Provided
            School District           Membership       Admin      Membership         Admin      Membership         Admin
 Burke County                           14,055           10         14,032              8          NA                8
   Students per Employee                                 1,405.5                       1,754.0
 Buncombe County                         25,418           1         25,367             25          NA                 32
   Students per Employee                                25,418.0                       1,014.7
 Catawba County                          17,332          16         17,475             20          NA                 22
   Students per Employee                                 1,083.3                          873.8
 Cleveland County                        16,760          38         16,580             39          NA                 42
   Students per Employee                                    441.1                         425.1
 Henderson County                        12,792          17         12,887             48          NA                 13
   Students per Employee                                    752.5                         268.5
 Iredell-Statesville                     20,792          19         21,236             17          NA                 15
   Students per Employee                                 1,094.3                       1,249.2
 Comparison District Average                 18,619            18       18,709               30           0                   25
   Students per Employee                                  1023.0                          627.8                              0.0

 Full-Time Employee Change
 Required for Burke County
 Staffing to Equal Comparison
 District Average Student per Full-
 Time Employee                                           3.7                           14.4          N/A              N/A
 Burke County Staffing at
 Comparison District Average
 Student per Full-Time Employee
                                        14,055.0         13.7         14,032.0         22.4          N/A              N/A
 Difference from Comparison
 District Average Daily
 Membership                             4,563.8          4.5          4,677.0          7.4           N/A              N/A
 Comparison District Average          18,618.8         18.2         18,709.0            29.8          0.0             24.8
 Source: Created by Evergreen Solutions with data from NC Statistical Profile Part II, 2010.




          Evergreen Solutions, LLC                                                                                Page 2-20
Fiscal Resources in Burke County Public Schools                                                 Burke County Public Schools


                                                Exhibit 2-18
                                       Comparison District Analysis
                                    Teachers Supported by Local Funds
                                 2006-07, 2007-08, and 2008-09 School Years

                                              2006-07                        2007-08                         2008-09
                                                       Local                          Local                         Local
                                     Average Daily    Provided Average Daily         Provided Average Daily        Provided
          School District            Membership       Teachers   Membership          Teachers   Membership         Teachers
Burke County                            14,055           21        14,032              100         NA                 66
  Students per Employee                                    669.3                          140.3
Buncombe County                         25,418           73        25,367               91         NA                  91
  Students per Employee                                    348.2                          278.8
Catawba County                          17,332           63        17,475               61         NA                  63
  Students per Employee                                    275.1                          286.5
Cleveland County                        16,760           46        16,580               57         NA                  52
  Students per Employee                                    364.3                          290.9
Henderson County                        12,792           67        12,887               62         NA                  79
  Students per Employee                                    190.9                          207.9
Iredell-Statesville                     20,792           54        21,236               72         NA                  162
  Students per Employee                                    385.0                          294.9
Comparison District Average             18,619           61        18,709               69          0                  89
  Students per Employee                                    307.2                          272.7                               0.0

Full-Time Employee Change
Required for Burke County
Staffing to Equal Comparison
District Average Student per Full-
Time Employee                                           24.7                           (48.5)          N/A             N/A
Burke County Staffing at
Comparison District Average
Student per Full-Time Employee
                                     14,055.0         45.7          14,032.0            51.5           N/A             N/A
 Difference from Comparison
 District Average Daily
 Membership                           4,563.8         14.9           4,677.0            17.1           NA              N/A
 Comparison District Average         18,618.8         60.6          18,709.0            68.6           0.0             89.4
Source Created by Evergreen Solutions with data from NC Statistical Profile Part II, 2010.




Exhibits 2-19 through 2-24 contain detailed staffing comparison for BCPS and the five
comparison districts. These data should be viewed with care as most data are self-reported by
the school districts and can be inaccurate due primarily to possible misunderstandings of
appropriate codes or simple human error. Since the state-collected data only include full-time
positions, a district’s decision to use a significant number of part-time positions in any capacity
could skew these totals as well.




          Evergreen Solutions, LLC                                                                                 Page 2-21
Fiscal Resources in Burke County Public Schools                                                                                          Burke County Public Schools


                                                                        Exhibit 2-19
                                                                Burke County Public Schools
                                                             Three-Year Staffing Comparisons
                                                         2006-07, 2007-08, and 2008-09 School Years

                                             2008-09 Public School Personnel              2007-08 Public School Personnel              2006-07 Public School Personnel
              Category                   State     Federal     Local       Total      State     Federal     Local       Total      State     Federal     Local       Total
Officials, Administrators & Managers           9                       6         15         9                       4         13         12          1           4         17
Principals                                    26                                26         24                      1         25         24                      1         25
Asst. Principal, Teaching
Asst. Principal, Non-teaching                 21                      2         23         13                      3         16         15                      5         20
Subtotal Administrators                       56                      8         64         46          0           8         54         51          1          10         62
Elementary Teachers                          399         43          20        462        328         57          57        442        333         48          12        393
Secondary Teachers                           217          6          12        235        140          8           8        156        155          5           2        162
Other Teachers                               387         48          34        469        370         35          35        440        379         37           7        423
Subtotal Teachers                          1,003         97          66      1,166        838        100         100       1,038       867         90          21        978
Guidance                                      48                      1         49         43                                43         44                      2         46
Psychological                                  4          4           1          9          5          4                      9          5          5                     10
Librarian, Audiovisual                        28                                28         22                      1         23         24                      1         25
Consultant, supervisor                         1                                 1          1          1                      2          1          1                      2
Other Professionals                           19          3          20         42         16          4           4         24         11          5          14         30
                   Total Professionals     1,159        104          96      1,359        971        109         113       1,193     1,003        102          48      1,153
Teacher Assistants                           175         40          24        239        198         22          19        239        195         26          22        243
Technicians                                    2                      3          5          3          1          10         14          3          1          10         14
Clerical, Secretarial                         78          2          10         90         58           2         26         86         62          2          27         91
Service Workers                               38          1          99        138         86                                86         85                    146        231
Skilled Crafts                                 1                     46         47          2                     39         41          2                     40         42
Laborers, Unskilled                                                   9          9                                 8          8                                 8          8
   Total                                   1,453        147         287      1,887      1,318        134         215      1,667      1,350        131         301      1,782
Source: NC Statistical Profile, 2010.




             Evergreen Solutions, LLC
                                                                                                                                                             Page 2-22
Fiscal Resources in Burke County Public Schools                                                                                       Burke County Public Schools


                                                                       Exhibit 2-20
                                                            Buncombe County Public Schools
                                                            Three-Year Staffing Comparisons
                                                        2006-07, 2007-08, and 2008-09 School Years

                                            2008-09 Public School Personnel              2007-08 Public School Personnel              2006-07 Public School Personnel
              Category                  State     Federal     Local       Total      State     Federal     Local       Total      State     Federal     Local       Total
Officials, Administrators & Managers          11          2           7         20         11          2           4         17         16          6           1         23
Principals                                   41                                41         41                                41         41                                41
Asst. Principal, Teaching                                                                                                              34         18                     52
Asst. Principal, Non-teaching                30                     25         55         29                     21         50
Subtotal Administrators                      82          2          32        116         81          2          25        108         91         24           1        116
Elementary Teachers                         726         25          35        786        730         25          35        790        851         50                    901
Secondary Teachers                          244          2          29        275        231          2          34        267        314         25                    339
Other Teachers                              507         34          27        568        502         38          22        562        357         27          73        457
Subtotal Teachers                         1,477         61          91      1,629      1,463         65          91      1,619      1,522        102          73      1,697
Guidance                                     71                                71         67                                67         64          4                     68
Psychological                                13          1                     14         12          1                     13         13                      1         14
Librarian, Audiovisual                       44                                44         43                                43         44                                44
Consultant, supervisor                        8          2          10         20          4          3           7         14                    16           4         20
Other Professionals                          68          8          28        104         61          4          26         91         45          5                     50
                  Total Professionals     1,763         74         161      1,998      1,731         75         149      1,955      1,779        151          79      2,009
Teacher Assistants                          301        144          98        543        298        151          97        546        336        101         192        629
Technicians                                                         26         26                                28         28                    29                     29
Clerical, Secretarial                        29          2         166        197         29          2         143        174         34        150           8        192
Service Workers                             256                     80        336        338          1         188        527        197                    171        368
Skilled Crafts                                7                     70         77          4                     72         76                    74                     74
Laborers, Unskilled                                                                                                                    27          1                     28
   Total                                  2,356        220         601      3,177      2,400        229         677      3,306      2,373        506         450      3,329
Source: NC Statistical Profile, 2010.




             Evergreen Solutions, LLC                                                                                                                      Page 2-23
Fiscal Resources in Burke County Public Schools                                                                                             Burke County Public Schools


                                                                         Exhibit 2-21
                                                               Catawba County Public Schools
                                                              Three-Year Staffing Comparisons
                                                          2006-07, 2007-08, and 2008-09 School Years

                                            2008-09 Public School Personnel              2007-08 Public School Personnel              2006-07 Public School Personnel
              Category                  State     Federal     Local       Total      State     Federal     Local       Total      State     Federal     Local       Total
Officials, Administrators & Managers          12          1         10          23         13          1           9         23         13          2           7         22
Principals                                   28                                28         28                                28         27                                27
Asst. Principal, Teaching
Asst. Principal, Non-teaching                20                     12         32         21                     11         32         21                      9         30
Subtotal Administrators                      60          1          22         83         62          1          20         83         61          2          16         79
Elementary Teachers                         654         45          42        741        648         41          48        737        657         58          39        754
Secondary Teachers                          308         16          18        342        314         14          10        338        298         16          20        334
Other Teachers                                7          5           3         15          7          3           3         13          3          4           4         11
Subtotal Teachers                           969         66          63       1,098       969         58          61      1,088        958         78          63       1,099
Guidance                                     47                                47         48                                48         44                                44
Psychological                                 5                                 5          6                                 6          3          1                      4
Librarian, Audiovisual                       28                                28         26                                26         27                                27
Consultant, supervisor                       19          2           1         22          4                      5          9          4                      5          9
Other Professionals                          43          3          19         65         59          5          13         77         45          9          14         68
                  Total Professionals     1,171         72         105      1,348      1,174         64          99      1,337      1,142         90          98       1,330
Teacher Assistants                          294         15          68        377        306         18          53        377        287         36          56        379
Technicians                                                         24         24                                20         20                                20         20
Clerical, Secretarial                        65                     33         98         63                     33         96         64                     29         93
Service Workers                              66                     58        124         70                    110        180         66          1         118        185
Skilled Crafts                               14                     42         56         15                     41         56         13                     40         53
Laborers, Unskilled
   Total                                  1,610         87         330      2,027      1,628         82         356      2,066      1,572        127         361       2,060
Source: NC Statistical Profile, 2010.




             Evergreen Solutions, LLC                                                                                                                              Page 2-24
Fiscal Resources in Burke County Public Schools                                                                                             Burke County Public Schools


                                                                         Exhibit 2-22
                                                               Cleveland County Public Schools
                                                              Three-Year Staffing Comparisons
                                                          2006-07, 2007-08, and 2008-09 School Years

                                            2008-09 Public School Personnel              2007-08 Public School Personnel              2006-07 Public School Personnel
              Category                  State     Federal     Local       Total      State     Federal     Local       Total      State     Federal     Local       Total
Officials, Administrators & Managers          14          1         18          33         15          1         16          32         13          1         17          31
Principals                                   29                                29         28                                28         28                                28
Asst. Principal, Teaching
Asst. Principal, Non-teaching                19                     24         43         20                     23         43         19                     21         40
Subtotal Administrators                      62          1          42        105         63          1          39        103         60          1          38         99
Elementary Teachers                         568         27          13        608        645         34          17        696        627         41          17        685
Secondary Teachers                          274          3           6        283        307          2          11        320        355          8           7        370
Other Teachers                              217         26          33        276        115         24          29        168        106         14          22        142
Subtotal Teachers                         1,059         56          52      1,167      1,067         60          57      1,184      1,088         63          46      1,197
Guidance                                     42                      1         43         41                      1         42         42                      2         44
Psychological                                 3          4                      7          2          6           1          9          4          6                     10
Librarian, Audiovisual                       26                                26         16                     10         26         19                      9         28
Consultant, supervisor                        1          1           3          5          2          4           2          8          2          4                      6
Other Professionals                          34         14          29         77         36         19          28         83         35         18          25         78
                  Total Professionals     1,227         76         127      1,430      1,227         90         138      1,455      1,250         92         120      1,462
Teacher Assistants                          284         87          49        420        293        103          61        457        289        103          69        461
Technicians                                   2                      8         10          1                     11         12          2          1          19         22
Clerical, Secretarial                        51          8          88        147         48          9          93        150         59          9          74        142
Service Workers                             104                     66        170         84          1          82        167         85          1          74        160
Skilled Crafts                               12                     41         53         12                     40         52         12                     43         55
Laborers, Unskilled
   Total                                  1,680        171         379      2,230      1,665        203         425      2,293      1,697        206         399      2,302
Source: NC Statistical Profile, 2010.




             Evergreen Solutions, LLC                                                                                                                              Page 2-25
Fiscal Resources in Burke County Public Schools                                                                                              Burke County Public Schools


                                                                         Exhibit 2-23
                                                              Henderson County Public Schools
                                                              Three-Year Staffing Comparisons
                                                          2006-07, 2007-08, and 2008-09 School Years

                                             2008-09 Public School Personnel              2007-08 Public School Personnel              2006-07 Public School Personnel
               Category                  State     Federal     Local       Total      State     Federal     Local       Total      State     Federal     Local       Total
 Officials, Administrators & Managers          11          2         12          25         11          2         15          28         8           2         12          22
 Principals                                   22                                22          7                     14         21         19                      2         21
 Asst. Principal, Teaching
 Asst. Principal, Non-teaching                14                      1         15          2                     19         21         12                      3         15
 Subtotal Administrators                      47          2          13         62         20          2          48         70         39          2          17         58
 Elementary Teachers                         357         25          46        428        408         34          28        470        378         31          41        450
 Secondary Teachers                          187                     11        198        215                     15        230        218          1           9        228
 Other Teachers                              232         16          22        270        159         10          19        188        143         23          17        183
 Subtotal Teachers                           776         41          79        896        782         44          62        888        739         55          67        861
 Guidance                                     32                      2         34         33                      1         34         32                      2         34
 Psychological                                 5          3           1          9          5          3                      8          7          2           1         10
 Librarian, Audiovisual                       19                      2         21         20                                20         20                                20
 Consultant, supervisor                       14          5                     19         10          5           1         16          7          8                     15
 Other Professionals                          21          4           4         29         10          5           2         17         11                      2         13
                   Total Professionals       914         55         101      1,070        880         59         114      1,053        855         67          89      1,011
 Teacher Assistants                          188         71          26        285        194         78          11        283        200         67          23        290
 Technicians                                                          8          8                                 4          4                     1           7          8
 Clerical, Secretarial                        79           2         10         91         77          3           8         88         55          2          30         87
 Service Workers                              24                    180        204         95                    122        217         92                    101        193
 Skilled Crafts                                8                     30         38          7                     29         36          9                     27         36
 Laborers, Unskilled
    Total                                  1,213        128         355      1,696      1,253        140         288      1,681      1,211        137         277      1,625
Source: NC Statistical Profile, 2010.




            Evergreen Solutions, LLC                                                                                                                                Page 2-26
Fiscal Resources in Burke County Public Schools                                                                                                   Burke County Public Schools


                                                                            Exhibit 2-24
                                                             Iredell-Statesville County Public Schools
                                                                Three-Year Staffing Comparisons
                                                            2006-07, 2007-08, and 2008-09 School Years

                                                2008-09 Public School Personnel              2007-08 Public School Personnel              2006-07 Public School Personnel
                 Category                   State     Federal     Local       Total      State     Federal     Local       Total      State     Federal     Local       Total
   Officials, Administrators & Managers           12          2         14          28         8           4         13          25         9           3         11          23
   Principals                                    34                                34         34                      1         35         33                      1         34
   Asst. Principal, Teaching                      1                                 1          2                                 2          2                                 2
   Asst. Principal, Non-teaching                 26                      1         27         31                      3         34         25                      7         32
   Subtotal Administrators                       73          2          15         90         75          4          17         96         69          3          19         91
   Elementary Teachers                          616         25          60        701        722         30          47        799        657          7          26        690
   Secondary Teachers                           172                     80        252        230                     15        245        187                      9        196
   Other Teachers                               432          6          22        460        453         29          10        492        423         21          19        463
   Subtotal Teachers                          1,220         31         162      1,413      1,405         59          72      1,536      1,267         28          54      1,349
   Guidance                                      50          1           3         54         52                      2         54         48                      2         50
   Psychological                                                                               8                                 8          7                                 7
   Librarian, Audiovisual                        30                      4         34         31                      4         35         35                      1         36
   Consultant, supervisor                                                1          1                                 1          1                                 1          1
   Other Professionals                           52          9          18         79         64          7          18         89         51         15          22         88
                      Total Professionals     1,425         43         203      1,671      1,635         70         114      1,819      1,477         46          99      1,622
   Teacher Assistants                           266         67          17        350        181         61          15        257        213         28          15        256
   Technicians                                    1                      9         10          1                     10         11          1          1           7          9
   Clerical, Secretarial                         78           2         71        151         70          3          75        148         88          1          48        137
   Service Workers                              310                    195        505        287                    155        442        311         77          40        428
   Skilled Crafts                                                       42         42                                43         43          1                     43         44
   Laborers, Unskilled
      Total                                   2,080        112         537      2,729      2,174        134         412      2,720      2,091        153         252      2,496

   Source: NC Statistical Profile, 2010.




          Evergreen Solutions, LLC                                                                                                                                      Page 2-27
Fiscal Resources in Burke County Public Schools                                             Burke County Public Schools


Exhibit 2-25 provides a summary comparison of student enrollment and the central office and
school administration in the six comparison school systems. This exhibit combines the
information in previous sections on federal, state, and locally-funded positions to provide a
synopsis for comparison. As can be seen, the students per administrator ratio in BCPS is higher
than four of the five peer districts, with the exception of Iredell-Statesville.

                                                   Exhibit 2-25
                             Comparison of Student Enrollment and Administrative Staff
                                               2008-09 School Year

                                                      Total Administration, Central
                                         S tudent      Office, Principals, Assistant    Total S tudents Per   Principal/Assistant
               S chool District        Enrollment*              Principals                Administrator            Principal
       Burke County                       14,032                    64                         219.3                 26/23
       Buncombe County                    25,367                   116                         218.7                 41/55
       Catawba County                     17,475                    83                         210.5                 28/32
       Cleveland County                   16,580                   105                         157.9                 29/43
       Henderson County                   12,887                    62                         207.9                 22/15
       Iredell-Statesville                21,236                    90                         236.0                 34/28
       S ix-District Average              17,930                    87                         208.4                 30/33
      Source: NC Statistical Profile, 2010.
      *Based on ADM from 2007-08



Exhibit 2-26 provides a summary of student enrollment and teaching staff in the six comparison
school systems. This exhibit combines the information in previous sections on federal, state, and
locally-funded positions to provide a synopsis for comparison. As can be seen, BCPS has a lower
student to teacher ratio than all other peer districts, with 12 students per teacher. This ratio is 3.9
students less than the highest ratio of 15.9 students per teacher in Catawba County.


                                                      Exhibit 2-26
                                   Comparison of Student Enrollment and Teaching Staff
                                                  2008-09 School Year

                                                        Total Elementary,
                                          S tudent    S econdary, and Other       Total S tudents Per    Elementary/S econdary
                S chool District        Enrollment*         Teachers                   Teacher                Teachers
        Burke County                       14,032             1,166                       12.0                 462/235
        Buncombe County                    25,367             1,629                       15.6                 786/275
        Catawba County                     17,475             1,098                       15.9                 741/342
        Cleveland County                   16,580             1,167                       14.2                 608/283
        Henderson County                   12,887              896                        14.4                 428/198
        Iredell-Statesville                21,236             1,413                       15.0                 701/252
        S ix-District Average              17,930             1,228                       14.5                 621/264
        Source: NC Statistical Profile, 2010.
        *Based on ADM from 2007-08




         Evergreen Solutions, LLC                                                                               Page 2-28
Fiscal Resources in Burke County Public Schools                                            Burke County Public Schools


2.3.4 SALARY AND BENEFITS

Exhibit 2-27 contains a detailed per pupil salary expenditure comparison for BCPS and the five
comparison districts. These figures align with the information presented throughout the chapter
in which, on average, BCPS spends more state and federal dollars on staffing than its peers, but
less local dollars. For the last two years, BCPS has spent more per pupil than the peer district
average on salaries.

                                           Exhibit 2-27
                            Comparison of Per Pupil Salary Expenditures
                              2005-06 through 2007-08 School Years

                                                         Per Pupil S alary Expenditures by S ource
                        S chool District             S tate       Federal          Local          Total
                                                                         2007-08
                Burke County                       $4,282.82      $548.98        $773.82         $5,605.62
                Buncombe County                    $4,113.50      $459.80       $1,187.32        $5,760.62
                Catawba County                     $4,037.42      $271.11        $931.67         $5,240.20
                Cleveland County                   $4,359.34      $494.17        $910.46         $5,763.97
                Henderson County                   $4,086.31      $459.14        $847.99         $5,393.44
                Iredell-Statesville                $3,756.23      $313.97       $1,118.69        $5,188.89
                S ix-District Average              $4,105.94      $424.53        $961.66         $5,492.12
                                                                         2006-07
                Burke County                       $4,119.09      $519.37        $559.03         $5,197.49
                Buncombe County                    $3,956.60      $391.46       $1,128.45        $5,476.51
                Catawba County                     $3,834.81      $309.16        $859.40         $5,003.37
                Cleveland County                   $4,152.54      $486.40        $768.34         $5,407.28
                Henderson County                   $3,918.70      $484.34        $779.77         $5,182.81
                Iredell-Statesville                $3,710.31      $334.65        $845.91         $4,890.87
                S ix-District Average              $3,948.68      $420.90        $823.48         $5,193.06
                                                                         2005-06
                Burke County                       $3,755.76      $466.26        $501.20         $4,723.22
                Buncombe County                    $3,668.76      $416.50       $1,066.25        $5,151.51
                Catawba County                     $3,577.36      $304.44        $793.82         $4,675.62
                Cleveland County                   $3,851.04      $454.21        $765.19         $5,070.44
                Henderson County                   $3,707.60      $478.41        $722.12         $4,908.13
                Iredell-Statesville                $3,480.42      $318.92        $791.40         $4,590.74
                 S ix-District Average              $3,673.49     $406.46        $773.33         $4,853.28
                Source: NC Statistical Profile, 2010.




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Fiscal Resources in Burke County Public Schools                                        Burke County Public Schools


Exhibit 2-28 displays per pupil expenditures for benefits. Per pupil expenditure trends for
benefits follow the same general trends as per pupil salary expenditures.

                                              Exhibit 2-28
                               Comparison of Per Pupil Benefit Expenditures
                                  2005-06 through 2007-08 School Years

                                                 Federal    S tate             Local           Total
                  S chool District                                   2007-08
         Burke County                            $148.99   $1,069.64       $208.80           $1,427.43
         Buncombe County                         $171.62   $1,001.99       $241.88           $1,415.49
         Catawba County                          $75.79    $976.07         $231.70           $1,283.56
         Cleveland County                        $145.46   $1,074.74       $233.42           $1,453.62
         Henderson County                        $122.15   $979.11         $223.62           $1,324.88
         Iredell-Statesville                     $92.05    $927.13         $285.93           $1,305.11
         S ix-District Average                   $126.01   $1,004.78       $237.56           $1,368.35
                                                                     2006-07
         Burke County                            $140.24   $968.37         $157.80           $1,266.41
         Buncombe County                         $107.92   $913.68         $264.21           $1,285.81
         Catawba County                          $82.02    $887.29         $203.42           $1,172.73
         Cleveland County                        $136.61   $979.95         $186.13           $1,302.69
         Henderson County                        $124.71   $908.35         $199.59           $1,232.65
         Iredell-Statesville                     $94.93    $873.47         $204.72           $1,173.12
         S ix-District Average                   $114.41   $921.85         $202.65           $1,238.90
                                                                     2005-06
         Burke County                            $130.49   $879.98         $150.84           $1,161.31
         Buncombe County                         $114.44   $855.74         $246.54           $1,216.72
         Catawba County                          $76.33    $828.64         $189.58           $1,094.55
         Cleveland County                        $125.28   $893.98         $192.72           $1,211.98
         Henderson County                        $117.79   $866.19         $181.20           $1,165.18
         Iredell-Statesville                     $89.23    $821.53         $196.85           $1,107.61
         S ix-District Average                   $108.93   $857.68         $192.96           $1,159.56
         Source: NC Statistical Profile, 2010.




        Evergreen Solutions, LLC                                                                         Page 2-30
                                       CHAPTER 3:
                           FINANCIAL MANAGEMENT




Evergreen Solutions, LLC
                        3.0 FINANCIAL MANAGEMENT

Sound school district financial management involves the effective use of limited resources to
support services. School districts must maximize their resources available from all sources and
must account for use of these resources accurately to local taxpayers, and state and federal
governments. The planning and budgeting process must support district goals. An effective
purchasing program provides districts with quality materials, supplies, services and equipment in
a timely manner at the lowest price. Proper accounting must reduce the risk of lost assets and
ensure their appropriate use. The district must provide the School Board and administrators with
timely, accurate and useful reports concerning its financial condition.

Financial managers collect, analyze, and provide financial information for decision makers.
Successful financial operations require qualified personnel with an adequate separation of duties,
as well as an accounting system that provides timely, useful, and accurate information to support
operating decisions. Comprehensive policies and procedures that ensure proper management of
financial resources are important.

This chapter reviews the financial management, purchasing, asset and risk functions of Burke
County Public Schools (BCPS). The review is organized around the five sections listed below:

       3.1       Organization and Financial Management
       3.2       Budgeting
       3.3       Purchasing
       3.4       Risk and Asset Management
       3.5       School and Day Care Funds

BCPS selected five other districts as their peer districts for comparison purposes for this
performance and financial review. These comparison school districts are Buncombe, Catawba,
Cleveland, Henderson, and Iredell-Statesville. Exhibit 3-1 presents a comparison of total
expenditures by source of funding for Burke County and the peer districts. As shown in the
exhibit, Burke County funds 68.9 percent of expenditures from state sources⎯the second highest
among peers and higher than the peer average. Burke County funds only 19.4 percent from local
funding which is the lowest among the peer districts, and 3.6 percentage points lower than the
peer average.
                                             Exhibit 3-1
                                 Total Expenditures by Source
                                       2007-08 School Year

                                                                Total Expenditures by Source
                 School District                    State          Federal      Local           Total
        Burke County                               68.9%           11.7%       19.4%           100.0%
        Buncombe County                            65.5%            8.7%       25.8%           100.0%
        Catawba County                             69.3%            7.2%       23.5%           100.0%
        Cleveland County                           68.1%            10.3%      21.6%           100.0%
        Henderson County                           67.9%            9.7%       22.4%           100.0%
        Iredell-Statesville                        67.4%            7.6%       25.0%           100.0%
        Peer Average                               67.9%            9.2%       23.0%           100.0%
        Source: North Carolina Statistical Profiles, 2007-08.




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Financial Management                                                                       Burke County Public Schools


Exhibit 3-2 compares the average daily membership, total per pupil expenditures, and rank per
pupil expenditures for Burke County and peer school districts. Burke County has the second
lowest average daily membership among peer districts and ranks 83rd statewide in per pupil
expenditures. Three peer districts have lower total per pupil expenditures and two have a higher
total per pupil expenditure. As can be seen, Burke County’s total per pupil expenditures are
$268 less than the statewide average.

                                                   Exhibit 3-2
                                              Per Pupil Expenditures
                                               2007-08 School Year

                                               Average                                    Rank per
                                                Daily             Total Per Pupil           Pupil
                      School District         Membership           Expenditure           Expenditures
                   Burke County                 14,032                $8,254                 83
                   Buncombe County              25,367                $8,432                  73
                   Catawba County               17,475                $7,896                 103
                   Cleveland County             16,580                $8,666                 67
                   Henderson County             12,887                $8,034                 97
                   Iredell-Statesville          21,236                $7,830                 106
                   Statewide Average                                  $8,522
                  Source: North Carolina Statistical Profiles, 2007-08.


Compared to peer districts, Burke County’s percentage of total expenditures for salaries of 67.9
percent is second highest among peer districts as shown in Exhibit 3-3. Burke County’s
percentage for benefits is the highest among peer districts. The district’s percentage for supplies
and materials is the lowest and for instructional equipment is the second lowest among peer
districts.
                                             Exhibit 3-3
                      Comparison of Percentage of Expenditures by Type
                                       2007-08 School Year

                                                         Purchased        Supplies and    Instructional
   District                  Salaries     Benefits        Services         Materials       Equipment       Total
   Burke County               67.9%        17.3%           6.8%              7.4%             0.6%        100.0%
   Buncombe County            68.3%        16.8%           5.6%              8.0%             1.3%        100.0%
   Catawba County             66.4%        16.1%           6.5%              9.6%             1.4%        100.0%
   Cleveland County           66.5%        16.8%           7.0%              8.7%             1.0%        100.0%
   Henderson County           67.1%        16.6%           6.4%              8.9%             1.0%        100.0%
   Iredell-Statesville        66.3%        16.6%           6.1%              10.8%            0.2%        100.0%
   Peer Average               67.1%        16.7%           6.4%              8.9%             0.9%        100.0%
  Source: North Carolina Statistical Profiles 2007-08.


Although the district’s average daily membership has been decreasing, the number of positions
have been increasing as shown in Exhibit 3-4. Between 2006-07 and 2008-09, the district added
a net of 105 employees⎯a 5.9 percent increase. A total of 206 professional positions were added
including two administrators, 188 teachers, and 16 other professionals. During this same period,
85 non-professional positions were reduced.




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Financial Management                                                                         Burke County Public Schools


                                       Exhibit 3-4
             Comparison of Number of Positions in Burke County Public Schools
                          2006-07 through 2008-09 School Years

                                                                                               Percent Change
                     Category                      2006-07      2007-08          2008-09      2006-07 to 2008-09
      Officials, Administrators & Managers               17           13                15         (11.8%)
      Principals                                         25           25                26           4.0%
      Asst. Principal, Non-teaching                      20           16                23          15.0%
      Subtotal Administrators                            62           54                64           3.2%
      Elementary Teachers                               393          442               462          17.6%
      Secondary Teachers                                162          156               235          45.1%
      Other Teachers                                    423          440               469          10.9%
      Subtotal Teachers                                 978        1,038             1,166          19.2%
      Guidance                                           46           43                49           6.5%
      Psychological                                      10            9                 9         (10.0%)
      Librarian, Audiovisual                             25           23                28          12.0%
      Consultant, supervisor                              2            2                 1         (50.0%)
      Other Professionals                                30           24                42          40.0%
                         Total Professionals          1,153        1,193             1,359          17.9%
      Teacher Assistants                                243          239               239          (1.6%)
      Technicians                                        14           14                 5         (64.3%)
      Clerical, Secretarial                              91           86                90          (1.1%)
      Service Workers                                   231           86               138         (40.3%)
      Skilled Crafts                                     42           41                47          11.9%
      Laborers, Unskilled                                 8            8                 9          12.5%
         Total                                        1,782        1,667             1,887           5.9%
         Source: North Carolina Statistical Profiles, 2006-07 through 2008-09.



3.1   ORGANIZATION AND FINANCIAL MANAGEMENT

A district’s financial management operation includes the functions of collection, disbursement
and accounting for local, state and federal funds. An effective fiscal operation implements
detailed policies and internal controls to process the district's daily business transactions
efficiently while providing accurate, complete, and timely information to district management
and the school board. Payroll is a major part of any district, since it normally represents the bulk
of the expenses.

In BCPS, the majority of the district’s financial operations are under the direction of the Finance
Officer who reports directly to the Superintendent. The Finance Officer is responsible for the
functions associated with accounting, budgeting, reporting, accounts payable, payroll, but does
not oversee the purchasing, warehouse, and fixed asset operations.

FINDING

BCPS requires all employees to use a direct deposit program for employee paychecks. The only
employees that receive hard copy checks are new employees and only for the first month of their
employment when required account information is being coordinated with the employee’s bank.
Direct deposit of employee pay checks is efficient for both employees and Burke County Public


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Financial Management                                                     Burke County Public Schools


Schools. Employees do not have to make trips to their bank to make deposits into their account
and BCPS does not have to use paper to print the checks, and distribute the checks to employees.

COMMENDATION

Burke County Public Schools is commended for its mandatory direct deposit of employee
checks that is cost effective and efficient for both employees and the district.


FINDING

To strengthen the government financial expertise of the BCPS Finance Office, which the 2007-
08 external audit report pointed out as a deficiency, four members including the Finance Officer
are participating in the North Carolina Association of School Business Officials Finance
Academy’s training and certification program. The Finance Officer, Assistant Finance Officer,
Accounts Payable Manager and the Payroll Manager are all in the second year of a three-year
program. Once successfully completing the training (which is expected to be June 2011), the
Finance Officer and Assistant Finance Officer will be certified as Finance Officers and the
Accounts Payable and Payroll Managers will be certified as Governmental Office Managers.

COMMENDATION

Burke County Public Schools is commended for providing training to members of its
Finance Office to strength the governmental financial expertise of staff.


FINDING

The BCPS organization for financial-related functions is fragmented and not centralized. Only a
portion of financial functions are under the direction of the Finance Officer, limiting
coordination and potential cost-effective revisions to processes.

The Finance Department’s responsibility include general accounting and reporting, budgeting,
accounts payable, payroll, and internal auditing of school funds. The Finance Officer is assisted
by:

   •   an Assistant Finance Officer/Internal Auditor whose primary duties are auditing school
       funds, assisting school bookkeepers, and accounting for grant funds,

   •   a Payroll Manager who has two Payroll Specialists that are responsible for processing all
       payroll related documents and reposts, and

   •   an Accounts Payable Manager who has two Accounts Payable Specialists that are
       responsible for processing all payments to vendors.




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Financial Management                                                     Burke County Public Schools


Other financial functions are assigned to program departments where the assignment of the
financial functions is not a core item of their programs. For example, purchasing responsibilities
are assigned to the Child Nutrition/Purchasing Department.

The BCPS purchasing program is managed by the Director of Child Nutrition/Purchasing who
reports to the Assistant Superintendent for Support Services. The time for the Director of Child
Nutrition/Purchasing is split between the dual responsibilities of managing food services and
managing district purchasing activities. The Director of Child Nutrition/Purchasing is assisted in
performing purchasing functions by a staff of three who also share purchasing and child nutrition
duties. The Purchasing staff includes:

   •   a Purchasing Assistant who primarily handles bids and spends approximately 90 percent
       of her time on purchasing functions;

   •   a Purchasing Clerk who primarily enters information taken from purchase requests (B-1
       forms) into the computer system to create purchase orders, and also spends
       approximately 90 percent of time on purchasing functions; and

   •   a Purchasing Clerk who is responsible for maintaining the district’s fixed asset system
       and processing purchasing documents related to warehouse orders. She spends
       approximately 50 percent of her time on purchasing functions.

It is estimated that purchasing duties require approximately 2.8 FTEs. The estimate of FTEs
assumes a 50-50 split of the director’s position between purchasing and child nutrition duties.
The purchasing responsibilities for other staff include:

   •   Director               .50 FTE
   •   Purchasing Assistant   .90 FTE
   •   Purchasing Clerk       .90 FTE
   •   Purchasing Clerk       .50 FTE
             Total            2.8 FTEs

Consolidating all financial-related functions within the BCPS Finance Office enables interrelated
processes to be better coordinated and would eliminate duplication. For a consolidation of all
financial-related functions to be most effective, the head of the office must be a very experienced
and talented professional. The title used by many districts for the position that manages a
consolidated department or office is Chief Financial Officer. The title reflects that the position
has primary responsibility for all financial processes in a school district.

RECOMMENDATION

Recommendation 3-1:

Consolidate and reorganize all financial functions under a Chief Financial Officer,
advertise for the position, and allow all interested persons to apply for the position,
including the current Finance Officer.




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Financial Management                                                      Burke County Public Schools


The consolidation of all financial-related functions will provide better coordination of related
functions and provide better oversight of financial related processes. The relocation of financial
functions from departments with program responsibilities will provide management of those
programs to have more time for their core functions. Transferring the purchasing functions from
the Child Nutrition/Purchasing Department will allow management of that department to
concentrate on actions needed to improve its financial position as discussed later in this chapter.

Reorganizing the Finance Office, replacing the Finance Officer with a Chief Financial Officer,
and recruiting for the most qualified individual will ensure that BCPS has the opportunity to
employ the most experienced individual for this critical position (see Section 4.1,
Recommendation 4-4, for revised organizational chart).

FISCAL IMPACT

This recommendation can be implemented with existing resources, and combined with other
efficiency recommendations discussed later in this chapter, should allow for the reduction of one
specialist position. Although there will need be salary adjustments increasing the compensation
for a Chief Financial Officer (CFO) and Purchasing Assistant, they will be more than offset by
the elimination of a specialist position (see Section 4.1, Recommendation 4-4, for cost
implications of CFO position).

The fiscal impact of this recommendation is based on eliminating one specialist position in the
Finance Office, and will result in annual savings of $34,923. Annual savings are calculated based
on the average salary of specialist positions of $26,659 plus benefits of $8,264.

