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Summary
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Los Angeles
Unified School
District:
It Has Increased Administrative Positions
for Various Reasons and Although Making
Progress, Its Performance Evaluation and
Salary-Setting Procedures for Managers
Still Need Improvement
September 2006
2005-132
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C S A
ALIFORNIA TATE UDITOR
ELAINEM.HOWLE STEVENM.HENDRICKSON
STATEAUDITOR CHIEFDEPUTYSTATEAUDITOR
September 14, 2006 2005-132
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As requested by the Joint Legislative Audit Committee, the Bureau of State Audits presents its audit report on the
Los Angeles Unified School District’s (LAUSD) reorganizations and its procedures for evaluating performance
and setting salaries for managers. This report concludes that LAUSD did not consistently achieve reductions in
support services positions proposed in its 2000 and 2004 reorganization plans.
Both reorganizations initially achieved staffing reductions, but by December 2005 support services staffing levels
had increased above the levels before the 2000 reorganization, which LAUSD attributed to the need for additional
employees to manage school construction and information services efforts. Further, only four of the eight local
district Parent/Community Advisory Councils (advisory councils) created by the 2000 reorganization plan are still
operating, and LAUSD has not attempted to measure parent satisfaction with the remaining advisory councils.
Also, LAUSD has made only limited assessments of any results of its 2000 reorganization.
Although LAUSD has established measurable benchmarks and goals for the superintendent, it has not replicated
this practice with other managers responsible for improving student achievement. Additionally, LAUSD has
addressed many of the concerns over salary-setting practices that we noted in a July 2001 audit, but its Personnel
Commission still does not have written procedures for determining salaries or appropriate documentation to
support salary-setting recommendations for classified managers and executives. Based on our survey of four of
the nation’s largest school districts, LAUSD’s salaries are higher than those of comparable positions for more
than half of the 27 high-level positions surveyed, but factors such as cost of living and enrollment could contribute
to the differences.
Respectfully submitted,
ELAINE M. HOWLE
State Auditor
BUREAU OF STATE AUDITS
555 Capitol Mall, Suite 300, Sacramento, California 95814 Telephone: (916) 445-0255 Fax: (916) 327-0019 www.bsa.ca.gov
ConTenTS
Summary 1
Introduction 5
Chapter 1
The Los Angeles Unified School District Did Not Fully
Carry Out Various Reorganization Objectives 15
Recommendations 31
Chapter 2
The Los Angeles Unified School District Has Made Progress
but Still Needs to Improve Its Processes for Evaluating and
Compensating Executive Managers 33
Recommendations 52
Appendix A
Los Angeles Unified School District’s Status on
Implementing Our 2001 Audit Recommendations 55
Appendix B
Salaries for 27 High-Level Positions at Los Angeles
Unified School District Compared With Salaries at
Other Large School Districts 57
Response to the Audit
Los Angeles Unified School District 61
California State Auditor’s Comments on the
Response From the Los Angeles Unified School District 71
SuMMArY
ReSulTS in bRief
The Los Angeles Unified School District (LAUSD) is the
nation’s second largest school district, with 727,000 students
attending kindergarten through 12th grade in the 2005–06
Audit Highlights . . . school year. Facing concerns about poor student performance, the
district reorganized its administrative structure in 2000 to place
Our review of the Los Angeles all schools into 11 local districts, which it consolidated into eight
Unified School District’s
local districts in 2004 to address budgetary shortfalls. Over the
(LAUSD) reorganizations and
last four years student performance has improved as seen in rising
its procedures for evaluating
performance and setting salaries Academic Performance Index (API) scores each year, but LAUSD’s
for managers found that: scores still remain below statewide API scores. In addition, the
Both the 2000 and 2004 governor has publicly indicated he would sign a bill for the mayor
reorganizations achieved and other entities to have certain management responsibilities
staffing reductions, but by over LAUSD. Finally, at an estimated cost of $19.3 billion, LAUSD
December 2005 support
began a program in 1997 to build new schools and modernize
services staffing levels had
existing schools to address an expected shortage of 200,000
increased to levels that
exceed those existing before classroom seats.
the 2000 reorganization,
which LAUSD attributed
The 2000 and 2004 reorganization plans proposed reductions in
to the need for additional
employees to manage support services positions at administrative and operating offices,
school construction and but LAUSD has not achieved lasting reductions for various reasons.
information services efforts.
In 2000 LAUSD proposed to cut 835 support services positions
Only four of the eight local at the central office, including shifting 501 of these positions to
district Parent/Community local districts and schools. However, it cut only 664 positions
Advisory Councils (advisory from the central office. Conversely, the 2004 reorganization
councils) created by the
proposed to eliminate 205 support services positions, but LAUSD
2000 reorganization
plan are still operating, actually cut 231 positions. Staffing reductions were temporary in
and LAUSD has not both cases, and by December 2005 support services staffing had
attempted to measure
increased by 658 positions over December 1999 levels. LAUSD
parent satisfaction with the
indicates that many of these additional employees were needed to
remaining advisory councils.
manage its school construction and modernization program and
Although LAUSD has to provide information technology services.
established measurable
benchmarks and goals for
the superintendent, it has Between December 1999 and December 2005, LAUSD’s support
not replicated this practice services positions increased by 12 percent, compared with a 3 percent
with other managers
increase in the number of employees who work at schools and
responsible for improving
interact with students, such as teachers, counselors, school custodians,
student achievement.
and bus drivers. The cost of salaries and benefits for the first group
continued on next page . . .
increased by 44 percent between fiscal years 1999–2000 and 2004–05.
