Consolidation of Services
What would outsourcing look like for my district and how could it help
Agenda
IntroductionsWhy talk about service consolidation/managed servicesWhat are the possible areas to consolidateWhat are the pro’s and con’sHow would we do this / What might it look likeTakeaways
Why are we talking about this?
Pressure from the legislatureNeed for fiscal efficiency and cost savingsDiminishing pool of skilled technical human resourcesComplex nature of the industryNeed for broad-view and solutions to issues common to many districts
Why are we talking about this?
Pressure from the legislaturePast legislation and disclosure requirements on consolidation of services/outsourcingFuture??Appropriations tied to these types of arrangementsMore legislation on accountability – fiscal and otherwise
Why are we talking about this?
Need for fiscal efficiency and cost savingsCurrent funding model is making it difficult to provide all necessary services with district personnel/resourcesFiscal reality in most districtsSchool Boards will generally always chose to reduce costs in non teaching and learning environment
Why are we talking about this?
Diminishing pool of skilled technical human resourcesBaby boomer generation is graduating to retirementNew generation of personnel tend to move about frequentlyOften the compensation level is below market for the skill sets requiredPension benefit is less attractive to potential employees even though the cost is rising
Why are we talking about this?
Complex nature of the industryVery technical areasFinanceOperations & MaintenanceTransportationSupports to teaching and learningOther supportive services (psychologists, social workers, etc.)
Why are we talking about this?
Need for broad-view approach and solutions to issues common to many districtsThe areas of need are common to most districtsEach district is forced to re-create the wheelEffectiveness increases as focus can be on areas of expertise rather than jack-of-all-trades approachEfficiency is gained through economy of scale
What are the possible areas to consolidate/outsource
Major Functional AreasTransportationCustodial & MaintenanceTechnologyFinanceTeacher and learning supportAdministration
What are the possible areas to consolidate/outsource
Instructional & Support - PositionsPara prosSubstitute teachersSubstitute bus driversCooksCustodiansCoachesPsychologists
What are the possible areas to consolidate/outsource
Instructional & Support - PositionsSocial workersTruancy agentsSecretariesAdministratorsAthletic directorsFinance office staffTechnology staff
What are the pro’s and con’s
Pro’sProvides broad-based experience and expertisePotential for cost reductionOpening the door to unknown potential solutionsSolving immediate and ongoing transition issuesReduction of unproductive District personnel timeMaking cumbersome processes efficient
What are the pro’s and con’s
Pro’sEnables district personnel time to focus on other important strategic mattersIf the contract or individuals performing the contract don’t meet the district’s expectations changes can occur much easier
What are the pro’s and con’s
Con’sThe District must manage the contracts to make sure expectations and desired results are metCommunication pattern may be differentThe contract and service is only as good as the provider and the agreement as to what is expectedIt is change and even if worth it in the long run will require additional effort/learning short term
How would we do this / What might it look like
THE HARD WAYFinancial EmergencyKey personnel retirement or tragedyEducational performance emergency – bottom 5%Lack of proper planning for transitionsWe waited too longHeads buried in the sandSchool Board & Administration delayed decisions
How would we do this / What might it look like
THE BETTER WAYForward thinkingPlanning for retirementsDecisions made in conjunction with overall strategic plan for the districtUsing 3-5 year financial projections to drive future decisions for financeRecognizing the need for expertise in ancillary areas so the District can focus on teaching and learning
How would we do this / What might it look like
What might this look like for my districtFinance DepartmentData processing positions such as payroll and accounts payableData can be processed electronically from remote locationsIndividual(s) may be in district a couple days a week or not at allDistrict may already have the technology necessary to make this happenTechnology might be provided through a service provider
How would we do this / What might it look like
What might this look like for my districtFinance DepartmentGrant accountingKnowledgeable individuals with specific grant experience can be leveraged among many districtsBetter knowledge of grant rules allows districts to leverage grant funding to maximize the impact to educational goals.PurchasingStandardized procedures can streamline centralized purchasing and reduce burden on district staffCan leverage group purchasing to obtain better rates from suppliers
How would we do this / What might it look like
What might this look like for my districtFinance DepartmentThe finance director may now be a shared position or provided through a vendor contractMany day to day operations can be handled remotely or in a few days a week in districtAccounting software can be accessed remotelyBudget preparation process and monitoringBudget models and reporting can be standardizedStandard monthly reporting can be duplicated
Takeaways
School districts are people and process drivenThe competent and experienced labor pool is shrinkingDistrict’s need to plan now for replacements of key employeesService consolidation and managed services can provide expertise, cost savings and peace of mind
Questions
??Contact Info:Richard Carpenter, CPA, CGFM, CGMA PrincipalRichard.Carpenter@Rehmann.comKim Lindsay, CPA, PrincipalKim.Lindsay@Rehmann.com
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