Recommendation             2010-11      2011-12       2012-13        2013-14        2014-15
Eliminate One
Specialist in Finance      $34,923      $34,923       $34,923        $34,923        $34,923
Office


FINDING

A portion of the Finance Office’s accounts payable process is time consuming and of limited
value. Duplicate verification of receiving information for invoices over $500 provides little if
any value.

Accounts payable employees in the Finance Office follow the majority of the normal accepted
practice of verification of documents prior to processing payments to vendors, but included in
the process is a requirement for two receiving verifications for some purchases. Accounts
payable employees receive copies of purchase orders after they are processed, verification from
the warehouse when items have been received at the warehouse or from schools or departments
when items are delivered directly to them, and receive invoices from vendors when items have
been shipped. The verification process requires information on invoices to be compared to
information on purchase orders to ensure amounts billed are the same as were contracted for, and
to obtain reports to ensure all items have been received.




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Financial Management                                                     Burke County Public Schools


However, in addition to the accepted practice of using the receiving information provided by the
warehouse, Accounts Payable Clerks also send invoices for more than $500 to the schools and
departments that ordered the items for a second receiving verification. This process is not normal
for accounts payable processes, takes a considerable amount of time both in the Finance Office
and for schools and departments, and provides very little if any added value to the process.

BCPS processes over 14,000 checks from state, federal, and local funds per year and accounts
payable staff estimate that approximately 60 percent or over the $500 amount and receive dual
receiving information. Interviews with accounts payable staff revealed that they almost never
receive verification from the second receiving at schools and departments that is different than
the first receiving.

All processes must be justified and add a benefit commensurate with its cost. Efficient financial
operations require processes with little if any value to be eliminated.

RECOMMENDATION

Recommendation 3-2:

Eliminate the time consuming process that requires a second receiving verification of
invoices that exceed $500.

Eliminating the requirement for sending invoices that exceed $500 for a second receiving
verification will reduce the amount of time spent by accounts payable staff and staff in schools
and departments. Relying on the receiving report from the warehouse is the normal practice in
financial operations and should provide sufficient assurance that items have been received
without the added time consuming burden of dual receiving verification.

FISCAL IMPACT

This recommendation can be implemented with existing resources. Although time saved by
accounts payable staff will not allow for a full-time position to be reduced, it will provide the
Finance Officer the flexibility to redirect staff time to more beneficial processes. However, this
and other recommendations in this chapter when implemented should allow for the reduction of
one specialist position.


FINDING

BCPS does not have a formal policy to track the status of recommendations included in audits
and other reports to ensure appropriate recommendations are being implemented in a timely
manner. Various types of reviews and audits are performed on BCPS operations and reports
prepared for the reviews and audits contain recommendations for needed improvements.

Audits of BCPS financial statements must be performed by qualified certified public accountants
each year. External auditors issue a management in conjunction with the annual audit where
comments on noncompliance issues are addressed. These comments are intended to be used to



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Financial Management                                                     Burke County Public Schools


improve internal controls and program compliance. General Statute 115C-441 states that “no
obligation may be incurred by a local school administrative unit unless the budget resolution
includes an appropriation authorizing the obligation and an unencumbered balance remains in the
appropriation sufficient to pay in the current fiscal year the sums obliged by the transaction for
the current fiscal year.” Comments provided by the outside auditor for the 2007-08 audit
reported that BCPS in the General (Local) Fund spent in excess of the budget and violated
General Statute 1156C-441. For 2007-08, it was also reported that the district spent in excess of
the budget in the State Public School Fund.

Again, the 2008-09 management letter from the outside auditor pointed out that the same
violations of statute continued uncorrected during 2008-09. The report stated that, in the General
(Local) Fund, the district again spent in excess of the budget, and that in the Capital Outlay
Fund for 2008-09, the district spent in excess of the budget.

The Evergreen Team was informed that the normal district practice is for the Finance Office to
address the findings independently within the department. No formal process is completed or
status reports prepared for the Superintendent or School Board to ensure processes are changed
to eliminate a reoccurrence.

Without a system to track and report on the status of recommendations, BCPS continues to run
the risk of failing to take needed action. Board members and district administrators need
periodic information on the current status of previous recommendations in order to hold BCPS
personnel accountable and to ensure that needed improvements are made.

Critical components of a tracking system for report recommendations include assigning
responsibility for initial identification of recommendations, frequency and format for reporting to
administrators and the governing board, management responsibilities for implementing
recommendations, and assigning responsibility for periodically reporting the status of these
recommendations.

RECOMMENDATION

Recommendation 3-3:

Adopt a formal Board policy for tracking and periodically reporting on the status of report
recommendations made to Burke County Public Schools.

By adopting a Board policy and procedure for tracking and periodically reporting the status of
report recommendations, BCPS will ensure that corrective actions are addressed in a timely
manner. Reports to the Superintendent and School Board should enable them to monitor the
completion of action steps needed to improve processes.

FISCAL IMPACT

This recommendation can be implemented with existing resources.




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Financial Management                                                     Burke County Public Schools


FINDING

BCPS lacks sufficient controls to ensure that expenditures do not exceed budget limits approved
by the School Board. Expenditures in both the 2007-08 and 2008-09 fiscal years exceeded
authorized budget limits in a number of accounts.

Although the automated system contains edits that stop payments to vendors when sufficient
budgeted funds are not available, the controls can be overridden and payroll expenditures can be
processed without going through the edit process.

Comments provided by the outside auditor for the 2007-08 audit reported that BCPS in the
General (Local) Fund spent in excess of the budget and violated General Statute 1156C-441 for:

   •   Regular Instruction - $460,065:
   •   School Leadership - $7,516;
   •   Accountability - $315;
   •   Policy, Leadership and Public Relations - $48,144; and
   •   Ancillary Services - $154,999.

For 2007-08, it was also reported that BCPS spent in excess of the budget in the State Public
School Fund for:

   •   Special Population Support and Development - $11,835; and
   •   Policy, Leadership and Public Relations - $1,943.

The recommendation by the external auditor for 2007-08 recommended that expenditures be
compared to the budget prior to payments being authorized. The corrective action plan, as stated
by the district, would be:

   Re-iterating to all staff with the capability to make Budget Journal Entries, that no budget
   Journal Entry is to be made between varying purchase codes without a Board Amendment
   being presented beforehand for any entry in excess of $1,000, or and Amendment for less
   than $1,000 at the next scheduled Board Meeting. I (Finance Director) will also monthly
   review all Budget Journal Entries to make certain none are in violation of Policy.

The corrective action plan as stated by BCPS did not address the problem which was controlling
expenditures and not budget adjustment processing.

Once again, in the 2008-09 management letter from the outside auditor, the same violations of
statute continued uncorrected during 2008-09. The report stated that, in the General (Local)
Fund, BCPS spent in excess of the budget for:

   •   Policy, Leadership and Public Relations - $30,224.

In the Capital Outlay Fund for 2008-09, the district spent in excess of the budget for:

   •   Real Property and Buildings - $1,814,339;



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Financial Management                                                    Burke County Public Schools


   •   Buses and Motor Vehicle - $995,013; and
   •   Debt Service $291,362.

The North Carolina Department of State Treasurer, in a letter dated February 9, 2010, also
addressed the statute violations and stated “expenditures should be controlled or the budget
amended prior to making any disbursements that would exceed appropriations”. The district's
response was “the 2009-10 budget ordinance has been passed by the Board of Education.
Included in the ordinance are/were all known and anticipated revenues and expenditures for the
2009-10 fiscal year. Any adjustments to anticipated revenues and expenditures are being
amended at each regularly scheduled BOE meeting”. Again, the actions only address making
budget adjustments to cover expenditures after the budget has been exceeded. The real issue is
monitoring budgets and controlling expenditures to ensure they stay within appropriated
expenditure limits and are not incurred without appropriate authority.

Addressing the results of overexpenditures by making subsequent budget adjustments does not
provide any expenditure control. Without expenditure controls that monitor and project
expenditures for all types of expenses, BCPS will continually run the risk of unknowingly
exceeding authorized budgets and violations of statute provision. Many districts either encumber
funds for salaries and benefits or include processes during monthly report preparations that
analyze and project expenditures for all types of expenses.

RECOMMENDATION

Recommendation 3-4:

Implement specific monitoring and controls that ensure that expenditures are managed,
stay within appropriations, and do not violate statutory provisions.

Implementing expenditure controls will help ensure that BCPS does not unknowingly exceed
expenditure budgets and continue to violate statute. A process should be implemented where
salary and benefits are encumbered to restrict the use of these budgeted funds for other purposes.
Reports should be prepared each month that compare estimates of total anticipated expenditures
to approved expenditure budgets.

Finance Office staff should analyze expenditures to date to determine expenditure trends and
unanticipated costs. The staff should then estimate the expenditures that are anticipated for the
remainder of the year based on the analysis completed, and determine if budgets are sufficient
for the projected total year expenditures. Should projected expenditures indicate that sufficient
budgets will not be available, actions should be taken immediately that will restrict future
expenditures or obtain Board approval prior to incurring the expenses. It is imperative that
BCPS monitor expenditures and identify budgets that are not sufficient for projected total
expenditures in sufficient time that the Superintendent and School Board can take action and not
wait until expenditures have occurred and budget adjustments are made just to cover the
exceeded budget limits.




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Financial Management                                                      Burke County Public Schools


FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

Although the BCPS 2009-10 Local Current Expense Fund was appropriated by Burke County at
the function/purpose level, the district does not provide Burke County with financial reports.
Without financial reports, it is impossible for the County to monitor district expenditures to help
ensure compliance with budgeting the funds by function.

Between the 2004-05 and 2008-09 fiscal years, Burke County and BCPS had a funding
understanding whereby the district would share in revenues received by Burke County for ad
valorem taxes. A transfer of the combined excess balance of $240,035 was made to the Local
Current Expense Fund.

During this period, BCPS received 24 percent of ad valorem taxes and thus was not required to
submit a budget request to Burke County for funding approval. Although periodic reports during
this time would have provided Burke County with informative data, there was no requirement for
BCPS to submit such reports and none were submitted.

However, due to provisions of a lawsuit settlement, the 2009-10 year funding to the district was
no longer covered by the participating 24 percent funding agreement. BCPS was required to
submit a budget request for funding to Burke County by function. The approval by Burke County
of the funding request also contained a provision that transfers between functions could not
exceed 10 percent without Burke County approval. Financial information is needed by the
County to monitor this transfer provision.

To help ensure compliance with funding provisions—whether state, federal or local—successful
school districts provide needed financial information to interested parties in a timely and
accurate manner. Providing the needed financial information keeps interested parties informed
and, many times, identifies issues early where corrective action, if needed, is much easier to
implement.

RECOMMENDATION

Recommendation 3-5:

Provide Burke County with the financial reports that will provide Burke County staff with
the capability to monitor authorized transfer limits.

Providing Burke County with financial reports in a mutually agreeable format will enable
monitoring of budget transfer limits. Providing financial information will also provide Burke
County with useful general expenditure data that keeps the County Commissioners and staff
informed of BCPS costs.




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Financial Management                                                       Burke County Public Schools


FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

BCPS lacks a Board policy and does not receive reports on a local capital account that provides
funding for Career and Technical Education projects. There is also some uncertainly as to what
purposes the fund can be used for.

BCPS maintains a local capital account that is used to fund the costs of houses constructed by
students enrolled in the Career and Technical Education Program. Funds from the sale of
completed houses have historically been deposited back into this fund to provide resources for
subsequent projects. Although a considerable amount of dollars are processed through the fund,
BCPS lacks a policy and procedures for its program, no reports are prepared for the fund, and
there is some uncertainty pertaining to what the fund balance can be used for.

BCPS staff indicated that there are two houses nearing completion which will be sold in the near
future. The district practice is for the monies received from the sale of the houses to be deposited
back into the fund to be available for future projects. However, $1,000,000 was transferred from
the fund to the Local Current Expense Fund during the 2008-09 year to provide needed cash to
pay for expenditures which exceeded the cash available in the Local Current Expense Fund. The
financial statements for 2008-09 report the $1,000,000 as a loan to the Local Current Expense
Fund from Capital Outlay Funds.

Discussions with BCPS staff indicated there is some uncertainty as to whether the $1,000,000
has to be or will be returned to the capital funds. Proper and effective management of district
funds require a legal determination as to their proper use, polices to provide staff with direction,
and reports to provide information to the Superintendent, School Board, and the public.

RECOMMENDATION

Recommendation 3-6:

Obtain a legal opinion on the appropriate use of the local capital fund for the CTE
Program, develop a Board policy and administrative procedures pertaining to the
management of these funds, and prepare reports for the School Board.

Developing polices governing the use of the local capital funds for CTE projects will help ensure
that the funds are managed appropriately and in compliance with Board direction. Obtaining a
legal opinion pertaining to the authorized use of the funds will provide the School Board with a
firm understating as to whether the $1,000,000 loaned to the Local Current Expense Fund has to
be repaid and provide information for future decisions. Regular reports will enable the Board to
fulfill its responsibilities associated with monitoring and managing district funds.




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Financial Management                                                                  Burke County Public Schools


FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

Although the BCPS Child Nutrition Fund does not pay all support and indirect cost, in the past,
the program’s expenditures consistently exceeded revenues. BCPS has not calculated total cost
for the Child Nutrition Fund to determine the fees that are needed to totally fund the program’s
costs.

During each of the last four years, the Child Nutrition Program’s fund balance has decreased. In
each of the last two years, the program has had expenditures that exceeded revenues by over
$500,000 each year. Exhibit 3-5 presents the revenues, expenditures and changes in fund
balances for the four years⎯2005-06 through 2008-09. During this four-year period, the fund
balance has decreased from $2,572,134 to $1,534,377⎯a 40 percent decrease.

                                             Exhibit 3-5
                                    Child Nutrition Fund Balance
                                 2005-06 through 2008-09 Fiscal Years

              Category                     2005-06           2006-07            2007-08        2008-09
      Beginning Balance Revenues          $2,672,134        $2,638,067         $2,576,420     $2,039,269
      Revenues                            $7,068,810        $7,314,356         $7,410,334     $7,563,435
      Expenditures                        $7,102,878        $7,376,003         $7,947,485     $8,068,325
      Net Change in Fund Balance            ($34,067)         ($61,647)         ($537,151)     ($504,891)
      Ending Balance                      $2,638,067        $2,576,420         $2,039,269     $1,534,377
      Source: BCPS Financial Statements, 2005-06, 2006-07, 2007-08, and 2008-09.


The Child Nutrition Fund is charged a portion of indirect support costs annually. The Finance
Office charges the fund approximately 50 percent of calculated indirect costs which amounts to
approximately $320,000 a year. BCPS does not charge the entire calculated amount due to the
fund’s expenditures consistently exceeding revenues. In addition, the pro-rata share of utilizes,
building maintenance, custodial and other support costs are not charged to the fund. All allocable
support and indirect costs not charged to the Child Nutrition fund is paid for by the Local
Current Expense Fund, thus reducing the amount available for paying costs directly related to
educating BCPS students.

Effective financial management of Child Nutrition Programs requires accurate and complete
financial information. Decision makers cannot effectively manage a program, such as a Child
Nutrition Program, without knowing the total costs of operating the program, the fees that need
to be charged to fully fund the program, and the impact on the Local Current Expense Fund
when all cost is not paid by the program.




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Financial Management                                                          Burke County Public Schools


RECOMMENDATION

Recommendation 3-7:

Determine the total cost for the Child Nutrition Program, take actions to increase fees or
reduce operating cost to enable the fund to reimburse the Local Current Expense Fund for
all support and indirect costs.

Calculating the total cost of operating the BCPS Child Nutrition Program, and the costs incurred
by the Local Current Expense Fund that are not reimbursed, will provide BCPS managers and
the School Board with financial data that will enable better management of district funds. When
total costs are known, decisions can be made either to increase fees to fund the total costs
whereby the Local Current Expense Fund can be reimbursed or the operating costs of the
program can be reduced to achieve the same goal. Should decisions be made not to reimburse the
Local Current Expense Fund, information will at least be available so that the decision will be an
informed decision based on complete financial information.

FISCAL IMPACT

The fiscal impact of this recommendation will result in additional funds being available in the
Local Current Expense Fund and is based on charging the Child Nutrition Fund for all allowable
indirect and support costs.

The exact amount cannot be calculated without the supporting data normally collected when
performing a full review of a Child Nutrition Program. Substantial data are needed to analyze
current indirect cost calculations, building space occupied, utility costs and building maintenance
support. However, it is estimated that an additional $400,000 a year could be charged to the
Child Nutrition Fund and is based on charging the other 50 percent of indirect costs not currently
charged and for other support costs not included in the indirect costs (such as utilities, custodial,
and building maintenance).

Recommendation              2010-11       2011-12        2012-13         2013-14         2014-15
Reimburse the Local
Current Expense
                            $400,000      $400,000      $400,000        $400,000        $400,000
Fund for all Support
and Indirect Costs


3.2   BUDGETING
A budget enables a school district to adequately maintain and control its financial resources. The
school board, central administration, school administrators, department heads, teachers, and
community members should be involved in the budgeting process. The budget should reflect the
overall goals and objectives of the district's long-range strategic plan. Given the scarcity of
resources available to a school district, it is critical that districts budget their dollars effectively.
Sound fiscal management entails forecasting a reasonable but conservative revenue number, as
well as a reasonable but aggressive expenditures to ensure that adequate funds are available.



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FINDING

Although the BCPS local fund balance has drastically decreased during the last two years, BCPS
does not have a fund balance policy to address the situation. An adequate fund balance is needed
to cover unanticipated financial situations.

The fund balance (also referred to as carryover) is defined as the excess of assets over liabilities,
and this amount is used in future years to offset any revenue shortfalls or adjustments that may
occur. In many instances, the fund balance is seen as the amount of money available to bridge
the difference between mandated state and federal expenditures and actual revenue allocations.
Many school districts establish a policy to maintain a specific fund balance, and superintendents
follow administrative procedures to implement this policy each year.

In the past two fiscal years, BCPS has allowed its fund balance to be reduced from $3,256,488
on June 30, 2008 to a negative $449,467 on June 30, 2009. Exhibit 3-6 presents a summary of
activity in the district’s Local Current Expense Fund that resulted in a reduction of the fund
balance by $3,705,955 during the two years from July 1, 2007 to June 30, 2009.

A school district’s fund balance policy is a critical component in the development and
implementation of an annual budget. The Government Finance Officers Association (GFOA)
recommends that governmental entities establish a formal policy on the level of unreserved fund
balance in the local fund, and that the fund balance should be no less than five to 15 percent of
regular local fund operating revenues or no less than two months of regular local fund operating
expenditures.

                                              Exhibit 3-6
                                        Local Fund Balance on
                                     Burke County Public Schools
                                 2005-06 through 2008-09 Fiscal Years

               Category                   2005-06            2006-07            2007-08        2008-09
      Beginning Balance Revenues          $1,579,847         $3,031,788         $3,256,488     $1,163,620
      Revenues                           $21,981,334        $21,372,760       $21,083,564    $22,565,237
      Expenditures                       $20,529,393        $21,148,060       $23,176,432    $24,178,325
      Net Change in Fund Balances         $1,451,941          $224,700        ($2,092,868)   ($1,613,087)
      Ending Balance                      $3,031,788         $3,256,488         $1,163,620     ($449,467)
     Source: BCPS Financial Statements, 2005-06, 2006-07, 2007-08, and 2008-09.


RECOMMENDATION

Recommendation 3-8:

Develop a school board policy to establish a minimum fund balance expectation to be used
as a guide during budget development, and prepare monthly reports for the School Board.

Developing and implementing a local fund balance policy will enable BCPS to manage its Local
Current Expense Fund resources. The Superintendent should draft a policy for Board adoption
that establishes a minimum fund balance expectation. The policy should include guidelines for



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Financial Management                                                            Burke County Public Schools


how to reach this minimum expectation and continue to maintain its fund balance at the
established level.

In addition, the Finance Officer should prepare a monthly report for the School Board that shows
the impact that current year revenues and expenditures are expected to have on the fund balance
at the end of the year.

Exhibit 3-7 illustrates a possible format for a report to the School Board.

FISCAL IMPACT

This recommendation can be implemented with existing resources.

                                             Exhibit 3-7
                                  Sample Fund Balance Monthly Report

                                          Burke County Public Schools
                                       Local Fund Balance Monthly Report
                                         For the Month Ended xx-xx-xx
                                                                      Estimated for the    Estimated
                                                        Year to Date Remainder of the     Yearly Totals
                   Description                             Totals          Year              Totals
  Beginning Fund Balance
  Revenues                                                                                       $0,000

  Revenues:
  County Appropriation                                        $0,000            $0,000           $0,000
  Contracted Services Nurses                                  $0,000            $0,000           $0,000
  Other Revenue Sources                                       $0,000            $0,000           $0,000
  Total Revenue                                               $0,000            $0,000           $0,000

  Expenditures:
  Salaries, Supplements and Benefits                          $0,000            $0,000           $0,000
  Instructional Support Expenses                              $0,000            $0,000           $0,000
  Pupil Support Expenses                                      $0,000            $0,000           $0,000
  Boar of Education                                           $0,000            $0,000           $0,000
  Administrative Support Expenses                             $0,000            $0,000           $0,000
  Utility Expenses                                            $0,000            $0,000           $0,000
  Business Support Services (Repairs and Maintenance)         $0,000            $0,000           $0,000
  Insurance Expense                                           $0,000            $0,000           $0,000
  Support Services (Personnel Department)
  Public Relations                                            $0,000            $0,000           $0,000
  Travel                                                      $0,000            $0,000           $0,000
  Other Expenses                                              $0,000            $0,000           $0,000
  Total Expenditures                                          $0,000            $0,000           $0,000

  Fund Balance                                                $0,000            $0,000           $0,000
 Source: Developed by Evergreen Solutions, February 2010.




        Evergreen Solutions, LLC                                                                 Page 3-16
Financial Management                                                     Burke County Public Schools


FINDING

BCPS does not have a formal policy as to when budget adjustments are required or what
approvals are required before adjustments can be made. Also, processes are not in place to hold
principals and department heads accountable for exceeding their authorized expenditure budgets.

Even though a formal policy does not exist, the budget resolution for 2009-10 states that the
Superintendent is hereby authorized to transfer appropriations within a fund under the following
conditions:

   •   he may transfer amounts between subfunctions and objects of expenditure within a
       function without limitations and without a report being required;

   •   he may transfer amounts not to exceed $1,000 between functions of the same fund with a
       report on such transfers being required at the first meeting of the Board of Education
       (applies to the Local Current Expense Fund); and

   •   he may not transfer any amounts between funds or from any contingency appropriation
       within a fund.

The direction provided by the budget resolution pertaining to budget adjustments seems to be
somewhat unclear. At the February 2010 budget meeting, the Finance Officer presented 16 pages
of budget adjustments⎯three pages required Board approval and the other 13 were for
information purposes only. Frequent budget adjustments are not advisable since they defeat the
purpose of the budget as a planning and control tool, and are very time consuming for staff to
prepare and enter into the automated finance system. If budgets are prepared with a reasonable
amount of care, few amendments are normally necessary.

When finance officials desire to amend a budget they should state their case in writing to the
Board that includes:

   •   identifying the expenditures to be increased;

   •   stating how the increase is to be funded (e.g., by a reduction in estimated year-end fund
       balance, by a reduction in other expenditures, or by an increase in receipts above
       budgeted amounts);

   •   providing the justification for the amendment; and

   •   indicating the course of action if the amendment is not approved.

For any budget system to work and to serve as a tool to manage district funds, it is imperative
that a system of accountability be in place. Budgets and subsequent expenditures within the
budget limits are not only statutory requirements, but are very important for effective budget
management. Inadequate monitoring and management in both 2007-08 and 2008-09 allowed
expenditures to exceed authorized budgets, and thus increased the risk of the BCPS budget being
exceeded.



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Financial Management                                                     Burke County Public Schools


RECOMMENDATION

Recommendation 3-9:

Establish a budget control system where schools and departments are held accountable for
their budgets, develop a budget adjustment policy that provides guidance as to when
budget adjustments are to be prepared, and require documentation of adjustments in
Board minutes.

A budget adjustment policy will ensure that all expenditures receive the approval of the School
Board and ensure that total budgeted funds are not exceeded. The Finance Officer should draft a
policy that states when a budget must be adjusted and the process that must be followed to obtain
Board adoption. The policy should also include what actions the Finance Officer is to take if
invoices or purchase orders are sent to the Finance Office for processing when authorized
budgeted amounts are not available. The Finance Officer should present the policy to the
Superintendent and the Board for adoption. The policy should then be distributed to all
department heads and principals.

In developing the budget control policy, it should be decided at what level school and department
budgets are to be controlled. Many districts manage salary budgets at the district level and do
not allow amounts to be transferred from salary budgets for other purposes without Board
approval. Also, many school districts place budget controls at a high level for each school and
department (such as an amount for utilities, other operating costs, and capital outlay). Although
expenditures are still recorded at detailed levels, the expenditures all rollup to higher-level
budget categories, and departments and schools then have the ability to expend budget amounts
for a variety of expenditures. Strict controls and accountability are established at the high budget
category level.

FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

BCPS does not have a budget calendar nor a formal process that requires consistent involvement
from school and department staff or the public. A formal budget calendar is an important
planning tool that establishes specific tasks, responsibilities, and deadlines for completing the
budget process. The calendar also documents the process that a district follows in the
development of the annual budget.

For fiscal year June 30, 2009, a budget resolution was not adopted by the Board until April 27,
2009. According to North Carolina law, a budget must be adopted. The State has very specific
guidelines regarding the adoption of the budget and requires that a Board adopt interim
appropriations if the budget resolution cannot be adopted by July 1. Without a budget calendar
that highlights when this requirement is mandated, deadlines can go unmet.




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Financial Management                                                                       Burke County Public Schools


BCPS has not established or followed a formal set of procedures in the development of its annual
operating budget. The practice normally followed is for the Finance Officer to meet individually
with principals and department heads. Budgets are developed within estimated funding amounts.
The Finance Officer then takes the budget requests to the Superintendent who reviews and
modifies the requests as appropriate. The budget is then taken to the School Board for approval
using standard automated reports for reporting the budget to the State.

In the past, BCPS did not obtain community involvement through public meetings nor use
advisory committees. Community input was not solicited to help identify priorities for the budget
or to help identify where reductions should be made when funding is not sufficient for needs.

In addition to establishing specific tasks, responsibilities, and deadlines for completing the
budget process, a budget calendar provides the community with notice of its opportunity for
input so they can plan accordingly. The budget calendar also identifies all the steps necessary to
develop and adopt the budget within the time established by law. The calendar guides the
Superintendent and the Board from year to year to ensure the continuity of the budget process.
Without a budget calendar, districts subject themselves to missing important dates or tasks.
There are many formats for budget calendars and steps that have to be performed. A budget
calendar should be customized to meet the needs of the district.

RECOMMENDATION

Recommendation 3-10:

Develop a formal budget calendar to standardize the budget process and to provide steps
for specific input by school staff, department staff, and the community.

To help ensure that BCPS consistently receives input from the public and staff in schools and
departments, a formal budget calendar should be developed that details what specific steps are to
be followed and when the involvement of various groups of stakeholders is to occur. The budget
calendar should be prepared and communicated to all stakeholders including the public, and
should be displayed on the BCPS Web site.

A sample budget calendar is presented in Exhibit 3-8.

                                                 Exhibit 3-8
                                           Sample Budget Calendar
                                       for Burke County Public Schools

   Date                                Description of Activity                                     Responsible
xx-xx-xx      Develop proposed budget calendar for superintendent review                 Finance Officer
xx-xx-xx      Present budget calendar for board approval                                 Finance Officer
xx-xx-xx      Meeting to obtain community input.
xx-xx-xx      Board work sessions to establish preliminary budget guidelines and goals   Board members
xx-xx-xx      Budget instructions presented to and discussed with principals and         Finance Officer
              department heads
xx-xx-xx      Budget requests due to Finance Department                                  Principals and Department Heads
xx-xx-xx       Budget work sessions                                                      Finance Officer, principals and
                                                                                         department heads
Source: Developed by Evergreen, February 2010.




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Financial Management                                                            Burke County Public Schools


FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

Timely, accurate, and easily understood reports are a necessity for Board members to effectively
monitor the district’s financial activity, status of its funds, and budgets. In the past, the BCPS
School Board did not receive any financial reports during the year. In the current year, this has
started to change with financial reports given to the Board in December 2009 and January 2010.

Although the district’s budget, approved by the School Board, includes information on revenues,
expenditures, and some limited information on positions, the Board does not receive routine
reports to keep it informed on how BCPS is progressing on meeting revenue goals and staying
within expenditure limits. Information is not provided during the year that indicates what the
financial position of Burke County Public Schools is expected to be at the end of the year. An
indication of the district’s financial condition at the end of the year requires informed staff to
analyze revenues received and expenditures made, and to make estimates of what revenues and
expenditures will be needed for the remainder of the year using various criteria.

Financial information needs to be submitted to School Board members routinely to enable them
to make informed decisions. Exhibit 3-9 provides a general description of routinely provided
reports to Board members used by other school districts.

                                                Exhibit 3-9
                                     Examples of Basic Finance Reports
                                         Used by School Districts

                               Sample Contents                                    Frequency
Comparison of budgeted to actual revenue by fund and expenditures by
department and related variance. Budgeted amounts should show beginning            Monthly
budget amounts and adjustments that are made during the year.
Notes explaining significant variances (5 percent or more) in the budgeted
                                                                                   Monthly
categories.
Revenue and expenditure data showing columns for current and prior year
                                                                                   Monthly
actual amounts for similar period.
Bar graphs and pie charts depicting comparative revenue and expenditure
                                                                                   Monthly
information.
Summary of monthly grant activities, including number and dollar value of
grants submitted, number and dollar value of grants awarded, and the ratio of      Quarterly
grants awarded to grants submitted-all compared to prior years.
Summary reports for enterprise funds showing a simplified balance sheet and
                                                                                   Quarterly
operating statements.
Status of the General Fund balance and impact of current and future actions
                                                                                   Monthly
will have.
Source: Created by Evergreen Solutions, February 2010.




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Financial Management                                                               Burke County Public Schools


Many governmental entities use the format shown in Exhibit 3-10 for providing budget
information to School Board members. The format is used both when reporting revenues and
expenditures by object for the entire fund and also by department. Many of these types of reports
also include comparisons to the previous year.

For management reports to be useful they must be formatted in a way that the data are easily
understood and consistently accurate, and that the users are trained sufficiently to enable them to
interpret the data. Executive-level reports need not be extensive, but should provide basic
summary-level financial and program-related information in an easy to understand format to
enable efficient decision making by Board members.

Without timely budget information, the School Board is unable to adequately monitor the
financial condition of the district. Unless financial data are provided to Board members, they are
unable to assess the revenue and expenditure trends, and are limited in their ability to provide
timely assistance in developing corrective actions before a financial situation escalates.

                                             Exhibit 3-10
                                      Example of Budget Document

                                                                Current Year
                                              Current             Year to
                                               Month               Date     Projected    Projected
                                   Estimated/ Received/          Received/ to End of     Remaining
             Description           Budgeted Expended            Expended      Year        Balance
         Revenues:
          XXXXXX                         $0,000        $0,000       $0,000      $0,000       $0,000
          XXXXXX                         $0,000        $0,000       $0,000      $0,000       $0,000
          XXXXXX                         $0,000        $0,000       $0,000      $0,000       $0,000
          XXXXXX                         $0,000        $0,000       $0,000      $0,000       $0,000
            Total Revenue                $0,000        $0,000       $0,000      $0,000       $0,000

         Expenditures
          XXXXXX                         $0,000        $0,000       $0,000      $0,000       $0,000
          XXXXXX                         $0,000        $0,000       $0,000      $0,000       $0,000
          XXXXXX                         $0,000        $0,000       $0,000      $0,000       $0,000
          XXXXXX                         $0,000        $0,000       $0,000      $0,000       $0,000
           Total Expenditures            $0,000        $0,000       $0,000      $0,000       $0,000
         Source: Developed by Evergreen Solutions, February 2010.



RECOMMENDATION

Recommendation 3-11:

Develop summary and easily understood financial reports for the School Board, and train
Board members on how to interpret financial information.

Requiring monthly budget status reports will provide the School Board with better oversight for
the BCPS budget. Should funding for BCPS become more restricted, closer oversight will
identify problem areas or where savings could be obtained.



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Financial Management                                                     Burke County Public Schools


FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

The BCPS 2009-10 budget document is basically 37 pages of numerical information using
essentially the same schedules required by the State Department of Education. Other than one
page, that is titled 2009-10 Budget Message, the schedules contain no narrative or explanatory
information. The packet of documents that encompasses the district’s budget begins with a one-
page transmittal letter from the Superintendent to School Board members.

The packet then has five separate documents that present a variety of financial information. The
documents include:

   •   a one-page document titled Local Current Expense Budget 2009-10 (This document
       compares the 2009-10 budgets to the 2008-09 budget for four revenue categories and 13
       expenditure categories.);

   •   a 25-page budget document provides a further breakdown of revenues and expenditures
       for the Local Current Expense Fund Budget;

   •   a one-page pie chart that shows the percentage of the district’s budget that is from Local,
       State, Federal, Capital and Child Nutrition;

   •   one-page titled Budget Resolution 2009-10 Revenue Sources as a percent of Total
       Revenue (The schedule shows the numerical amounts for the revenue sources shown in
       the pie chart); and

   •   a six-page document titled Budget Resolution 2009-10. This document is presented to the
       Board and, when approved, becomes the official budget for the district. The document
       has individual schedules that present the revenues and expenditure budgets for the Local
       Current Expense Fund, State Public School Fund, Federal Grants Fund, School Food
       Service fund, and Capital Outlay Fund. The last page of the document includes a number
       of provisions, as transfer authority, and provides for the signatures of the Board
       Chairman and Secretary.

For 2009-10, the budget provided a total of $126,178,593 in appropriations. Exhibit 3-11
presents the district’s budget by fund source and amount separated for instructional programs
and supporting services.

Many district budgets include multi-year comparative data in an easy to understand format to
provide useful information to readers. Schedules are included for each department that present
budgeted amounts by summarized categories (such as salaries, benefits, operating and capital
with comparisons shown for the budget year to the previous two to three years). Also, budget
documents contain schedules showing positions by department for the current year compared to
the previous four or five years, and comparative schedules for revenues by source.



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Financial Management                                                      Burke County Public Schools


                                        Exhibit 3-11
                      Summary of Budget for Burke County Public Schools
                                    2009-10 Fiscal Year

                                                 Instructional    Supporting
                           Fund                    Program         Services        Total
       Local Current Expense Fund                 $8,140,778      $14,905,619    $23,046,397
       State Public School Fund                  $60,852,604       $8,866,508    $69,719,112
       Federal Grant Program                     $11,692,970       $4,828,746    $16,521,716
       School Food Service Fund                                    $7,963,007     $7,963,007
       Capital Outlay Fund                        $2,427,354       $6,501,006     $8,928,361
         Total Budget                            $83,113,706      $43,064,887   $126,178,593
       Source: BCPS Budget Documents, 2009-10.

A school district’s budget is most effective when it is useful to both district staff and the
community in understanding the financial details. A budget document has three major purposes,
the document serves as a:

   •    communications device;
   •    policy document; and
   •    financial plan.

The Association of School Business Officials (ASBO) and the Government Finance Officers
Association (GFOA) are two national organizations that promote excellence in the form, content,
and presentation of budget documents.

The following is a list of components for ASBO-certified budget documents:

   •    table of contents that identifies major budget sections;
   •    executive summary that presents an overview of key initiatives and financial priorities;
   •    background and current information about the district—its mission and its goals;
   •    organization chart;
   •    overview of the budget process; and
   •    graphs and charts to facilitate understanding and illustrate key financial information.

Many school districts across the country use these criteria to apply for awards these
organizations grant, but some use it primarily to improve their budget document's content,
format, and presentation. School districts have an opportunity to "tell their story" when their
budgets communicate what is behind and beyond the numbers.

RECOMMENDATION

Recommendation 3-12:

Improve the BCPS budget document, and submit the document for review to the
Association of School Business Officials (ASBO) and the Government Finance Officers
Association (GFOA) for continued improvement.




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Financial Management                                                     Burke County Public Schools


Improving the BCPS budget document to include summary comparative information by
departments and schools, summary comparative information for positions and other useful
information will enable the School Board and community to better understand how taxpayer
dollars are being used in educating students. Submitting the budget document to either the
GFOA or ASBO for review and comment will enable BCPS to continue to make the district’s
budget document a more useful tool.

FISCAL IMPACT

This recommendation can be implemented with existing resources.


3.3   PURCHASING
Effective purchasing and warehousing functions provide school districts with supplies, materials,
equipment, and services of acceptable quality, when districts need them and at the lowest
possible prices. Purchasing includes those activities associated with the acquisition of supplies,
materials, services, and equipment. Warehousing ensures proper storage and delivery of goods
needed by schools and departments.

FINDING

The BCPS purchasing process requires all purchases to come through the Director of Child
Nutrition/Purchasing before a purchase is initiated. This process makes obtaining many low cost
items untimely and inefficient. The district has not delegated purchasing authority to any staff
other than to the Director of Child Nutrition/Purchasing.