The same costs for the second group increased by 26 percent.1
1 Represents regular program employees supported by LAUSD’s general fund.
California State Auditor Report 2005-132 1
LAUSD has addressed many The 2000 reorganization plan also created Parent/Community
of the concerns over the Advisory Councils (advisory councils) at each local district to
salary-setting practices that
provide parents and community members with access to local
we noted in a July 2001
district administrators and a way to influence district policy.
audit, but its Personnel
Commission still does not Four of these eight advisory councils are no longer functioning,
have written procedures and LAUSD has not attempted to measure parent satisfaction
for determining salaries or
with the councils that still exist. In fact, it has made only
appropriate documentation
to support salary-setting limited assessments of any results of its 2000 reorganization.
recommendations for Although it has updated the LAUSD Board of Education (board
classified managers and
of education) on changes to its administrative structure since
executives.
the reorganization, it has not reported the financial changes
Based on our survey of resulting from the reorganization as the board has requested.
four of the nation’s largest LAUSD lacks adequate performance assessment in other areas
school districts, LAUSD’s
as well. Since it expanded its in-house legal staff beginning in
salaries are higher than
those of comparable 2001, LAUSD has reduced annual legal services costs by more
positions for more than than $3 million and decreased settlement and judgment costs.
half of the 27 high-level
However, it has not fully developed the performance metrics it
positions surveyed, but
proposed to measure the legal expansion plan that was adopted
there may be factors that
justify such differences. by the board of education, so it is difficult to determine if it is
meeting all the plan’s goals.
We also assessed LAUSD’s progress in implementing the
recommendations of our July 2001 audit, Los Angeles Unified
School District: It Has Made Some Progress in Its Reorganization but
Has Not Ensured That Every Salary Level It Awards Is Appropriate
(2000-125). Although the district has taken some corrective
actions, it has not implemented or has only partly implemented
most of our recommendations for establishing performance
measures and improving its compensation practices.
For example, our 2001 audit reported that LAUSD had not
established specific, easily measurable performance standards for
certain high-level executives and managers and that the standards
it did establish were vague and open to subjective results. Although
LAUSD has established measurable benchmarks and goals for the
superintendent, it still does not have performance benchmarks
for all executives and managers, nor has it always maintained
documentation of past evaluations. A January 2006 review of the
district by a peer group of other school administrators found little
evidence that LAUSD held its staff accountable for attaining their
performance goals.
Our 2001 audit also found that the three different groups
within LAUSD that set salaries of administrators—the Personnel
Commission, the Human Resources Division, and the
superintendent—did not have written procedures for determining
salary levels for some positions, and did not always follow the
2 California State Auditor Report 2005-132
written procedures they did have in place. In addition, LAUSD
could not provide sufficient documentation to demonstrate that
it conducted a thorough analysis for each position before setting
salaries. Currently, more progress is needed to ensure transparency
over salary-setting decisions. The Personnel Commission still does
not have written procedures for determining salaries, and 11 of
the 15 salary-setting decisions we reviewed lacked documentation
to support the salary recommendations. In contrast, the
superintendent’s process for determining salaries for certificated
executives is reasonable, but it could be documented better. Also,
the Human Resources Division has addressed most of our previous
concerns over the salary-setting practices for certificated managers.
The number of high-level executives and managers LAUSD chooses
to employ on contracts also has increased, but the reasons for
these increases appear justified. Finally, our survey of comparable
large school districts across the country shows that LAUSD pays
higher salaries for more than half of the 27 highest-level executive
and administrative positions we reviewed. Factors that may justify
these larger salaries include cost of living, size of enrollment, and
differences in scope and range of responsibilities.
ReCOMMenDATiOnS
When LAUSD makes major changes in its organizational
structure with the intent of improving its operations, it should
do the following to measure the effectiveness of these changes:
• Consider ways to track the impact of these organizational
changes on such factors as staffing and cost.
• Develop performance metrics with goals and quantifiable
benchmarks to evaluate itself on its progress in achieving the
planned improvements.
If LAUSD decides to continue with the advisory councils, it should:
• Evaluate why the advisory councils have not met the
objectives set out in the 2000 reorganization plan.
• Develop more specific guidelines on what the advisory
councils should accomplish, define the local districts’ roles
and types of assistance they would offer, and develop a
mechanism for monitoring and oversight to ensure that the
advisory councils operate as intended.
California State Auditor Report 2005-132 3
To measure the effectiveness of key administrators directly
involved in affecting student performance, LAUSD should:
• Establish specific, measurable, and reasonable goals for these
administrators that are aligned with district-wide goals related
to student performance.
• Evaluate these administrators in writing based on their ability
to meet their goals and hold them accountable for their
performance.
• Ensure that it retains written evaluations of administrators for
a reasonable time period.
Similarly, to measure the effectiveness of key administrators
who oversee operating units, LAUSD should establish specific,
measurable, and reasonable goals for these administrators and
evaluate them in writing on their ability to meet such goals.
In addition, it should retain the evaluations for a reasonable
time period.
To avoid the appearance of subjectivity and lack of thoroughness
in setting salaries for classified administrators, the Personnel
Commission should:
• Establish written guidelines for setting salaries and
ensure that it consistently follows them for determining
administrative compensation.
• Maintain complete records of its salary determination process,
including what methods it followed and what information it
used to support its decisions.
LAUSD should maintain complete records to support salary
determinations for executive-level administrators to show
that these determinations are based on reasonable and
objective criteria.
AGenCY COMMenTS
LAUSD generally agreed with our recommendations and indicated
some of the steps it would take to implement them. n
California State Auditor Report 2005-132
InTroDuCTIon
bACKGROunD
With 727,000 students attending kindergarten through
12th grade in the 2005–06 school year, Los Angeles
Unified School District (LAUSD) is the nation’s
second largest school district, as shown in Table 1. It has about
five times as many students as San Diego City Schools, the next
largest school district in California.
TAble 1
Seven largest School Districts in the united States
number of
District enrollment School Year Schools Grades
New York City Department of Education 1,011,000 2005–06 1,573 Kindergarten–12th
los Angeles unified School District 727,000 2005–06 937 Kindergarten–12th
Chicago Public Schools 405,000 2004–05 613 Kindergarten–12th
Miami-Dade County Public Schools 366,000 2004–05 406 Pre-kindergarten–12th
Clark County School District 292,000 2005–06 317 Kindergarten–12th
Broward County Public Schools 255,000 2004–05 264 Pre-kindergarten–12th
Houston Independent School District 193,000 2004–05 280 Kindergarten–12th
Sources: District responses to Bureau of State Audits’ surveys and districts’ Web sites.
