The Hamilton County School Board has asked the School System to
acquire an "enterprise resource planning system," or ERPS. An ERPS
is an integrated system of computer applications which allow rapid and
widespread access to information for budget development, accounting, purchasing,
human resources/payroll, and inventory management. Despite the high
cost of acquisition, and the expected installation period of 2 years, the
Board expects substantial net benefits. Data entry costs should be
greatly reduced, because data will generally be entered only once and will
come "from the source." Information will then be made available rapidly
through a web-style "Intranet." In every school, the principal and
the staff will each have dedicated computers for using the system.
You are a member of a task force convened by the system's superintendent to advise her on how the enterprise resource planning system should be structured. Your role is either:
one of several principals,
one of several master teachers, or
one of several parent activists.
Hamilton County has a mix of urban and suburban areas with a great deal of ethnic and class diversity. Average student test grades are far below recently-adopted state standards, despite the fact that average spending per student is above the state average. The management of the school system is therefore under attack. The county executive has little control over the system. State law requires the country to appropriate a "maintenance of effort" level of property tax revenues (i.e., no less than the amount appropriated in the previous year), but gives effective control over the use of that money to an elected school board and a superintendent who is appointed for a four-year renewable term. There are 40 schools in the county--5 high schools, 10 middle schools, and 25 elementary schools.
Read the following memo from the superintendent, and prepare a response for task force discussion.
To: Members of the ERPS Acquisition Task Force
From: Superintendent Dewey
Subject: Budget Development and Control with the ERPS
Previous task force meetings have surveyed the basic features of an ERPS. Now that we are near the time for specifying the ERPS bid requirements, we need to explore issues related to using the system for budget development and control.
As most of you know, the current system of budget development and control is very centralized. The chief financial officer, myself, and the school board allocate specific amounts to every school for each object of expense. Schools are allowed to exceed these amounts only in extraordinary circumstances. All personnel decisions must be approved by the personnel officer and myself.
The new ERPS may allow the system to be run on a more decentralized basis. Under this approach, the administration would give each school much greater flexibility for allocating funds. Principals would also have more flexibility in making hiring decisions, particularly regarding the ratio of teachers to aides; of course, the pay scales from the union contract would be honored.
Under the new system, individual schools would have flexible budgets. Schools, not the central administration, would choose how many supplies to buy, how much to rely on technology and how many custodians to employ. Every school would also be required to enter accurately into the ERPS how money was spent at the time it was spent. Payroll would be coordinated by the central administration. Schools would also be charged against their budgets when provided with services by the central administration, such as for curriculum and staff development. Student bus transportation would be funded out of the central administration budget.
The School Board's members have sent us a clear message: they expect steady increases on student tests. I am strongly committed to this goal. Therefore, I am willing to consider granting schools such budgetary flexibility only if I can be assured that principals and teachers will be responsible for their use of funds. Over the long run, I can envision the use of activity-based costing to determine the unit costs in each school of teaching for the critical subjects of reading, writing, math, and science. The central administration would then be able to compare the cost-effectiveness of different schools. This would allow us to reward effective schools, and make necessary adjustments to ineffective schools.
Please come to the task force meeting with written responses to this memo.