The purchasing process requires all departments and schools, needing materials or services
regardless of the amount, to prepare a request to purchase on a B-1 form that is sent to the
Director of Child Nutrition/Purchasing. The B-1 form is manually completed by schools and the
central office; however, the child nutrition, transportation, and maintenance departments have the
ability to prepare the form electronically. Due to the current funding situation, the Finance
Officer reviews all purchase orders before they are completed and sent to a vendor. The
information on the B-1 form is keyed into the purchasing system, funds are encumbered, and five
copies of a purchase order are prepared. The Purchasing Office keeps one copy of the B-1 form,
one goes to the vendor, one to the school/department, one to the warehouse, and one to the
Finance Office.

The district’s purchasing guidelines are presented in Exhibit 3-12.

After reviewing the B-1 form and determining that the department or school has obtained needed
quotes or bids, a purchasing assistant takes information on the B-1 form and enters it into the
purchasing system to create a purchase order. If the purchase request is for an item contained in a
state contract, the purchase is made from the identified state contract vendor unless the items
have been found at a lower price.




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Financial Management                                                                  Burke County Public Schools


                                               Exhibit 3-12
                                        Burke County Public Schools
                                           Purchasing Guidelines
                                           2009-10 School Year

     Purchase Amount                        Threshold Action                    Authorized to Make Purchase
  Up to $1,000                   Request purchase from best vendor          Director of Child Nutrition/Purchasing
                                 considering price, quality                 must approve
                                 and availability.
  $1,000 to less than $2,500     Three telephone or written quotes          Director of Child Nutrition/Purchasing
                                 unless sole source or emergency.           must approve

 $2,500 to less than $5,000      Written invitations for bids and written   Director of Child Nutrition/Purchasing
                                 responses

  $5,000 to less than $90,000    Request for price proposals (Form B-3,     Director of Child Nutrition/Purchasing
                                 Invitation to Bid) and General Terms
                                 and Conditions mailed or faxed to
                                 prospective bidders.
  $90,000 or more                 Formal bid process, requiring public      Director of Child Nutrition/Purchasing
                                 advertisement.
Source: BCPS Purchasing Office, February 2010.




A few standing purchase orders have been prepared for selected departments to assist them in
obtaining routine small dollar purchases, mainly building maintenance supplies and some office
supplies. Standing purchase orders for $1,000 or less are issued to a few local vendors where
materials and supplies are frequently purchased. These standing purchase orders allow
departments to purchase small dollar items from the selected vendors without having to complete
the entire individual purchase order process. Individual invoices are received for each purchase
and a payment is processed.

Centralizing purchasing authority solely to the Director of Child Nutrition/Purchasing certainly
provides a considerable amount of control over purchasing activity and may in some instances
provide a lower cost for items. However, the savings from lower cost is, in most cases, more than
offset by the inconvenience of delays and the amount of administrative time that it takes to
process all purchase requests through the Purchasing Office. Interviews with departments that
are required to have the Director of Child Nutrition/Purchasing purchase all items indicated a
general dissatisfaction with the process.

Many school districts have delegated limited purchasing authority to department heads and
principals to make purchases. This practice improves the timeliness of purchases and reduces
the amount of administrative time it takes to complete individual requests for purchases and
purchase orders. Along with the delegation to purchase are guidelines that require bid-quote
forms to be attached to invoices that show the required process was followed before making the
purchase.




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Financial Management                                                     Burke County Public Schools


RECOMMENDATION

Recommendation 3-13:

Delegate purchasing authority to principals and department heads for low cost purchases
to increase efficiency and timeliness of receiving needed items.

Revising the BCPS purchasing process to allow departments and schools to complete lower cost
purchasing transactions without first coming through the Purchasing Office will enable
departments and schools to obtain items more timely and reduce the administrative time that is
required to prepare request for purchases. This action will not only reduce the burden on the
departments and schools, but will also provide the Purchasing Department more time to spend
on high dollar purchases and provide more training to departments.

FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

BCPS has not established a procurement card (P-card) program for use by employees when
making small dollar purchases. Purchase orders are required for acquisition of all materials and
supplies of any dollar amount.

Procurement cards are designed to maintain control of expenses, while reducing administrative
costs associated with authorizing, tracking, and paying specific small, recurring purchases.
Procurement cards are similar to debit cards, but are designed to provide a high level of control
while streamlining and simplifying the process for making low-dollar, high-volume purchases.
P-cards can be controlled at several levels, including by department and by employee. Card
limits can be set by individual employee; by single purchase limits; with monthly, weekly, or
daily limits; or some combination. Merchant category codes can also be established with each
card so that employees can only make purchases through pre-approved vendors.

Districts can set spending limits for each card at issuance and place restrictions on the types of
purchases made. An effective procurement card program centralizes the approval of cardholders,
restricts cardholders to employees or job positions specifically approved by the School Board,
lists examples of appropriate types of transactions, and imposes limits based upon particular
positions

Procurement card expenditures are paid monthly to the issuing bank in the form of one lump-
sum payment. Card holder payments can be reviewed daily, weekly, or monthly by both the
cardholder and accounts payable staff. Using procurement cards significantly reduces the number
of purchase orders and payments processed annually. Procurement card policies normally state
that violations can result in revocation of the card and disciplinary action, up to and including
termination of employment.




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Financial Management                                                      Burke County Public Schools


BCPS processes over 11,000 purchase orders per year. Although the district captures the dollar
amount of each purchase order, the number that was under $1,000 was not available. It was
estimated that over 50 percent were under the $1,000 amount which many districts use as limit
for use of procurement cards.

Using procurement cards can significantly reduce the number of purchase requisitions and
payments processed. Procurement cards have produced savings by reducing the number of
purchase orders and payments, and in some instances by obtaining lower prices from their
suppliers due to faster payments. As an example, Norfolk Public Schools in Virginia
implemented a procurement card program that has drastically reduced the number of purchase
requisitions processed and number of vendor payments that have to be made. In addition,
Norfolk Public Schools receives over $150,000 annually in rebates from its procurement card
contract.

RECOMMENDATION

Recommendation 3-14:

Establish a Purchasing Card Program to increase efficiencies in the purchasing and
payment processes.

The use of procurement cards will provide BCPS with a more efficient process to obtain small
dollar purchases and make subsequent payments to vendors. Time savings in the accounts
payable process could be significant and dependent upon the procurement card limits and
provisions.

FISCAL IMPACT

This recommendation can be implemented with existing resources.


3.4   ASSET AND RISK MANAGEMENT

An effective asset and risk management program controls costs by protecting districts against
significant losses. Risk management includes the identification, analysis, and reduction of risk to
the district's assets and employees through insurance and safety programs. Fixed asset
management should account for district property efficiently and accurately, and safeguard it
against theft and obsolescence.

FINDING

BCPS has significantly reduced its workers’ compensation costs. With the assistance of its
financial advisor and third-party administrator, the district has reduced its cost incurred in 2005-
06 of $544,340 to only $92,384 in 2009-10⎯an 83 percent decrease. The district’s Safety
Officer worked closely with outside service providers to coordinate training for district staff and
conducts a variety of inspections to ensure facilities are risk free.




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Financial Management                                                      Burke County Public Schools


COMMENDATION

Burke County Public Schools is commended for addressing excessive workers’
compensation costs and reducing claims through training and safety inspections.


FINDING

Burke County Public Schools was recently notified that its Experience Modification Factor
(EMF) would be revised downward to .99. This is considerable achievement, indicating a
marked decrease in accident, injuries and insurance claims. Every employer that spends more
than $50,000 per year on workers’ compensation has an EMF. Each employer starts with an
experience modification factor of 1.00 and goes up and down depending on claim experience.
The lower the claim rate, the lower the experience modification factor, and thus the insurance
premium charged.

COMMENDATION

Burke County Public Schools is commended for its efforts to control and reduce accidents,
injuries, and claims, and its recent achievement of an EMF of .99, leading to lower
insurance premiums.


FINDING

Although BCPS has a fixed asset system, it does not have formal polices to adequately protect its
investment in fixed assets. There are no requirements for annual physical inventories to be
conducted, approvals before items can be deleted from the asset inventory, guidelines that
require reimbursement for items lost due to negligence, or for a police report or employee
affidavit for lost or stolen items.

The district’s fixed asset system is maintained in the Purchasing Office under the direction of the
Director of Child Nutrition/Purchasing. A Purchasing Clerk is responsible for entering items
purchased into the fixed asset system and for deleting items when requested. The Finance Office
sends invoices and other documents to the Purchasing Clerk when the expenditure coding
indicates that the invoice is in payment of fixed asset items.

On June 30, 2009, BCPS had over $129 million invested in fixed assets from its Local Current
Expense Fund and over $700 thousand from its Child Nutrition Fund. Exhibit 3-13 shows a
summary of the district’s investment in fixed assets on June 30, 2009.

BCPS does provide limited direction in Section XIV of the purchasing manual. Section XIV
provides information pertaining to fixed assets that are purchased, as well as the process that is to
be followed to add items purchased to the fixed asset system. In addition, Section XVII of the
manual indicates that the disposal of BCPS assets declared surplus will be under the direction of
a Surplus Material Committee that is chaired by the Purchasing Agent. Section XIV shows an
effective date of April 1, 1994 without any revisions, and Section XVII shows a revision date of
October 1999.



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Financial Management                                                         Burke County Public Schools


                                             Exhibit 3-13
                           Capital Assets in Burke County Public Schools
                                            June 30, 2009

                                            Governmental     Business-type
                  Description                  Activities     Activities         Total
         Land                                 $3,414,165                       $3,414,165
         Buildings improvements             $181,187,782                     $181,187,782
         Construction in Progress               $351,033                         $351,033
         Equipment                            $5,222,994      $3,435,133       $8,658,127
         Vehicles                            $10,610,957                      $10,610,957
          Subtotal                          $200,786,931      $3,435,133     $204,222,064
         Less Accumulated                    $71,699,351      $2,734,091      $74,433,442
         Depreciation
          TOTAL                             $129,087,580       $701,042      $129,788,622
         Source: BCPS Financial Statements, June 30, 2009.


Although BCPS does not have a specific requirement for a physical inventory to be conducted
annually, interviews indicated that inventories are sometimes performed at the request of the
Purchasing Department. How the results are to be used is unclear.

BCPS practice allows items that cannot be found to be deleted from the inventory listing without
any approvals being obtained. Principals and department heads can request items to be deleted
from their inventory listings without providing justifications and further approvals are not
required. The procedure for lost or destroyed property does not hold site administrators
responsible for lost or destroyed items. Section XIV of the purchasing manual requires a person
to be designated at each school or department to be the fixed asset contract person; however,
interviews indicated that it was unclear who the designated individuals are at schools and
departments.

Fixed asset policies normally address many issues that pertain to an entity’s investment in fixed
assets. Policies include guidelines for all fixed assets and regularly address:

   •   who is responsible for accounting for the district’s investment in fixed assets and the
       system that is to be used for the accounting;

   •   responsibility and accountability for the property and equipment owned;

   •   requiring annual physical inventories and approvals that must be obtained before items
       can be deleted from asset records;

   •   capitalization thresholds for property, equipment, land, and infrastructure;

   •   depreciation methods, salvage value, and a schedule of estimated useful lives;

   •   determining capitalized improvements versus maintenance expenses;




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Financial Management                                                       Burke County Public Schools


      •   reporting junked, stolen, or missing property, and what approvals are required to delete
          these items from the inventory;

      •   receiving donated property; and

      •   transferring assets between departments.

To protect its investment in fixed assets, districts must track their assets and have policies that
provide direction on how the assets are to be managed. As items are acquired, they are
immediately added to the list, and when the district disposes of an item through normal processes
they are taken off the listing. When an item can not be found, the situation is examined and
proper approvals required before the item can be taken from the asset inventory.

Best practice examples have shown that school districts that have control over fixed assets are
those that assign responsibility to specific individuals and then hold those individuals
accountable for any missing assets or other discrepancies. In addition, Board members review
and approve reports that show a detailed listing of any missing or stolen assets and who was
responsible for the custody of those assets.

RECOMMENDATION

Recommendation 3-15:

Develop a Board Policy to help ensure the protection of the district’s investment in its fixed
assets.

Developing policies for BCPS fixed assets will ensure that the investment in fixed assets is
properly managed and protected. Assigning individual accountability, and requiring approvals
for items lost or stolen, will increase controls over the district’s investment in fixed assets.
Requiring justifications and approvals for items lost or stolen should enhance oversight by
principals and department heads as well as custody of fixed assets.

FISCAL IMPACT

This recommendation can be implemented with existing resources.


3.5       SCHOOL AND DAY CARE FUNDS
School funds are essentially monies maintained at schools in bank accounts established for each
school. Funds come from a variety of activities at the school such as fund raisers and athletics.
Principals have management responsibility for the funds. Day care funds are maintained as
school funds, but identified and maintained in separate accounts.

FINDING

An annual audit is conducted by an outside auditing firm of BCPS school funds; however, the
audit is limited in scope and the Finance Office performs a more detailed audit of all school



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Financial Management                                                         Burke County Public Schools


funds each year. The Assistant Finance Officer prepares an audit schedule each year that
includes all school funds and day care accounts. A comprehensive and detailed audit program is
used for each audit that includes specific processes for auditing receipts, disbursements, and
balances.

COMMENDATION

Burke County Public Schools is commended for conducting detailed audits of its school and
day care funds to help ensure proper use and accountability.


FINDING

Although the management of the 17 day care sites is centralized and provided by two co-
directors, funds for the programs are managed and under the direction of principals at individual
schools. There is no BCPS policy for the management of day care funds.

The BCPS Day Care Program generates revenues and incurs approximately $1.7 million dollars
a year in costs. Exhibit 3-14 presents financial activity for the 17 day care facilities in the district
for 2008-09. Funds are accounted for as school funds and transactions are entered into the school
fund system. As shown in Exhibit 3-14, the cumulative accounts had a balance at June 30, 2009
of $667,636, and $16,059 was transferred from the day care funds to other school funds by
principals for other purposes.

                                             Exhibit 3-14
                                   Day Care Funds Financial Activity
                                    in Burke County Public Schools
                                          2008-09 Fiscal Year

                                Beginning                                                Ending
              School             Balance          Receipts   Disbursement   Transfers    Balance
      Chesterfield              $15,455           $34,845       $38,713      $2,096      $13,683
      Drexel                    $53,026         $162,342      $164,917        ($394)     $50,057
      East Burke Middle         $19,735           $65,712       $75,626      $1,383      $11,205
      Forest Hill               $20,886           $62,459       $62,041       ($320)     $20,984
      George Hildebrand         $45,191         $110,572      $115,089                   $40,674
      Glen Alpine               $52,362         $151,309      $135,014       ($1,147)    $67,510
      Hallyburton               $42,378           $78,594       $91,030        ($128)    $29,814
      Hildebran                 $35,796         $114,623        $97,413                  $53,005
      Icard                     $27,552           $82,553       $79,750                  $30,355
      Liberty                   $35,394           $49,309       $60,749         ($92)    $23,862
      Mull                       $9,115           $81,157       $89,729                    $543
      Oka Hill                  $50,950         $142,085      $132,126        ($218)     $60,691
      Ray Childers              $89,686         $141,511      $159,991        ($990)     $70,215
      Rutherford College        $70,857           $94,553       $95,251                  $70,159
      Salem                     $54,564         $132,726      $133,284                   $54,006
      Valdese                   $31,053           $91,540       $87,013       $2,197     $37,777
      W.A Young                 $43,575         $100,635        $92,669     ($18,447)    $33,095
      TOTAL                    $697,575        $1,696,524    $1,710,404     ($16,059)   $667,636
       Source: BCPS School Fund Reports, 2008-09.




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Financial Management                                                                 Burke County Public Schools


Although not a formal policy, BCPS operates under a School Board directive whereby each
account is to keep a fund balance equal to three months of expenditures. There is no guidance as
to how to reach the desired fund balance or what is to happen to the funds if the balance exceeds
the desired target. Exhibit 3-15 shows the status of each day care fund and how it compares to
the three-month expenditure target as of June 30, 2009.

                                      Exhibit 3-15
                  Day Care Fund Balances* Exceeding Three-Month Target
                                   2008-09 Fiscal Year

                                                           Three Months of      Excess (Deficit) of
                                         Balance          Expenditures Fund     Balance Over Fund
                    School           June 30, 2009          Balance Target        Balance Target
            Chesterfield                 $13,683                $9,678                $4,005
            Drexel                       $50,057               $41,229                $8,828
            East Burke Middle            $11,205               $18,907               ($7,702)
            Forest Hill                  $20,984               $15,510                $5,474
            George Hildebrand            $40,674               $28,772               $11,902
            Glen Alpine                  $67,510               $33,754               $33,756
            Hallyburton                  $29,814               $22,757                $7,057
            Hildebran                    $53,005               $24,353               $28,652
            Icard                        $30,355               $19,937               $10,418
            Liberty                      $23,862               $15,187                $8,675
            Mull                            $543               $22,432              ($21,889)
            Oka Hill                     $60,691               $33,031               $27,660
            Ray Childers                 $70,215               $39,998               $30,217
            Rutherford College           $70,159               $23,813               $46,346
            Salem                        $54,006               $33,321               $20,685
            Valdese                      $37,777               $21,753               $16,024
            W.A Young                    $33,095               $23,167                $9,928
            TOTAL                       $667,636              $427,601              $240,035
            Source: BCPS School Fund Reports, 2008-09, and Evergreen Calculations, 2010.
            *Includes expenditures for day care and feeding programs.

BCPS day care funds are not charged the cost for use of buildings nor for increased utility costs.
Total costs are not identified to enable the district to know if the program is self-sufficient, if the
program is generating receipts that exceed costs, or if the district is subsidizing the program from
its Local Current Expense Fund. However, the Finance Office does calculate an indirect charge
for services provided by various district staff that supports the day care program, including staff
from the Finance Office, Purchasing Department, Human Resources, and the Superintendent.
Indirect costs charged to the Day Care Funds for 2009-10 totaled $102,834 and were allocated to
each account based on the site’s percentage of total receipts for the 2008-09 fiscal year.

For funds to be managed properly, and to ensure that they are only expended for intended
purposes, policies and guidelines must be in place. Centralizing funds and providing
management authority helps to ensure that standard processes are used for each site’s funds.

RECOMMENDATION

Recommendation 3-16:

Develop a Board Policy for day care funds, centralize accounts, allocate total costs, and
transfer fund balances at the end of each year that exceed target amounts to the Local
Current Expense Fund (i.e., the funding source for general operations of the district).



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Financial Management                                                   Burke County Public Schools


Centralizing day care funds will provide better oversight to the monies in the accounts and help
ensure they are expended only for day care costs. A Board policy will standardize how and what
funds can be expended for and provide a source of revenue for the Local Current Expense Fund.

FISCAL IMPACT

The fiscal impact of this recommendation is based on the transfer of the combined excess
balance of $240,035 to the Local Current Expense Fund. The combined balances of all day care
funds at June 30, 2009 of $667,636 exceeded the three-month combined target balance of
$427,601 by $240,035 as shown in Exhibit 3-15.

Recommendation            2010-11      2011-12     2012-13        2013-14        2014-15
Transfer Fund
                         $240,035     $240,035     $240,035       $240,035       $240,035
Balances




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                                           CHAPTER 4:
                              REVIEW OF NON-FINANCIAL
                           MANAGEMENT AND OPERATIONS




Evergreen Solutions, LLC
                      4.0 REVIEW OF NON-FINANCIAL
                      MANAGEMENT AND OPERATIONS

This chapter reviews non-financial administrative and support services in Burke County Public
Schools and is divided into the following six sections:

          4.1    Central Administration
          4.2    Human Resources
          4.3    Transportation
          4.4    Child Nutrition
          4.5    Facilities
          4.6    Safety and Security

The findings contained in this chapter are intended to identify operational strengths and
challenges in Burke County Public Schools. The associated commendations and
recommendations are designed to highlight practices that are exemplary as well as provide
strategies for addressing areas of concern.


4.1        CENTRAL ADMINISTRATION
The heart of an organization is its overall organization and management. The health of the
organization can be ascertained in a number of ways, including reviewing the organizational
structure and its management. An organization functioning at a best practices level has these
characteristics:

      •    defines itself as a system and the organization’s stakeholders include its owners and staff,
           its suppliers, intermediate customers, the ultimate customers of the product or service,
           and the communities in which the organization operates;

      •    has a strong sensing system for receiving current information on all parts of the system
           and their interactions (system dynamics thinking);

      •    possesses a strong sense of purpose;

      •    operates in a “form follows function” mode—work determines the structures and
           mechanisms to do it and consequently it uses multiple structures, including formal
           pyramidal structures, horizontal structures and teams, project structures, and temporary
           structures as necessary;

      •    respects customer service both to outside customers and to others within the organization;

      •    is information driven and shares information across functions and organizational levels;

      •    has communication systems which are relatively open throughout the organization;



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   •   encourages and allows decisions to be made at the level closest to the customer, where all
       the necessary information is available;

   •   has reward systems that support team and individual development—managers,
       supervisors, and teams are appraised against both performance and improvement goals;

   •   operates in a learning mode and identifies learning points as part of the process of all
       decision making;

   •   makes explicit recognition for innovation and creativity, and has a high tolerance for
       different styles of thinking and for ambiguity;

   •   has policies which reflect respect for the tensions between work and family demands;

   •   keeps an explicit social agenda;

   •   gives sufficient attention to efficient work, quality, and safety awareness in operations,
       and identifies and manages change; and

   •   is generally guided by a strong manager employing a variety of work groups composed of
       individuals possessing appropriate skills and complementary traits.

FINDING

Burke County Public Schools did not have any organizational charts when Dr. Stellar recently
took over as Superintendent. As a consequence, BCPS staffing has grown without any annual
review of district priorities or needs. Prior to his development of these organizational charts to
show Evergreen consultants “what is,” the most recent depiction of the district’s organizational
structure is contained in the Board Policy Manual and dated July 2004.

Exhibit 4-1 shows the current high-level organizational structure for the BCPS central office that
Dr. Stellar developed. Support positions under the Associate and Assistant Superintendents,
Chief Technology Officer, and Directors are not shown for simplicity.

Interviews with Dr. Stellar and other central office administrators revealed an awareness of the
need to reorganize central administrative staffing to streamline operations for greater efficiency
and effectiveness, and to focus on core activities in each functional area. Senior managers
demonstrated a desire for input from the Evergreen Team to assist in that process.

COMMENDATION

Central office administrators recognize the need for better organizing the central office
structure for improving efficiency, effectiveness, and customer-service orientation to
schools in Burke County Public Schools.




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Review of Non-Financial Management and Operations                          Burke County Public Schools


                                              Exhibit 4-1
                              Current Executive Organizational Structure in
                                      Burke County Public Schools




Source: Superintendent’s Office, Burke County Public Schools, 2010.



FINDING

As shown in Exhibit 4-1, the Superintendent currently has 12 direct reports. This span of control
is too large for him to be able to focus on key district responsibilities as well as on Board and
community relations.

Additional concerns related to the current organizational structure are:

    •    Some positions that report to the Superintendent are directors which should more
         logically report to intermediate positions such as an Assistant or Associate
         Superintendent who are better positioned to focus on day-to-day departmental activities.

    •    The Grant Writer reports directly to the Superintendent rather than to a position more
         directly related to programs for which grants should be written and monitored.

    •    Under the current organizational structure, there is no structurally coordinated effort
         centered on curriculum and instruction.

    •    The Associate Superintendent and the Assistant Superintendent appear to have similar
         spans of control, suggesting that there is only a minimal difference between the two
         levels of positions. Typically, when there is an Associate Superintendent, the position
         serves as the conduit between other executive positions and the Superintendent, instead
         of playing a minor role. This is not the case organizationally in Burke County Public
         Schools.

Exhibit 4-2 proposes a revised organizational structure for the executive management. The
direct reports for each senior manager are discussed later in the chapter.



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Review of Non-Financial Management and Operations                                                Burke County Public Schools


                                                Exhibit 4-2
                                  Proposed Executive Organizational Structure
                                         Burke County Public Schools

                                                          Superintendent




                                        Administrative
                                          Assistant




                          Assistant
      Assistant
                       Superintendent   Chief Finance    Chief Technology   Executive Director      Executive Director   School Community
  Superintendent for
                       Curriculum and      Officer            Officer       for Accountability      Human Resources      Engagement Officer
   Support Services
                         Instruction                                           and Planning


Source: Created by Evergreen Solutions, 2010.



RECOMMENDATION

Recommendation 4-1:

Adopt the proposed executive organizational structure to decrease the Superintendent’s
span of control and enable him to focus on broader districtwide responsibilities.

The proposed positions of Executive Director of Accountability and Planning, Chief Financial
Officer, Executive Director of Human Resources, and School Community Engagement Officer
should be advertised. The benefits of this structure are:

     •      Only senior positions and the School Community Engagement Officer report directly to
            the Superintendent. This action reduces the Superintendent’s span of control from 12
            direct reports to eight direct reports.

     •      Creating an Assistant Superintendent for Curriculum and Instruction enables BCPS to
            focus on its core functions of teaching and learning.

     •      Directors will report to one of those positions most closely related to their job function.

     •      The School Community Engagement Officer, when maximized, will serve as a critical
            conduit of information to and from the community and should be closely associated with
            the Superintendent’s Office. Once this is done, the person in that position can work with
            the Superintendent to develop a comprehensive public relations program for BCPS.

     •      The accountability role would be expanded beyond just student achievement to include
            overall accountability within the district, strategic planning, assessment, and the use of



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Review of Non-Financial Management and Operations                       Burke County Public Schools


       data supporting those functions. Broadening this position to encompass strategic planning
       as well as accountability, and placing it as a direct report to the Superintendent, will
       elevate responsibility to the central role it must play in the district.

   •   Elevating the financial and human resources roles to more senior-level positions as
       executive directors also recognizes their central role in district operations.

   •   The Superintendent’s time can be better leveraged to lead BCPS initiatives and reach out
       to the community for input and dissemination of district communications, rather than
       having such a broad span of control for direct staff supervision.

FISCAL IMPACT

Eliminating the Associate Superintendent’s salary would save the district $135,454 including
benefits. In a later recommendation, the position will actually be reclassified to an Executive
Director, and accounted for in a subsequent section. Adding an Assistant Superintendent position
at the pay level of the existing Assistant Superintendent would cost the district $116,756,
including benefits. Elevating the Human Resources, Planning/Accountability and Finance
Officer positions is estimated to cost the district an additional $6,550 + $17,790 (the difference
between the current Finance Officer’s salary and the proposed increase) + $104,800 for the new
Executive Director for Planning/Accountability including benefits. The proposed salary is
calculated by adding $5,000 to the current salary of the Personnel Administrator (plus $1,500
benefits). No salary change is recommended for the School Community Engagement Officer.

 Recommendation                 2010-11        2011-12      2012-13        2013-14       2014-15
 Eliminate an Associate
                                $135,454      $135,454     $135,454       $135,454       $135,454
 Superintendent
 Add an Assistant
 Superintendent for
                               ($116,756)    ($116,756)    ($116,756)    ($116,756)     ($116,756)
 Curriculum and
 Instruction
 Create a Chief Financial
                               ($101,782)    ($101,782)    ($101,782)    ($101,782)     ($101,782)
 Officer
 Eliminate the Finance
                                 $83,992       $83,992      $83,992        $83,992        $83,992
 Officer
 Create an Executive
 Director of Human             ($108,730)    ($108,730)    ($108,730)    ($108,730)     ($108,730)
 Resources
 Eliminate the Personnel
                                $102,180      $102,180     $102,180       $102,180       $102,180
 Administrator
 Add an Executive
 Director for Planning and     ($104,800)    ($104,800)    ($104,800)    ($104,800)     ($104,800)
 Accountability
 Total                         ($110,442)    ($110,442)    ($110,442)    ($110,442)     ($110,442)




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FINDING

Currently, BCPS has instructional coaches at both the elementary and secondary levels.
Although these individuals are lauded for the professional development and mentoring they offer
teachers, they are inequitably allocated and do not have a balanced knowledge of content areas
needed by the schools they serve.

Documentation provided by the district shows that the ratio of instructional coaches to students
ranges from 1:493 at Walter Johnson to 1:2,175 at Forest Hill.* At this point, each secondary
school has its own instructional coach while at the elementary level, each serves approximately
three schools. The number of days elementary instructional coaches are assigned depends on the
school’s need, with those schools performing at lower levels being assigned more days per week.

Several staff interviewed noted that there is variability in the quality of services they provide.
Again, this is an area in which BCPS has few written expectations or accountability procedures
other than a job description that was provided to Evergreen. Several interviewees also noted a
need for content specialists at the central office level to serve the entire district.

BCPS instructional leaders emphasized that there is no time for vertical alignment of curriculum
or to develop curriculum maps. One teacher stated that there had been attempts in the past, but
they had been sporadic. Another expressed concern that the organizational structure does not
lend itself to a focus on curriculum. Without a structure that focuses on teaching and learning,
and experienced educators assigned curricular and instructional responsibility, student
performance cannot improve at levels that BCPS students and teachers are both capable of
achieving, and a goal which the Superintendent has prioritized to achieve.

RECOMMENDATION

Recommendation 4-2:

Eliminate the Instructional Coaches and add Content Coordinators to work under the
Office of the proposed Assistant Superintendent for Curriculum and Instruction.

Burke County Public Schools needs instructional leaders to:

     •    have the time and authority to examine student performance at the district as well as
          school levels;

     •    identify strengths to build on and gaps that point out needs relative to instructional
          materials, professional development, and curricular needs as well as together across
          content areas to integrate professional development and curriculum standards; and

     •    work together to address identified needs.



*Calculated at 20 percent of five days for the school’s 435 x 5= 2,175 students since the coach is only there one day a week.



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There are staff who analyze data and even train and work with school staff to understand it, but
do not take the data beyond that level to change teaching and learning in a cohesive, seamless
way through the K-12 sequence. Creating Content Coordinators to work closely with other
instructional leaders in the district will achieve this goal. The positions should be advertised with
current talented instructional coaches encouraged to apply. Specific content areas that should be
created include Mathematics, Reading, Language Arts, Science, Social Studies, Arts, Physical
Education/Athletics, and Career Technical Education/Workforce Development.

BCPS could also capitalize on the knowledge and expertise of the instructional coaches who do
not become Content Coordinators and other strong teachers by creating Curriculum Instructional
Teams (CIT) in each content area. They should have representation from each level of schools
and grades, and meet monthly with the new Content Coordinators to perform some of the above-
mentioned tasks, develop curriculum maps, and align curricula. The trainers of trainers model
could be used to develop CIT members at each school as content experts and resources for their
colleagues.

FISCAL IMPACT

The elimination of the 15 instructional coaches who work 11 months would save BCPS about
$890,184 annually (salaries of $45,302 for 11 months x 15=$679,530) plus benefits of 31 percent
($679,530 x .31=$210,654). Replacing those positions with seven new Content Coordinators at a
proposed salary of $52,033, based on the average Coordinator’s salary, plus benefits of 31
percent ($16,130) would cost an annual $68,163 for each position.

The Content Coordinator responsible for PE/Athletics should become the Athletic Director for
the entire district, eliminating the need for the current four part-time athletic directors who
receive supplements of $2,340 each per district records. The current position of Director of
Career Technical Education should become a Coordinator, and also have sole responsibility for
Workforce Development, rather than partial responsibility for it. Any grant amendment that may
be necessary for that change should be filed. Deducting the average salary and benefits of a
Coordinator ($68,163) from the average of a Director ($71,229), results in a difference of
$3,066.

 Recommendation                2010-11         2011-12        2012-13        2013-14        2014-15
 Eliminate 15
 Instructional Coach           $809,266       $809,266       $809,266       $809,266        $809,266
 Positions
 Add Seven Content
                              ($477,141)     ($477,141)     ($477,141)      ($477,141)     ($477,141)
 Coordinator Positions
 Convert Director of
                                $3,066         $3,066          $3,066         $3,066         $3,066
 CTE to Coordinator
 Eliminate Supplements
 for Four Athletic              $9,360         $9,360          $9,360         $9,360         $9,360
 Directors
 Total Savings                 $344,551       $344,551       $344,551       $344,551        $344,551




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Review of Non-Financial Management and Operations                         Burke County Public Schools


FINDING

Many of the supervisory responsibilities assigned to central office administrators are not
logically located within areas related to each office’s core functions. This impedes their ability to
coordinate, communicate, and plan so that programs and activities are interwoven, non-
duplicative, and place staff in proximity to those with related roles for the district to take full
advantage of their individual and collective expertise. Specifically:

   •   Day Care Co-Directors/Site Directors for programs at each school report to the Assistant
       Superintendent for Support Services who supervises such activities as Facilities
       Management and Maintenance. They were placed there because they were considered an
       enterprise fund and, in that respect, it has been a profitable decision for the district and
       program. However, to strengthen the instructional foundation that students receive,
       communications and coordination would be facilitated by placing them under the
       proposed Assistant Superintendent for Curriculum and Instruction.

   •   Other activities related to early childhood including Even Start, mobile Pre-School, and
       Early Childhood specialists are located in a completely separate department under the
       Director of Elementary Education/Title I with each of these positions reporting to her.
       These operations should be combined.

   •   Two Directors oversee career-tech tasks and are supported by additional positions. The
       Director of Relations/Workforce Development and Career and Technical Education
       Director both supervise activities related to student understanding and benefiting from the
       link between school and careers. Both positions also work with community industry and
       businesses to further employment within the local area. Both also have employees, for a
       total of six full-time and two part-time positions in those offices.

   •   The Director of Relations/Workforce Development has two sets of responsibilities that
       are completely unrelated: performing public relations/communications and coordinating
       workforce development activities. The dual nature of responsibilities possibly contributes
       to feedback from principals that the communications aspect of the job is delegated to
       schools, rather than serving as a channel from schools to the community for school-
       related news. These responsibilities should be separated.

   •   Similarly, the Director of Child Nutrition is also responsible for Purchasing. These roles
       should also be separated.

Under the current organizational structure, the Associate Superintendent for Student Services not
only oversees functions typically related to that area, but also district athletics, JROTC and
Drivers’ Education, all of which would more appropriately fall under the umbrella of the
Assistant Superintendent for Curriculum and Instruction that is proposed in Recommendation 4-
1.




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There are three positions under the Associate Superintendent of Student Services with
responsibilities relating to school safety and/or student health:

   •   the Director of Safe Schools/Healthy Schools;
   •   a Healthy Schools Coordinator; and
   •   a Safe Schools Coordinator.

The Project Director and the Safe Schools Coordinator were written into the Safe Schools/
Healthy Schools Grant. Additionally, the Associate Superintendent works with DARE and
Resource Officers. Those responsibilities should be assumed by the position responsible for Safe
and Healthy Schools. Those positions should be merged under the grant with all responsibilities
being assigned to the position which is responsible for Safe Schools/Healthy Schools. Any
necessary grant amendment should be filed to enact this merger.

The Director of Safe Schools/Healthy Schools currently houses two additional grant-funded
positions with responsibilities that typically do not require separate positions, but are
administered by people with other responsibilities.

   •   The Crisis Coordinator’s responsibilities are to assist students, school personnel, and
       families when death occurs to a student, a teacher, or a parent by assembling a team of
       school counselors to go to a school and provide assistance/grief counseling. The creation
       of a position for this purpose is inefficient in that fulfillment of the intended role of the
       position is an anticipatory one waiting for a crisis. In most districts that have crisis
       teams, guidance counselors as a group or with a designated leader take the lead in
       organizing teams to respond to a crisis, whatever it may be. The administrator who assists
       and supports counselors as a whole then is responsible for working with them to secure
       and update crisis training.

   •   A part-time Enrichment Coordinator coordinates after-school clubs and activities for
       students not engaged in traditional after-school activities. Generally, when a school has
       after-school activities, the sponsor, a school administrator, or someone receiving a
       stipend oversees and coordinates those activities.

Keeping in line with other recommendations in this report, the Director of School Nurses should
be converted to a coordinator-level position. The head of 11 nurses does not justify a position at
the director’s level.

RECOMMENDATION

Recommendation 4-3:

Reorganize the Department of Curriculum and Instruction to better align staff with similar
roles and responsibilities, and consolidate grant-funded positions.

Exhibit 4-3 shows the proposed organizational structure for the Department of Curriculum and
Instruction, and the details of the reporting structures beneath each executive position.




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Review of Non-Financial Management and Operations                                              Burke County Public Schools

                                                                  Exhibit 4-3
                                                   Proposed Organizational Structure for the
                                                   Department of Curriculum and Instruction




               Source: Created by Evergreen Solutions, March 2010.
               *not a position
               **to serve all curriculum coordinators




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Review of Non-Financial Management and Operations                         Burke County Public Schools


Implementing these changes will enable the Executive Director of Student Services to better
focus on the support nature of that role. Consolidating all safety-related responsibilities under
one position should better assure that all activities and decisions are cohesive.

All responsibilities of the Safe and Healthy Schools Coordinators and the Director should be
consolidated under a single Coordinator of Safe Schools/Healthy Schools and Security and the
position should be advertised. Evergreen is fully aware that these positions are funded by a very
competitive federal grant. However, most grants allow for budget amendments. Evergreen
believes that the integrity of the grant can be maintained by consolidating some of the functions
of these positions and re-directing grant funds to realize its goals in a more student-centered way,
rather than for unnecessary administrative costs. Assigning responsibility for some of the
singular functions of these positions is an inefficient use of grant funds.

FISCAL IMPACT

The implementation of this recommendation would require the reassignment of an administrative
assistant from the current Associate Superintendent to the proposed Assistant Superintendent. A
Coordinator of Early Childhood should be created to oversee all early childhood programs under
the direction of the Elementary Education Director. The cost of this position is calculated at the
average coordinator salary of $68,163, including benefits. The Even Start Coordinator should be
changed to a Specialist. The savings from that change is based on the average specialist’s salary,
including benefits, of $34,923.