For the 2005–06 school year, LAUSD had almost 78,000 regular
employees, including 37,000 teachers. Its total expenditures
in fiscal year 2004–05 were $8.5 billion. More than 65 percent
of these expenditures were for employee salaries and benefits.
Figure 1 on the following page shows how LAUSD’s highest
management levels are structured.
Currently, as shown in Figure 1, LAUSD has a traditional
school governance structure with a superintendent to manage
its operations and a board of education to oversee policies.
Additionally, the superintendent has various instructional
and operational units reporting to him. LAUSD employs most
executives and managers who oversee these units through
employment contracts rather than on a permanent basis.
California State Auditor Report 2005-132 5
fiGuRe 1
los Angeles unified School District Organization Chart for High-level Positions
board of education
Personnel
Various units (such
Commission*
as special counsel,
inspector general)
Superintendent
Others (such as General counsel
communications,
government
relations, chief
of staff)
Chief instructional Eight local district Executive Chief operating Chief facilities Chief financial
officers, elementary superintendents administrator, officer executive officer
and secondary educational services
Source: Los Angeles Unified School District’s (LAUSD) June 2006 organization chart.
* The Personnel Commission operates mostly independently from the LAUSD Board of Education (board of education). It is an
autonomous agency led by three commissioners, one of whom is appointed by the board of education.
lAuSD Reorganized its Administrative Structure in
2000 and 200
LAUSD undertook the reorganization in 2000 because of concerns
about poor student performance.2 According to its analysis of the
first year of statewide testing, LAUSD’s mean Academic Performance
Index (API) scores were significantly lower than the California mean
scores. California uses the API to measure the academic performance
and improvement of schools by producing a score ranging from
200 to 1000 based on the summary of various indicators, including
standardized tests in various subjects, results from California’s high
school exit exam, and other factors. LAUSD’s organizational structure
also received criticism in a 1993 external consultant’s study and in
a 1998 review of its school facilities program by the Little Hoover
Commission, an independent state oversight agency.
2 The California Education Code generally uses the term “reorganization” to describe the
process of redefining the geographic territory of a school district by a number of different
actions. However, our discussion of reorganization refers to changes in management structure.
6 California State Auditor Report 2005-132
The LAUSD Board of Education (board of education) adopted
a plan in April 2000 that reorganized management of schools
into 11 newly designated local districts, each with its own
superintendent and administrative staff. The reorganization took
effect in July 2000 with the stated intent to improve academic
achievement by assigning the local districts decision-making
responsibility, by reconstituting the central office to provide
support services to local districts, and by focusing district-wide
efforts on teaching students to read. Our 2001 audit of this
reorganization found that LAUSD had shifted some of the central
office positions into the local districts, but the central office
retained significant decision-making and policy-setting authority.
After the 2000 reorganization, LAUSD faced significant budget
cuts and indicated that it reduced its general fund expenditures
by $1.3 billion between fiscal years 2001–02 and 2003–04.
Facing an immediate need to reduce LAUSD’s budget further in
fiscal year 2004–05, the board of education took several actions,
including a reorganization plan to consolidate the existing
11 local districts into eight districts, in June 2004. The plan
proposed $24.2 million in immediate savings resulting from a
20 percent cut in local district budgets and reductions in local
district positions. We discuss the changes in total LAUSD staff
since the 2000 reorganization in more detail in Chapter 1.
Despite Recent Gains in Student Achievement, lAuSD Still faces
Challenges in Meeting State and federal education Requirements
LAUSD’s API scores have been improving over the last four years,
as shown in Figure 2 on the following page. The district’s
API base score climbed by 54 points between 2002 and 2005, a
9 percent increase. Despite these improvements, LAUSD’s 2005
API base score of 649 is still 60 points, or 8 percent, below the
statewide score of 709.
According to LAUSD, the gap between its mean API scores and
statewide mean API scores has decreased for all grade levels
since 1999. However, the statewide API scores include LAUSD’s
scores, and the California Department of Education does not
calculate statewide scores separately without LAUSD. Thus, we
were unable to compare the API scores of LAUSD with all other
California school districts.
California State Auditor Report 2005-132 7
fiGuRe 2
Annual Academic Performance index base Scores for
California and the los Angeles unified School District
2002 Through 2005
California
800 LAUSD
709
700 683 689
649
633
622
595
600
500
2002 2003 2004 2005
Source: California Department of Education’s (CDE) Web site.
Note: CDE did not calculate the Academic Performance Index base score for California
until 2003, when it did so for the federal No Child Left Behind Act of 2001.
California State Auditor Report 2005-132
erocS
In addition to the API, the federal No Child Left Behind Act of
2001 also requires all schools and local education agencies that
want to receive federal funding under the act to meet Adequate
Yearly Progress requirements, which take into consideration
participation in and performance on statewide assessments
used to calculate API scores and graduation rates. Since 2003,
when the federal requirements took effect, LAUSD has met most
of the 46 requirements in any one year. For example, LAUSD
met 43 of the 46 requirements in 2005. However, its English
learners and students with disabilities subgroups did not meet
proficiency requirements in statewide assessments, and it did
not meet the graduation rate requirement. A school district that
does not meet all its Adequate Yearly Progress requirements for
two consecutive years or more, such as LAUSD, is identified as a
program improvement school district. It is required to implement
varying levels of services and interventions, depending on how
many consecutive years it fails to meet the requirements.
lAuSD Governance May be Realigned
The mayor of Los Angeles has criticized LAUSD for its shortcomings
in student performance. Citing concerns with graduation rates and
other indicators of student performance, the mayor sought to change
the governance of the school district. The Legislature approved
Assembly Bill 1381 of the 2005–06 Regular Session in August 2006.
