RIPEC was asked to review the central administrative function of the Warwick School Department. The following report, Management Study and Benchmarking Analysis of the Warwick School District, provides recommendations for the District. RIPEC focused most of its attention on the operations of the Central Business Office (CBO), and has reviewed similar activities performed by the City to see if there were potential savings while maintaining quality back-office services to the school district and City. The following highlights key findings and recommendations from the RIPEC Warwick School District Management Study presented March 22, 2006.
- Modernize the School District Budget Document – While the department’s public budget document is useful, it has a number of limitations. There are a number of potential changes to the document that would ensure taxpayers and policy makers have a robust picture of the school department’s operating budget. The school district should also consider using the budget process and its document as an opportunity to educate others on its activities.
- Develop a Budget Narrative – The budget document is the fundamental policy document for most organizations, and as such, should be viewed as the principle communication tool for policymakers as well as taxpayers. The current narrative does not go far enough to take advantage of the opportunity to provide explanations of the budget, its goals, and the major issues dealt with in the budget. An effective narrative should provide summaries of financial information, such as trends in revenues and spending.
- Implement All Funds Budgeting – A major component of the school district’s budget not represented in the operating budget are the district’s funding sources and related expenditures from Federal and other third party sources. A key issue facing the School District is that while it is often aggressive in pursuing Federal and other non-traditional funding to provide some relief to the general fund, these expenditures may require full or partial support after the alternative funding has ceased to exist or has diminished.
- Enhance Internal Budgeting and Financial Management – While there has been improvement in the budget and financial management process in the school district, there are certain areas that could use additional attention. While one can track the budget as it progresses through the budget making process, there is a lack of sufficient documentation to track budget numbers to actual experience as the year progresses.
- Enhance Personnel Supplement – There is a need to enhance the personnel supplement information. The current supplements provides general data about positions, where the positions are located, salary ranges, total salary cost for those positions and funding source. While this information is helpful and is certainly more detailed than in several other school districts, there are some changes that may make this document more useful as a management tool in the future.
- Establish Annual Five-Year Forecast – The school department, in concert with the City Administration, should develop and annually update a five year forecast for the school district. This should include a detailed discussion of the baseline and the assumptions upon which the forecast is based. This should be done with the understanding that a forecast is a financial tool, not a defining document of future spending needs.
- Pursue More Aggressive Federal Indirect Cost Recovery – While this forecast assumes Federal indirect cost recoveries will grow at or about the rate of personal income growth, RIPEC would like to take this opportunity to suggest that this revenue effort could be maximized. The School District currently does not aggressively pursue Federal indirect cost recoveries, which permit school districts to allocate a portion of the Federal grant to offset administrative costs associated with the grant. RIPEC believes this has untapped potential for additional funding to support the department that would offset existing general revenue appropriations.
- Prepare for Teacher Contract – The forecasts discussed in this Study indicate that there is a need to develop a meaningful financial plan that incorporates both permanent cost savings measures within the school department to offset some of the expenses associated with the contract and a financing structure that raises sufficient funds to support the balance of the costs of implementing a new contract. Both of these efforts will require difficult choices for both the school department as well as the City’s taxpayers.