The consolidation of the responsibilities of the Safe Schools Coordinator and the Healthy
Schools Coordinator, under a reclassified Coordinator of Safe Schools/Healthy Schools, will
save the district grant funds amounting to $139,392, including benefits. The Director’s position
should be classified as a 12-month Coordinator’s position, and readvertised with a potential
savings of at least $10,000.

Reclassifying the Director of Nurses to a Coordinator will save the district the difference
between the average salaries of a coordinator and director or $3,066. This figure is based on the
average salaries and not on actual salaries of existing staff.

There should be only one FTE position in the Grants Office.

 Recommendation                    2010-11      2011-12      2012-13      2013-14       2014-15
 Add a Coordinator of Early
                                 ($68,163)     ($68,163)    ($68,163)    ($68,163)     ($68,163)
 Childhood
 Change the Even Start
                                   $33,240      $33,240      $33,240      $33,240       $33,240
 Coordinator to a Specialist
 Eliminate the Safe Schools
                                   $68,163      $68,163      $68,163      $68,163       $68,163
 Coordinator Position
 Eliminate the Healthy
 Schools Coordinator               $68,163      $68,163      $68,163      $68,163       $68,163
 Position




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Review of Non-Financial Management and Operations                         Burke County Public Schools


 Recommendation                    2010-11      2011-12     2012-13       2013-14       2014-15
 Re-classify the Director of
 Safe Schools/Healthy              $10,000      $10,000      $10,000      $10,000       $10,000
 Schools to a Coordinator
 Re-classify the Director of
                                   $3,066       $3,066       $3,066       $3,066        $3,066
 Nurses to a Coordinator
 Eliminate the
 Administrative Assistant          $39,983      $39,983      $39,983      $39,983       $39,983
 Position for CTE
 Eliminate the Two Part-
 time Administrative
 Assistant Positions Under
                                   $39,983      $39,983      $39,983      $39,983       $39,983
 the Director of
 Relations/Workforce
 Development
 Re-classify the Two
 Coordinators for Special
 Populations, Career
                                   $66,480      $66,480      $66,480      $66,480       $66,480
 Development and
 Instructional Management
 to Specialists
 Total                             $260,915     $260,915    $260,915      $260,915      $260,915


FINDING

The district’s organization for financial-related functions is also fragmented and not centralized.
Only a portion of financial functions is under the direction of the Finance Officer limiting
coordination and potential cost-effective revisions of processes.

The Finance Department’s responsibility include general accounting and reporting, budgeting,
accounts payable, payroll, and internal auditing of school funds. The Finance Officer is assisted
by an Assistant Finance Officer/Internal Auditor, a Payroll Manager, and an Accounts Payable
Manager.

Some financial functions are assigned to other departments where the assignment of the financial
functions is not a core item of their programs. For example, purchasing responsibilities are
assigned to the Child Nutrition/Purchasing Department, and the management of the district’s
warehouse is assigned to the Director of Transportation and Logistics.

Management of the district’s purchasing program is handled by the Director of Child
Nutrition/Purchasing who reports to the Assistant Superintendent for Support Services. The
Director of Child Nutrition/Purchasing’s time is split between the dual responsibilities of
managing the Child Nutrition and managing district purchasing activities. The Director of Child
Nutrition/Purchasing is assisted in performing purchasing functions by a staff of three who also




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share purchasing and child nutrition duties. The staff includes a Purchasing Assistant and two
Purchasing Clerks.

As stated in Chapter 3, Evergreen estimates that purchasing duties require approximately 2.8
FTEs. The estimate of FTEs assumes a 50-50 split of the director’s position between purchasing
and child nutrition duties, and is calculated as follows:

   •   Director                  .50 FTE
   •   Purchasing Assistant      .90 FTE
   •   Purchasing Clerk          .90 FTE
   •   Purchasing Clerk          .50 FTE
             Total              2.8 FTE

Warehouse functions are under the direction of a Warehouse Manager who reports to the
Director of Transportation and Logistics who in turn reports to the Assistant Superintendent of
Support Services. The Warehouse has been assigned to Transportation and Logistics for about
one year. Prior to being assigned to Transportation and Logistics it was assigned to the Custodial
Department for four years, and prior to that was assigned to the Purchasing Department for many
years.

The Warehouse Manager is assisted by three drivers whose duties include:

   •   one driver is responsible for deliveries to schools and departments for items ordered, but
       delivered to the warehouse and for items maintained in the Warehouse;

   •   one driver is responsible for delivery of child nutrition food and other supplies, whose
       salary is paid from child nutrition program funds; and

   •   one driver is the designated courier for the district and picks up mail and delivers it to all
       school and departments.

Consolidating all financial-related functions under a district’s finance department enables
interrelated processes to be better coordinated and eliminates duplication. For a consolidation of
all financial-related functions to be most effective, the head of the office must be a very
experienced and talented professional. The title used by many districts (similar in size to BCPS)
for the position that manages a consolidated department or office is Chief Financial Officer. The
title reflects that the position has primary responsibility for all financial processes.

The movement of the Day Care Co-Directors and division of responsibilities of the current
Director of Child Nutrition/Purchasing will also bring about a change in the organizational
structure of the Assistant Superintendent for Support Services. His span of control will be
reduced somewhat with the re-deployment of the Day Care Co-Directors to supervision by the
proposed Assistant Superintendent for Curriculum and Instruction.




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The Assistant Superintendent for Support Services direct reports will now be:

   •   Director of Facilities Management;
   •   Director of Transportation and Logistics;
   •   Director of Child Nutrition;
   •   Safety/Environment Officer;
   •   Director of Building Operations Support; and
   •   Facility Use Coordinator/Administrative Assistant.

The Warehouse Manager and drivers should remain in this department under the Director of
Transportation and Logistics.

The organization of the Department of Support Services is shown in Exhibit 4-4.

                                           Exhibit 4-4
                                 Proposed Organizational Structure
                                  Department of Support Services
                                   Burke County Public Schools




               Source: Created by Evergreen Solutions, March 2010.



RECOMMENDATION

Recommendation 4-4:

Adopt the proposed organizational structure for the Finance Office to consolidate and
reorganize all financial related functions under a Chief Financial Officer.

The consolidation of all financial-related functions will provide better coordination of related
functions and provide better oversight of financial processes. The relocation of financial
functions from departments with program responsibilities will provide management of those
programs to have more time for their core functions. Transferring the purchasing functions from
the Child Nutrition/Purchasing Department will allow management of that department to
concentrate on actions needed to improve its financial position as discussed later in this chapter.



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Relocating the purchasing functions will entail moving the three employees who assist the
Director of Child Nutrition/Purchasing. Moving the three staff is close to the 2.8 FTEs that are
currently assigned purchasing duties. The purchasing assistant should be provided the title of
purchasing manager to correspond to the other classifications within the finance office.

Reorganizing the Finance Department and replacing the Finance Officer with a Chief Financial
Officer and recruiting for the most qualified individual will help ensure that the district has the
opportunity to employ the most experienced and qualified individual for this critical position.

Exhibit 4-5 shows the proposed structure for the Financial Department.

                                         Exhibit 4-5
                               Proposed Organizational Structure
                                    Department of Finance
                                 Burke County Public Schools




                          Source: Created by Evergreen Solutions, March 2010.




FISCAL IMPACT

Upgrading the Purchasing Assistant to a Purchasing Manager from a salary of $27,316 to
$31,899 results in a salary and benefit cost of $4,583. With benefits, it will be a total of
$6,004. Paying the 10 percent of the Purchasing Clerk’s salary currently paid with Child
Nutrition funds from local funds will cost $3,341, including salary and benefits. Paying the 50
percent of the Purchasing Clerk’s salary currently paid with Child Nutrition funds from Local
funds will cost $15,774 including salary and benefits. The Director of Child
Nutrition/Purchasing salary is currently split between the local fund and the Child Nutrition fund
(50% & 50%). Each pays $46,430 including benefits. Although there will be a cost to the Child
Nutrition fund, there will be a reduction in cost of $46,430 to the local fund.




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Review of Non-Financial Management and Operations                         Burke County Public Schools



 Recommendation               2010-11       2011-12       2012-13       2013-14      2014-15
 Re-classify the .90
 Purchasing Assistant to      ($6,004)      ($6,004)      ($6,004)      ($6,004)     ($6,004)
 a 1.0 Manager
 Pay the 10 Percent of
 Purchasing Clerk salary      ($3,341)      ($3,341)      ($3,341)      ($3,341)     ($3,341)
 from Local Funds
 Pay the 50 Percent of
 Purchasing Clerk salary     ($15,774)     ($15,774)     ($15,774)     ($15,774)     ($15,774)
 from Local Funds
 Reduce Local Fund
 Use for the Director         $46,430       $46,430       $46,430       $46,430      $46,430
 of Child Nutrition
 Net Savings                  $21,311       $21,311       $21,311       $21,311      $21,311


FINDING

The Superintendent recognizes the key role that planning and accountability play in school
districts today. In recognition of that fact, Evergreen proposes in Recommendation 4-1 that the
existing student accountability function be expanded to encompass overall accountability within
the district as well as strategic planning using the data resources of the current office of Student
Accountability, but placing it under a new Executive Director for Accountability and Planning.

RECOMMENDATION

Recommendation 4-5:

Create an Office of Accountability and Planning.

Testimony in several interviews noted that there is a lack of clarity regarding the data functions
in the Offices of Technology and Student Accountability. Additionally, the Office of Student
Accountability is one of the only two that has an Assistant Director. With the addition of the
position of Executive Director for Accountability and Planning, the Assistant Director should be
eliminated. The part-time Administrative Assistant for Textbooks should be converted into a
full-time position serving as the Administrative Assistant to the Executive Director as well as
having responsibility for textbooks.

Exhibit 4-6 shows the organizational structure of the proposed Office of Accountability and
Planning.




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                                         Exhibit 4-6
                          Proposed Organizational Structure for the
                            Office of Accountability and Planning
                              in Burke County Public Schools




                               Source: Created by Evergreen Solutions, March 2010.

FISCAL IMPACT

Eliminating the Assistant Director will save the district $108,594, including benefits. Converting
the part-time administrative assistant to full-time will cost an additional $19,992, calculated at
half of the average administrative assistant’s salary of $39,983. Note: The costs for the
Executive Director were included in the fiscal impact for Recommendation 4-1.

 Recommendation                  2010-11        2011-12        2012-13         2013-14        2014-15
 Eliminate the Assistant
                                $108,594        $108,594       $108,594       $108,594       $108,594
 Director
 Convert the Part-Time
 Administrative Assistant to    ($19,992) ($19,992) ($19,992) ($19,992) ($19,992)
 Full-Time
 Total Savings                   $88,602        $88,602        $88,602         $88,602        $88,602


FINDING

An effective way of viewing the efficiency of a school system is by benchmarking total staffing
ratios. The intent of an efficient school system is to provide as much direct classroom instruction
to students as possible, while keeping the overall ratios of total staff to students within an
acceptable range. The level of effectiveness in reaching this goal can be determined, in large
part, by comparing the percentages of total staff and instructional staff in the school district of



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interest to other peer school districts. A school district compares favorably by exhibiting a higher
percentage of instructional staff and a lower percentage of overall staff.

Exhibit 4-7 compares the number of administrator positions, including school-based, within
BCPS and the peer districts. This exhibit shows that, for 2007-08 (the latest data available from
the state), BCPS had fewer district administrative personnel than any of its peers. BCPS also had
1.22 fewer district administrators per 1,000 students than the peer average. Even more notable is
the fact that BCPS has the lowest number of administrators paid with local funds and 16.8 fewer
than the peer average number of locally-funded positions.

                                               Exhibit 4-7
                                  Administrators in Comparison Districts
                                          2007-08 School Year
                                            Total          Total Number                District       Locally-
                                           Student           of District          Administrators      Funded
            School System                 Population       Administrators        per 1,000 Students   Positions
    Burke County                           14,032                54                      3.8              8
    Buncombe County                        25,467               108                      4.2            25
    Catawba County                         17,332                83                      4.8            20
    Cleveland County                       16,580               103                      6.2            39
    Henderson County                       12,887                70                      5.4            48
    Iredell-Statesville                    21,236                96                      4.5            17
    Peer School System Average             18,700.4              91.2                    5.02           24.8
    Source: Part II, North Carolina Statistical Profiles 2007, 2008, and 2009.



COMMENDATION

Burke County Public Schools pays fewer administrative positions out of local funds than
any of the peer school districts, and has a lower administrator per 1,000 student ratio than
its peers.


FINDING

Differences in principal philosophies and priorities as well as differences in socio-economic
neighborhoods of schools have contributed to program disparities among BCPS schools. In the
past, principals received school budgets and had much flexibility in how they spent the funds.
Also, schools whose parents have greater economic resources have had technology donated, but
others have not been so fortunate. This practice has led to some schools having up-to-date
technology and lab experiences available for their students while others did not.

The Superintendent has already recognized the disparity not only in resources, but in the
differences in educational experiences for students depending upon the schools they attend in the
district. To begin to level the playing field for teachers and students, Dr. Steller has committed
resources to adding 45 computer labs at locations throughout the district with the input and
advice of principals.



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COMMENDATION

The BCPS Superintendent is commended for recognizing and aggressively addressing
inequities in educational opportunities through technology for its students.


FINDING

As with technology, some schools have parents with the ability to supplement school needs by
adding art programs. In fact, some schools have had the benefit of an art teacher funded by their
PTO. Others, without similar resources, have only had art through a grant-funded art bus that
offers art experiences for all elementary students once per nine weeks. The grant will not be
funded again after this school year, so those schools without PTO-funded art teachers will not
have equitable art experiences for their children.

RECOMMENDATION

Recommendation 4-6:

Equalize art experiences for all elementary students when the Art Bus Grant ends at the
end of this school year.

In its 2009-2012 Strategic Plan, BCPS states as one goal, to have globally competitive students.
Providing equitable opportunities for all students has to be an underlying premise for this goal to
be accomplished. Allowing schools with a higher socio-economic basis to provide enhanced
programs and learning opportunities for their students undermines this goal and must be
balanced with BCPS resources so that all students are able to have the same learning
experiences.

As a first step, BCPS should plan to hire an art teacher to rotate among its elementary schools as
the art bus teacher funded through the grant. BCPS should discuss and plan to equalize art class
time for all students.

FISCAL IMPACT

The annual cost of implementing this recommendation would be the average salary and benefits
of a BCPS teacher of $53,951.

 Recommendation                2010-11       2011-12     2012-13      2013-14     2014-15
 Hire an Elementary Art
                              ($53,951)     ($53,951) ($53,951) ($53,951) ($53,951)
 Teacher




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FINDING

BCPS is making strides to address the challenges that site-based decision making has presented
to the district’s diminishing resources⎯both fiscal and human—and lost economies of scale by
not using bulk purchasing. Principals used to be able to adopt whatever textbook their school
selected without having to adhere to any guidelines from the central office. This resulted in as
many as five textbooks for the same content area at the elementary level, and seven current
phonics programs. In recent years, principals were told that they could either adopt, or not, one
textbook series that was chosen for the district. Last year math was up for adoption. Twelve of
17 high schools chose to use the one text selected by the district. The other principals continued
to use former textbooks.

This is a step in the right direction in terms of reducing the professional development that must
be supported by district staff. Currently, Instructional Coaches have to support three different
core textbooks for reading adoptions with training, model lessons, and resources. Having fewer
multiple textbook series to support enables the district to focus the training it offers teachers, and
build on this training rather than having a fragmented approach caused by supporting many
adoptions.

Unifying textbook adoptions benefits students who transfer from one school in the district to
another. For instance, instead of having to learn new terms used by one textbook company or a
different vocabulary in a reading text, using the same textbook will prevent them from lost time
learning foundational knowledge from a new series when they change schools.

BCPS also maintains a centralized book inventory system so that, instead of purchasing
additional books when school enrollments fluctuate, surplus books are transferred from one
school to another. A document provided by the district shows that the process has contributed to
a current carryover of $290,375.

Formerly, school principals had almost complete autonomy to spend their funds to purchase
textbooks, software, and other school budget items. When he arrived, Dr. Stellar had staff
examine software programs that were used in schools to determine the ones most commonly
used. Then, instead of each individual school purchasing a site license as had been done in the
past, BCPS purchased a countywide license. Costs for Study Island in 2008-09 were $213,563
before consolidating the purchase. In 2009-10, with the centralized license, the costs were
$128,138, netting the district a savings of $85,425. This will be an ongoing annual savings from
which the district will benefit. With its consolidation of identified technology needs, BCPS also
purchased 1,000 computers and received 320 additional computers free as a result of a bulk
purchase rather than individual school purchases.

Supplementary savings will also be achieved in terms of dollars, staff time, and additional
resources because technology support personnel, instructional coaches, and central office staff
will be able to focus resources on a few specific programs instead of having to support multiple
academic and software programs and platforms. This will, in turn, result in greater focus and
improvement in quality of teaching and learning.




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COMMENDATION

The BCPS Superintendent has examined areas in which the district can capitalize on
economies of scale for purchases made in schools. These actions save dollars and focus
teaching and learning across the district for the benefit of students.


FINDING

The Superintendent is now focusing on identifying and better standardizing key decisions and
processes that will provide uniformity of programs and curricula for all BCPS students. He is
removing responsibilities principals used to have, such as scheduling field trips that detracted
from their instructional leadership roles. He also plans to work towards a team management
model with the BCPS principals.

COMMENDATION

The Superintendent plans to tap the knowledge and experience of principals as partners in
leading Burke County Public Schools.


FINDING

Burke County Public Schools has adopted processes to begin systematically communicating with
the public. When central office staff meet to discuss or decide on issues that will affect school
staffs, minutes and products of these meetings are posted on the BCPS Web site for access by all
stakeholders. Although the district already had a relatively new Strategic Plan, once Dr. Stellar
reviewed it, he identified some additional issues that he felt should be addressed. He is also
planning on seeking the Baldrige Quality Award. This award is based on validated, leading-edge
management practices against which organizations can measure themselves. It is recognized both
nationally and internationally as a model for performance excellence and a common means of
sharing best practices. Going through the process, whether receiving the award or not, provides
organizations, including school districts, feedback from an objective evaluation and assists in
aiming towards becoming a high-performing school system focused on student excellence.

Rather than revising the strategic plan internally, BCPS has begun the process of holding
stakeholder meetings in the community to garner input and perspectives from multiple
audiences. The district has hired a skilled facilitator to ensure that views coalesce into a clearly
articulated vision with specific goals, objectives, strategies, and action plans that include
activities, accountability for completion, timelines, and evaluation processes.

While the strategic plan (dated 2009-2012) had similar components, there was no clear
relationship to which specific staff member was responsible for explicit strategies, professional
development, or evaluation analysis nor how needed resources would be allocated. Data the
district have shared with participants in recent meetings compare a number of metrics relating to
student performance and gives participants a sound understanding of where BCPS students stand
relative to other North Carolina districts.



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COMMENDATION

BCPS is commended for its high goals for strategic planning, its outreach to the
community, and the transparency of its processes that are guiding change.


FINDING

Dr. Stellar plans to create an education foundation in BCPS. Among other things, he anticipates
that it will provide a means of positive public relations, serve as a basis for Adopt-A-School
programs, and lead to the development and communication for an alumni organization to connect
graduates and offer them opportunities to contribute to BCPS schools and the community.

Foundations offer many advantages to education within communities, large and small, across the
nation. They, of course, offer ancillary funds and resources to schools, a benefit of particular
importance in current tight economic times. Beyond the obvious concrete advantages a
foundation offers to schools and communities, foundations also serve as forums for soliciting and
communicating educational perspectives and accurate information to community leaders, thus,
improving communications within the community and decreasing misunderstanding.
Foundations provide a means of involving a broad cross-section of the community in their
schools, giving people in all walks of life a chance to learn about their local schools and make a
difference through their actions.

COMMENDATION

The Superintendent recognizes the merits of a Foundation for BCPS schools and for the
community as a whole.


FINDING
The administrative assistant to the Assistant Superintendent for Support Services currently
coordinates community school programs, but the Relations/Workforce Development Director is
also responsible for them. With initiatives put in place within the past year and a half, revenues
have increased from about $1,600 per year to close to $58,000 this year—an increase of 173
percent projected for the end of the year.

RECOMMENDATION

Recommendation 4-7:

Remove responsibility for community schools/facilities rental from the Relations/
Workforce Development Director.

The actions the administrative assistant has taken under the leadership of the Assistant
Superintendent she reports to have reaped fiscal benefits to BCPS and related benefits to the
community in use of school facilities. Location of this responsibility should remain where it is.
Procedures should be developed in writing so that, should the need to review that decision arise
in the future, another person could assume those responsibilities with clear cut guidance for
continuing its success.



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FISCAL IMPACT

The implementation of this recommendation can be accomplished with existing resources.


FINDING

The BCPS Day Care Program has implemented a number of cost controls in the program. A
conservative estimate of savings, accrued from consolidation of day care centers last summer, is
contained in Exhibit 4-8.

                                        Exhibit 4-8
                 Savings from Consolidation of Summer Day Care Programs

                                Expenditure Category          Savings Accrued
                                Director Mileage                         $882
                                Bus Mileage                             4,468
                                Summer Feeding                          4,050
                                Staff Payroll                          49,150
                                Utilities                               4,548
                                Total                                 $63,098
                               Source: Office of the Assistant Superintendent for Support Services, 2010.

Besides operating the site educational programs, the Day Care Program also operates a summer
food service program that prepares breakfast and snack menus for students at all sites. As a part
of those operations, they must comply with program requirements, including food components,
verify weekly claims, submit claims to the state, and undergo an annual audit. Summer food
service records show a net gain for both the breakfast and snack programs, as illustrated in
Exhibit 4-9.

                                         Exhibit 4-9
                                    Profits and Expenses
                                Summer Day Care Food Programs
                                        2008 and 2009

                      Year       Month         Spent         Reimbursed*        Gain/Loss
                                June          13,429.33        16,592.84         3,163.51
                      2008      July          11,262.68        25,329.85        14,067.17
                                August         1,620.00        31,436.89        11,816.89
                                June          13,885.48        23,691.13         9,805.65
                      2009      July          18,233.48        23,691.13         5,457.65
                                August         4,502.24        10,190.36         5,688.12
                      Source: Office of Associate Superintendent for Support Services, 2010.
                      *Reimbursement Rate 2009: Breakfast snack, $1.8150; Afternoon snack, $.07525.


Besides operating before- and after-school and summer programs, the Day Care Program also
operates Supplemental Education Service (SES) Programs for students at schools not meeting
specific performance standards under No Child Left Behind. Most often such programs are
privately run. The Day Care Directors and Assistant Superintendent for Support Services report



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that they are in the process of examining the metrics related to the district’s SES programs in
terms of costs and student achievement as a comparison with other SES Programs serving BCPS
students. This may be the basis for a decision to expand SES Programs in Burke County Public
Schools.

COMMENDATION

The Day Care Program and Assistant Superintendent for Support Services have created an
effective enterprise program with before-, after- and summer BCPS programs to generate
revenues despite economic challenges.


FINDING

Tuition for the BCPS Day Care Programs has not been increased since January 2001. While
student enrollment is declining and there has been no increase in the past nine years, there has
been a 30 percent increase in staffing salaries at the same time. Entry-level pay in 2001 for a
staff member with a high school diploma was $6.15; it is now $9.05 per hour.

Last year the state mandated a raise of either 2.5 percent of salary or $1,100 for some non-
certified staff, which included BCPS day care. This action resulted in an increase of
approximately 10 percent of their wages. Those increases were not funded and added to program
expenses. Losses and fluctuations in enrollment in Day Care Programs have occurred with a drop
in ADM and local unemployment increases. These, of course, have led to decreased revenues for
the program. Parents have been polled and appear willing to pay for an increase that will enable
them to have child care so that they can work. Currently, at church programs in the county,
charges are $45 per week compared to the BCPS cost of $28. Church summer programs charge
$95 per week compared to $60 per week in BCPS.

District staff conducted a comparison study of four-week rates charged for registration, before
and/or after school care, additional workdays, summer programs, and registration in neighboring
districts. The results of this study are shown in Exhibit 4-10. Using current BCPS rates and
other district rates in 2008, BCPS charges lower rates for all services except before-school
programs than all districts surveyed:

   •   between $10 and $25 lower rates for program and summer registration;

   •   from $38 to $196 less for both before- and after-school programs;

   •   from $24 to $58 lower for after-school programs;

   •   for before-school programs, BCPS charges $12 more than Catawba and Caldwell
       Counties, $82 less than Granite Falls, and $38 less than Hickory Quality Child Care;

   •   between $1 and $18 less per day for additional workdays; and

   •   from $15 to $55 lower weekly rates for the summer program.



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                                          Exhibit 4-10
                                 Comparison of Day Care Rates
                            Registration and Monthly (4-Week) Costs
                 in Burke County Public Schools and Comparison School Districts

                                          Before-                                                       Summer
                                         and After-   After-   Before-     Workdays                     (Weekly
         Site           Registration       School     School   School    (In Addition)   Registration    Rates)
Burke County                $25             $112       $96      $72           $12            $25          $60
Creative Beginnings         $50             $150       $150     N/A           $30            $50          $115
Country Side                No              $308       $154     $154          $13            No           $100
(Granite Falls)
Hickory City                 $25              $180    $120      $60          $19             $25          $95
(Catawba)
Caldwell County              $15              $180    $120      $60          $13             $15          $75
Schools
Hickory Quality              $25              $180    $120      $100         $30             $25          $105
Child Care
Source: Burke County Day Care Office, 2010.



However, no rate increase has yet occurred. A document provided Evergreen shows that the
district could be reimbursed between $346 and $435 per month. Consideration is being given to
an increase of $4/month for all before- and after-school programs and $5/week for the summer
program. This would in no way bring costs close to state reimbursement rates, but could be taken
as a first step in recovering lost revenues.

BCPS does not charge different rates for different levels of star ratings despite the fact that
programs with more stars are more costly because they have reduced student: teacher ratios.
BCPS has five 5-star programs and seven 4-star of its 17 programs. The district has intentionally
not done this in consideration of the financial challenges families are facing in the current
economy.

The programs could and should be generating more funds to be used to cover program costs and
at the participating schools to strengthen programs, teacher professional development, and
provide additional instructional resources or technology—all of which would benefit the students
at those schools and in these programs.

RECOMMENDATION

Recommendation 4-8:

Immediately increase day care rates for before-school, after-school, and summer programs
to proposed rates at a minimum, monitor comparative costs annually, and continue to raise
rates incrementally toward state reimbursement rates.

BCPS is not competitive with other regional programs or local private providers. Costs have
increased considerably in the past nine years, but revenues have not. Reimbursement by the state



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is capped by the rates that the district charges for its programs. Thus, by not increasing rates at
least to those at the mid-range of surveyed districts, BCPS is limiting its income for the program
and its reimbursement rate from the State. The goal should be for rates to be comparable to peer
districts and BCPS should more closely approach state reimbursement rates.

FISCAL IMPACT

Costs are calculated at an increased weekly fee of $5 for a nine-week summer program and an
enrollment of 700 students. This would increase summer revenues to $31,500. Additionally,
increasing monthly rates for nine months for today’s 970 currently enrolled students for all other
programs by $4 would generate annual additional revenues of $34,920. If the district were to
increase rates for students participating in both before- and after-school programs to $8 per
month, revenues would be even further enhanced. A doubling of the rate is shown in starting in
2012-13.

 Recommendation                  2010-11     2011-12      2012-13      2013-14     2014-15
 Increase Before- and After-
 School Program Rates by         $34,920     $34,920      $69,840      $69,840     $69,840
 $4
 Increase Summer Rates by
                                 $31,500     $31,500      $63,000      $63,000     $63,000
 $5 Per Week
 Total Revenues                  $66,420     $66,420     $132,840     $132,840     $132,840


FINDING

As with any dually supervised program, before- and after-school programs create some
ambiguity of responsibility, decision making, and authority. Both principals and district staff
referenced the challenges. Although the programs are district-run programs, revenues remain in
the schools where the programs are housed. The lack of clear policy and procedures has led to
variance from school to school in program activity, expenditures, and likely their impact on
student achievement.

Principals are allowed to maintain the revenues from school year and summer day care programs
at their schools rather than reverting to the district⎯even though the district bears the majority of
related costs. Although principals are reportedly required to maintain a fund balance the
equivalent of three months expenses in their school accounts, a document provided by BCPS
shows that only nine of the 17 programs maintain those fund balances. One school actually had
no fund balance at all. Fund balances by school are shown in Exhibit 4-11.

A required fund balance is meant to retain funds at each school to create an escrow to pay for the
indirect costs. Each program is assessed to cover central office personnel overhead as well as to
have funds available to make payroll for the program in subsequent months. When funds are not
available, payroll must come from somewhere else. Some other ways that day care funds have
been used include enhancement of playgrounds and facilities.




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                                              Exhibit 4-11
                                        BCPS Daycare Programs
                                       Average Operating Expenses
                                          2009-10 School Year

                                                                               Difference Between
                                  2009-10 Required       Actual Fund Balance    Requirement and
                School              Fund Balance           in School Funds           Balance
         Chesterfield                $11,432.00               $2,295.49            ($9,136.51)
         Drexel                      $36,910.00              $36,319.00              ($591.00)
         East Burke Middle           $20,084.00               $6,872.91          ($13,211.09)
         Forest Hill                 $16,459.00              $14,125.91            ($2,333.09)
         George Hildebrand           $29,532.00              $36,214.00             $6,682.00
         Glen Alpine                 $21,732.00              $25,164.00             $3,432.00
         Hallyburton                 $19,817.00              $19,817.00                  0
         Hildebran                   $18,887.00              $22,616.18             $3,729.18
         Icard                       $21,695.00              $23,068.32             $1,373.32
         Liberty                     $15,736.00              $18,208.00             $2,472.00
         Mull                        $24,933.00                   $0.00          ($24,933.00)
         Oak Hill                    $31,633.00              $21,000.00          ($10,633.00)
         Ray Childers                $34,127.00              $32,955.59            ($1,171.41)
         Rutherford College          $22,643.00              $21,276.00            ($1,367.00)
         Salem                       $33,687.00              $35,416.00             $1,729.00
         Valdese                     $24,341.00              $24,789.00               $448.00
         W. A. Young                 $19,588.00              $22,000.00             $2,412.00
         Totals                     $403,236.00            $362,137.40           ($41,098.60)
       Source: Burke County Public Schools, Day Care Office, 2010.



Although they are district programs, principals have historically had operational control, with the
Assistant Superintendent and Day Care Co-Directors having administrative control. This has
included each principal’s ability to determine both expenditures of funds as well as use of the
facility. While many principals understand the educational benefits of the programs to their day-
time student achievement, in some instances, Site Directors have been told (sometimes with no
notice) that they will not be allowed to use particular rooms or computer labs. This action
impairs the ability of before- and after-school staff to provide planned activities for the students
and to offer the enhanced educational opportunities they deem beneficial to students shared by
both programs. In some cases, too, Site Directors have had some of their day care-related hours
usurped by principals for non-day care activities.

Importantly, Hillcrest Elementary School improved its student performance dramatically last
year. They had received a grant for a tutoring after-school program. With similar coordination
and teamwork between daytime programs and before- and after-school programs, it is just as
likely that student achievement at after-schools would increase concomitantly. That level of
camaraderie between school programs and day care programs is currently impeded by a lack of
clear expectations and consequences.




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RECOMMENDATION

Recommendation 4-9:

Centralize budget controls for all day care programs and create an incentive program that
offers principals benefits for increasing day care student enrollment and achievement.

There is a clear need for more specific lines of authority for day care activities to be determined
and shared with all staff. Additionally, the central office needs to consolidate more control over
these programs with regard to budget and to communicate clarity and consistency of the
program’s intent and potential relative to student achievement.

Creating a positive agreement that maintains consistency and accountability for day care
programs across the district, while at the same time developing an attitude of partnership and
mutual benefit between principals and day care administrators, will lead ultimately to student
enrichment and improved achievement.

Principals and central office administrators should develop an incentive program that enables
schools to earn a percentage above the three-month reserve for their schools. The incentive funds
should benefit students in both the school and before- and after-school programs. For instance, if
funds are used for additional computers for a lab or reading books or software, before- and after-
school students should have the same access as is available to students during the school day.

BCPS should create a review committee composed of representation from principals, teachers,
and district administrators to develop and present parameters to the Superintendent and his
Cabinet for earning the incentives. The committee should also review applications for approval.
Higher percentages could be set with increased student performance at the schools. The basic
idea is for funds generated to be used for the joint benefit of students in programs throughout the
day, and to help improve day care programs with respect to student learning.

FISCAL IMPACT

The cost of implementing this recommendation would depend upon committee decisions made
after a review of finances for the Day Care Program.


FINDING

Several BCPS employees noted a concern over the costs to the district of salaries for the two Co-
Directors of the Day Care Program. Eight years ago, the full-time Day Care Director and
secretary both left the district. The two current Co-Directors assumed responsibilities for both
positions with additional extra duty pay. Currently that pay is $5/hour for each of them for their
co-director responsibilities on top of their individual hourly rates as Site Coordinators for the
school that each is also responsible for. Their salaries are $18 and $19 per hour for 37.5 hours
per week for their site director responsibilities plus the additional $5 for co-director
responsibilities for a total of $23/hour and $24/hour each. Other Site Directors receive from $11-
17 per hour depending on their years of experience, education, accreditation, and other variables.



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Co-Director responsibilities include:

   •   management of their own school site;

   •   oversight of two district Supplemental Education Services (SES) Programs (down from
       five last year);

   •   hiring, staffing, and licensing all sites and programs;

   •   development and maintenance of staff, parent, and student handbooks and job
       descriptions (which are current and BCPS specific);

   •   determination of consolidation locations;

   •   compliance with sanitation requirements and related cleaning at their school sites;

   •   monthly meetings with Site Directors;

   •   oversight and management of two snack programs;

   •   all responsibilities related to the operation of the district’s summer programs; and

   •   working with principals relating to decisions about budget fund balances and program
       operations.

RECOMMENDATION

Recommendation 4-10:

Retain the combined Co-Director/Site Coordinator system, as it currently exists.

The combined salaries of the two Day Care Co-Directors do appear, on the surface, high
compared to most director positions in the district, although combined, they are still less than
that of the Chief Technology Officer. However, the majority of their salaries is for their
responsibilities as Site Coordinators for the two schools they serve and not for their co-director
responsibilities. All schools with Day Care programs have Site Coordinators, which is the
additional role each director also has.

For $5/hour or $19,500 combined, BCPS is purchasing director responsibilities for its 17 Day
Care sites. If they were to continue the Site Coordinator responsibilities, but hire a single full-
time Director, the district would spend more than it currently does for the current dual
responsibilities of the two for Site Coordinators and Day Care Directors. With responsibility for
before- and after-school programs, it would be impossible for anyone to share oversight of a
school’s programs, especially when the programs begin at six o’clock in the morning and end,
officially, at six o’clock at night.




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Although other Site Coordinators have the ability to split their shifts and perform personal tasks
between the morning and afternoon sessions, the Day Care Directors have responsibility for
planning, purchasing, communicating with parents, staff, and the state, record-keeping, and
compliance with state regulations, so, for all practical purposes, they have 12-hour work days.
Additionally, during school breaks when other staff are off, they must be at their sites to
supervise program staff and children. Besides the traditional day care programs, they also
administer SES and food service programs.

FISCAL IMPACT

The implementation of this recommendation can be achieved with existing resources.


FINDING

BCPS maintains two alternative education centers, one at each end of the county. Each is staffed
with a principal, administrative assistant, and either a social worker or a counselor. One has nine
and one 10 teachers. Each serves between 90 and 110 students throughout the year. Exhibit 4-12
shows the staffing at each alternative school.

                                            Exhibit 4-12
                               Staffing of BCPS Alternative Schools
                                        2009-10 School Year

                                                                   School
                                                                      College Street
                                Position                 East ALPS      Academy
                      Principal                               1             1
                      Administrative Assistant                1             1
                      Counselor/Social Worker                 1             1
                      Teacher Assistant                       1             0
                      Vocational Teacher                      2             2
                      Social Studies Teacher                  1             2
                      Science Teacher                         1             1
                      Math Teacher                            2             2
                      Language Arts Teacher                   2             2
                      Exceptional Children Teacher            1             1
                      Total Staff                            13           13
                     Source: Created by Evergreen from data provided by the Associate
                     Superintendent for Student Services, 2010.

Student enrollments fluctuate throughout the year as students are staffed, graduate, or return to
their home schools at the end of each semester. Students may also remain at the centers if they
choose. If all students were to be enrolled throughout the year, the teacher: student ratio would
be 1:12, or 8.4 students per staff member. However, with an everchanging student enrollment, it
is likely no student would be enrolled in each class at any one time. The additional costs of one
administrator, one administrative assistant, and one counselor or social worker per facility add
considerably to program costs in addition to utilities and maintenance of the facilities.




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Exhibit 4-13 shows student enrollment and graduation information for each alternative school.