If enacted the bill would, subject to approval from the Los Angeles
County superintendent of schools, create a partnership between the
mayor, LAUSD, parent and community groups, school personnel,
and employee organizations to oversee three clusters of schools
in a demonstration project, including three low-performing high
schools and the lower-level schools whose students will attend those
high schools. The bill also proposes to create a council of mayors
from each city within LAUSD’s boundaries to, among other things,
participate in selecting and evaluating the superintendent; review
and comment on the annual budget and state-required reports on
school data and academic indicators of student performance; and
provide input on LAUSD’s facilities program. Additionally, the
bill proposes to transfer responsibility over certain employment
decisions, contracting operations, and management of the facilities
program from the board of education to the superintendent. Lastly,
the bill proposes that parents, teachers, and other certificated staff
have an authentic role in selecting curriculum, instruction materials,
and professional development programs for LAUSD. The bill’s
provisions would take effect on January 1, 2007 and remain in effect
until January 1, 2013. As of early September 2006, the governor has
publicly indicated he would sign the bill.
lAuSD undertook an Aggressive School Construction and
Modernization Program to Relieve Overcrowded Schools
and Reduce Class Sizes
LAUSD is in the midst of a major program to construct and
modernize schools. It started this program in 1997, when it forecast
a shortage of 200,000 classroom seats based on enrollment numbers
and projected growth rates. LAUSD intends to build more than
150 schools to address this shortage, and had built 53 new schools
as of November 2005. According to the director of facilities support
services, LAUSD also plans to modernize almost 800 existing schools.
As shown in Figure 3 on the following page, although enrollment
in LAUSD steadily increased in the first five years, it peaked in
the 2002–03 and 2003–04 school years and has been declining
slightly since. According to its October 2005 update to the board
of education, LAUSD believes the enrollment decline is the
result of declining birthrates since 1990, rising housing costs, and
an increasing number of households with few or no children.
California State Auditor Report 2005-132 9
fiGuRe 3
Student enrollment from School Year 1997–9 Through 2009–10
800
700
600
500
400
300
200
100
0
School Year
Sources: California Department of Education’s Web site and the Los Angeles Unified School District’s 2006–07 provisional budget.
10 California State Auditor Report 2005-132
)sdnasuohT
ni(
tnemllornE
Actual enrollment
Forecasted enrollment
735 747 747 741
680 696 710 721 727 712 699 688 677
8 9 0 1 2 3 4 5 6 7 8 9 0
9 9 0 0 0 0 0 0 0 0 0 0 1
– – 0 – – – – – – – – – –
7 8 2 0 1 2 3 4 5 6 7 8 9
9 9 – 0 0 0 0 0 0 0 0 0 0
9 9 9 0 0 0 0 0 0 0 0 0 0
1 1 9 2 2 2 2 2 2 2 2 2 2
9
1
Despite these recent enrollment trends, which LAUSD uses
to adjust its planned facilities program, the district indicates
that many schools remain overcrowded. The district has used
interim measures such as the multi-track calendar (which used
a shortened school year), temporary facilities, and busing of
students to schools outside their neighborhoods to relieve
overcrowding. According to LAUSD’s general counsel, the board
of education adopted a master facilities plan that targeted
busing and the multi-track calendar as educationally inferior
means to deal with overcrowding. He also indicated that a court
settlement in 2004 addressed some of these interim measures,
and legislation that arose out of that settlement puts into law
the board of education’s previous commitment to eliminate by
2012 the use of the shortened school year multi-track calendar. The
district will need more classroom space to implement this plan.
To address overcrowding problems, voters passed four local
bond measures between 1997 and 2005 to fund new school
construction and existing school modernization. LAUSD received
other sources of funding including developer fees, state matching
funds, and federal grants, bringing its facilities program funding
to $19.3 billion as of July 2006. Of this amount, it plans to use
$11.7 billion to construct new schools to meet LAUSD’s revised
forecast, which requires 180,000 new classroom seats by 2012 and
$7.6 billion to renovate existing schools.
lAuSD Sets Compensation for Administrators in Various Ways
Different operating units within LAUSD are responsible for setting
salaries, and each of these units has its own set of procedures for
determining salaries, as shown in Table 2.
TAble 2
entities Responsible for Determining Salaries
entity Type of employee Description
Personnel Commission Classified Positions that provide operational or administrative support and do
not require instructional credentials or certificates. Examples include
accountants, bus drivers, and school police.
Human Resources Certificated Positions that require certifications or credentials, and are not at the highest
Division management level. These include principals and program directors.
Superintendent High-level certificated High-level certificated managers on employment contracts, such as local
managers district superintendents and assistant superintendents.
Source: Bureau of State Audits’ review of documents and interviews with Los Angeles Unified School District administrators.
The Personnel Commission is a three-member board independent
of LAUSD that sets salaries for classified employees. According to
its chief human resources specialist (chief specialist), when a need
for a classified position arises, the Personnel Commission employs
staff who may conduct a classification study to determine
whether the duties are performed within an existing job
classification. If a new classification must be created, Personnel
Commission staff conduct a salary study to establish the salary
range. For union-represented positions, which make up most
classified employees, collective bargaining is used to set salaries.
However, high-level executive and administrative positions, such
as many of those we discuss in this report, are not represented
by unions and therefore are not subject to collective bargaining.
California State Auditor Report 2005-132 11
According to the chief specialist, a salary study usually includes
a survey of salaries for similar positions with comparable duties
at other entities. The commission also uses internal alignment,
which is a process to ensure that the salary established for a new
position is in line with existing salary levels for similar positions
and with those positions above and below it within LAUSD.
The Personnel Commission also may consider market factors or
use information from job surveys it has purchased from private
human resource firms. Once a salary is determined, staff presents
its salary recommendation in a public meeting to the Personnel
Commission board members for approval.
Although the Personnel Commission is the only operating unit
that determines salaries for classified employees, the Human
Resources Division and the superintendent determine salaries for
certificated employees, as indicated previously in Table 2. The
Human Resources Division conducts a study that analyzes the level
of responsibility of a position by using a standardized template to
score a position based on level of supervision, problem solving,
and other management factors. The numeric score assigned
to the position corresponds to a predetermined salary range.
Finally, LAUSD indicates that the superintendent uses an internal
alignment approach to set salaries for high-level executive and
administrative certificated positions. The board of education must
approve the superintendent’s decisions.