                                            Exhibit 4-13
                             Student Enrollment and Graduation Data for
                                      BCPS Alternative Schools
                                        2008-09 School Year

                 Data Source                           East ALPS                   College Street Academy
      Average Student Enrollment                         90-110                             90-110
                                                      Graduates
                                                East ALPS                         College Street Academy
      Time Period                  Number          *Percentage Range           Number *Percentage Range
      2008-09                        67                 61%-74%                  45            41%-50%
      1st Semester 2009-10           41                 37%-46%                  30            27%-33%
     Source: Created by Evergreen from data provided by the Associate Superintendent for Student Services, 2010.
     *depending on actual number enrolled

RECOMMENDATION

Recommendation 4-11:

Combine alternative schools and consolidate the faculty to maintain a teacher: student
ratio of no more than 1:15.

By closing one school and reducing teaching staff by five, class sizes for 180-220 students with
the combined enrollment would range from 1:12 to 1:15. This would reduce transportation and
operating costs for an entire facility (addressed later in this report) and program, and eliminate
the staff costs of operating two separate programs. Staffing should be examined annually.

FISCAL IMPACT

Savings are determined at an average salary and benefits of teachers, administrators, and
administrative assistants.

The elimination of four teaching positions and a counselor/social worker would save the district
an estimated $269,755 ($53,951 salary and benefits x 5). Reduction of one principal would save
an additional estimated $88,022 including benefits. Reducing staff further by one administrative
assistant would save an additional $39,983, including benefits. Total annual savings would be
$397,760 in staff alone.

 Recommendation                     2010-11           2011-12        2012-13         2013-14            2014-15
 Eliminate Four Teachers            $215,804          $215,804       $215,804        $215,804           $215,804
 Eliminate One Social
                                     $53,951          $53,951         $53,951         $53,951            $53,951
 Worker
 Eliminate One Principal             $88,022          $88,022         $88,022         $88,022            $88,022
 Eliminate One
                                     $39,983          $39,983         $39,983         $39,983            $39,983
 Administrative Assistant
 Total Savings                      $397,760          $397,760       $397,760        $397,760           $397,760



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FINDING

Many items included in the BCPS Policy Manual are not policies at all, but are merely
reiterations of state law or state board regulations. These are unnecessary inclusions, as they
already require North Carolina school districts, including BCPS, to comply with these rules and
regulations. An examination of a random selection of content in the BCPS Policy Manual
ranged in dates from 1978 to 2006 with the majority of policies having been adopted without
apparent revision between the late 1980s and mid 1990s⎯between 15 and 30 years ago. In fact,
the copyright policy was written in 1985, prior to the advent of today’s technology.

BCPS has no policy on day care programs at all. Consequently, there is no way for principals
and other staff to understand the need to comply with safety, sanitation, and summer feeding
program rules. The Co-Directors have developed a handbook that could serve as a foundation for
administrative procedures to accompany policies that should be developed. Although there is a
written mandate for principals to maintain three months operating expenses in their Day Care
accounts, there are no provisions for consequences should they not comply. In this case, this
failure to have specifics in policy has led to some schools not having the funds to make payroll,
and even to repay the district’s assessed indirect costs a year after they should have been settled.

The Superintendent and staff have diligently applied themselves to reviewing and updating the
contents of the policy manual. In that, they are progressing to ensure that what is contained in
policy is current and relevant to BCPS needs as well as compliant with current state and federal
laws. Some current and newly-adopted policies are available on the BCPS Web site for review.

RECOMMENDATION

Recommendation 4-12:

Continue reviewing and revising Board policies, eliminating those that reiterate state laws
and regulations, eliminate hard copies, and post policies on the BCPS Web site.

A revision of the Board Policy Manual is long overdue. Once it is completed, annual reviews and
updates should be conducted. Containing redundant state requirements unnecessarily adds length
to the policy manual, which is approximately four inches thick. Once the policies are reviewed
and streamlined, the manual will be more user friendly and likely accessed more frequently by
staff and the public. The entire policy book should be accessible online. Hard copies should be
eliminated.

FISCAL IMPACT

An estimated 40 hard copies of the BCPS Policy Manual are distributed to schools and central
offices. Based on an estimated 1,000 pages in the manual, using a conservative cost of $.10/page,
the cost for each manual is $100, or $4,000 for existing copies. By maintaining the updated
manual online rather than distributing hard copies, and if the review process reduces the manual
size by half, BCPS can save an estimated $2,000 initially (500 pages x 40 copies x $.10/page).




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Additional savings will be reaped each year as policies are revised and updated. Estimating a
maximum of 20 policies reviewed and revised annually, savings would be $80 (20 pages x 40
copies x $.10/page).

 Recommendation                        2010-11         2011-12          2012-13         2013-14         2014-15
 Eliminate Hard Copies of
                                        $4,000            $80              $80             $80             $80
 the BCPS Policy Manual


FINDING

The State of North Carolina provides funding for exceptional children based on the lesser of the
December 1 handicapped child count or 12.5 percent of the allotted average daily membership
(ADM). Exhibit 4-14 shows a comparison of BCPS exceptional children enrollment with peer
districts and demonstrates that BCPS has a higher percentage of students in its exceptional
children programs than all of them. The district has five percent more exceptional children
students than the average of the five peers (12.5%) and the state-funded percentage (12.5%), and
4.4 percent more than the district with the closest percentage (Buncombe County at 13.1%).

                                             Exhibit 4-14
                               Comparison of BCPS Exceptional Children
                                         with Peer Districts

                                                                                                   Percent of
                                          Total Student        Number of Exceptional              Exceptional
              School District              Population*                Children**                    Children
        Burke County                         13,941                       2,441                      17.5%
        Buncombe County                      25,724                       3,361                       13.1%
        Catawba County                       17,560                       2,208                       12.6%
        Cleveland County                     16,496                       2,073                       12.6%
        Henderson County                     13,282                       1,590                       12.0%
        Iredell-Statesville                  21,291                       2,596                       12.2%
        Peer District Average                18,871                       2,366                      12.5%
       Source: North Carolina Department of Public Information Web site, 2010
       *First Month: 2008-09 school year.
       **Unduplicated - a child who has more than one category of disability is counted only in the category of his/her
       primary disability.


Therefore, the district must pay for the education of those additional five percent of its students
who are in exceptional children programs with resources other than state funds. Staff interviewed
stated that there were several possible contributing factors to the apparent overidentification: the
quality of the BCPS program and the presence of the School for the Deaf and the West Carolina
Center in BCPS. Additionally, there may be students who should have 504 plans who have been
identified and served as exceptional children students. Interviewees noted that BCPS has
identified a particularly high number of students for its speech/language program as well.

Regardless of possible contributing factors, program specialists are in the process of auditing all
exceptional children folders to ensure that all students in the program actually qualify and are
properly placed. They are also reviewing IEPs and 504 plans to ensure that students are



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appropriately placed with two having been identified before the site visit who were changed to
504s from IEPs. BCPS is also participating in North Carolina’s State Improvement Project (NC
SIP). The program is based on research evidence that the vast majority of students with
disabilities can read and write, as well as demonstrate math skills on grade level when
appropriate. Staff is receiving training through a regional center in reading foundations and math.

BCPS staff are developing procedures for use districtwide that will ensure that students are being
placed in the Least Restrictive Environment. Comments in principal focus groups showed that
BCPS uses the national Response to Intervention [in North Carolina known as Response to
Instruction (RTI) initiative] that is part of the reauthorization of the IDEA national legislation in
2004, but apparently does not use a team approach as many other districts do to support children
with special learning needs in the regular classroom environment. RTI stresses the importance of
providing high quality, scientifically-based instruction and interventions, and holding schools
accountable for the progress of all students in terms of meeting grade-level standards.

The essential elements of an RTI approach are:

   •   the provision of scientific, research-based instruction and interventions in general
       education;

   •   monitoring and measurement of student progress in response to the instruction and
       interventions; and

   •   use of these measures of student progress to shape instruction and make educational
       decisions.

Many BCPS interviews conducted by Evergreen consultants revealed that RTI implementation
for students depends largely on the psychologists who are charged with leading the initiative.
Consensus seemed to unveil a need for training and written consistent procedures to ensure that
all students in all schools benefit from the intent of RTI to support students in general education
classes before referral for testing for exceptional children services.

RECOMMENDATION

Recommendation 4-13:

Expand efforts to correctly identify and place students, and develop procedures and
training for teams in all schools to offer a continuum of interventions in general education
classes.

Consistent implementation of processes for support and identification before students are
referred for placement in exceptional children programs has been proven to:

   •   serve students in general education classes and often prevent their need for exceptional
       children placement;

   •   benefit other students in those classes beyond those with special needs; and



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     •    reduce the numbers of students requiring more intensive interventions in exceptional
          children programs.

One possible resource for Burke County to tap for addressing its overidentification of students is
Duplin County. The Duplin County Director of Exceptional Children has initiated practices that
allow students to be identified early and served within their regular classrooms rather than being
identified for exceptional children classes. This action has reduced the percentage of its students
being identified for exceptional children programs below state funding levels.

FISCAL IMPACT

State funds for each school-aged exceptional children student are approximately $3,501. At that
same rate, the additional five percent of students [13,992 (1/13/10 count) x .05=700 students]
that must be funded from sources other than state dollars cost the district $2,450,700 ($3,501 x
700=$2,450,700).* Anticipating that it will take time for procedures to be developed, uniformly
applied, and new students appropriately placed as well as current students being reviewed for
proper placement, estimates are based on a reduction of 70 students the first year, an additional
100 the second, an additional 200 the third, an additional 300 in Years 4 and 5.

 Recommendation                       2010-11          2011-12           2012-13            2013-14              2014-15
 Reduce Exceptional
 Children Enrollment to              $245,070         $595,170         $1,295,370         $2,345,670           $2,345,670
 State-Funded Levels


FINDING

BCPS has staffed its schools with more assistant principal (AP) months than is allocated by the
state. This year the state funded 533 months for principals and assistant principals. A document
BCPS provided to Evergreen shows that this year, BCPS has employed both groups of
employees for 583 months, 50 months over the state allotment at a cost of $317,050 based on
average assistant principal salaries and benefits. This year BCPS had reduced all assistant
principals to ten-month contracts, but had then added time on each.

This same document demonstrates the district’s commitment to reducing school administrators
months closer to the state allotment. The document reveals a proposal to reduce principals from
12 months to 11.8 months. Implementing that proposed change would reduce the number of
months allotted to principals in BCPS from this year’s 348 to 341.9 next year. Similarly, it
redistributes assistant principal allotments among schools and reduces the number of months
from this year’s 235 months to a proposed 194 next year. However, that change still results in an
overage of school administrator months of 5.9. It is a very positive step in the right direction, but
does not completely bring principal and assistant principal allotments to the state-funded level.



*Calculations are based on 670 students as an estimated potential savings and would be more if the district targeted the actual
700 over the number of students that state funds.




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RECOMMENDATION

Recommendation 4-14:

Continue to reduce the number of assistant principal months in BCPS to the number of
months funded by the North Carolina Department of Public Instruction (DPI).

Reducing school administration to equal DPI allocations will allow BCPS to redirect those
additional funds toward classroom instruction.

FISCAL IMPACT

The average salary and benefits of an assistant principal in BCPS is $63,408. Dividing this
amount by ten yields a monthly cost of $6,341. Decreasing the number of assistant principal
months by 5.9 would save the district $37,412 annually.

 Recommendation              2010-11      2011-12       2012-13        2013-14         2014-15
 Reduce Assistant
                             $37,412      $37,412       $37,412        $37,412         $37,412
 Principal Expenses


FINDING

When administrators were asked what the BCPS process was for them to have access to the
board’s attorney, all interviewees stated that they would request guidance from the
Superintendent or the Associate Superintendent. A formal uniform process has been established.
Having a clearly delineated process, that is universally communicated, helps the School Board to
control its legal costs.

A review of invoices for legal services revealed that the attorney provides a breakdown of
expenses charged by portion of hour or by hourly rate. As a consequence, costs were well-
validated leaving BCPS district certain of compliance with contractual hourly rates. It should
continue to ensure that it is paying fair market value for legal services, closely monitor rates and
billing, work performed, and the individuals performing the services.

COMMENDATION

Burke County Public Schools have developed internal processes to ensure containment of
legal fees originating from staff and contractual compliance.


FINDING

Generally, when a school district enters into a lawsuit, the potential costs versus gains are
weighed and discussed as the School Board considers the merits of a lawsuit. Often a district
sets limits of expenditures for the pursuit of a legal solution. BCPS has spent a large sum in
pursuing additional funding from Burke County in 2009. Interviewees indicated that no ceiling



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had been set. Schwartz and Shaw was initially hired to represent the Board with the
Superintendent buy-out/resignation. The firm’s duties were expanded to include representation
for several citizen lawsuits, a lawsuit filed by the County Commissioners, the budget dispute
with the County Commissioners, and the Superintendent’s search. Although both School Board
members and the acting Superintendent identified escalating costs numerous times, there was no
curtailment of these costs.

On June 15, 2009, the Commissioners met with the former Superintendent Burleson and the
Finance Officer, and agreed to fund BCPS in the amount of $14,134,160 for 2009-10. Two
weeks later, when the former Superintendent resigned, this was changed to $13,770,360 in the
County Ordinance. An additional $363,800 was to be held in a 6900 contingency fund by the
Commissioners. The contingency funds would have to be requested by BCPS with justification.

The final lawsuit ruling by Judge Bridges was for $14,154,127. If you use the agreement with
Mr. Burleson on June 15, 2009, BCPS received an additional $19,967 as the result of legal
action. If you use the budget ordinance, BCPS received an additional $383,767. In either case,
BCPS spent $335,893 for a net gain of far less.

Exhibit 4-15 details the district’s legal expenditures for the past three and a half years and shows
a commendable annual decrease of expenses until the 2009-10 school year. For 2006-07, the
district spent an average of $5.22 per student (ADM basis); in 2007, that amount decreased to
$4.40 per student. Costs continued to decrease the next year to $4.02 per student. However, with
the lawsuit with Burke County regarding funding, costs for May through October 2009 increased
to an average of $27.49 per student. Excluding costs related to the lawsuit, so far for the 2009-10
school year, costs would average about $2.71 per student.

                                                Exhibit 4-15
                                         BCPS Legal Expenditures
                                      2006-07 through 2009-10 (partial)

                                                                                         2009-10          Total
                                                                                       (Partial May    Expenses Per
                                                                                         through          Firm
                    Firm                        2006-07      2007-08       2008-09       October)
 Simpson, Kuehnert, Vinay, & Jones                       -            -   $35,105.21      $36,667.04     $71,722.25
 Roberts & Stevens                               $8,658.75   $16,097.23   $11,532.99                     $36,288.97
 Groome, Tuttle, Pike & Blair                            -    $2,016.00    $6,282.50                      $8,298.50
 Schwartz & Shaw, PLLC                                   -            -            -    $335,893.64     $335,893.64
 Starnes, Aycock, Haire, Hogan, Saunders, &
 Rigsbee                                        $63,883.00   $43,159.52    $2,237.00                    $109,279.52
 *Total Expenses                                   $72,542      $61,273      $55,158       $372,561        $561,483

 Student Enrollment                                13,894       13,910       13,735          13,555
 Annual Costs Per Student                           $5.22        $4.40        $4.02          $27.49
Source: Created by Evergreen Solutions, 2010.
*rounded to nearest dollar




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Before the current expenditures related to the lawsuit, legal expenditures had decreased in the
past few years. In contrast, costs for legal work in all school districts have increased over the last
three decades due to a number of circumstances. These include due process activity associated
with disciplinary proceedings, complicated issues related to special education students, personnel
and student harassment allegations, risk management matters, and a variety of other issues. Areas
of special education and student disciplinary activity are particularly troublesome and often
require special legal expertise. These areas are typically complicated by the complexities of
federal requirements and the relationship to local and state regulations. However, as in all areas
that support the effective and efficient operations of the organization, school districts need to
seek to minimize legal expenses, in particular, as they consider the potential cost effectiveness of
originating lawsuits.

RECOMMENDATION

Recommendation 4-15:

Implement a process that ensures a cost-benefit analysis of legal costs originating with the
district before undertaking legal actions.

BCPS should discuss and determine how much money it is willing to support in legal expenses
with the Burke County over increased funding as well as future lawsuits. The implementation of
this recommendation should result in an organized, ongoing process designed to control legal
expenses. Once legal action has begun, the Board should monitor expenditures and regularly
discuss the merits of its continuation versus costs to the district in terms of dollars, public good
will, and distraction from its core educational mission.

As one example, the Vancouver, Washington School District has enacted numerous cost-saving
measures to minimize its legal expenses and serves as an exemplary model for the district.
Examples include:

   •   the requirement of two signatures on all legal bills with the staff person who has been
       working with them signing off regarding reasonability of time and billing;

    • a criminal history background check for anyone enacting a contract in the schools; and

    • assurance of breach and termination provisions for all contracts.

FISCAL IMPACT

Conservatively, BCPS should be able to reduce legal fees in a typical year far below today’s
expenditures. The impact of determining a ceiling for legal expenditures related to the current
lawsuit cannot be estimated, but should certainly be a part of future legal considerations.


FINDING

Feedback provided during focus groups with school administrators reflects a disconnect between
expectations and job performance for two district-level positions: the Grant Writer and the
Relations/Workforce Development Director. Generally, in school districts, the functions



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performed by staff in both positions support and provide enhancement to school leaders.
Concerns expressed by BCPS school leaders, however, revealed the sense that both positions
serve more as conduits of information about opportunities for school leaders to act on, rather
than the Grant Writer and Relations/Workforce Development Director themselves to perform
grantwriting and communications tasks. One person described it as an attitude of “we frame the
problem and give you the work to do.”

The Relations/Workforce Development Director is supposed to work with internships and
coordinate community schools and facilities rental. In fact, the administrative assistant to the
Assistant Superintendent for Support Services performs the community schools and facilities
rental role. Thus far, BCPS does not have a unified message (brand image) and has not yet
developed a comprehensive communications campaign that details market segments and how to
communicate with each, or a speaker’s bureau to convey “the” message. These components
should be an integral part of a public relations role. Additionally, the office should be the point
contact for parental engagement and volunteer programs to enlist parents and other community
members in supporting and assisting in the schools. It is the logical office to develop a
comprehensive public relations program for BCPS, and coordinate and encourage business
partnerships and an Adopt-A-School program. The Relations/Workforce Development Director
also has two part-time administrative assistants and a facilitator who work in the office.

Specifically, many interviews stated that information about grants was channeled to them rather
than the Grant Writer meeting with them to confirm the need for a grant opportunity, solicit input
regarding strategies, and writing the grant reflecting their thoughts about school needs. Similarly,
rather than being the district representative to arrange for media coverage of positive things
and/or events in schools, principals said communications with the Relations Director indicated
the need for them to take action to contact media. As with other district issues, this lack of
congruence in expectations for those positions could partially be the result of no clear
expectations set forth in job descriptions for these two positions.

RECOMMENDATION

Recommendation 4-16:

Develop job descriptions and clear expectations for working relationships between the
Grant Writer and proposed School Community Engagement Officer and principals.

 The Superintendent should direct the Personnel Administrator to request copies of job
descriptions for similar positions in other North Carolina districts. The Superintendent should
agenda discussion at a meeting with principals and district administrators concerning the job
roles and expectations of these two positions. Consensus should be provided in writing for two
reasons: to clarify expectations among all parties, and to serve as the foundation for subsequent
written job descriptions The proposed School Community Engagement Officer should be housed
in the central office in proximity to the Superintendent and other Cabinet members.




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FISCAL IMPACT

The implementation of this recommendation can be accomplished with existing resources.
However, clearer expectations for the role of the Grant Writer should lead to better
communications among schools and district staff regarding grant opportunities which should also
result in procurement of grant funds more closely tied to school and district needs.


FINDING

There is some documentation that hiring the two retired staff members as Co-Directors of the
Exceptional Children Program, without paying their benefits, since they are both retired*, has
saved the district approximately $4,500. These two individuals divide 20 calendar days between
themselves, with each working 10 days. This schedule leaves some months without coverage by
exceptional children managers.

These co-directors are both experienced administrators familiar with exceptional children
programs and have instituted a number of efficiencies into the Exceptional Children Program.
They have also begun developing written procedures to increase consistency among schools.
They are both extremely committed and talented educators who have brought value to the shared
role.

The dual responsibility for leading the Exceptional Children Department was meant to be
temporary. When Dr. Stellar started, he asked the two retirees to stay on for a while. These
individuals have laid a strong foundation for the program to move forward. Principals, in a focus
group, expressed some concern about the responsiveness of the office.

RECOMMENDATION

Recommendation 4-17:

Advertise for the position of Exceptional Children Director and fill the position as soon as
possible.

Only under unique circumstances is the dual leadership for a program effective over the long-
term. This shared responsibility was meant to be temporary, and it would be better for the
program and continuity for the district to advertise for a single Director of Exceptional Children
to assume leadership of the program as the single point of contact.

FISCAL IMPACT

The current costs for the shared salaries for this position are $84,378 with no cost for benefits.
Even at a lower rate of pay, any new staff hired for it will incur an additional cost for benefits. At
the average director’s salary and benefits of $93,310 including benefits, filling the vacancy with
an individual will cost $8,932 in additional funds for BCPS.

*One from BCPS; one from another district.




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 Recommendation              2010-11      2011-12      2012-13        2013-14        2014-15
 Hire One Person as the
 Exceptional Children         $8,932       $8,932       $8,932        $8,932          $8,932
 Director


4.2    HUMAN RESOURCES
Personnel management is a critical function in school districts. The employees of a school
district’s human resources department must ensure that complex personnel policies are followed.
In many cases, this department provides the first impression of district quality to potential
employees.

The BCPS Human Resources Department consists of the personnel administrator, a pre-
employment specialist, a human resource management specialist, a retirement/workers’
compensation specialist, a credit renewal specialist, and a health benefits specialist. The
department has lost four positions in the past few years and an additional one since Evergreen’s
on-site visit.

FINDING

Staffing in the Personnel Office has decreased despite increasing responsibilities. Although
responsibility for student records is located under the Associate Superintendent for Student
Services on the organizational chart, two staff members were formerly allotted to the Personnel
Office for student records because some student records were being retained on microfilm. The
Personnel Department has imaged all personnel records, some of which were deteriorating
because they were being stored in an attic, they can be indexed and accessible electronically.
Consequently, the Personnel Office has also been tasked to do the same with student records. As
a result, there is estimated to be a two- to six-week turnaround for requests for student records
for former students.

Since then, those two student records positions as well as three additional positions have been
lost from the department, one since the on-site visit. The four original lost positions reportedly
saved the district approximately $200,000, but resulted in the loss of one particularly key
position, the individual who was a full-time licensure specialist. This position’s responsibilities
were assurance with highly qualified requirements, assurance that teachers had a clear status,
monitoring that staff with lateral entry licenses were being nurtured and developing into quality
teachers, management of the tenure process, and contractual agreements with teachers under
contract and non-instructional staff that needed contracts. The latest staff member who left
BCPS had the role the benefits coordinator, human resources home page coordinator and
designer, EBenefits Facilitator, online registration for health-related human resources issues, was
responsible for the School Board Index Report, a monthly supplement to the BOE Report that
catalogs all personnel action throughout the year, and she served as the receptionist for the
office. She transferred within the district to a position with the same salary but fewer
responsibilities.




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In focus groups, principals expressed concern about the lack of timeliness of responses they
receive from the Personnel Office. With the reduced staff the office has experienced, that is to be
expected, but should not be an ongoing issue. Additional staff will help improve responsiveness.

RECOMMENDATION

Recommendation 4-18:

Adopt the proposed organizational structure for the Department of Human Resources, and
replace two vacancies in the Human Resources/Personnel Office.

The responsibilities for maintaining accurate licensure records, highly qualified data for
compliance with No Child Left Behind, and other personnel processes that relate to staff
qualifications, benefits, and salaries as well as responsiveness to staff needs are very essential.
These critical roles must be maintained for the welfare of BCPS employees and responsiveness
of the Personnel Office to staff and school needs. All staff should be cross-trained so that they
are familiar with licensure, benefits, and records management.

Exhibit 4-16 shows the proposed reorganization of the Department of Human Resources under
an Executive Director (also see Recommendation 4-1).

                                            Exhibit 4-16
                                  Proposed Organizational Structure
                                   Department of Human Resources
                                    Burke County Public Schools

                                                              Executive Director
                                                                 for Human
                                                                  Resources


                                             Administrative
                                               Assistant




               Pre-Employment     Human Resource          Retirement/Workers’      Credit Renewal     Health Benefit
                   Specialist   Management Specialist    Compensation Specialist      Specialist        Specialist




                                                                                    Certification
                                                                                     Specialist


            Source: Created by Evergreen Solutions, March 2010.


FISCAL IMPACT

Average salaries for administrative assistants are $39,983 including benefits. Adding two
positions would cost the district $79,966 annually. The district should carefully examine the
salary level for these positions to ensure that the level of pay is commensurate with the level of
responsibility.



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 Recommendation              2010-11       2011-12      2012-13        2013-14         2014-15
 Replace Two Personnel
 Administrative              ($79,966)    ($79,966)     ($79,966)      ($79,966)      ($79,966)
 Assistants


FINDING

Prior to the on-site visit, Evergreen requested BCPS job descriptions. Job descriptions that were
provided were merely printouts of generic state job descriptions. State documents are meant to
serve as models for North Carolina school districts to use to tailor to their own unique needs and
job parameters, not to be used verbatim. Only a few BCPS-developed job descriptions were
provided to Evergreen—one for Instructional Coaches and some related to the Day Care
Program.

Job descriptions in BCPS do not serve either to guide employee actions nor as a basis for
evaluations. Having no job description prevents staff from having a clear understanding of
expectations and responsibilities, and from knowing on what criteria they will be evaluated.

Having clear job descriptions with specific job tasks and responsibilities helps the district in a
number of ways. Job descriptions:

   •   reduce duplication of effort;
   •   improve staff morale because they know what is expected of them;
   •   strengthen accountability for work production; and
   •   provide the district a means of tying annual evaluation to the duties outlined.

RECOMMENDATION

Recommendation 4-19:

Develop BCPS job descriptions for each position, and tie them directly to performance
evaluations.

The Executive Director of Human Resources should work with district staff to update BCPS job
descriptions. Job descriptions are an essential management tool for specifying minimum
qualifications, knowledge, skills and ability requirements, and essential job functions.

Comprehensive job descriptions should include:

   •   general description of duties;
   •   specific duties and responsibilities, including examples of specific functions;
   •   other duties and responsibilities;
   •   overtime status;
   •   minimum training and experience;
   •   performance aptitudes;



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   •   physical demands, work environment, and ADA compliance;
   •   evaluation criteria;
   •   employee’s supervisor;
   •   pay grade or salary line;
   •   terms of employment; and
   •   the date developed or revised.

The School Board should approve all job descriptions. All BCPS staff and new hires should each
receive copies. Administrators should review and update job descriptions annually. District
leaders should incorporate job descriptions into the staff evaluation process.

FISCAL IMPACT

This recommendation can be implemented with existing resources, but should increase
efficiency, effectiveness and accountability. The development of job descriptions could also be
included as a part of the contract called for in Recommendation 4-21.


FINDING

The Personnel Administrator has determined the need to discontinue grant-related practices that
create duplication and contribute to potential lower morale among district staff. Grant
applications have previously been written in a lack of compliance with district hiring
compensation practices.

Grant-related positions have been written for specific individuals instead of advertising new
positions through conventional district practices. Salaries have been written into grants breaching
district salary schedules. Specific examples include:

   •   The salary of the Relations/Workforce Development Director is only exceeded by that of
       the Superintendent, Assistant and Associate Superintendents, Chief Technology Officer
       and Secondary Director.

   •   The Safe and Drug-Free Schools Coordinator’s salary is $58,550, higher than one
       Director’s salary and at a total of $76,701, including benefits.

This salary-setting practice for grant-funded positions has contributed to a disparity in salaries
among BCPS staff. This practice ignores employees already in the district by eliminating them
from consideration for newly-created positions, and by setting salaries for new employees above
those of long-term employees with potentially similar job responsibilities.

Additionally, positions have been added to the district as grant funds have been procured rather
than merging responsibilities with like tasks. Often new positions also have additional staff
supporting them. This duplicates responsibilities and staffing, and can cause conflict between
positions with similar or related authority. Moreover, it is not a cost-effective management
practice.




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RECOMMENDATION

Recommendation 4-20:

Use the BCPS salary schedule for the determination of salary and benefits for positions
funded by grants, assess the need for additional personnel for grant responsibilities, and
advertise all positions created by grants.

The implementation of this recommendation will provide equity among staff. Using the district’s
salary schedule will ensure equitable compensation among all staff and help all staff to
understand and accept salary determinations. Examining the need for additional staffing before
creating new positions into grants will also ensure equitable job responsibilities among staff with
similar responsibilities, rather than grant-funded individuals having a narrow range of
responsibilities that are usually assumed by other staff with broader job functions. These actions
will also help to target grant funds toward more student-centered activities instead of adding staff
to the district. This, too, prevents the district from either having to let grant-funded staff go or
finding ways to keep them when the job they were hired for no longer exists. Finally, advertising
all new grant-funded positions instead of writing specific individuals into grant applications will
assure an equitable playing field for all staff and others interested in applying for grant-funded
positions. These actions will prevent a perception of favoritism.

FISCAL IMPACT

Savings that would have been experienced by the district in the case of the Relations/Workforce
Director (salary and benefits $105,355) if the position had been funded at the average of other
director’s salaries ($93,310 including benefits) would have been $12,045.

Savings that would have been experienced by setting the Safe and Drug-Free Schools
Coordinator’s salary of $76,701 at the average coordinator’s salary of $68,163 would have been
$8,538.

These are just two examples where savings could have been achieved.


FINDING

There is no apparent systematized approach to determination of employee reporting structures
nor delineation of differences in responsibility among job categories. Common practice in most
school districts is for there to be a line-staff reporting order with, for instance, directors
supervising coordinators who may, in turn, supervise specialists. This is not the case in BCPS
with directors and coordinators and/or coordinators and specialists reporting to the same
supervisor. Coordinators sometimes report to Coordinators. Having essentially no job
descriptions likely contributes to this dilemma.

BCPS has:

   •   a total of 13 full-time directors;




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   •   two director positions shared by four staff members;
   •   one part-time Director of Drivers’ Education;
   •   four part-time Athletic Directors;
   •   one Assistant Director for Technology;
   •   one Assistant Director for Accountability;
   •   six coordinators;
   •   one part-time Drivers Education Coordinator; and
   •   many specialists, facilitators, and managers.

The Technology and Accountability offices have assistant directors, rather than others related to
teaching and learning.

Similarly, decisions about salaries have historically been made without a system to guide them.
For example, when both the Title I and Middle School Directors had expanded responsibilities
added to their roles, they were both given raises to compensate for their broadened roles.
Merging two positions into one does save the district dollars, but there needs to be a system for
determining whether the decision and the compensation for increased responsibilities are valid.

A document entitled “Base Gross Salaries” provided to Evergreen shows that, excluding the
Superintendent, salaries for central office administrators range from almost $58,000 to $103,000.
The salary of the assistant directors ranges between $52,896 and $72,624. The higher assistant
director salary exceeds that of four directors and the Finance Officer.

Burke County Public Schools has not historically conducted regular reviews of the
competitiveness of central office administrator, teacher or classified employee salaries with peer
districts. Public sector organizations typically hire external consultants to conduct
comprehensive compensation and classification studies every three to five years to gauge overall
market competitiveness and adjust salary schedules to be more competitive, and to judge internal
equity and correct any inequities identified. External consultants are hired to provide an
objective, third-party review and to use their expertise and proven methodologies to make
unbiased recommendations.

BCPS has never conducted an internal comprehensive compensation and classification study nor
hired an external consultant to conduct such a study. While market reviews can be conducted
internally, a group or individual from outside the district typically conducts the classification
review component, since it involves a detailed review of individual job duties and requires
objectivity in making individual classification and pay recommendations.

The internal equity or classification review portion of the study should include a detailed analysis
of individual position duties as they relate to other positions in the district. The external equity or
compensation review component of the study should include a detailed comparison of district
pay ranges to market peer pay ranges. Often, as part of a compensation and classification study,
school districts across the country request the selected consultant to develop updated electronic
job descriptions, review Americans with Disabilities Act (ADA) requirements, and review Fair
Labor Standards Act (FLSA) determinations for all job titles. The information needed to develop




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these items is collected as part of the study, and the district could save time and ensure quality
end products by hiring an expert to produce them.

RECOMMENDATION

Recommendation 4-21:

Conduct a comprehensive compensation and classification study to ensure internal equity
and market competitiveness.

The Executive Director of Human Resources should work with the Chief Finance Officer to
develop a Request for Proposals (RFP) for an external human resources consultant to conduct a
comprehensive compensation and classification study and oversee the competitive bid process.
The pay and classification study should be comprehensive and address both internal and external
equity issues.

The RFP should include all components of a full compensation and classification study, as well
as development of electronic, updated job descriptions, including ADA-related physical
requirements and FLSA determinations, for all jobs in Burke County Public Schools.

Once a firm is selected and work begins, the Executive Director of Human Resources should act
as the project manager for the study.

FISCAL IMPACT

This recommendation can be implemented at a one-time cost to BCPS of approximately $45,000
to $50,000 (without including teachers). The costs shown below represent the median of the
likely range of competitive bids. The cost for implementing this recommendation would be
related to hiring an external consultant. While there is a one-time cost to hire a consultant, BCPS
can expect to strategically position itself as a market competitor in the future by implementing a
sound and equitable compensation and classification system, and reap intangible benefits, such
as increased employee morale.

 Recommendation            2010-11           2011-12      2012-13      2013-14      2014-15
 Conduct Compensation and
                          ($47,500)              $0          $0           $0           $0
 Classification Study


FINDING

When district administrators discovered that a neighboring district was advertising for a teacher
of visually impaired students, the two districts collaborated on interviewing and hiring one
person to be shared by both school systems. Examining such opportunities for shared services
provides adequate levels of service to students while, at the same time, saves both districts funds
through cost-effective practices.




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COMMENDATION

Burke County Public Schools is commended for implementing cost-effective hiring
processes for instructional staff in the Exceptional Children Program.


FINDING

Exhibit 4-17 shows BCPS data for gifted students in comparison to peer districts. Supporting
those students in BCPS are one director, one administrative assistant and three gifted teachers. In
most districts across the nation and in North Carolina districts with similar student enrollments,
coordination of the program for gifted and talented students is undertaken by a director with
other responsibilities rather than one dedicated to that program, or a lead teacher who may
answer to the Exceptional Child Director or a Curriculum Director.

                                     Exhibit 4-17
              Burke County Academically or Intellectually Gifted Enrollments
                      and Percentages Compared to Peer Districts
                                 2008-09 School Year

                                                                  Number of                  Percent
                                                               Academically or         Academically or
                                          Total Student      Intellectually Gifted        Intellectually
                 School District           Population*        (AIG) Students**          Gifted Students
            Burke County                      13,941                  1,988                  14.3%
            Buncombe County                   25,724                  3,837                   14.9%
            Catawba County                    17,560                  1,900                   10.8%
            Cleveland County                  16,496                  2,785                   16.9%
            Henderson County                  13,282                   706                    5.3%
            Iredell-Statesville               21,291                  2,135                   10.0%
            Peer District Average             18,871                  2,273                  11.6%
            Source: North Carolina Department of Public Information Web site, 2010.
            *First Month: 2008-09 school year.
            ** Count from April 2008.
            http://www.ncpublicschools.org/docs/academicservices/gifted/student-data/childcount/2008.pdf



RECOMMENDATION

Recommendation 4-22:

Reclassify the position of Director of Academically or Intellectually Gifted (AIG) students
to Coordinator of Academically or Intellectually Gifted (AIG); reassign the administrative
assistant position to support the curriculum coordinators; and re-examine the FTE in the
department relative to BCPS AIG enrollment.

The Curriculum Coordinators will need support for phone, copying, and clerical tasks as they co-
lead the district’s curriculum, instruction, and professional development with the Elementary and
Secondary Directors and the Assistant Superintendent for Curriculum and Instruction. Since




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most districts do not have a position solely responsible for AIG, the district certainly does not
need a director-level position for that responsibility.

FISCAL IMPACT

The difference between a Director’s salary and a Coordinator’s is $3,066 including benefits. A
re-examination of AIG enrollment may save additional dollars with elimination of at least one
additional position in the department.

 Recommendation                  2010-11     2011-12      2012-13      2013-14     2014-15
 Reclassify the AIG
                                 $3,066       $3,066       $3,066      $3,066       $3,066
 Director


FINDING

In recognition of the need to bring the cost for substitute teachers down as well as to provide
instructional continuity for BCPS students, this year the district has enacted limitations on
substitutes. BCPS calculated the three-year average of what each school had spent for
substitutes. The district excluded the two highest and lowest schools to “smooth the bell curve”
and allocated the resulting average to each school for substitute expenditures.

If a school overspends those dollars, except in extenuating circumstances, they must fund
substitute teachers with school resources instead of having the expense be paid by the district as
in the past. BCPS also stopped the practice of providing substitutes for positions the State does
not pay for. As of the dates of Evergreen’s on-site visit, past the mid-point in the school year,
only about $300,000 had been spent. BCPS anticipates a savings of around $400,000. They have
set aside a reserve of $100,000 at the central office to help principals who have extraordinary
circumstances⎯such as an inordinate number of pregnant teachers or a flu epidemic that affects
teachers.

COMMENDATION

Burke County Public Schools has enacted cost-effective measures that should be continued
to reduce its costs for substitute teachers.


FINDING

Burke County Public Schools spent close to a million dollars last year on substitute teachers. The
actual figure was $918,808. That represents 3,113 days that teachers were not in their classes
teaching. That means that, on average, every instructional day, there were 17.3 teachers absent.
There are over 1,000 teachers in the district who are eligible for state reimbursement for
substitutes.

Comments in principal focus groups reflected discontent with the district’s decision to try to
control substitute costs. An action that other districts have implemented to minimize substitute
costs is the development of an incentive program to encourage employee attendance and



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discourage absenteeism. Rather than being perceived as a negative approach to control of
substitute teacher costs, this action is often viewed as a positive, pro-active measure.

As one example, Fort Bend ISD in Texas instituted such a program of attendance bonuses and
included teacher attendance as a part of principal evaluations. They saved $116,000 in substitute
costs the first year and reduced absences by 7,000 days.

RECOMMENDATION

Recommendation 4-23:

Create an employee attendance incentive program.

Developing an incentive program that awards employees at six-week, semester, or at the end of
year with bonuses for perfect attendance has helped other districts reduce their substitute costs.
In so doing, too, they have kept teachers in the classes and helped focus more concertedly on
improving student achievement. BCPS should create a committee of administrators and teachers
to examine other programs and develop one tailored to BCPS needs and resources.

FISCAL IMPACT

Without knowing the details of the proposal that BCPS staff develop, it is not possible to
determine the fiscal impact either in terms of costs or savings.


4.3    TRANSPORTATION
The BCPS Transportation and Logistics Department is responsible for the safe and efficient
transportation of BCPS students on a daily basis. The Transportation Department is also
responsible for training bus drivers, investigating accidents and complaints, routing, purchasing,
and providing inspections and preventive maintenance on school buses.

According to Exhibit 4-18, the BCPS transportation budget for the 2007-08 school year was
$3,273,321. The BCPS Transportation Department operates 107 school buses (down from 109 a
year ago) to transport students to area schools. BCPS transported approximately 6,758 students
for a total of approximately 1,255,320 miles, at a cost per student of about $487 annually. As can
be seen, BCPS transportation costs per student at $487 are lower than for all other peer school
systems, and $75 less than the peer school system average.

BCPS has run a top-rated operation in terms of efficiency for the past three school years⎯2006-
07 through 2008-09. One hundred percent efficiency has meant that all funding for transportation
comes from state and federal sources, and none from local funds.

Thus, the biggest challenge facing the BCPS Transportation Department is to maintain its
consistent, top-level performance.




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                                                  Exhibit 4-18
                                        Student Transportation Overview
                                            in Comparison Districts
                                             2007-08 School Year*

                                                                                                 Cost Per   Cost Per
    School District       Buses Pupils**           Miles         Cost***        Cost Per Bus      Pupil      Mile
 Burke County                109        6,728    1,255,320       $3,273,321       $30,030.47      $486.52       $2.61
 Buncombe County             260      14,471     2,580,419       $9,745,569       $37,482.96      $673.46       $3.78
 Catawba County              182      10,238     1,674,629       $5,255,807       $28,878.06      $513.36       $3.14
 Cleveland County           173         8,245    1,614,982       $4,623,791       $26,727.12      $560.80       $2.86
 Henderson County           104         5,897    1,082,966       $3,591,368       $34,532.38      $609.02       $3.32
 Iredell-Statesville         203      12,451     2,395,771       $6,559,151       $32,311.09      $526.80       $2.74
 Peer Average                172        9,672    1,767,348       $5,508,168       $31,660.35      $561.66       $3.08
 State Total             14,063      777,484       73****      $420,711,139       $29,916.17      $517.00         NA
Data obtained from Table 31 of NC Statistical Profile 2009.
State data obtained from NC Facts and Figures 2008-09.
* Includes contract transportation. Mileage includes to and from school only.
** Number of pupils transported daily.
*** Includes contract transportation and bus replacement.
**** State average mileage per day.



FINDING

As shown in state calculations, the BCPS Transportation Department is operating at the highest
level of cost efficiency. During the past three school years, BCPS has achieved a 100 percent
budget rating in transportation funding in both Budget Rating 1 and Budget Rating 2. The only
alternatives are to maintain the perfect level achieved or to fall below.

Exhibit 4-19 shows the most recent notice BCPS received from NCDPI for the 2009-10 school
year. With one exception, 2005-06, BCPS has received identical notices since the 2004-05
school year. BCPS was able to recover its 100 percent status quickly after dropping below in that
one year.

NCDPI administers an allotment each year to the school systems in the State of North Carolina
for the operation of student transportation programs. NCDPI also pays for replacement buses
when route school buses reach age (20 years) or mileage limits (200,000). The funding process
used by NCDPI assigns each school system an efficiency rating. This rating is then translated to
a budget formula used to determine the transportation allotment.

Derek Graham’s Pupil Transportation Funding in North Carolina explains the funding formula
in this way:

    The first step is to plot each county as an (X, Y) coordinate on a graph. The X-axis is the
    ratio of the number of buses operated per one hundred students. The Y-axis is annual total
    expenditures per student.

    Consider the “southern most” point on the graph. This point (A) represents an LEA (Local
    Education Agency) which spends fewer dollars per student than any other LEA in the state.




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                                            Exhibit 4-19
                                    Burke County Public Schools
                             100 Percent Transportation Efficiency Notice




   Source: North Carolina Department of Public Instruction, 2010.
   NOTE: The information contained on this sheet was furnished to DPI’s School Business Division for Allotment Revision
   13.




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   Therefore, it can be said that no other LEA is more efficient with respect to dollars per
   student than this LEA.

   Consider the “western most” point on the graph (B). This LEA operates fewer buses per one
   hundred students than any other LEA. It can be said of this LEA that no other LEA in the
   state is more efficient with respect to buses operated per one hundred students than this LEA.
   These two points—A and B—become part of the “efficiency frontier.” There may be one or
   more additional points (e.g., C and D) between these two that become part of the frontier as
   well.




   All other points on the graph are less efficient with respect to expenditures AND number of
   buses than some point on the frontier. Graphically, every other point on the graph is to the
   “northeast” of some frontier point.

NCDPI compares each school system’s performance with standardized performance criteria
comprised of the population of North Carolina school systems. Contextual and demographic
factors are also calculated and used to distribute transportation funds equitably.

NCDPI produces an annual report that details each school system’s performance ratings on two
separate measures:

   •   Budget Rating 1 – Simulator Rating: This rating is based on transportation
       expenditures and buses operated, as well as students transported. These data are
       calculated for each North Carolina school system using the NCDPI operational
       simulation formula.

   •   Budget Rating 2 – Model Run: NCDPI determines this measure by comparing each
       county with all other counties in terms of cost and buses per adjusted student. This factor
       focuses on the efficiency of transportation operations in relation to all other school
       systems in the State.



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To determine each school system’s cost efficiency and bus efficiency ratings, each system is
compared to the minimum statewide cost per student and the minimum statewide buses per 100
students. Ratings are developed with adjustments for differences in environmental
characteristics including:

   •   student population density;
   •   median family income;
   •   average distance to school;
   •   average number of seats per bus;
   •   percent of special education students transported;
   •   roadway density; and
   •   circuitry⎯which is a measure of how well streets are connected.

Once each school system has been assigned its efficiency ratings, a buffer amount of 10 percent
is added, not to exceed 100 percent. This buffer is designed to account for any undetected flaws
in the system. Achieving anything less than a 100 percent budget rating is essentially “leaving
money on the table,” because state transportation funding is reduced for efficiency scores of less
than 100 percent.

The allotment for a school system is determined by multiplying the budget rating by total eligible
expenditures for the previous year. This figure is then adjusted upward for growth in student
population size, if appropriate, and any salary increases implemented by the General Assembly.

An analysis of BCPS Transportation Department budget rating data revealed that the department
has been above the state average in the measures of operational efficiency and effectiveness
since the 2004-05 school year, with the sole exception of the 2005-06 school year.

To assist in understanding how their efficiency score is determined, NCDPI provides each school
system with a simulator program (TIMS). In the program, school systems can perform “what if”
analyses to determine how proposed changes will affect their efficiency score, and thus, their
level of state funding. Many other factors can be manipulated in the budget simulator to assess
their effect on the overall budget rating. The BCPS Transportation Director is thoroughly
familiar with the simulator program and credits its use with contributing to the department’s
success in achieving the consistent 100 percent ratings.

COMMENDATION

The BCPS Transportation Department has achieved a complete and consistent high level of
efficiency, as evidenced by its 2006-10 NCDPI budget ratings at 100 percent, resulting in
complete reimbursement from the State of North Carolina for all regular school
transportation expenses.


FINDING

The BCPS operates a bus inspection and preventive maintenance program that has recently been
ranked high among North Carolina counties. In a letter from NCDPI to Superintendent Stellar of



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February 19, 2010, Burke County Public Schools received a score of 19.80 for its inspection and
preventive maintenance program. This was significantly better than the previous year’s score of
32.40. Last year, the average evaluation score was 26.83, and BCPS was below that average.
Once computations have been made official for the current year, it is likely that the present score
of 19.80 will be above average.

The district employs DPI Vehicle Fleet Management OP-1 software furnished by NCDPI. This is
a highly comprehensive system that, if followed and used to its fullest extent, tracks all
maintenance items and preventive maintenance work orders and schedules within a 30-day time
period.

As a consequence, the Compliance Report for preventative maintenance work for 2009-10 shows
all inspection and maintenance orders to have been completed on time. In addition, selective
compliance audits were all labeled “satisfactory” for these items:

   •   open orders;
   •   completed orders;
   •   mechanic labor;
   •   bus inventory;
   •   new vehicle service;
   •   monthly inspections;
   •   maintenance;
   •   inventory received;
   •   physical inventory (10 of 10 correct);
   •   fuel issues;
   •   service call log;
   •   driver sign-in sheet; and
   •   refund reports.

COMMENDATION

The BCPS Transportation Department is commended for its diligent preventive
maintenance and bus inspection program, indicating a high level of care in keeping the bus
fleet both safe and reliable.


FINDING

All BCPS bus drivers are classified as part-time and only qualify for benefits if they are
employed in a dual role within the school system. This employment option helps reduce
employee turnover which is typically a problem among part-time positions.

In many school systems, bus drivers are classified as part-time positions and do not qualify for
benefits. Often, these school systems have significant problems with turnover, as part-time
employees leave for full-time employment that offers benefits. Other school systems, in their
efforts to retain quality employees, have had to lower the threshold requirements for bus drivers



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to earn benefits. Those school systems provide the benefits of full-time employment to part-time
employees which increase costs.

In BCPS, drivers who wish additional employment, both to earn additional wages and to qualify
for benefits, can seek dual employment within the school system. Many bus drivers who desire
this option also work in school cafeterias, as teacher aides, or in other part-time capacities. The
school system benefits from a more stable workforce for positions that are typically hard to
retain and saves the cost of providing benefits to part-time workers. Dual employment, whereby
the school system develops a full-time work schedule by combining part-time jobs, is often
considered a model employment practice. In addition, BCPS has been able to control overtime
demands more effectively because of this practice.

COMMENDATION

Burke County Public Schools engages in a model employment practice by offering bus
drivers the opportunity to work in multiple capacities in order to achieve full-time status
and obtain benefits.


FINDING

BCPS operates mobile fueling trucks for its bus fleet, to avoid having buses drive significant
distances to a central fueling station in the course of daily routes. In addition, the BCPS
maintenance garage services all BCPS vehicles, including trucks, vans, and activity buses.

The Burke County Government also operates a variety of vehicles (such as ambulances, law
enforcement vehicles, and maintenance trucks). The potential synergistic value to Burke County
of using the BCPS mobile fueling fleet to help fuel some or all of the County’s vehicles should
be explored. As an alternative, BCPS could use Burke County’s fueling sites.

Conversely, Burke County also has a need for a vehicle maintenance facility. Likewise, the
potential synergistic value to Burke County of a joint maintenance facility should be explored.

RECOMMENDATION

Recommendation 4-24:

Conduct a careful analysis of the potential benefits of joint operations in transportation
between Burke County and the Burke County Public Schools.

Since Burke County has a responsibility for fulfilling the local funding needs of the school
system, including transportation’s local share for activity buses, it appears possible that Burke
County might benefit from operating some common activities jointly with the public schools.
The potential economy-of-scale savings may be an incentive for cooperation.

FISCAL IMPACT

The actual savings due to economies of scale cannot be provided at this time. However, the
savings can be assumed to be about 10 percent of the County’s and the BCPS transportation



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maintenance costs. This amounts to about $40,000 per year. This amount is shown to begin in
2010-11 to allow time for study of such a cooperative arrangement.

 Recommendation               2010-11      2011-12      2012-13      2013-14      2014-15
 Conduct Joint Activities
                                 $0        $40,000      $40,000      $40,000      $40,000
 In Transportation


FINDING

Although the BCPS Transportation Department has achieved a 100 percent efficiency rating for
all but one year in the past five in both rating categories, and tracks several measures of
performance informally, the department can actually improve its performance measurement.

To meet state requirements, BCPS Transportation Department staff complete an annual report
which contains some data that would be useful in analyzing performance locally. However, these
data fall short of those needed to produce a comprehensive understanding of transportation
effectiveness and efficiency in BCPS. Indicators of effectiveness and efficiency can assist the
Transportation Department in consistently tracking and monitoring districtwide performance.
The Transportation Department can then compare these statistics to those of peer school systems
and its own history. Ideally, the Transportation Department would annually select a target goal
for each indicator and track progress towards that goal.

While it is evident that BCPS Transportation Department staff are successful in maximizing the
effectiveness of the transportation function and regularly track performance in many areas, the
department does not track, compile, or publish its findings on a full spectrum of performance
indicators. The department does collect a portion of these statistics, as required by the state for
funding reasons, but does not report them in an open forum, such as at a School Board meeting.
Such reporting would promote the department’s current efficiency and provide data from which
to assess the potential for further efficiencies.

Many high-performing school systems use effectiveness and efficiency indicators to assess
ongoing performance in key management areas. Performance indicators are especially needed in
costly areas such as transportation. Performance indicators allow departments of transportation to
track service quality and make adjustments where required, with resulting improvements in
performance being documented to demonstrate progress. Accurate and timely reporting on
performance indicators help management allocated funds to the most critical needs, and provide
evidence to stakeholders that the Transportation Department is using its resources effectively.

Examples of performance measures related to school district transportation are provided in
Exhibit 4-20.




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                                        Exhibit 4-20
                       Potential Transportation Effectiveness Indicators

                                    Sample Transportation Indicators

                   Operational Performance
                   Number of Student Riders
                   Percentage of BCPS Students Transported
                   Number of Buses Operated
                   Miles Traveled per Day
                   Safe Transportation of Students
                   Reported Accidents per 100,000 miles
                   Student Injuries per 100,000 miles
                   Disciplinary Referrals per 100,000 miles
                   Percentage of Buses Passing External Safety Inspections (if
                   appropriate)
                   Operational Efficiency
                   Operational Costs per Mile Driven
                   Operational Costs per Student
                   Operational Costs per Regular Student Route
                   Operational Costs per Exceptional Student Route
                   Salaries and Benefits as Percentage of Total Operating Costs
                   Maintenance Costs per Bus
                   Ratio of Student Riders to Bus Capacity
                   Operational Quality
                   Percentage of Bus Routes On-Time
                   Average Student Riders per Bus
                   Duration of Average Bus Route (for both regular and exceptional
                   routes)
                   Results of Transportation Quality Surveys

                   Source: Created by Evergreen Solutions, 2010.




RECOMMENDATION

Recommendation 4-25:

Identify and evaluate performance indicators, and issue an annual report card for the
BCPS Transportation Department.

Currently, only some data are available to support the perception of effectiveness for the BCPS
Transportation Department, other than the recent 100 percent efficiency ratings from the State.
Other data should be systematically collected and reported to monitor all key aspects of
effectiveness. The BCPS Transportation Department should implement the collection, analysis,
and reporting of additional vital performance statistics to illustrate the current status of
operations.




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Such an annual review of its operations should provide assurances that the department has met
performance standards, both in comparison to its past and in comparison to its peers. The report
card should serve to highlight solid performance and areas in need of improvement.

FISCAL IMPACT

This recommendation can be implemented with existing resources. While no specifics can be
cited at this time, it is likely that the BCPS Transportation Department will achieve some cost
savings in its local share and the cost reimbursed by the State, as it works to achieve the
standards identified in its report card.


4.4    CHILD NUTRITION
School meal programs began when the Child Nutrition Act of 1946 authorized the National
School Lunch Program to “safeguard the health and well-being of the nation’s children.” The
program, administered by the U.S. Department of Agriculture (USDA), is open to all public and
nonprofit private schools and all residential childcare institutions.

Burke County Public Schools participates in the National School Lunch Program (NSLP), and
the School Breakfast Program (SBP). School systems that participate in these federal programs
receive cash subsidies and donated commodities from USDA for each eligible meal they serve.
In return, the school system must serve its students meals that meet federal guidelines for
nutritional value and offer free or reduced-price meals to eligible students.

In 2008-09, the USDA reimbursed over $8 billion for the National School Lunch Program. This
federal support comes in the form of a cash reimbursement for each meal served, depending on
the economic status of the student. The poorest students qualify for free lunches, while others
qualify for reduced price lunches. All meals served according to federal guidelines receive some
level of reimbursement, including those served to students who pay full price.

Child Nutrition is one of the functions of any school system that is most publicly recognized and
is often assessed informally by many external stakeholders. This level of visibility, along with
the potential for financial profit and loss, makes Child Nutrition an area that must be guided with
clear expectations and monitored with precision.

The BCPS Child Nutrition Department operates 26 school kitchens. According to the BCPS Web
site, the kitchens serve an average of 11,441 meals per day or over 2,059,386 meals per year.
The annual budget is just under $8 million.

The BCPS food services staff consists of the Child Nutrition Director (who also serves in the
capacity of Purchasing Director for BCPS), a child nutrition bookkeeper, two supervisors of
cafeteria managers, 26 cafeteria managers, and 126 cafeteria workers.




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FINDING

The BCPS Child Nutrition Department has recently found itself operating with increasingly
narrowing profit margins, until it has most recently become unprofitable.

Exhibit 4-21 provides data obtained from BCPS, showing profits and losses of Child Nutrition
from 2002-03 to 2008-09. As can be seen, the exhibit shows a decline in profitability until the
first loss in 2008-09.

                                          Exhibit 4-21
                               BCPS Child Nutrition Department
                                  Profit and Loss Statements
                             2002-03 through 2008-09 School Years
                                   School Year        Profit or (Loss)
                                     2002-03             $775,969
                                     2003-04             $448,692
                                     2004-05             $391,990
                                     2005-06             $365,428
                                     2006-07             $276,114
                                     2007-08             $34,389
                                     2008-09            ($337,478)
                               Source: BCPS Incentive Program Analysis, 2010.

USDA defines the indirect cost a school district incurs due to meal production and service as
follows:

   Indirect costs are also incurred. Indirect costs are those costs which are incurred to the
   benefit of school food service as well as other school functions, but are not readily
   identifiable to the school food account. Since these costs do contribute to the cost of
   producing a meal, Federal policy allows that they may be claimed for reimbursement. It
   is to the advantage of the child nutrition operation to include these costs in their claim
   for reimbursement so that each program may bear its fair share of the total cost.

NCDPI calculates from the BCPS Child Nutrition Department reports the allowable indirect cost
for the year, based on formulas that apply uniformly to all school districts in North Carolina.
This indirect cost amount is to be paid into the school district’s general fund from the child
nutrition department’s account. At its discretion, a school district may require its child nutrition
department to pay 100 percent of the calculated indirect cost, or a portion thereof, or nothing.
This discretion is usually applied when the child nutrition program’s reserve dips below one
operating month. Payments of indirect cost are then either reduced or eliminated. Despite the less
than ideal financial conditions under which it operates, the BCPS Child Nutrition Department
has consistently paid 100 percent of its indirect cost allotment to the BCPS General Fund.
Indirect costs include prorating custodians, utility costs, waste management, human resources
administration, and maintenance/repair needs (see Recommendation 3-7 in Chapter 3).




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Clearly, action is necessary to increase revenues and decrease expenses in order to eliminate the
pattern of financial losses year after year. In fact, the pattern should be reversed to establish a
consistent, positive cash flow. This action should also allow the operating reserve to be funded at
a minimum of one month and a maximum of three. Furthermore, it should allow funds to be
accumulated toward the purchase of new food service equipment when existing equipment must
be replaced, or when new school facilities are constructed.

It is important to note that a Child Nutrition Program must break even from a budget standpoint.
Therefore, funds not available from federal sources must be paid annually out of the general
fund, thus requiring additional Burke County local dollars to reach a break-even budgetary
status.

RECOMMENDATION

Recommendation 4-26:

Prepare and implement a detailed and well-considered, long-term strategy to operate the
BCPS Child Nutrition Department consistently in a fiscally sound manner.

Future operations of the BCPS Child Nutrition Department should show a positive cash flow at
the end of each school year, after all legitimate revenues and expenses have been accounted for.
It is important that funds are accumulated as a result of the department’s operations. Such funds
can be used legitimately to pay all indirect costs to the BCPS general fund, maintain a maximum
three-month operating reserve, and purchase new food preparation and serving equipment for
renovations and new construction.

The strategy should aim to increase revenues and decrease expenses. This chapter contains
specific recommendations for revenue enhancements and cost reductions. Recommendation 4-
25 establishes the strategic framework for the implementation of the subsequent
recommendations, and for other future ideas not yet articulated.

The Superintendent should assemble a task force of BCPS internal managers (e.g., auxiliary
services, child nutrition, finance, safety, purchasing) and meet on a periodic, perhaps monthly,
basis. The task force agenda should be the profitability of Child Nutrition. This chapter contains
some recommendations aimed at course-corrections toward profitability:

   •   meals per labor hour productivity improvements;
   •   increase severe breakfast and lunch eligibility; and
   •   maintain meal prices based on cost-of-living indicators.

FISCAL IMPACT

This recommendation can be implemented with existing resources. The recommendations that
follow in this section are intended for consideration as components of the department’s child
nutrition profitability strategy. Each of these recommendations has direct, quantifiable fiscal
implications.




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FINDING

BCPS kitchen productivity, as measured by meal per labor hour (MPLH) varies from site to site.
Meals are prepared at each school according to the conventional system model, whereby some
foods are prepared from raw ingredients on the premises (using some bakery breads and prepared
pizza and washing dishes). MPLH is calculated by determining the number of meals or meal
equivalents served, and dividing by the number of labor hours required to produce and serve
those meals.

Exhibit 4-22 shows the MPLH guidelines for conventional food preparation by daily lunch
equivalents.

                                      Exhibit 4-22
                    MPLH Guidelines for Conventional and Convenience
                              Meal Preparation Systems

                      Number of Meal            Conventional             Convenience
                        Equivalents               System**                 System***
                         Up to 100                    10                       12
                          101-150                     11                       13
                          151-200                     12                       14
                          202-250                     14                       15
                          251-300                    15 *                      16
                          301-400                    16 *                      18
                          401-500                    17 *                      19
                          501-600                    17 *                      19
                          601-700                    18 *                      20
                          701-800                    19 *                      22
                          801-900                     20                       23
                           901 up                     21                       23
                    Source: Staffing Guidelines for On-Site Meal Base Kitchens – InTeam Cost
                    Control Manual, 2006.
                    *NCDPI guidelines limit MPLH to 15-19 range.
                    ** Conventional system is preparation of some foods from raw
                    ingredients on premises (using some bakery breads and prepared
                    pizza and washing dishes).
                    *** Convenience system is using maximum amount of processed
                    foods (for example, using all bakery breads, prefried chicken, and
                    preportioned condiments and washing only trays or using disposable
                    dinnerware).


Using these guidelines, BCPS achieved a districtwide MLPH figure of 17.03 in its most recent
calculations. Exhibit 4-23 shows the average daily lunch equivalents for each BCPS site, the
MPLH achieved at each site, the NCDPI recommended MPLH, and the resultant shortfall or
surplus.




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Exhibit 4-23 also shows the following campus-specific results:

   •   Performing on target (within +/- .5) MPLH: Chesterfield Elementary School, Drexel
       Primary, Forest Hill Elementary School, George Hildebrand Elementary School, Glen
       Alpine Elementary School, Heritage Middle School, Rutherford College Elementary
       School, Table Rock Middle School, Valdese Elementary School, Walter Johnson Middle
       School.

   •   Exceeding target (above .5) MPLH: Hallyburton Elementary School, Hillcrest
       Elementary School, Icard Elementary School, Mountain View Elementary School, Mull
       Elementary School, Oak Hill Elementary School, Rutherford College Elementary School,
       Salem Elementary School.

   •   Performing below target (within -.5 and -1.0) MPLH: Ray Childers Elementary
       School.

   •   Performing significantly below target (below -1.0) MPLH: East Burke High School,
       East Burke Middle School, Freedom High School, Hildebran Elementary School, J C
       Draughn High School, Liberty Middle School, W A Young Elementary School.

RECOMMENDATION

Recommendation 4-27:

Develop and implement a labor productivity improvement program for the BCPS Child
Nutrition Department.

Although many campuses meet or exceed MPLH guidelines, there is room for improvement in
labor productivity in the BCPS Child Nutrition Department. Initially, the Child Nutrition
Department should set quarterly productivity improvement goals for the seven schools with a
MPLH deficit of 1.0 or greater, based on the productivity guidelines using the Conventional
System. Specific steps to improve productivity at each site should be discussed by the Child
Nutrition Director and the Supervisor with all affected Cafeteria Managers. Productivity
improvement steps should be agreed upon by all parties.

Low-performing cafeteria sites should be observed, and potentially negative work routines
identified and corrected. Cafeteria managers and cafeteria workers should be given opportunities
to suggest potential productivity improvements.

After this initial step has been completed, productivity improvements at other schools below
MPLH goals can be addressed.

FISCAL IMPACT

Based on the data in Exhibit 4-23, the total daily labor hours amount to 793.9. For a 180-day
school year, this amounts to 142,902 hours. The potential hours to be saved by productivity
improvements to within a target of +/- .5 MPLH at the seven sites are shown in Exhibit 4-24.



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                                              Exhibit 4-23
                                MPLH Productivity at BCPS School Sites
                               December 1, 2009 through December 31, 2009
                                             Average Daily   Daily Labor                                  (Shortfall)
                                                 Lunch         Hours        Meals per    Recommended          or
                       Site                   Equivalents                  Labor Hour       MPLH*          Surplus
   Chesterfield Elementary School                264.14         17.0         15.42            15                .42
   Drexel Primary School                         298.64         20.5         14.57            15               (.43)
   East Burke High School                        836.00         50.3         16.62            19             (2.38)
   East Burke Middle School                      861.21         52.0         16.56            19             (2.44)
   Forest Hill Elementary School                 436.07         26.0         16.77            17               (.23)
   Freedom High School                           998.35         56.8         17.58            19             (1.42)
   George Hildebrand Elementary School           455.57         27.0         16.87            17               (.13)
   Glen Alpine Elementary School                 535.64         31.0         17.28            17                .28
   Hallyburton Elementary School                 276.92         17.5         15.82            15                .82
   Heritage Middle School                        658.71         35.8         18.40            18                .40
   Hildebran Elementary School                   524.92         33.5         15.66            17             (1.34)
   Hillcrest Elementary School                   296.14         17.0         17.42            15              2.42
   Icard Elementary School                       369.00         20.5         18.00            16              2.00
   J C Draughn High School                       651.35         40.0         16.28            18             (1.72)
   Liberty Middle School                         709.35         39.5         17.96            19             (1.04)
   Mountain View Elementary School               280.71         14.0         20.05            15              5.05
   Mull Elementary School                        347.71         20.5         16.96            16                .96
   Oak Hill Elementary School                    478.42         27.3         17.52            17                .52
   Ray Childers Elementary School                496.50         30.3         16.39            17               (.61)
   R L Patton High School                        866.78         50.0         17.34            17                .34
   Rutherford College Elementary School          237.28         14.0         16.95            15              1.95
   Salem Elementary School                       595.71         32.5         18.33            17              1.33
   Table Rock Middle School                      675.92         37.3         18.12            18                .12
   Valdese Elementary School                     439.85         26.0         16.92            17               (.08)
   W A Young Elementary School                   427.00         26.8         15.93            17             (1.07)
   Walter Johnson Middle School                  524.42         30.8         17.03            17                .03
   UNIT TOTAL                                 13,540.31        793.9         17.03
  Source: Prepared by Evergreen Solutions from the following sources: (1) BCPS Child Nutrition Department; (2) Staffing
  Guidelines for On-Site Meal Base Kitchens – InTeam Cost Control Manual, 2006. *NCDPI Guidelines limit MPLH ranges to
  15-19.; see Exhibit 4-21.



                                          Exhibit 4-24
                     Daily Labor Hours Saved from Productivity Improvements
                   to Target MPLH Levels at the Seven Poorest Performing Sites

                                    Average Daily    Daily                                     (Shortfall) Hours Saved
                                       Lunch         Labor      Meals per    Recommended           or       if Target
               Site                  Equivalents     Hours     Labor Hour       MPLH*           Surplus     Reached
East Burke High School                 836.00         50.3        16.62           19              (2.38)        6
East Burke Middle School               861.21         52.0        16.56           19              (2.44)        7
Freedom High School                    998.35         56.8        17.58           19              (1.42)        5
Hildebran Elementary School            524.92         33.5        15.66           17              (1.34)        2
J C Draughn High School                651.35         40.0        16.28           18              (1.72)        4
Liberty Middle School                  709.35         39.5        17.96           19              (1.04)        2.5
W A Young Elementary School            427.00         26.8        15.93           17              (1.07)        2
TOTAL                                                                                                          28.5
Source: Prepared by Evergreen Solutions from the following sources: (1) BCPS Child Nutrition Department; (2) Staffing
Guidelines for On-Site Meal Base Kitchens – InTeam Cost Control Manual, 2006. *NCDPI Guidelines limit MPLH ranges to 15-
19.




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Thus, the daily hours saved by merely improving the seven poorest performing sites to target
MPLH levels are 28.5. The annual labor hours saved would thus be 5130, based on 180 days
worked. At an average annual salary per cafeteria worker of $15,940 including benefits, the
average hourly wage computes to $22.14 (180 days 4 hours per day). Thus the annual savings of
5,130 hours would amount to $113,578.

This amount is shown in the time line below. However, additional savings are possible
eventually by bringing all sites performing below the MPLH target to the desired performance
level.

Recommendation                   2010-11        2011-12          2012-13    2013-14        2014-15
Improve Seven Worst
                                 $113,578       $113,578     $113,578       $113,578      $113,578
Cafeterias to MPLH Target


FINDING

The 2009-10 basic federal reimbursement rates for breakfast and lunch are shown in Exhibit 4-
25. Because BCPS has, in many of its schools, a 60 percent or higher eligibility for free and
reduced breakfast and lunch (see Exhibit 4-26), those campuses qualify for the severe need
reimbursement rate.

                                        Exhibit 4-25
                 National School Breakfast and Lunch Reimbursement Rates
                                  2009 – 2010 School Year

                                             Non-                   Non-
                                            Severe      Severe     Severe   Severe
                                             Need        Need       Need     Need
                         Program          Breakfast Breakfast      Lunch    Lunch
                   Free Meal                $1.46       $1.74      $2.68    $2.85
                   Reduced Price Meal       $1.16       $1.44      $2.28    $2.45
                   Paid Meal                $0.26        $.26      $0.25     $.33
                 Source: http://www.fns.usda.gov, 2009.



To qualify for reimbursement of lunch and breakfast costs, the following thresholds must be met:

   •   Severe Need Lunch Reimbursement: For those school district programs serving more
       than 60 percent free and reduced-price lunches in the second preceding year (currently
       2007-08).

   •   Severe Need Breakfast Reimbursement (applies separately to each site): Severe need
       eligibility is limited to those schools in which 40 percent or more of the lunches served in
       those schools were served free or at a reduced price during the second preceding school
       year (currently 2007-08).




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   According to BCPS officials, all schools are currently qualified for severe need breakfast
   reimbursement, but not for severe lunch reimbursement. In Exhibit 4-26 the severe need
   lunch reimbursement eligibility is just a fraction of a percent below 60 percent districtwide—
   at 59.25 percent.
                                           Exhibit 4-26
                                Burke County Public Schools
                      Free and Reduced Eligibility (Pre-K included)
                                        January 15, 2010
                                                        Average           Free and    Percent
                                                         Daily             Reduce     Free and
                School                                 Membership         Eligible    Reduced
                ELEMENTARY SCHOOLS

                Chesterfield                                234             198          84.62%
                Drexel                                      288             197          68.40%
                Forest Hill                                 441             238          53.97%
                George Hildebrand                           425             255          60.00%
                Glen Alpine                                 504             327          64.88%
                Hallyburton                                 288             182          63.19%
                Hildebran                                   437             263          60.18%
                Hillcrest                                   209             209         100.00%
                Icard                                       316             235          74.37%
                Mt. View                                    249             208          83.53%
                Mull                                        338             191          56.51%
                Oak Hill                                    470             275          58.51%
                Ray Childers                                492             324          65.85%
                Rutherford College                          232             137          59.05%
                Salem                                       612             329          53.76%
                Valdese                                     463             207          44.71%
                W. A. Young                                 398             289          72.61%

                TOTAL                                      6396             4064        63.54%

                SECONDARY SCHOOLS

                EBHS                                        987             511          51.77%
                EBMS                                        758             458          60.42%
                Draughn                                     773             405          52.39%
                Freedom                                    1191             770          64.65%
                Heritage                                    659             361          54.78%
                Liberty                                     679             325          47.86%
                N. Liberty                                   82              58          70.73%
                Patton                                     1043             447          42.86%
                TRMS                                        618             396          64.08%
                W. Johnson                                  501             325          64.87%
                BAS/West                                    111             74           66.67%
                BAS/East                                    94              67           71.28%
                BMC                                         121             42           34.71%

                TOTAL                                      7,617           4,239        55.65%

                TOTAL ALL SCHOOLS                        14,013             8,303       59.25%
              Source: Burke County Public Schools Children Nutrition Office, 2010.




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Consequently, BCPS should be able to expand its severe need reimbursement eligibility for
lunch, and retain its eligibility for the severe need breakfast reimbursement.

RECOMMENDATION

Recommendation 4-28:

Obtain severe need lunch reimbursement eligibility, and maintain severe need breakfast
reimbursement eligibility for students in Burke County Public Schools.

Severe need lunch reimbursement eligibility may require a few years to accomplish, since the
“second preceding school year” is the qualifying measure.

Because reimbursement at severe need levels is higher than regular reimbursements, it is highly
desirable to have BCPS qualify for the maximum possible reimbursement. BCPS appears to be
within a fraction of a percentage point of qualifying for severe need lunch reimbursement across
all schools. Severe need breakfast reimbursements are currently in force for all BCPS schools.

FISCAL IMPACT

Based on a labor study performed by BCPS from December 1 to December 31, 2009, 147,721
lunches and 47,598 breakfasts were produced during that time period. This is a percentage split
of approximately 75 percent for lunch and 25 percent for breakfast. Thus, of the total annual
production of over two million meals in BCPS, approximately 1.5 million lunches are produced.
Assuming that 60 percent of all lunches districtwide can be qualified for severe need
reimbursement, the additional amount received would be 900,000 lunches times the increment of
17 cents (see Exhibit 4-24) for reduced and free lunch, and the same categories of severe need
lunch.

This amounts to an annual increase in income of $153,000. The total of $153,000 is therefore
shown in the timeline below. However, due to the “second year prior” qualification requirement,
this extra income is shown to start in 2011-12.

Recommendation                 2010-11      2011-12       2012-13       2013-14       2014-15
Obtain Severe Need Lunch
                                   $0       $153,000     $153,000       $153,000      $153,000
Reimbursements


FINDING

One of the reasons often cited by BCPS officials as a major contributor to the decline in
profitability of its Child Nutrition Program is that “meal prices were not increased for ten years.”
While the action of keeping meal prices level may have been an act of kindness toward families
with children in BCPS, it was not necessarily an example of prudent fiscal management of the
breakfast and lunch programs in the school district. Moreover, when meal prices were finally
increased last year, the change was hard for many families to accept. While many families
complained and vowed to send their children to school with bagged lunches, many soon realized



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that they could not produce equally healthy and nourishing meals matching even the new, higher
prices.

Exhibit 4-27 shows the most current meal prices posted on the NCDPI Web site for the peer
school systems used in this study. Also shown are highest and lowest-priced districts in North
Carolina.

                                            Exhibit 4-27
                           Meal Prices at BCPS and Comparison Districts
                                  Number of Lunch Meal Prices
                                        2007-08 School Year

                    School District                # Schools      Elem    Middle    High     Adult
          Burke County Schools                        28          $1.40   $1.60     $1.60    $2.25
          Buncombe County Schools                     41          $1.75   $1.75     $2.00    $2.50
          Catawba County Schools                      27          $1.80   $1.95     $1.95    $0.00
          Cleveland County Schools                    28          $1.20   $1.30     $1.30    $0.00
          Henderson County Schools                    21          $1.90   $2.15     $2.15    $2.75
          Iredell-Statesville Schools                 34          $1.95   $2.10     $2.10    $0.00
          Chapel Hill-Carrboro Schools
                                                       16         $2.50   $2.75     $2.75    $3.35
          (highest-priced district)
          Hertford County Schools
                                                       5          $0.75   $0.75     $0.75    $0.00
          (lowest-priced district)
        Source: North Carolina Department of Public Instruction, 2010.

For 2009-10, BCPS raised the above prices an average of about 30 percent for middle and high
schools to $2.10, and adult lunches to $3.00. The $1.40 price for elementary schools remains as
shown in Exhibit 4-27.