SCOPe AnD MeTHODOlOGY
The Joint Legislative Audit Committee (audit committee) asked the
Bureau of State Audits to evaluate the impact of LAUSD’s
reorganizations and review its compensation practices.
Specifically, the audit committee asked that we determine how
LAUSD tracked cost and position reductions resulting from
the 2000 and 2004 reorganizations. Also, the audit committee
asked us to determine if community and parent access and
participation in the LAUSD policy-making process increased as a
result of the 2000 reorganization. Further, the audit committee
directed us to determine whether LAUSD has established a
periodic evaluation process of its administrative organization.
We also were asked to determine whether it developed and, if
so, monitors staff performance measures. In addition, we were
asked to analyze its practices for setting salaries and determine
whether high-level executive and administrative salaries
continue to differ widely from similar positions in other school
12 California State Auditor Report 2005-132
districts. Finally, the audit committee asked us to determine the
extent to which LAUSD implemented recommendations from
our similar July 2001 audit.
To familiarize ourselves with state public education requirements,
we reviewed relevant laws, rules, regulations, and policies governing
administrative staffing and compensation for school districts.
To identify LAUSD’s performance measures for the reorganizations
and determine what assessments it conducted, we reviewed the
reorganization plans adopted by the board of education and
interviewed district staff. We also evaluated annual staffing data
compiled by LAUSD and cost data from its annual audited financial
reports to identify staffing and cost impacts of the reorganizations.
Differences between the staffing and financial data should be noted.
Staffing numbers reflect total positions employed in December
of each fiscal year funded from all sources. The audited financial
data is more limited and represents only LAUSD’s general fund
expenditures for regular program costs. The standards from the
U.S. Government Accountability Office require us to assess the
reliability of computer-processed data. We determined that the
staffing data contained in LAUSD’s system was sufficiently reliable
for the purposes of this audit. Further, we were able to recalculate
LAUSD’s trends of staffing changes since fiscal year 1999–2000 with
reasonable accuracy. We present those trends in Figures 4 and 5 on
pages 16 and 19. We did not test the reliability of the financial data
because it is from LAUSD’s financial reports, which are audited by
independent auditors. In addition to the two reorganizations, we
reviewed the impacts resulting from LAUSD’s expansion of its legal
staff in 2001 and assessed how it measured these results.
To determine whether the 2000 reorganization increased parent
and community access to LAUSD’s policy-making process,
we interviewed parent and community group participants,
and local district superintendents and staff. We also reviewed
meeting minutes and other documents provided by these groups
and assessed how LAUSD evaluated any change in parent and
community participation.
To determine whether LAUSD developed performance measures
and monitors them, we reviewed year-end performance
evaluations and performance goals that were available. We
focused this review on high-level executives and managers because
these positions are responsible for the overall direction of
LAUSD. We also determined whether the superintendent was held
California State Auditor Report 2005-132 13
accountable for meeting performance measures. Further, we reviewed
a study performed by a peer group that the board of education
contracted to review LAUSD’s organization and operations.
To determine whether LAUSD’s salary-setting practices are applied
consistently, we reviewed its written policies and guidelines,
where available. We evaluated how LAUSD set the salaries for
a sample of high-level positions by reviewing job descriptions,
internal salary studies, and other documents. When we did not
find adequate documentation of LAUSD’s policies or actions, we
interviewed district staff to understand its procedures and the
justification for determining a particular salary. Further, because
our 2001 audit highlighted LAUSD’s salary-setting practices as
a significant concern, we compared its current practices to the
practices that we previously reported.
To determine whether high-level executive and administrative
salaries vary with those of other districts, we surveyed seven
large school districts to gather salary data and job descriptions to
compare to 27 LAUSD positions. We compared the salaries and
job descriptions of the four school districts that responded with
the comparable LAUSD positions.
Finally, to determine the extent to which LAUSD has implemented
our 2001 audit recommendations, we interviewed staff, reviewed its
one-year response to that audit, and examined other documents.
Additionally, we evaluated how well it implemented our
recommendations to establish performance measures for high-level
staff and improve its salary-setting practices based on the results of
our audit tests as previously described. n
1 California State Auditor Report 2005-132
CHAPTer 1
The Los Angeles Unified School
District Did Not Fully Carry Out
Various Reorganization Objectives
CHAPTeR SuMMARY
Los Angeles Unified School District (LAUSD) proposed
to cut support services positions when it reorganized
its administrative structure in 2000 and again in 2004.
However, current staffing numbers show that it has been able to
make only some of these cuts, and its support services staff has
increased since its 2000 reorganization. Most increases are in
areas such as facilities and information services, both of which
are in the midst of major expansion projects. LAUSD’s total
number of employees has gone up since 2000, but its support
services staff has increased at a faster rate than school services
employees. Similarly, annual support services salaries and
benefits costs have increased at a faster rate than school services
salaries and benefits costs. Further, although LAUSD is below
the State’s mandated limit of eight administrators for every
100 teachers, this ratio has increased steadily over the last six years.
Another initiative in the 2000 reorganization plan was to create
Parent/Community Advisory Councils (advisory councils) at
each local district to provide parents and other community
members additional access to LAUSD administrators and a means
to influence school policy. Half of these advisory councils are no
longer functioning, and LAUSD has not attempted to measure
parent satisfaction with those still operating. In fact, it has made
only limited assessments of any results of its 2000 reorganization.
Although it has provided several updates to the LAUSD Board of
Education (board of education) on changes to its administrative
structure since the reorganization, it has not reported the
financial changes resulting from the reorganization, even though
the board of education requested this information. This lack of
assessing performance is not isolated to the 2000 reorganization.
In 2001 LAUSD began to expand its legal staff to be more proactive
in resolving legal issues in an effort to decrease overall legal
costs. Although it has achieved cost savings, LAUSD has not fully
developed the performance metrics it proposed to evaluate progress
in meeting its legal expansion goals.