RECOMMENDATION

Recommendation 4-29:

Set a meal price policy indexed to the USDA reimbursement rates.

BCPS should arrive at a benchmark price for its meals for 2010-11, and then set an index against
which future price increases will be set. BCPS should consider a new benchmark paid price
profile for 2010-11 as follows:

       Breakfast         K-5                 $1.25 Paid         $0.30 Reduced
                         6-12                $1.50 Paid         $0.30 Reduced
                         Adults              $2.00

       Lunch             K-5                 $1.75 Paid         $0.40 Reduced
                         6-12                $2.50 Paid         $0.40 Reduced
                         Adults              $3.45




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The above meal price structure should be tested for profitability, as it will be the benchmark
from which future price increases will be put into effect. If it proves to be in need of up or down
adjustment, such action should be taken before making it the official benchmark. By indexing
this benchmark price structure to changes in the reimbursement rate for free or reduced meals
from USDA, a logical and fair pricing process can be implemented by BCPS.

FISCAL IMPACT

Beginning in 2010-11, BCPS will see an average increase of approximately 20 percent in its
meal charges. This should be the last major price increase to make up for years of keeping prices
level, despite increases in the cost of living. Thereafter, the increases should be as incremental as
the increases in reimbursement rates from USDA.

This initial increase obtained is calculated as follows: paid lunch and paid breakfast actual
income for 2008-09 was $1,489,495. Assuming conservatively an 18 percent increase due to
initial lower demand because of increased prices, the total added income would be $297,900.
This figure is shown in the timeline below beginning in 2011-12. Indexed increases will in fact
cause these numbers to change with changes in the USDA reimbursement rate, but this change is
not shown.

Recommendation                2010-11      2011-12         2012-13        2013-14         2014-15
Index Meal Prices to
USDA Reimbursement               $0        $297,900       $297,900        $297,900       $297,900
Increases


FINDING

The added income from productivity improvements, maximized severe need reimbursements,
and indexed meal price increases, will contribute to a more positive balance in the Child
Nutrition Fund during the years ahead. It is anticipated that, by the 2013-14 school year,
sufficient funds will be available to renovate six school kitchens, and to construct one new
school kitchen as part of new school construction. Six renovations at $75,000 each, and a new
kitchen at $100,000 each, would require a fund balance of approximately $550,000.

RECOMMENDATION

Recommendation 4-30:

Factor into future facilities planning, the use of Child Nutrition Funds to renovate
approximately six kitchens and construct two new ones.

Child Nutrition Fund resources can be explicitly used for the purpose of capital programs related
to child nutrition. As the Child Nutrition Fund begins to accumulate a positive balance, facilities
planners at BCPS should begin to include such funding in their plans for school renovation and
for new construction.




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FISCAL IMPACT

As more monies accumulate in the Food Services Fund over the next five years, these resources
will also be available for capital projects for child nutrition. A first drawdown of Child Nutrition
Fund monies for capital projects should begin in 2013-14. That initial drawdown amount is
estimated to be approximately $450,000 for six kitchen renovations.


FINDING

The Director of Child Nutrition has the full title of Director of Child Nutrition and Purchasing.
While the person currently serving in this position is performing this unusual combination of
duties to the satisfaction of management, the duties of this position are not organizationally and
functionally compatible. Although Child Nutrition requires significant purchasing actions, this
does not necessarily satisfy a requirement that purchasing and child nutrition need to be managed
by one and the same person.

RECOMMENDATION

Recommendation 4-31:

Establish a Director of Child Nutrition position, and a Director of Purchasing position
separately from each other (as also recommended in Chapter 3 and Section 4.1 of Chapter
4).

The incumbent in the current “Director of Child Nutrition and Purchasing” position should be
retained as a full-time Director of Child Nutrition. Details of the newly created “Director of
Purchasing” position are addressed in Chapter 3.

FISCAL IMPACT

The fiscal impact for this recommendation is addressed in Recommendation 4-1.


FINDING

Burke County Public Schools has, for over a decade, operated a “Child Nutrition Incentive
Program.” According to official BCPS documents:

   The Burke County Public Schools’ Child Nutrition Incentive Program is based on the
   performance of the cafeteria staff toward meeting the goals of the CNP to operate in an
   efficient manner while maintaining high standards of quality in meals prepared and served.
   In order to be eligible for the incentive bonus, each school must complete a minimum of five
   (5) of seven (7) objectives. The incentive program will award a bonus of 4 percent of annual
   salary to each CNP employee of the schools that meet the minimum of five objectives. CNP
   employees of schools meeting all seven objectives will receive an additional 1 percent bonus.
   Employees will receive the incentive monies only if they have not been absent during the 180



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   day school term. Any days absent for any reason will be deducted from the totals bonus
   amount and will be based on the percentage of attendance.

The BCPS seven incentive program objectives for 2009-10 are:

   •   Use 90 percent of the school’s pro-rated share of commodities received by the unit by the
       last working day of April 2010.

   •   Meet the guidelines of a minimum of 15 meals per labor hour.

   •   Maintain a sanitation grade of 95 percent (without regard to the additional two points
       received from serve safe certification).

   •   Maintain the following student participation:

       - Elementary Schools           90 percent lunch
       - Middle Schools               80 percent lunch
       - High Schools                 70 percent meal equivalents

   •   Schools may not exceed the following reportable CNP – related accident reports:

       - Not more than two for schools with an ADM of 300 or less
       - Not more than three for schools with an ADM of 300 to 600
       - Not more than four for schools with an ADM of 600 or more

   •   Participation in a minimum of two of these three promotional and professional
       development activities:

       - School/Student Involvement, such as Nutrition Advisory Council sponsorship or a
         survey for input on menu selections

       - Promotion and sponsorship of three special events in the cafeteria, such as
         grandparents day, national school lunch week, national school breakfast week,
         national nutrition month, or a cafeteria dining room improvement/beautification
         project

       - Participation in, and promotion of, professional and staff development activities
         during the school work day or as approved by the supervisor, such as training, or CN
         awards program

   •   School’s net Child Nutrition Program financial operations must be sound – revenues must
       exceed expenditures.

Thus the Child Nutrition Incentive Program has for decades provided bonus income to cafeteria
workers that met at least five of seven annual program goals. In turn, the incentives have been
instrumental in raising the performance level of the Child Nutrition Program in Burke County
Public Schools.



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COMMENDATION

Burke County Public Schools is commended for the positive contributions of its Child
Nutrition Incentive Program.


4.5       FACILITIES
The manner in which a school district manages its facilities can have a significant effect on other
school functions. Useful, well-maintained, up-to-date, and cheerful learning environments can
help reinforce positive attitudes and performance by students, teachers, and administrators. For
example, high indoor air quality and thermal comfort have been shown to improve concentration
and learning. Facilities that are neither overcrowded nor underutilized create an educational
community where team work, cooperation, and other positive attributes can be practiced and
promoted.

The BCPS Maintenance Department is responsible for the operation and maintenance of 28
schools, and several ancillary facilities including the central administration offices, the school
bus garage, the maintenance department, the child nutrition department, and daycare. In all, the
buildings comprise 2,650,015 gross square feet.

The individual gross square footage of each facility is shown in Exhibit 4-28.

FINDING

The BCPS Maintenance Department maintains a staffing level that is a best practice according to
industry standards. In addition to three supervisory staff, the Maintenance Department has a
roster of the following 26 tradespersons:

      •   3 carpenters
      •   6 electricians
      •   1 boiler plant technician
      •   5 HVAC mechanics
      •   1 food service equipment technician
      •   3 painters
      •   2 plumbers
      •   2 roofers/masons
      •   1 locksmith
      •   1 cabinetmaker
      •   1 welder

At a total gross square footage of 2,650,015, the ratio of gross square feet per maintenance
worker is approximately 101,924. According to the 38th Annual Survey of Operating &
Maintenance costs for schools by American School and University Magazine, the recommended
benchmark is a national average of 92,074 gross square feet per maintenance worker. BCPS,
therefore, has a maintenance staff roster that meets the best practice benchmark most commonly
recognized in the industry.



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                                         Exhibit 4-28
                                Burke County School Facilities
                           Gross Square Footage as of February, 2010
                                          Site                   Gross Floor Area (s.f.)
                     Chesterfield Elementary School                       43,811
                     Drexel Primary School                                66,705
                     East Burke High School                             247,989
                     East Burke Middle School                           130,030
                     Forest Hill Elementary School                        52,464
                     Freedom High School                                257,041
                     George Hildebrand Elementary School                  76,902
                     Glen Alpine Elementary School                      115,279
                     Hallyburton Elementary School                        46,355
                     Heritage Middle School                             119,477
                     Hildebran Elementary School                          64,474
                     Hillcrest Elementary School                          45,674
                     Icard Elementary School                              40,963
                     J C Draughn High School                            157,564
                     Liberty Middle School                              159,046
                     Mountain View Elementary School                      44,248
                     Mull Elementary School                               56,311
                     Oak Hill Elementary School                           61,743
                     Ray Childers Elementary School                       73,500
                     R L Patton High School                             157,564
                     Rutherford College Elementary School                 37,484
                     Salem Elementary School                              92,650
                     Table Rock Middle School                           119,477
                     Valdese Elementary School                            59,984
                     W A Young Elementary School                          73,500
                     Walter Johnson Middle School                       118,478
                     Maintenance                                          37,684
                     Burke Alternative School                             37,930
                     Technology Center                                    14,910
                     Bus Garage                                           11,950
                     East Alps Special Education                          10,510
                     West Concord Staff Development Center                18,138
                     TOTAL GROSS SQUARE FEET                           2,650,015
                     Source: BCPS Facilities Department, 2010.

COMMENDATION

BCPS is commended for staffing its Maintenance Department at a level that is within the
recommended best practice range by American School and University Magazine.


FINDING

Burke County and BCPS should explore the potentially synergistic and cost-effective
consequences of sharing their respective maintenance staffs. It has been established that BCPS
has a best practices staffing of its Maintenance Department. However, it is well known that
maintenance staffs are not always uniformly busy. While routine preventive maintenance
activities are often the order of the day, emergency work orders can stress staff resources at other
times. At times one maintenance worker is overcommitted and staff in another entity is not,



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cooperation may be highly useful. It may result in an avoidance of excessive overtime, and
reduced reliance on outsourcing.

It appears that a cooperative arrangement should be explored. A merger of the two departments
would at this time be premature. Instead, an effort to create a cooperative arrangement should be
undertaken.

RECOMMENDATION

Recommendation 4-32:

Implement a cooperative arrangement between the Maintenance Departments of Burke
County and BCPS for the purpose of supplementing each other’s work loads.

While the extent of the effectiveness of a cooperative arrangement cannot be predicted, it has the
potential for synergy and cost effectiveness, and should therefore be explored between Burke
County and BCPS. The major likely cost savings accruing to Burke County and BCPS would
come from a reduction or possible elimination of overtime, and the reduction of outsourcing.

FISCAL IMPACT

Evergreen cannot estimate a specific fiscal impact at this time. In addition to economies of scale
that might be achieved, it is clear that cooperative arrangements between Burke County and
BCPS could contribute to a strengthening of the relationship of these two local agencies in the
years to come.


FINDING

BCPS currently employs 28 head custodians (one for each facility), 69 full-time, and 16 part-
time custodians. This translates into a custodial staff FTE of 105.

According to the 38th Annual Survey of Operating & Maintenance costs for schools by
American School and University Magazine, the recommended benchmark is a national average
of 32,100 gross square feet per custodial worker, based on responses from K-12 schools across
the United States. At a total gross square footage of 2,650,015, the ratio of gross square feet per
custodial worker at BCPS is approximately 25,238. This floor area is about 20 percent below the
average across the United States.

The North Carolina Department of Public Instruction (DPI) has developed a more detailed
allocation formula. This formula includes the number of teachers and students as follows:
          (# of Teachers / 10) + (# of Students / 260) + (Total Square Footage / 15,000)
The resulting figure is then divided by three to obtain the custodial allotment.
Based on the foregoing the DPI calculation for BCPS is as follows:
                        1,063/10 + 14,032/260 + 2,650,015/15,000 = 112
                                               3



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Based on this DPI formula, the FTE custodian count of 112 is seven positions higher than the
count of 105 in BCPS. Consequently, it appears that the custodial staffing at BCPS is appropriate
by DPI benchmarking.

This figure can be greatly affected by the overall maintenance and condition of the area to be
cleaned. Older buildings are often more difficult to keep satisfactorily clean than newer ones and
some building materials are more difficult to keep satisfactorily clean than others. DPI
recognizes this and notes that a difficulty factor can be applied to this general formula to adjust
for specific conditions.

The BCPS school cleaning program is noticeably above average. In the walk-through of facilities
by the Evergreen Team, it was obvious that a high level of cleaning was present consistently in
the buildings visited. In documentation provided by BCPS to Evergreen consultants, it has been
pointed out that BCPS subscribes to the cleaning standards advocated by APPA (formerly
Association of Physical Plant Administrators)⎯considered among the highest and best in the
industry.

To quote from the BCPS Custodial Inspection Ratings System:

   We are proud to report that there were 21 schools with a “Superior” rating, seven with an
   “excellent” rating, and no schools with a less than 90 percent rating during the 2008-09
   school year.

COMMENDATION

Burke County Public Schools is commended for its effective staffing of custodial services,
and exceptional cleanliness of its facilities.


FINDING

BCPS projects to spend $2,710,000 on energy for its facilities during the current 2009-10 school
year. Exhibit 4-29 shows the key energy consumption statistics for BCPS, beginning with the
2004-05 school year. The cost per square foot is shown, and it is compared to the American
School and University Magazine (ASUMAG) average cost per square foot for that given year.

                                             Exhibit 4-29
                                   Key Energy Consumption Data
                                   2004-05 to 2009-10 School Years

                                                                                             2009-10
         Category          2004-05       2005-06      2006-07      2007-08      2008-09    (projected)
      Energy Cost        $2,533,897    $2,787,145   $2,829,934   $3,226,536   $3,551,535   $2,710,000
      Gross Floor Area    2,309,467     2,309,467    2,309,467    2,492,451    2,650,015    2,650,015
      Cost per Sq. Ft.      $1.10         $1.21        $1.23        $1.29        $1.34        $1.02
      ASUMAG Avg.           $1.10         $1.20        $1.32        $1.25        $1.19     not yet reported
     Source: BCPS Maintenance Department, 2010.




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BCPS has been well in line with this the ASUMAG benchmarks – with the exception of the
recent 2008-09 results. Upon the realization that energy costs were rising without any apparent
control, BCPS decided to embark upon an energy education program.

BCPS officials noted the following:

   Faced with overwhelming cuts to our budget, we knew that ”just trying harder” and “putting
   out a memo” wasn’t going to cut it. We needed an arrangement that would push us out of our
   comfort zone and get results fast. That’s why we recommended Energy Education, Inc. as a
   “personal energy trainer”… A proposal was presented by the company to the Finance
   Committee on April 22nd, and the School Board voted unanimously to enter into a contract
   with the company on May 18th. We took a couple of weeks to finalize the details of the
   contract, and won some concessions such as a large price reduction, a fast track clause that
   deferred our first four monthly payments, and a waiver to utilize an existing manager as the
   Energy Education Specialist instead of hiring a completely new position. These actions saved
   us an estimated $155,000 in the first five months of the contract. The contract was awarded
   on June 1st, 2009.

By tracking energy expenditures for the first half of the 2009-10 school year, BCPS projects a
total energy expenditure for the year of $2,710,000, resulting in a remarkably low cost per square
foot of $1.02. American School and University Magazine (ASUMAG) has not yet released the
results of its 39th Annual Operations & Maintenance Cost Study at this time, but the energy cost
per square foot average for the United States will be unlikely as low as $1.02.

COMMENDATION

Burke County Public Schools is commended for its energy consumption profile that has
been largely in line with nationally-recognized benchmarks, and for instituting an Energy
Education Program to assist with achieving a major reduction in energy use and cost.


FINDING

BCPS has significant deferred maintenance items on record; the district must take all available
steps to reduce and cure this maintenance backlog. BCPS currently has a deferred maintenance
backlog amounting to over $36 million.

Deferred maintenance is a serious matter that will, if not corrected, cost BCPS increasing
amounts of new resources⎯considerably greater than had the items been funded when they
needed to be repaired (see School Maintenance & Renovation by Glen I. Earthman and Linda
Lemasters, Pro.Active Publications, 2004 and Save a Penny, Lose a School – the Real Cost of
Deferred Maintenance by Barbara Kent Lawrence, 2002).

A commonly accepted measure of the state of repair of facilities is the Facilities Condition Index.
It measures the ratio, as a percentage, of the value of deferred maintenance over the total
replacement value of the school district’s total physical plant. BCPS insurance records show the




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plant replacement value as almost $355 million. As a ratio, $36 million divided by $355 million
computes to 10.26 percent. The industry standard for FCI is as follows:

   •   Below 5 percent - acceptable range by industry standard: “good”.
   •   5 percent to 10 percent - “fair” range
   •   Above 10 percent -“poor” range

Consequently, BCPS is at this point entering the FCI “poor” range. As deferred maintenance
reaches higher amounts, this condition will worsen. BCPS is currently spending about 1.2
percent of plant replacement value on maintenance:

   • Maintenance labor and equipment:       $2,454,243
   • Maintenance parts and outsourcing:       $645,000
   • Minor construction and repair:         $1,200,000
   Total real property maintenance expenses $4,299,243

The ratio of the real property maintenance expenses over the plant replacement value is the
industry standard Asset Protection Index (API). This value is 1.2 percent. The industry
acceptable range is between two and four percent. Instead of spending $4,299,243, BCPS should
instead be spending at least two percent of $355 million, or $7,100,000 per year on maintenance
and repairs.

It is clear that BCPS has spent less than two percent of plant replacement value consistently over
the years. It has thereby accumulated more than $36 million in a maintenance backlog.

BCPS do the following:

   •   spend a minimum of $7.1 million per year on maintenance of its physical plant; and
   •   cure the current $36.3 million on deferred maintenance.

BCPS cannot afford the $36,384,172 currently needed to cure the maintenance backlog that has
been permitted to accumulate over the years, nor can it afford not to address this backlog
positively and aggressively. In addition, BCPS must increase its current maintenance spending
from $4.3 million to $7.1 million.

A tool which can be used to address this dilemma, at least in part, is the mechanism of
performance contracting. While performance contracting seeks to finance capital improvements
of all types, it relies on a certain amount of energy plant improvements to reduce energy
consumption. It is the savings from energy use that are used to serve as collateral for funds
borrowed to make needed capital improvements, and thus reduce the deferred maintenance
backlog.




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RECOMMENDATION

Recommendation 4-33:

Use the performance contracting method to finance capital improvements, including high-
impact energy retrofits, and use other fund proceeds to increase maintenance funding to
$7.1 million annually, and reduce the current $36 million deferred maintenance backlog.

There are commonly three parties to a performance contract. In the case of the BCPS:

   •   the Burke County Board of Education and/or the Board of County Commissioners;
   •   an Energy Services Company (ESCO); and
   •   a bank or other financial institution that provides the financing to the ESCO.

Key contractual provisions include:

   •   the method for guaranteeing energy savings to BCPS or the Board of County
       Commissioners;

   •   the method for verifying the energy savings; and

   •   how the overall risk is insured and financed.

The method of Building Commissioning is often used to assure all participants that the installed
equipment actually performs as intended and as required to obtain the contracted for performance
and savings.

The BCPS Assistant Superintendent of Support Services or his designee should serve as the day-
to-day liaison with the ESCO during the period of the performance contract, and be responsible
for its proper implementation. The liaison should also serve as the designated agency
representative, or be authorized to hire an agency representative, to assist with implementing the
energy management and conservation plan, including building commissioning, performance
contracting, improved insulation, lighting controls, and other energy management measures.

The performance contract will require the school system or Burke County to make monthly
payments on money borrowed to upgrade building energy systems and fund maintenance and
repair. The critical element is that the monthly payments are either less than or equal to the
expected savings from energy consumption. This has the desired net effect of the school system
being able to borrow money that it can pay off with savings from improved energy systems
installed with the borrowed money.

FISCAL IMPACT

The implementation of a performance contracting initiative can be accomplished with existing
staff and resources, and at minimal or no additional cost to BCPS or Burke County. Since
financing burdens will not be directly on the records of the School Board nor the Board of
County Commissioners (the ESCO is the borrower), borrowing capacity should not be affected



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in any manner. Within seven to ten years or earlier, after contract signing, the financed portion
will be paid off. At that time, the full energy savings realized will be available for other
budgetary priorities, resulting in a positive future fiscal impact. Precise savings cannot be
determined at this time, but a conservative HVAC operating cost savings of 30 percent over
current expenditures is plausible.

According to the energy consumption data furnished by BCPS, the total consumption in 2009-10
is projected to be $2,710,000. Thus an annual savings of $813,000 is possible. Assuming that the
commissioning agent and agency representative are one and the same person, the likely annual
fee of the Agency Representative and the Commissioning Agent amount would total about
$50,000. This reduces the projected possible savings from $813,000 to $763,000. If a
performance contract could be devised whereby it encompasses all Burke County facilities,
including those of BCPS, then the funds required to retire the borrowed debt could be paid
directly by the County. At a preferred rate of three percent over seven years from the ESCO, the
amount BCPS can probably finance is about $7 million, with a monthly amortization cost of
about $65,000, or $780,000 per year. Once the debt is paid, the energy savings can be used for
purposes other than debt retirement.

The above figures are for illustrative purposes only and are not intended to represent the actual
figures that will be determined in collaboration with the ESCO, the Agency Representative, and
the Commissioning Agent.

In summary, performance contracting has the following fiscal effects: The initial cost of
financing the replacement of obsolete energy equipment and other capital projects is zero dollars
per year for seven to ten years. This is the case because the annual financing cost is generated
from an equal amount of savings in energy cost. The $50,000 in fees are not shown below, as it
is assumed that the Burke County will pay this amount in its cooperative effort with BCPS. After
a zero cost financing of about $7 million, an annual savings of $780,000 should be reached in the
vicinity of 2016-17.


FINDING

Evergreen consultants included a facilities master plan document our data request list; this item
was not provided. Therefore, we have concluded that no facilities master plan exits for BCPS.

Various planning efforts are ongoing at Burke County Public Schools, but they are not governed
by a current master plan document. Some people may argue that a facilities master plan is only
needed during periods of intense construction and renovation in a school system. Such a view
sees a school district primarily as a static entity, interrupted only occasionally by brief bursts of
change. This view is highly inaccurate. Instead, a school district is constantly undergoing
changes in a wide variety of ways at all times.

Therefore, a carefully updated facilities master plan is needed as a guide to assist BCPS officials
with decision making on an ongoing basis.




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RECOMMENDATION

Recommendation 4-34:

Prepare a new “Five-Year Facilities Master Plan 2011-2015”, update it annually, use it as
the official planning guide for BCPS, and measure progress against the plan.

The Five-Year Facilities Master Plan 2011-2015 should be established as a living document that
guides the facilities planning, design and construction activities of BCPS. Its characteristics
should be as follows:

   •   The plan document should be officially monitored, updated and its contents distributed
       by the district to the School Board and local government agencies.

   •   Only planning actions compatible with this plan document should be approved and
       initiated. If plans contrary to the document, or not contained in the document, are
       seriously contemplated, then the plan should be amended deliberately and decisively.

   •   The initial document should be completed in time for the 2011-12 budget preparation,
       should contain an immediate funding request for 2011-12 for such items as new
       construction, renovation, additions, and similar activities. The funding request should
       also contain a forecast for the remaining nine-year period to apprise BCPS fiscal planners
       of needs that will come up in the future.

   •   Every year, as one year of the plan is implemented, a new year should be added to the
       plan. (Example: the following year it becomes the Five-Year Capital Facilities Plan 2012-
       2016.) This type of plan updating activity should become mandatory and routine to keep
       the Plan up-to-date, and to keep it useful as a guide document. Any statutorily required
       plans to the State Department of Education or other agencies should be wholly
       incorporated in, and fully coordinated with, this effort.

Prototype Plan Description

The Five-Year Facilities Master Plan should address the following:

   •   the strategy required to meet the need for facility improvement and for the capital
       investments necessary to support existing and projected educational needs;

   •   the educational goals of BCPS to satisfy the needs of students, parents, educators,
       administrative staff and the community; and

   •   realistic plans to help BCPS provide for its short- and long-range facilities needs.

The planning process never ends. As such, when the Five-Year Facilities Master Plan 2011-2015
has been adopted, BCPS should then commence a re-evaluation of the plan in light of current




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and future needs. These reviews should occur as often as a new need arises, but not less than
annually.

While the process for developing and maintaining a Five-Year Facilities Master Plan can be
complex and intricate for very large school districts, an effort should be made to keep the process
uncomplicated in the case of BCPS. The following essentials should be included in Plan
development and maintenance:

Goal-setting Around Four Priorities

Planners must address four critical factors throughout the planning and design process: quality,
educational program, budget and time.

Before the planning process begins, BCPS should decide which of these four priority areas is
most important:

   •   Financial constraints
   •   Time constraints
   •   Educational specifications (facility programs)
   •   Quality

For example, if BCPS is having financial problems, then budget may cause BCPS to follow a
certain path to its end. Likewise, if time is a constraint, then BCPS staff must consider that
quality and educational specifications may have to take a back seat. It would be advised that key
personnel address all four of these factors when considering compromises on the needs of the
educational program.

Goal-setting for the Five-Year Facilities Master Plan should include the following actions:

   •   Recommend priorities and strategies concerning proposed projects, student and faculty
       stations, and potential financial sources that will meet the facility needs and educational
       goals of BCPS.

   •   Conduct a thorough review, analysis, and evaluation of data that relate to facilities. This
       process will enable understanding of the issues that require resolution.

   •   Continue gathering data and prepare a Project Plan of Action. The Project Plan of Action
       should identify projects and their priorities, define the scope, budgets and
       construction/renovation schedules, and it will help to coordinate the financial and project
       phase issues.

   •   Provide a process that includes and involves all stakeholders: community, schools,
       administrators, the school board, and other agencies of government.

   •   Develop implementation guidelines for the Five-Year Facilities Master Plan and the
       Project Plan of Action.



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The Capital Facilities Plan Team

The Superintendent should appoint, as soon as possible, a Facilities Master Plan Team.

This Team should include board members, facilities and real estate experts, demographers,
educators, the superintendent, representatives of local government, and private stakeholders in
the community. The Team would guide the facilities planning, design and construction effort of
BCPS, and focus especially on educational philosophy, financing, and facilities needs.

Initially, team meetings should be conducted not less frequently than every two weeks. This
will speed the process and focus the membership on those issues that are being researched,
developed or contemplated. As the entire process becomes more routine, the meetings may occur
monthly and occasionally more or less frequently.

It may be valuable to include members from other local and state government agencies on the
team. Other school districts have found that by partnering with non-educational agencies during
the planning process, it is often possible to develop school facilities that provide for other needs
and activities in the community, thus increasing prospective facilities use revenue.

Community Meetings

Authentic community engagement instills a sense of ownership within a community, which is a
key factor in sustaining school improvement efforts. Community input is essential in any Five-
Year Facilities Master Planning process. It is advised that the Team conduct a series of “open
forum” meetings, around the City, encouraging community participation. Initially, there should
be at least three rounds of meetings in strategic locations that maximize the potential for
community involvement. For a resource list on community participation in school planning (see
http://www.edfacilities.org/rl/ community_participation.cfm).

During the first round of meetings, the planning process should be explained, goals and
objectives presented, and community input solicited on the educational needs of the community.
Included in this appraisal should be discussions eliciting information about special education
needs of students, and whether these needs are currently being met.

During the second round of meetings, the community should be apprised of the data collection
efforts to date, the current status of BCPS school facilities, and the demographic data affecting
the master plan.

The third round of meetings should present the Five-Year Facilities Master Plan, including the
facilities condition assessment, the project plan, the implementation plan, and the financing plan.
Any recommendations to construct new facilities, abandon existing facilities, or consolidate two
or more facilities should be explained in detail at this meeting. Sufficient time should be allotted
to ensure full community awareness of the impact of all plan recommendations.

As there may be considerable community discussion regarding the proposed project plan and
financing plan, follow on meetings may be held to address these concerns.




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Professional Consultant

The Team should hire, as soon as possible, a professional firm of planners, architects and
engineers to prepare the initial Five-Year Facilities Master Plan.

The professional firm should develop a profile of the implications of the BCPS educational goals
for its facilities. The firm should propose actions that will help achieve these goals.

The firm should look at the impacts of current and projected enrollment vis-a-vis the capacity of
the existing facilities. Data that may be included are demographics, floor plans of school
buildings, fire evacuation plans, and enrollment data from the previous school year.

The firm should assess the physical condition of the schools, along with any additional school-
related buildings owned by BCPS. The data collected should be building by building, with as
much detail as possible. BCPS already has an excellent database showing building condition, and
much of this information merely needs to be updated rather than generated from scratch.
Whatever data are compiled during the assessment should be used to analyze each facility’s
ability to meet the educational goals of BCPS.

The firm should also review historic budgets, major construction costs and costs of renovations.
These data should be collected in any convenient form that is available. An analysis of current
project budgets, including any shortfalls or overages, should be made as they relate to the ability
of BCPS and individual schools to meet educational goals.

FISCAL IMPACT

There are two types of fiscal impact to be considered for Recommendation 4-34.

First, the annual cost of creating and then updating the Plan is estimated as follows:

   •   Year One: Consulting fees/expenses for plan preparation ($60,000).
   •   Year Two and Beyond: Consulting fees for plan updates ($30,000).

Second, the full implementation of the plan, and its official use as a guide document for decision
making about facilities, has the potential of creating a transparent set of actions that can be easily
understood and thus supported or opposed by the general public. Savings due to an avoidance of
errors, and less need to react rapidly to unanticipated situations, are palpable, but cannot be
easily quantified. This is equally the case with savings from an avoidance of unending debates
and arguments due to a lack of information and facts.

Recommendation                          2010-11       2011-12      2012-13      2013-14     2014-15
Prepare and Update a Five-Year
                                       ($60,000)      ($30,000) ($30,000) ($30,000) ($30,000)
Facilities Master Plan




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FINDING

The central administration function of BCPS is currently housed in several separate facilities.

    •    the central office is located within a county-owned complex;

    •    the West Concord Staff Development Center in Morganton houses the meeting room
         currently used by the Board of Education;

    •    the Career and Technical Education Center houses the BCPS Public Relations Office and
         the Grant Writer’s office; and

    •    the Technology Center is located in Hildebran.

BCPS needs to consider a consolidation effort, allowing all central administration functions to be
located in one building, preferably in a geographically central location, with easy access and
ample parking.

RECOMMENDATION

Recommendation 4-35:

Consolidate all BCPS central office functions into one building.

The advantages of such a move are significant and include:

    •    better interaction among all BCPS central office employees;
    •    one single destination for all BCPS central office business;
    •    return to Burke County of valuable office space: and
    •    potentially lower utility costs for one central office function.

This recommendation should be included in the Five-Year Facilities Master Plan and
consolidation proposals should be made part of the planning process.

FISCAL IMPACT

In a preliminary site consolidation analysis (revised April 6, 2010), Burke County Public Schools
estimated the potential annual net savings for operations and maintenance from central office
consolidation. This estimate shows an annual savings of $107,000 in operations and
maintenance costs, while capital construction costs to accomplish the consolidation are estimated
to be about $1,250,000 in the 2011-12 school year. These preliminary cost estimates are
reflected in the timeline below The process of further studying and solidifying this issue can be
accomplished with existing resources.

Recommendation                                 2010-11        2011-12      2012-13     2013-14      2014-15
Consolidate Central Offices*                     $0             $0         $107,000    $107,000     $107,000

*Does not include $1,250,000 in anticipated renovation costs in 2011-12.




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FINDING

BCPS has gradually lost average daily membership (ADM) for several years. Exhibit 4-30
shows some of this recent ADM decline, along with the situation in the peer school systems.

                                               Exhibit 4-30
                                    Average Daily Membership (ADM)
                                 Change in BCPS and Peer School Districts
                                     2005-06 to 2008-09 School Years
                          ADM Change                      ADM Change                  ADM Change
                         from 2005-06 to   Percent       from 2006-07 to   Percent   from 2007-08 to   Percent
    School District          2006-07       Change            2007-08       Change        2008-09       Change
 Burke County                 -208          -1.5%               -23         -0.2%          -231         -1.6%
 Buncombe County                182          0.7%               -51         -0.2%           131          0.5%
 Catawba County                328           1.9%              143           0.8%          471           2.8%
 Cleveland County              -118         -0.7%              -180         -1.1%         -298          -1.8%
 Henderson County               214          1.7%                95          0.7%           309          2.5%
 Iredell-Statesville            591          2.8%               444          2.1%         1,035          5.1%
               Average         165           0.8%               71          0.4%           236          1.2%
Source: Created by Evergreen Solutions, February 2010.



This loss of student enrollment has caused many schools to be underutilized⎯some by over 40
percent. Only four of the 29 BCPS school sites are overcapacity. Exhibit 4-31 shows BCPS data
on school utilization (current as of January 14, 2010).

In the case of one pair of geographically close schools – Drexel and Hallyburton Elementary
Schools – BCPS has already taken action to appoint one principal for both facilities. This was
done because both schools can be consolidated into one facility due to a low utilization rate.
Similarly, another pair of schools has been examined at BCPS for possible consolidation—
Mountain View and Hillcrest Elementary Schools.

In both cases, a preliminary analysis has been conducted by BCPS for moving Hallyburton into
Drexel, and Hillcrest into Mountain View. Detailed studies are still required to determine the
best plans of action, and whether or not alternative re-use potentials exist for the schools slated
for closure.

Another item under consideration in the preliminary analysis is the possible closure of both
BCPS alternative schools (East Alps and College Street Academy) due to low numbers of
students, and the move of the alternative school to a new site. The targeted building for this
consolidation is the empty Hallyburton Elementary School which would be renamed
“Halliburton Academy.”

In addition, the thorough examination of undercapacity school sites will lead BCPS to eliminate
some portable classrooms. A plan to reduce the number of BCPS portable classrooms is being
formulated. Exhibit 4-31 also shows the number of portables at each school location. It would
be appropriate at this time to remove some or all of these portables where excess student capacity
is in evidence.




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                                               Exhibit 4-31
                                       Burke County School Facilities
                                         Capacity and Utilization*

                                                          Student         Current   Percent of    No. of
                                 Site                     Capacity         ADM      Capacity     Portables
          Chesterfield Elementary School                     275             216      78.5          2
          Drexel Primary School                              473             250      52.9
          East Burke High School                            1600             986      61.6
          East Burke Middle School                           800             758      94.8
          Forest Hill Elementary School                      335             427     127.5          6
          Freedom High School                               1600            1165      72.8          9
          George Hildebrand Elementary School                400             386      96.5          7
          Glen Alpine Elementary School                      600             472      78.7
          Hallyburton Elementary School                      360             292      81.1
          Heritage Middle School                             800             659      82.4
          Hildebran Elementary School                        605             388      64.1
          Hillcrest Elementary School                        330             192      58.2          2
          Icard Elementary School                            237             297     125.3          7
          J C Draughn High School                           1000             778      77.6
          Liberty Middle School                              800             677      84.6
          Mountain View Elementary School                    328             230      70.1
          Mull Elementary School                             401             323      80.5
          Oak Hill Elementary School                         400             432     108.0          7
          Ray Childers Elementary School                     600             456      76.0
          R L Patton High School                            1000            1044     104.4
          Rutherford College Elementary School               237             218      92.0          6
          Salem Elementary School                            500             568     113.6          6
          Table Rock Middle School                           800             618      77.3
          Valdese Elementary School                          475             422      88.8
          W A Young Elementary School                        600             374      62.3
          Walter Johnson Middle School                       800             501      62.6
          College Street Academy                             125              96      76.8
          East Alps Special Education                        120              99      82.5
          North Liberty (at Liberty Middle School)           100              81      81.0
          Office of Administrative Services                 N/A            N/A         N/A
          Support Services Compound                         N/A            N/A         N/A          5
          West Concord Staff Development Center             N/A            N/A         N/A
          Technology Center                                 N/A            N/A         N/A
          Source: Burke County Public Schools, Facilities Office, 2010.
          *Information current as of January 14, 2010.


RECOMMENDATION

Recommendation 4-36:

Consolidate at least two pairs of elementary schools, combine both alternative education
facilities, and remove portables as appropriate, due to low utilization.

In it preliminary site consolidation analysis, BCPS has recognized that the advantages of such a
move are significant and include:

   •   better utilization of facilities;
   •   reduction in administrative and support staff; and
   •   energy savings.



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This topic should be included and treated in detail in the proposed Five-Year Facilities
Master Plan and specific consolidation and related proposals should be made as part of the
planning process.

The closing of schools is frequently an emotionally-charged issue due to tradition and legacy
concerns, and should therefore follow the public participation aspects of facilities master
planning delineated under Recommendation 4-34. Only when the general public
understands that school closings and other consolidation efforts have been considered
carefully and deliberately, can they find broader acceptance and support.

FISCAL IMPACT

In its preliminary site consolidation analysis, Burke County Public Schools estimated the
potential annual net savings for operations and maintenance from the school consolidation
actions. This estimate shows an annual savings of $1,222,000 in operations and maintenance
costs, while capital construction costs to accomplish the consolidations are estimated to be about
$2,320,000 in 2011-12. These preliminary cost estimates are reflected in the timeline below The
process of further studying and solidifying this issue can be accomplished with existing
resources.