California State Auditor Report 2005-132 15
PROPOSeD SuPPORT SeRViCeS STAff ReDuCTiOnS
WeRe nOT fullY ACCOMPliSHeD
For various reasons, LAUSD has not achieved the support
services staff reductions outlined in its reorganization plans. The
2000 reorganization plan proposed a reduction of 835 central
office support services positions, including shifting 501 of these
positions to regional offices and schools. See the text box for an
explanation of central and regional offices. By December 2000
LAUSD reduced its central office support services staff from 5,100
to 4,436—664 positions—as shown in Figure 4.
fiGuRe
Central and Regional Support Services
full-Time equivalent employees
As of December for Each Year
Source: Los Angeles Unified School District’s Budget Services and Financial Planning Division.
Note: This figure represents employees supported by all funding sources. The number of
full-time equivalent employees is calculated by treating each person that works full-time as
one employee and those who work part-time as fractional positions based on time worked.
16 California State Auditor Report 2005-132
seeyolpmE
tnelaviuqE
emiT-lluF
Totals
Central office
8,000 2000 Reorganization Regional offices
7,000
6,105 6,141 6,423 6,192 6,359
6,000 5,701 5,705
5,000
5,100 4,950 5,097 5,190
4,669 4,735
4,000 4,436
3,000
2,000
1,436 1,406 1,473
1,269 1,095 1,169
1,000 601
0
1999 2000 2001 2002 2003 2004 2005
The district could not tell us whether this decrease
was the result of position cuts or transfers, but
Types of Support Services employees
regional support services positions increased at the
Central office—employees primarily located at same time by 668 positions, so it would appear that
district headquarters.
most of the decrease was the result of transfers.
Regional offices—employees primarily located at
Further, central office support services staffing has
the eight local offices and other field offices.
increased in each year since December 2000, and
by December 2005 it exceeded the pre-reorganization
level. Regional support services positions increased
slightly during the same period, but by December 2005 the number
of regional positions returned to below the December 2000 level.
According to LAUSD’s budget director, several factors contributed
to the disparity between proposed and actual staffing cuts. He
stated that the 2000 reorganization was the largest but not
the only change in the district’s organization at that time. As
Figure 4 indicates, LAUSD added 658 central and regional support
services positions between December 1999, when these positions
numbered 5,701, and December 2005, when they numbered 6,359.
The Facilities Services Division contributed most to the increase
by adding 430 positions during that time. As described in the
Introduction, LAUSD has been involved in an aggressive school
construction and modernization program since 1997.
Local district office positions grew by 371, mostly as a result of
creating the local school districts during the 2000 reorganization.
The number of staff members in Information Services units
increased by 232 between December 1999 and December 2005.
According to the budget director, LAUSD added positions to
implement new data systems, including the replacement of its
payroll and accounting systems, and to develop a system to
track student test scores and other student data. Other units that
saw staffing increases were the Business Services Division, Office
of the General Counsel, Human Resources Division, Office of the
Inspector General, and School Police. Not all operating units grew
during this time. In fact, various school services employees within
Educational Support units that oversee instructional programs such
as the Specially Funded and Parent/Community Program Division,
Student Health and Human Services, and Language Acquisition
Branch, had a combined net decrease of 419 positions. See Table 3
on the following page for a listing of these changes.
California State Auditor Report 2005-132 17
TAble 3
Changes in Support Services Positions between
December 1999 and December 2005
Operating unit(s) Positions
Facilities Services 430
Local Districts 371
Information Services 232
Other (such as Business Services and Human Resources) 44
Educational Support (such as Student Health and Human Services) (419)
Total increase 65
Source: Los Angeles Unified School District’s Budget Services and Financial Planning Division.
LAUSD was aware that the staffing increases in Facilities Services,
Information Services, and other central office operating units would
affect overall staffing levels, but the 2000 reorganization plan did not
account for them. According to the LAUSD executive administrator
who led the team responsible for implementing the reorganization
plan, the proposed staffing cuts were based on a snapshot in time
so that LAUSD could determine which central level resources could
be shifted to local district offices. The reorganization plan, therefore,
did not give a complete picture of the impact on the overall staffing
levels of LAUSD. The budget director also stated that the proposed
reductions were not found to be feasible in some cases, resulting in
fewer reductions than originally planned. However, he indicated
that identifying the reasons for these differences would be time-
consuming and even with great effort might not be possible.
Moreover, LAUSD acknowledged in the 2000 reorganization plan
that, for various reasons, it could not determine the actual impact of
its proposed position reductions.
Unlike the 2000 plan, the June 2004 reorganization
from 11 to eight local districts produced more staffing
Types of employees
reductions than the plan proposed. The 2004 plan
proposed an immediate reduction of 205 support
Support Services—employees who do not interact
directly with students, but provide administrative services positions, compared with the actual reduction
and operational support. They may be located
of 231 positions. This net reduction included an
at central, local district, or field offices. Examples
include information technology, human resources, increase of 147 central office support services staff and
and student health and human services employees. a 378-position decrease in regional support services
School Services—employees located at schools. staff. Although LAUSD achieved a temporary net
Examples include teachers, counselors, principals,
reduction in positions, its support services staffing
bus drivers, and custodians.
1 California State Auditor Report 2005-132
began to increase once again. It added 167 positions (3 percent),
increasing from 6,192 in December 2004 to 6,359 in December 2005,
as shown previously in Figure 4.
Although certain operating units within LAUSD expanded since
December 1999, the percentage increase in support services
staff outpaced increases for school services staff as shown in
Figure 5. Total support services positions increased by 12 percent
from 5,701 positions in December 1999 to 6,359 positions in
December 2005, compared with a 3 percent increase in school
services staff during the same period. The school services group, as
described in the text box, includes employees who work at school
locations, and is the largest category of LAUSD employees.
fiGuRe 5
School Services and Support Services employees
Totals
100,000
School services*
Support services
80,000
60,000
7,000
6,000
5,000
1999 2000 2001 2002 2003 2004 2005
As of December for Each Year
Source: Los Angeles Unified School District‘s (LAUSD) Budget Services and Financial Planning Division.
Note: This figure represents employees supported by all funding sources. This figure excludes positions that LAUSD’s budget director
could not identify as either school services or support services employees, and positions paid by other agencies such as elected
bargaining unit employees. The excluded positions, which annually average 169 positions, make up less than 1 percent of total
LAUSD positions and therefore are not significant to our comparison.