Of the total 52 portables located at schools, it is likely that eight can be removed at this time, as
they are located on campuses that are occupied below capacity. A search of the Internet for used
portable classrooms for sale found an average of $10,000 per unit as the likely average sale price.
Thus, eight portables in average to good condition could yield approximately $80,000. This is
reflected in 2010-11 in the timeline below.

Additionally, the combining of some kitchens will likely improve meal production efficiency,
thus helping Child Nutrition move closer to profitability.

Finally, the disposition of closed facilities can yield additional income, if the buildings are sold
or leased on the open market. If they are re-used by Burke County, no income to BCPS is likely.
If they are demolished, a demolition cost will be incurred. It is strongly recommended that one
year should be allowed to find a buyer, lessor, or other alternative re-use for the vacant
structures. Thereafter, if no re-use options are in evidence, the vacant buildings should be
demolished. Under no circumstances should any vacant buildings be “mothballed” (i.e. plumbing
lines drained, all utilities shut down, and windows boarded). Such action usually results in
excessive vandalism, damage from freeze/thaw cycles, and mold and mildew problems.

Recommendation                    2010-11          2011-12         2012-13      2013-14      2014-15
Consolidate Schools*              $80,000            $0           $1,222,000   $1,222,000   $1,222,000
*Does not include $2,320,000 in anticipated renovation costs in 2011-12.



FINDING

BCPS has a comprehensive policy for the use of its school facilities. This policy is shown in
Exhibit 4-32.




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                                                             Exhibit 4-32
                                               School Facilities Comprehensive Policy

                                                                                            DESCRIPTOR CODE                            ISSUED DATE
DESCRIPTOR TERM:                                                                                 8.9100                                   9/8/2009
Community Schools Programs - Facility Use Policy                                          LATEST DATE REVISED
                                                                                                                                    CROSS REFERENCE
                                                                                                9/8/2009

STATUTORY PROVISIONS


115C-206. The Superintendent of Public Instruction shall prepare and present to the State Board of Education recommendations for general guidelines for
encouraging increased community involvement in the public schools and use of public school facilities. The Superintendent of Public Instruction shall consult
with the interagency council in preparing the general guidelines. These recommendations shall include, but shall not be limited to provisions for:
      1.     The use of public school facilities by governmental, charitable or civic organizations for activities within the community
      2.     The utilization of the talents and abilities of volunteers within the community for the enhancement of public school programs including tutoring,
             counseling, and cultural programs/projects
      3.     Increased communications between the staff and faculty of the public schools, other community institutions and agencies, and citizens in the
             community
Based on the recommendations of the Superintendent of Public Instruction, the State Board of Education shall adopt appropriate policies and guidelines for
encouraging increased community involvement in the public schools and use of the public school facilities.

The State Board of Education shall establish rules and regulations governing the submission and approval of programs prepared by local boards of education
for encouraging increased community involvement in the public schools and use of the public school facilities.

The State Board of Education is authorized to allocate funds to the local boards of education for the employment of community schools coordinators and for
other appropriate expenses upon approval of a program submitted by a local board of education and subject to the availability of funds. In the event that a local
board of education already has sufficient personnel employed performing functions similar to those of a community schools coordinator, the State Board of
Education may allocate funds to that local board of education for other purposes consistent with this Article. Funds allocated to a local board of education shall
not initially exceed three fourths of the total budget approved in the community schools program submitted by a local board of education.

115C-207. Every local board of education which elects to apply for funding pursuant to this Article shall:
    1.    Develop programs and plans for increased community involvement in the public schools based upon policies and guidelines adopted by
          the State Board of Education
    2.    Develop programs and plans for increased community use of public school facilities based upon policies and guidelines adopted by the
          State Board of Education
      3.     Establish rules governing the implementation of such programs and plans in its public schools and submit these rules along with adopted programs
             and plans to the State Board of Education for approval by the State Board of Education
Programs and plans developed by a local board of education shall provide for the establishment of one or more community schools advisory councils for the
public schools under the board’s jurisdiction and for the employment of one or more community schools coordinators. The local board of education shall
establish the terms and conditions of employment for the community schools coordinators.

Every local board of education which elects to apply for funding pursuant to this Article shall have the authority to enter into agreements with other local
boards of education, agencies and institutions for the joint development of plans and programs and the joint expenditure of funds allocated by the State Board
of Education. Local funds from every local board of education applying for funds for the community schools program must equal at least one fourth of the
total budget for the community schools program of said local board of education.

115C-208. Every participating local board of education shall establish one or more community schools advisory councils which may become involved in
matters affecting the educational process in accordance with rules established by the local board of education and approved by the State Board of Education
and further shall consider ways of increasing community involvement in the public schools and utilization of public school facilities. Community schools
advisory councils may assist local boards of education in the development and preparation of the plans and programs to achieve such goals, may assist in the
implementation of such plans and programs and may provide such other assistance as may be requested by the local boards of education.

Community schools advisory councils shall work with local school officials and personnel, parent-teacher organizations, and community groups and agencies
in providing maximum opportunities for public schools to serve the communities, and shall encourage the maximum use of volunteers in the public schools.

At least one half of the members of each community schools advisory council shall be the parents of students in the particular public school system: Provided,
that less than twenty-five percent (25%) of the pupils attending a particular school reside outside the immediate community of the school, at least one half of
the members shall be parents of students in the particular school for which the advisory council is established. Whenever possible the local board of education
is encouraged to include at least one high school student. The size of the councils and the terms of membership on the councils shall be determined by the local
board of education in accordance with the State guidelines.

115C-209. Every participating local board of education shall employ one or more community schools coordinator and shall establish the terms and conditions
of their employment. Community schools coordinators shall be responsible for:
      1.    Providing support to the community schools advisory councils and public school officials.
      2.    Fostering cooperation between the local board of education and appropriate community agencies.
      3.    Encouraging maximum use of community volunteers in the public schools.
      4.    Performing such other duties as may be assigned by the local superintendent and the local board of education, consistent with the purposes of this
            Article.
Legal References: Equal Access Act, 20 U.S.C.A. 4071-4074; Americans With Disabilities Act, 42




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                                                    Exhibit 4-32 (Continued)
                                              School Facilities Comprehensive Policy

U.S.C. 12101 et seq. and -12181, et seq., 28 CFR part 36; Community Schools Act, G.S. 115C art. 13 and 204-209; G.S. 115C-524(b), G.S. 163-99


STATE BOARD POLICY


2F.0403 - GUIDELINES
For local boards of education electing to apply for funding from the State Board of Education and provided by the North Carolina General Assembly under
the provisions of the Community Schools Act, the following guidelines are established for developing local community schools programs:
      1.    appoint a community schools advisory council(s);
      2.    adopt policies, rules, regulations and plans for increased community involvement in public schools and their programs;
      3.    adopt policies, rules, regulations and plans for increased use of public school facilities by individuals, organizations and agencies.

2F.0404 - FUNDING

2F-0405 - PROCEDURES FOR MAKING APPLICATION
Each local education agency shall be expected to submit an application according to the following:
      1.    Participating local boards of education shall make application on forms provided by the Department of Public Instruction.
      2.    The application shall contain:
                  a.    plans for establishing and involving local community schools advisory councils;
                  b.    local policies and regulations for increased community involvement including volunteers in public schools and increased community
                        use of public school facilities;
                  c.    the procedures by which needs of the community will be assessed and the existing resources available to meet those needs;
                  d.    the goals and objectives of the proposed program;
                  e.    the methods and techniques of cooperation, coordination, and collaboration with other agencies;
                  f.    the plan for evaluating the program;
                  g.    a budget showing total proposed state and local funds to be expended; and
                  h.    a program description to include:
                              i.     number of school sites to be used,
                             ii.     age groups to be served,
                            iii.     types of services to be offered, and
                  i.    administrative organization for implementation of the program

2F.0406 - CRITERIA FOR PROPOSAL REVIEW

2F-0407 - ADOPT-A-SCHOOL PROGRAM
The purpose of the Adopt-A-School Program is to provide volunteers, supportive services and staff to link private and public resources in greater participation
in the teaching-learning process. The program will be administered by the Division of Community Schools, but will be sponsored in cooperation with the
Governor’s Office of Citizen Affairs. The following guidelines are established for developing local Adopt-A-School programs:
       1.    A local board of education may volunteer or be invited to participate in the Adopt-A-School program. The ultimate goal is to establish programs
             in all school systems.
       2.    Initially, the selection of participating local boards of education will be made by the Department of Public Instruction and the Governor’s Office
             of Citizen Affairs.
       3.    Selection criteria for local school systems shall include readiness and commitment to the program and diversity with respect to the following:
                    a.     geographic distribution,
                    b.     city and county systems,
                    c.     size of systems.

      4.    The Adopt-A-School program shall be coordinated with community schools activities in those systems where community schools programs are
            established.
      5.    Initially, the program will focus on providing volunteers for grades K-6 with specific emphasis on grades K-3.
      6.    It is anticipated that each participating school system will receive foundation and/or state support for two years only. After two year’s support, the
            program will then become the responsibility of the local school system. State and/or foundation funds will be used to:
                   a.     employ volunteer specialists to assist local school systems in the organization and implementation of the Adopt-A-School program:
                               i.     volunteer specialists will be paid on the State Salary Schedule for Teachers;
                              ii.     job descriptions and assignments for volunteer specialists will be developed by the State Department of Public Instruction,
                                      and job descriptions for all other personnel will be developed by agencies by whom the employees are employed;
                   b.     provide staff development, training for volunteers, and recognition activities for volunteers;
                   c.     purchase instructional materials and supplies;
                   d.     make provisions for pre-school care and educational experiences for children of volunteers.

      7.    Foundation funds will be allocated to the State Board of Education and budget transfers from these funds will be made to the Governor’s Office of
            Citizen Affairs to carry out the responsibilities assigned to that office including recognition activities, promotion and training/materials for
            volunteers.

EFF.: November 17, 1980
REF.: NCAC Title 16 Chapter 2 as cited above.




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                                                   Exhibit 4-32 (Continued)
                                             School Facilities Comprehensive Policy
LOCAL BOARD POLICY
   A. General Principle.
       The Burke County Board of Education (“the Board”) endorses the concept that school facilities should be available to Burke County citizens in
       an orderly and equitable manner. The Board promotes community use of facilities for purposes that contribute to the school program,
       community affairs, or the goals of the Community Schools Act, article 13 (G.S. 115C-203 through 209). As a service to the community, the
       Board may allow the use of public school property by organizations, institutions and businesses for such educational, recreational, social, civic,
       philanthropic, and like purposes as the Board deems in the best interest of the community.

           Administrative Procedures required for the implementation of this policy shall be as prescribed by the Superintendent and a copy of these
           procedures will be available in the index of The Burke County Board Of Education Policy Manual.
     B.    Facilities Available For Use.
           The Board permits eligible individuals or groups to use the facilities of those schools designated by the Board as “Community Schools”. A list
           of community schools shall be available to the public in the superintendent’s office and each principal’s office.

           The following types of facilities are available for use at the community schools: auditoriums, lobbies, media centers, gymnasiums, dining areas,
           designated classrooms, athletic fields and the driving track at Freedom High School.

           Permission to use school facilities may be granted by the principal or designee and the assistant superintendent or designee when such use will
           not interfere in any way with the regular programs, activities and schedule of the schools. All inquiries for the use of school facilities shall be
           initiated at the desired facility. The final decision for facility utilization will be made by site administration (in most cases, the Principal).
     C.    Priority Of Use and Fees Required.
           Priority in the use of school facilities shall be in accordance with the categories listed below. Within a category, specific types of groups will be
           given priority, as listed. The requirement for fees is listed in each category; collection of fees is required to cover the cost of utilities, custodial
           and building operations expenses associated with each group’s use of the school facilities. The Superintendent shall submit the amount or
           method of calculating fees to be charged in accordance with this policy to the Board for approval, as needed. Fees shall be charged uniformly to
           all groups within a particular user category.
                  1.     Category A – School Affiliated Groups:
                               a.     School sponsored groups including teachers and students in the regular K-12 program and extra-curricular educational
                                      activities. Such activities include school athletics program events, school drama and choral productions and meetings of
                                      school student organizations, clubs and other organizations permitted to meet under the Equal Access Act.
                               a.     School related groups that conduct educational activities that enhance the school’s programs directly, such as PTA,
                                      PTO, adult education offerings within the school, NCAE, NCSBSA, other teachers’, principals’, and administrators’
                                      organization meetings, academic, music and athletic booster clubs.
                               b.     Local government agency recreation department programs, where such local tax-funded programs are conducted to
                                      promote general physical education, health and wellness and teamwork for Burke County Public Schools students as
                                      the prime program objective.
                               c.     Non-profit community and civic groups, supervised non-profit youth athletic and character-building groups, church and
                                      non-profit faith-based groups and other non-profit groups conducting a non-income generating activity (i.e., no
                                      admission charge, other sales or donations are collected) exclusively and expressly for the entertainment, recreation or
                                      development of students within the school used.
                               d.     Local Board of Elections

                       Category A Fees: No fees are charged, and no facility use agreement is required, unless such groups are using facilities for a
                       profit-making endeavor where the total profits are not devoted to the improvement of the group’s educational programs.
                 2.    Category B – Local, Community and Civic Groups:
                              a.    Special events for various branches and units of the Armed Forces and their allied reserve groups.
                              b.    Local and state government units, other educational institutions and chartered community service agencies including
                                    but not limited to fire departments, law enforcement agencies, correctional facilities, rescue squads, Western Piedmont
                                    Community College, other community colleges, Broughton State Hospital, The NC Forest Service and Burke County
                                    Agriculture Extension.
                              c.    Organized non-profit community and civic groups, supervised non-profit youth and adult athletic and character-
                                    building groups, church and non-profit faith-based groups and other non-profit groups including, but not limited to
                                    churches; Special Olympics, The American Red Cross, March Of Dimes, and The United Way Fund; Boy Scouts, Girl
                                    Scouts, and 4-H Clubs: Pee Wee, Traveling Sports Clubs/Associations, Athletic Foundations, AAU, YBOA, and YAO
                                    affiliated clubs; Optimists, Kiwanis, Rotary, and Lions Clubs; veterans organizations; fraternities, sororities and alumni
                                    associations not directly related to the school.
                              d.
                       Category B Fees: An appropriate Facility Use Agreement will be executed at least 7 days but not more than 60 days prior to the
                       event or first use of the facilities requested. Fees will be charged for these groups based on a fee schedule approved by the Board to
                       recover costs of rent, utilities and custodial services required by this policy or agreed between the group and the school.
                 3.    Category C – For-Profit Groups, Private Groups and Individuals of the General Public:
                              a.    Persons, organizations or associations that request use of school facilities for a commercial enterprise or to engage in a
                                    business for profit, including but not limited to business and industry, auction sales, pageants, public plays, dance
                                    competitions and activities by Category B organizations whose sole purpose is fund-raising.

                       Category C Fees: An appropriate Facility Use Agreement will be executed at least 7 days but not more than 60 days prior to the
                       event or first use of the facilities requested. Fees will be charged for these groups based on a fee schedule approved by the Board to
                       recover costs of rent, utilities and custodial services required by this policy or agreed between the group and the school.




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                                                 Exhibit 4-32 (Continued)
                                           School Facilities Comprehensive Policy
     B.   The fee schedule shall be made an attachment to and a part of this policy. The group executing a Facility Use Agreement will be billed
          additionally for necessary cleanup or extended time of use not covered in the initial agreement terms.
     C.   Damages and Liability Insurance.
          User groups executing a Facility Use Agreement are responsible for all damages to school facilities, property or equipment that occurs while
          the facility is being used by the group, regardless of who caused the damage.

          All user groups, except category A groups, must furnish a certificate of insurance for general liability coverage of $1,000,000 for each claim
          made. Alternatively, the superintendent or designee may require the group to execute a waiver of liability that states that no liability shall attach
          to the Board of Education, individually or collectively, for personal injury or personal property damage by reason of use of the school property.
     D.   Terms and Acceptance of Agreements.
          The Superintendent or his designee is authorized to enter into agreements with community groups for the use of school property for terms up to
          one year.

          An agreement for a specific “one time” period of use or special event shall be considered a basic rental/use agreement. Such use may occur
          during a single day or over a period of several days within a given month. Category B and C users granted this agreement will be charged fees
          according to the fee schedule for special and specific events, based on the area(s) of the school to be used, duration of the event and category of
          the user. All charges for all hours used will be due and payable in advance of the beginning time of the event period.

          An agreement with a single community group for a recurring use over a period of longer than one month but less than one year shall be
          considered as a facility use license. Such use is generally expected to be the same amount of hours each month. Category B and C users granted
          this license will be charged fees according to the fee schedule for licenses less than one year, based on the area(s) of the school to be used,
          duration of the event and category of the user. All charges for hours licensed will be due and payable by the fourth day of each month for that
          month of use. Variations of greater than 10 percent in the agreed hours to be used each month will be handled as a supplemental basic use
          agreement for special events. Failure to remit payment by the 15th day of the month for that month’s use shall be grounds to terminate the
          license in whole.

          An agreement for one year or more shall be deemed a long term lease and must be approved in advance by the Board. Terms, conditions and
          fee charges shall be as negotiated with the Superintendent or designee.
     E.   Rules Governing Use of School Facilities
          The Superintendent shall develop administrative procedures consistent with this policy. Such procedures shall address the application process,
          supervision of groups using facilities, care of facilities, prohibited conduct and other issues deemed appropriate by the Superintendent. A copy
          of the administrative procedures shall be furnished to all applicants at the time they receive the facilities use application form. In addition to
          any administrative procedures established by the Superintendent, all users of school facilities must comply with the following rules:
                1.    Groups and individuals that use school facilities must comply with all federal, state and local laws and any additional rules required
                      by the Board, Superintendent or designee, or the Principal.
                2.    No organization shall be eligible to use school facilities if such organization advocates governmental change by violence, or
                      advocates any doctrine or theories subversive to the law or constitutions of the State of North Carolina or the United States of
                      America.
                3.    Users must comply with the requirements of the Americans with Disabilities Act (ADA), particularly with Sub-Chapter III, Public
                      Accommodations and Services Operated by Private Entities, and the federal regulations adopted consistent with the ADA.
                4.    All school campuses and properties are tobacco free. Users must comply with Board policy and legal requirements regarding the
                      use of tobacco products in school facilities and grounds.
                5.    Users shall not consume or possess alcohol or controlled substances on school campuses or property.
                6.    Users shall not possess weapons or explosives while on school campuses or property. The use of open flame on school campuses or
                      property is also prohibited. The Principal or designee reserves the right to use metal detectors with any group using the facility.
                7.    Users and individuals attending the users’ events shall not engage in gambling or like games of chance on school campuses and
                      property.
                8.    Any violation by a user group or associated individual of the provisions of this policy or any applicable administrative procedures
                      will be deemed grounds for the suspension of the user group’s privilege to use school facilities for such period of time considered
                      appropriate by the Principal, subject to the review of the Superintendent and the Board.
                9.    The Burke County Board of Education through the Superintendent or designee reserves the right to cancel a permit to use school
                      property and refund payment whenever it deems such action advisable and in the best interest of the school system; or to modify or
                      change its rules at any time with or without cause. In the event of such revocation or cancellation, there shall be no claim or right
                      whatsoever to damages or reimbursement on account of loss, damage or expenses.

     F.   Review of Decisions Concerning Use of School Facilities
          Any person or organization may request a review of any decision made by staff pursuant to this policy in accordance with established policy on
          Parent and Student Grievance Procedure.

     G.   Implementation of Policy
          All existing agreements in force as of the date of adoption of this policy shall remain in effect for the duration of the current term of the
          agreement. No existing agreement shall remain in effect for more than one year from the date of the agreement without approval from the
          board. Subsequent renewals shall be subject to the terms of this policy and fee schedules and administrative procedures.

ATTACHMENTS:
   1.  Fee Schedule for Facility Use – Special and Specific Events
   2.  Fee Schedule for Facility Use – Licenses Less Than One Year
       Fee Schedule for Facility Use – Equipment and Furniture
Source: BCPS Policy Manual, 2010.




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COMMENDATION

Burke County Public Schools is commended for the development and implementation of a
policy to regulate and facilitate the use of school facilities by various groups and
organizations in the community.


FINDING

BCPS uses SchoolDude software for facilities maintenance and work order processing. The
SchoolDude software also provides a facilities use scheduling, invoicing and tracking system.

The SchoolDude organization is capable of analyzing the track record of facilities rental and
income from facilities use, and making recommendations for how BCPS can optimize its income
from community use of facilities.

RECOMMENDATION

Recommendation 4-37:

Review the facilities use policy and rental income each year, using SchoolDude’s knowledge
and assistance.

The BCPS School Board should review its facilities use policy once a year in order to make any
changes reflecting use charges, facilities available for use, use rules, or any other aspects of the
policy. While it is not expected or necessary that changes to the policy are made every year, an
annual examination of the policy’s provisions will help assure that it reflects the most current
situation in the school system. BCPS should take advantage of SchoolDude’s availability for
analyzing optimum income strategies for facilities use, and for making strategic
recommendations. Most importantly, the Board and administration must be consistent in its
implementation of this policy.

FISCAL IMPACT

Annual income from facilities use has been typically in the range of $15,000 to $30,000 at
BCPS. SchoolDude analyses can show how such income could be doubled, tripled, or even
quadrupled. In one recent example, a school district’s typical income from facilities use fees was
$76,000 annually. The School Dude analysis showed that peer districts were earning $300,000
per year, and that a maximum potential of earnings amounted to $473,000 annually.

In the case of Burke County Public Schools, with 26 schools (17 elementary schools, five middle
schools, and four high schools) it appears that earnings from outside use have averaged about
$1,000 per school per year. Based on Evergreen’s experience with other school districts, it is
likely that the SchoolDude analysis will show at least a potential for $3,000 on average per
school facility, or $78,000 per year. Given the BCPS typical income of $30,000 per year for
facilities use by outside groups, the timeline below shows an additional income of $48,000 per
year at minimum.



        Evergreen Solutions, LLC                                                           Page 4-92
Review of Non-Financial Management and Operations                                               Burke County Public Schools


Recommendation                                2010-11             2011-12 2012-13 2013-14 2014-15
Increase Income from Facilities
                                               $48,000            $48,000 $48,000 $48,000 $48,000
Use by Outside Organizations


4.6    SECURITY AND SAFETY

FINDING

Today, school districts are expected more than ever to provide a safe and secure environment for
their students and staff. While districts are largely insulated from violent crime, it is incidents of
violence at schools that draw national attention. School districts must take proactive measures in
safety and security even in incident free schools. Students, teachers, and other district employees
deserve a safe school environment in which to work and learn.

In 2003, Homeland Security Presidential Directive-5 (HSPD-5) initiated the development of a
National Incident Management System (NIMS) and requires its use by public sector agencies,
including school districts. The intent of this system is to provide a common template and
language for responding organizations to work together in preventing, preparing for, responding
to, and recovering from incidents. As noted by FEMA, “NIMS represents a core set of doctrines,
concepts, principles, terminology, and organizational processes that enables effective, efficient,
and collaborative incident management.”

NIMS emphasizes that true preparedness requires a commitment to continuous review and
improvement. Most districts understand the continuous nature of emergency management, as
well as the four phases that comprise the process circle (shown in Exhibit 4-33).

                                        Exhibit 4-33
                        Continuous Process of Emergency Management




                     Source: The Office of Safe and Drug Free Schools’ Practical information on Crisis
                     Planning: A Guide for Schools and Communities, January 2007.




        Evergreen Solutions, LLC                                                                                Page 4-93
Review of Non-Financial Management and Operations                        Burke County Public Schools


FINDING

The district has in place well-prepared and thoughtfully considered policies and procedures in
most areas of security and safety. The following procedures and documents are in the BCPS
Policy Manual:

   4210 - Release of Students from School
   4230 - Communicable Diseases and Head Lice
   4240 - Child Abuse
   4260 - Student Sex Offenders
   4600 - Student Fees
   4705 - Confidentiality of Personal Identifying and Address
   5022 - Registered Sex Offenders
   5026 - Smoke Alcoholic Weapon Free Environments
   5050 - Emergency Closing of Schools
   5059 - Equal Treatment in Dealing with Persons Who Comprise the School Community
   5060 - Public Complaints and Concerns
   5120 - Relationship with Law Enforcement
   6125 - Administration of Drugs
   6540 - Hazardous Materials
   7240 - Drug Free Workplace
   9200 - Care Maintenance and Security of Facilities

Noticeably absent from the BCPS Policy Manual are policies or procedures related to:

   •   student discipline;
   •   use of visual monitoring and surveillance;
   •   use of security wanding or screening devices.

COMMENDATION

With very few exceptions, BCPS has a substantive, timely and useful array of policies and
procedures in the area of security and safety.


FINDING

As noted under the previous commendation, BCPS needs to add at least three policies to its
policy manual related to school safety and security: student discipline; use of visual monitoring
and surveillance; and use of security wanding and screening devices.

RECOMMENDATION

Recommendation 4-38:

Create additional school security and safety policies in student discipline, surveillance, and
screening.



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Review of Non-Financial Management and Operations                            Burke County Public Schools


A search of the Internet has yielded numerous Web sites offering sample policies regarding
school security and safety. Here is the list of the first group:

   •   InstantSecurityPolicy.com/Policies
   •   AboutSecuritySchool.com
   •   www.schoolsecurity.org/trends/zero_tolerance.html - Cached
   •   www.schoolsecurity.org/trends/cell_phones.html - Cached
   •   www2.lhric.org/security/index.html - Cached
   •   www.a-better-child.org/page/876675 - 58k - Cached
   •   www.rmlibrary.com/lib/security/schoolsecurity.php - 88k - Cached
   •   www.oppaga.state.fl.us/reports/pdf/bfmpbrevardch15.pdf
   •   www.mde.k12.ms.us/lead/osos/SchoolSafetyManualppendices2.pdf - 1107k - Cached

Under the leadership of the Superintendent, the Assistant Superintendent for Support Services
should conduct a review of sample security and safety policies, and recommend to the
Superintendent the formulation of new policies, and the revision of existing ones. The selection
of additional policies, as well as the revision of existing policy statements, should be
accomplished on the basis of appropriateness for the current situation in BCPS.

The periodic review of security and safety policies, as well as of all other policies related to the
purview of Support Services, should be a routine activity initiated and directed by the Assistant
Superintendent for Support Services.

FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

Although the BCPS Policy Manual contains an impressive array of emergency policies and
procedures, the district needs have a crisis management plan aligned with recent Federal
guidelines. Without a written document agreed upon and practiced prior to an emergency,
procedures are often passed along verbally, which could slow response times and result in lack of
coordination and chaos during an actual emergency.

RECOMMENDATION

Recommendation 4-39:

Create an up-to-date BCPS Crisis Management Plan.

The Superintendent and principals should review the US DOE publication, Practical Information
on Crisis Planning: A Guide for Schools and Communities, available at this Web site:
www.ed.gov/emergencyplan. It provides checklists and suggests topics that should be contained in a
crisis management plan, including:




        Evergreen Solutions, LLC                                                             Page 4-95
Review of Non-Financial Management and Operations                           Burke County Public Schools


   •   Mitigation and Prevention: decrease the need for response as opposed to simply
       increasing response capability.

   •   Preparedness: facilitate a rapid, coordinated, effective response when a crisis occurs.

   •   Response: the time to follow the crisis plan and make use of your preparations.

   •   Recovery: return to learning and restore the infrastructure as quickly as possible.

The Superintendent, selected other central administrators, and principals, should also complete at
least two online courses offered by FEMA and recommended for all public entity leaders:

   •   ICS-100 An Introduction to Incident Command System (ICS) (the 100SC version was
       developed specifically for school districts), and

   •   ICS-700 NIMS: An Introduction.

Both are available through http://training.fema.gov/IS/ and can be completed online for free of
charge.

The Superintendent should then lead development of a comprehensive crisis management plan,
and should coordinate with the Burke County Sheriff’s Office for assistance and support. The
plan should be reviewed and approved by the board and then shared with staff. Because it will
contain sensitive information (such as likely student evacuation routes, which could be used in a
negative manner by an insightful evildoer), the plan should not be widely disseminated, but all
staff should know its contents and understand their role in all possible types of crisis. The district
should review and practice key elements of its crisis management plan at least annually.

FISCAL IMPACT

This recommendation can be implemented with existing resources.


FINDING

Cameras are installed in BCPS high schools. BCPS officials expressed a desire to Evergreen
consultants that they would like to see additional cameras installed, especially in outdoor areas
that are not easily monitored by staff. The desire was further expressed that such camera systems
should have their observations recorded, thus permitting a review of any incidents the cameras
may have observed.

RECOMMENDATION

Recommendation 4-40:

Investigate the availability of grant funds from the U.S. Department of Justice/U.S.
Department of Education under the “Safe Schools/Healthy Students” Program.




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Review of Non-Financial Management and Operations                         Burke County Public Schools


These grants include funding for the purchase and installation of camera systems. Upon
obtaining such funds, BCPS should combine it with local funds to purchase and install a useful
camera system (see http://www.sshs.samhsa.gov/apply/default.aspx).

Such grants often require matching funds from the community. In some cases, funds from private
donors, and from state and local government sources were used to structure the successful
funding.

FISCAL IMPACT

This recommendation can be implemented with resources from public and private sources.


FINDING

BCPS is in the process of installing cameras on its school buses. School bus cameras that have a
high resolution to identify trouble-makers and fighters or rule-breakers are useful in pinpointing
and pursuing students that are unruly and aggressive.

While the time required to install cameras on all regular fleet buses will take considerable time,
BCPS appears committed to a policy whereby this policy will be determinedly carried out.

COMMENDATION

Burke County Public Schools is commended for its commitment to installing surveillance
cameras on its entire fleet of school buses.




        Evergreen Solutions, LLC                                                           Page 4-97
                                     CHAPTER 5:
              FISCAL IMPACT OF RECOMMENDATIONS




Evergreen Solutions, LLC
               5.0 FISCAL IMPACT OF RECOMMENDATIONS

       The Evergreen Team has developed 56 recommendations in this report. Twenty-six (26) of the
       recommendations have fiscal implications. Exhibit 5-1 shows the total costs and savings for
       study recommendations that have a fiscal impact. As can be seen, the total net savings is over
       $21.8 million over five years for efficiencies in financial management and non-financial
       management areas as well as operations of the Burke County School System. It is important to
       keep in mind that the identified savings and costs are incremental and cumulative.

                                             Exhibit 5-1
                              Summary of Annual Costs and Savings by Year
                                  Over Five Years Recommendations


                                                    Years                                 Total 5-Year   One-Time
                          2010-11     2011-12      2012-13      2013-14      2014-15       (Costs) or    (Costs) or
    Cost Savings                                                                            Savings       Savings
TOTAL SAVINGS            $2,394,575   $3,151,655   $5,247,275   $6,297,575   $6,297,575    $23,388,655           $0
TOTAL COSTS              ($304,359)   ($274,359)   ($274,359)   ($274,359)   ($274,359)   ($1,401,795)    ($127,500)
TOTAL NET SAVINGS        $2,090,216   $2,877,296   $4,972,916   $6,023,216   $6,023,216    $21,986,860    ($127,500)
TOTAL FIVE-YEAR NET SAVINGS MINUS ONE-TIME SAVINGS                                                       $21,859,360



       Exhibit 5-2 shows costs and savings by chapter for recommendations in Chapters 3 and 4.

       There are about 30 additional recommendations in this report that do not have a fiscal impact.
       These recommendations are included in Chapters 3 and 4 of the full report.




              Evergreen Solutions, LLC                                                            Page 5-1
 Fiscal Impact of Recommendations                                                                                       Burke County School System


                                                                Exhibit 5-2
                                                 Summary of Annual Costs and Savings by Year


                                                                                                                          Total 5-Year   One-Time
                                                                          Estimated (Cost)/Savings                         (Costs) or    (Costs) or
           Chapter/Recommendation                          2010-11    2011-12     2012-13      2013-14      2014-15         Savings       Savings
CHAPTER 3: FINANCIAL MANAGEMENT
 3-1    Eliminate One Specialist in Finance Office          $34,923    $34,923      $34,923     $34,923      $34,923          $174,615
        Reimburse the Local Fund for all Support and
 3-7
        Indirect Costs                                     $400,000   $400,000     $400,000    $400,000     $400,000        $2,000,000
3-16    Transfer Fund Balances                             $240,035   $240,035     $240,035    $240,035     $240,035        $1,200,175
Chapter 3 Subtotal (Cost)/Savings                          $674,958   $674,958     $674,958    $674,958     $674,958        $3,374,790
CHAPTER 4: NON-FINANCIAL MANAGEMENT AND OPERATIONS
     Adopt Proposed Executive Organizational
 4-1
     Structure                                       ($110,442) ($110,442)       ($110,442)   ($110,442)   ($110,442)       ($552,210)
     Eliminate Instructional Coaches/add Content
 4-2
     Coordinators                                      $344,551   $344,551         $344,551    $344,551     $344,551        $1,722,755
     Reorganize the Department of Curriculum and
 4-3
     Instruction                                       $260,915   $260,915         $260,915    $260,915     $260,915        $1,304,575
     Adopt the Proposed Organizational Structure for
 4-4
     the Finance Office                                 $21,311    $21,311          $21,311      $21,311      $21,311         $106,555
 4-5 Create Office of Accountability and Planning       $88,602    $88,602          $88,602      $88,602      $88,602         $443,010
 4-6 Hire Elementary Art Teacher                      ($53,951)  ($53,951)        ($53,951)    ($53,951)    ($53,951)       ($269,755)
 4-8 Increase Day Care Rates                            $66,420    $66,420         $132,840    $132,840     $132,840         $531,360
4-11    Close one Alternative School                       $397,760   $397,760     $397,760    $397,760     $397,760        $1,988,800
4-12    Eliminate Hard Copies of Board Policy Manual         $4,000        $80         $80          $80          $80            $4,320
        Reduce Exceptional Children Enrollment to State-
4-13
        Funded Levels                                      $245,070   $595,170   $1,295,370   $2,345,670   $2,345,670       $6,826,950
4-14    Reduce Assistant Principal Expenses                 $37,412    $37,412      $37,412     $37,412      $37,412          $187,060
        Hire One Person as the Exceptional Children
4-17
        Director                                             $8,932     $8,932       $8,932      $8,932       $8,932           $44,660




         Evergreen Solutions, LLC                                                                                                        Page 5-2
   Fiscal Impact of Recommendations                                                                                                Burke County School System




                                                               Exhibit 5-2 (Continued)
                                                      Summary of Annual Costs and Savings by Year

                                                                                                                                       Total 5-
                                                                                                                                        Year               One-Time
                                                                                 Estimated (Cost)/Savings                             (Costs) or           (Costs) or
               Chapter/Recommendation                         2010-11        2011-12      2012-13       2013-14          2014-15       Savings              Savings
         Adopt the Proposed Organizational Structure for
 4-18
         the Department of Human Resources                    ($79,966)        ($79,966)     ($79,966)     ($79,966)     ($79,966)        ($399,830)    
         Conduct a Comprehensive Compensation and
 4-21
         Classification Study                                        $0               $0            $0            $0            $0               $0          ($47,500)
 4-22    Reclassify the AIG Director                             $3,066          $3,066         $3,066        $3,066       $3,066           $15,330
 4-24    Conduct Joint Activities in Transportation                  $0         $40,000        $40,000       $40,000      $40,000          $160,000
         Improve Seven Worst Cafeteria/ Kitchen
 4-27    Locations to MPLH Target                              $113,578        $113,578      $113,578       $113,578     $113,578          $567,890
 4-28    Obtain Severe Need Lunch Reimbursements                     $0        $153,000      $153,000       $153,000     $153,000          $612,000     
         Index Meal Prices to USDA Reimbursement
 4-29    Increases                                                   $0        $297,900      $297,900       $297,900     $297,900      $1,191,600
         Prepare and Update a Five-Year Facilities Master
 4-34    Plan                                                 ($60,000)        ($30,000)     ($30,000)     ($30,000)     ($30,000)        ($180,000) 
 4-35    Consolidate Central Office*                                 $0               $0     $107,000       $107,000     $107,000          $321,000  
 4-36   Consolidate Schools*                                    $80,000               $0    $1,222,000    $1,222,000   $1,222,000      $3,746,000            ($80,000)
        Increase Income from Facilities Use by Outside
 4-37 Organizations                                             $48,000         $48,000        $48,000       $48,000      $48,000       $240,000
Chapter 4 Subtotal (Cost)/Savings                            $1,415,258      $2,202,338     $4,297,958    $5,348,258   $5,348,258     $18,612,070           ($127,500)
TOTAL SAVINGS                                                $2,394,575      $3,151,655     $5,247,275    $6,297,575   $6,297,575     $23,388,655                     $0
TOTAL COSTS                                                  ($304,359)      ($274,359)     ($274,359)    ($274,359)    ($274,359)   ($1,401,795)           ($127,500)
TOTAL NET SAVINGS                                            $2,090,216      $2,877,296     $4,972,916    $6,023,216   $6,023,216     $21,986,860           ($127,500)
 TOTAL FIVE-YEAR NET SAVINGS MINUS ONE-TIME SAVINGS                                                                                                        $21,859,360
*Does not include $1,250,000 and $1,018,000 in anticipated renovation costs in 2011-12 for Recommendations 4-35 and 4-36, respectively.




            Evergreen Solutions, LLC                                                                                                                       Page 5-3