* In December 2005 the school services group included 57,869 full-time equivalent positions, or 77 percent of school services positions
that provided instructional services, such as teachers and teaching assistants, classroom aides, principals, counselors, librarians, and
nurses. The remaining 17,637 positions provide noninstructional services in areas such as office and clerical support, food services, school
maintenance, school transportation, and school police.
California State Auditor Report 2005-132 19
seeyolpmE
tnelaviuqE
emiT-lluF
2000 Reorganization
84,577
81,561 82,712 82,677 81,945 81,865
79,005
78,472
75,856 76,571 76,254 75,753 75,506
73,304
6,423 6,359
6,105 6,141 6,192
5,701 5,705
inCReASe in SuPPORT SeRViCeS COSTS OuTPACeD
COST inCReASeS fOR SCHOOl SeRViCeS eMPlOYeeS
We also found that salaries and benefits costs for support
services from fiscal years 1999–2000 to 2004–05 increased at a
faster rate than those same costs for school services. However,
salaries and benefits costs for support services were, and
still remain, significantly less than those for school services.
According to the budget director, LAUSD has not calculated
the costs resulting from the 2000 and 2004 reorganizations.
Therefore, to review salaries and benefits costs before and
after the two reorganizations, we reviewed cost data included
in LAUSD’s comprehensive annual financial report (financial
report) for fiscal years 1999–2000 to 2004–05.3 Our comparison
of support services and school services salaries and benefits
costs in Figure 6 is similar to our previous staffing comparison,
but represents only regular program costs supported by
LAUSD’s general fund. The budget director concurs that using
data from the financial report provides an appropriate view
of changes in salaries and benefits costs because the financial
report data seems consistent with the position data he
provided us.
Salaries and benefits expenditures for both support services
and school services employees increased from fiscal years
1999–2000 to 2004–05, which is consistent with the increase in
positions discussed in the previous section. The school services
group increased 26 percent from the fiscal year 1999–2000
salaries and benefits level, to $4.1 billion in fiscal year 2004–05,
SSaallaarriieess aanndd bbeenneefifittss while the support services group’s salaries and benefits level
ccoossttss ffoorr ssuuppppoorrtt sseerrvviicceess increased by 44 percent to $288 million during the same
eemmppllooyyeeeess iinnccrreeaasseedd bbyy period. In reviewing the details of the increase for support
4444 ppeerrcceenntt ffrroomm fifissccaall services salaries and benefits, we noted the operating units
yyeeaarrss 11999999––22000000 ttoo experiencing the greatest increases include Human Resources
22000044––0055,, ccoommppaarreedd ttoo (63 percent), Office of the General Counsel (188 percent),
aa 2266 ppeerrcceenntt iinnccrreeaassee ffoorr Information Technology (36 percent), Communication/Public
sscchhooooll sseerrvviicceess ssaallaarriieess Information (985 percent), Student Health and Human Services
aanndd bbeenneefifittss ccoossttss.. (69 percent), and Special Education Services (52 percent).
However, we cannot conclude with certainty whether the
changes were the result of increased costs, transfers in
positions, changes in how the independent auditor classified
these positions, or a combination of these reasons.
3 The comprehensive annual financial report is prepared by an independent accounting
firm and includes audited financial statements for LAUSD.
20 California State Auditor Report 2005-132
fiGuRe 6
Salaries and benefits Costs of School Services
and Support Services employees
Totals
School services
$5,000 Support services
4,000
3,000
2,000
1,000
0
1999–2000 2000–01 2001–02 2002–03 2003–04 2004–05
Fiscal Year
Sources: Bureau of State Audits’ review of the Los Angeles Unified School District’s (LAUSD)
comprehensive annual financial reports.
Note: These salaries and benefits costs are for LAUSD’s general fund regular program, which
makes up roughly 80 percent of total salaries and benefits costs. Those costs funded by
bonds, special programs, and other funds are not included.
California State Auditor Report 2005-132 21
)snoilliM
ni(
serutidnepxE
4,350 4,405 4,417
4,094
3,950
4,099 4,129
4,043
3,470
3,702 3,743
3,270
200 248 351 307 306 288
THe RATiO Of CeRTifiCATeD ADMiniSTRATiVe
eMPlOYeeS TO TeACHeRS HAS inCReASeD buT DOeS
nOT eXCeeD THe STATe MAnDATeD liMiT
Another important measure to evaluate the impact of LAUSD’s
reorganization efforts on administrative staffing is the ratio of
certificated administrators to teachers. The California Education
Code sets the maximum ratio for unified school districts at
eight administrators for every 100 teachers, and beginning
with fiscal year 2002–03 the State Board of Education requires
each district’s independent auditor to monitor this ratio.
Exceeding this limit causes a district to lose some state funding
allocated solely for the purposes of classroom instruction and
improvement. Table 4 describes the types of positions that are
included in the ratio. According to the assistant superintendent
of planning, assessment, and research (assistant superintendent),
LAUSD conducts a survey of its certificated employees each fall
to calculate this ratio.
TAble
employee Categories
Type of employee Positions included
included in administrator to teacher ratio
Administrative employee All individuals employed in positions requiring certification qualifications who are not pupil
services employees or teachers. Examples include principals, assistant principals, local district
superintendents, and other certificated staff working in a nonteaching position at a school site,
local district office, or the central office.
Teacher All individuals employed in positions requiring certification qualifications whose duties require
him or her to provide direct instruction to pupils.
not included in administrator to teacher ratio
Classified employee Employees whose positions do not require certification qualifications. Examples include clerical
staff, janitorial staff, and cafeteria staff.
Pupil services employee Employees whose positions require standard designated services credentials, health and development
credentials, or librarian credentials who provide direct services to pupils. Examples include librarians,
nurses, counselors, and psychologists.
Sources: The California Education Code, Section 41401, and Bureau of State Audits’ review of documents.
As shown in Figure 7, the ratio of administrators to teachers
generally has been increasing over the last six years. The ratio
was 4.98 administrators for 100 teachers in the 1998–99 school
year, which was calculated based on 1,740 administrators and
34,870 teachers. By the 2004–05 school year, the ratio reached 7.16,
based on the increased number of 2,575 administrators and
35,921 teachers.
According to the assistant superintendent, LAUSD has not
conducted a formal analysis of the reasons for the changes in the
administrator-to-teacher ratio from year to year because there is
not a requirement to do so. However, the assistant superintendent
indicated that changes in student enrollment and policy changes
either initiated by LAUSD or outside its control may have
contributed to the increasing ratio of administrators to teachers.
For example, she stated that a decline in student enrollment
might have led to a drop in teaching positions. We noted in the
Introduction that student enrollment dropped from a peak
22 California State Auditor Report 2005-132
fiGuRe 7
Ratio of Administrators Per 100 Teachers
8
7
6
5
4
3
2
1
0
8 9 0 1 2 3 4 5
9 9 0 0 0 0 0 0
– – 0 – – – – –
7 8 2 0 1 2 3 4
9 9 – 0 0 0 0 0
9 9 9 0 0 0 0 0
1 1 9 2 2 2 2 2
9
1
Sources: Los Angeles Unified School District’s (LAUSD) Planning, Assessment, and
Research Division records.
Note: The statutory limit for unified school districts is eight administrators per 100 teachers. The
California Department of Education states that before fiscal year 2002–03 it only collected ratio
information provided by school districts and calculated any penalties, which it then reported
annually to the Legislature. However, the California Department of Education indicates that it was
not required under state law to verify the information. LAUSD’s independent auditor confirmed
the ratios for fiscal years 2003–04 and 2004–05. It also indicated auditing the ratio for fiscal year
2002–03, but could not confirm this ratio. The independent auditor has not yet audited the ratio
for fiscal year 2005–06, so we do not present it.
California State Auditor Report 2005-132 23
srehcaeT
001
reP
srotartsinimdA
fo
rebmuN
7.26
7.16
6.34 6.35
6.15
5.79
5.38
4.98
School Year
of approximately 747,000 in the 2002–03 and 2003–04 school
years to 741,000 in the 2004–05 school year. Similarly, the
number of teachers fell from 36,910 to 35,921 in the same time
frame. The assistant superintendent also provided some possible
reasons for increases in administrator positions, including hiring
additional assistant principals to comply with special education
policy changes that resulted from a lawsuit against the district
and hiring additional administrators to manage small learning
communities that LAUSD introduced into some schools.
However, she was unable to provide supporting evidence to
link these enrollment and policy changes to the increase in the
administrator-to-teacher ratio.
lAuSD ACHieVeD COST SAVinGS bY eXPAnDinG
in-HOuSe leGAl SeRViCeS, buT iT DiD nOT fullY
DeVelOP PROPOSeD PeRfORMAnCe MeTRiCS
Distinct from the reorganizations we have already discussed,
LAUSD expanded its legal services staff in 2001 to improve the
quality of legal services it receives. It also proposed to evaluate its
LLAAUUSSDD eexxppaannddeedd iittss lleeggaall expansion through six sets of performance metrics. This expansion
sseerrvviicceess ssttaaffff iinn 22000011 ttoo was based on the board of education and the superintendent’s
iimmpprroovvee tthhee qquuaalliittyy ooff lleeggaall commitment to having LAUSD understand its legal rights and
sseerrvviicceess iitt rreecceeiivveess aanndd obligations so it might achieve the maximum benefit from the law
pprrooppoosseedd ttoo eevvaalluuaattee tthhee while avoiding unnecessary legal entanglements. Although it has
eexxppaannssiioonn tthhrroouugghh ssiixx sseettss achieved cost savings and other potential benefits, LAUSD did not
ooff ppeerrffoorrmmaannccee mmeettrriiccss.. fully develop the six performance metrics with which it proposed
to measure its legal expansion plan.
The expansion of legal Services in 2001 Produced Cost Savings
Shortly after it adopted the 2000 reorganization plan, the
board of education approved a separate plan in February
2001 to expand LAUSD’s in-house attorneys and legal support
staff. LAUSD created seven teams of attorneys, each providing
preventive counseling to different operating units such as the
Facilities Services, Business Services, and Special Education
divisions. The plan proposed adding 18 to 20 attorneys to the
staff of 12 attorneys it already employed. LAUSD continues to
retain some outside law firms to handle litigation and other
highly specialized services.
As indicated in Figure 8, LAUSD’s in-house and outside legal costs
have fallen by $3 million, from $25.3 million in fiscal year 2001–02
to $22.3 million in fiscal year 2004–05. Although LAUSD incurred
additional in-house costs such as salaries, benefits, supplies, and
travel as it hired more legal staff, its fees for outside legal services
decreased at a more rapid rate.
In addition to a decline in outside legal services costs, LAUSD
reported experiencing a decrease in settlement and judgment
costs over the same period.4 However, we cannot comment
on the extent of cost decreases because we could not verify that
the amounts LAUSD provided to us were accurate. Although
decreases in settlements and judgments were reported, the
extent to which the expansion of in-house legal staff has
contributed directly to the reduction in these costs is unknown.
4 These are either amounts LAUSD agrees to pay to settle cases or court-ordered amounts
resulting from judgments made against it.
2 California State Auditor Report 2005-132
fiGuRe
Annual Costs of in-House and Outside legal Services
Litigation and other outside expenses
$30 In-house expenses
25
20
15
10
5
0
2001–02 2002–03 2003–04 2004–05
Fiscal Year
Sources: Los Angeles Unified School District’s (LAUSD) financial reporting database, and
its Office of the General Counsel’s internal records of outside counsel expenses.
Note: This figure excludes bond-funded expenses, which annually average $11 million, that
LAUSD believes are best handled by outside legal counsel. This figure also excludes information
technology and other support services provided by outside contractors, as well as settlement
and judgment costs.
California State Auditor Report 2005-132 25
)snoilliM
ni(
serutidnepxE
25.3
24.2
19.8 23.1
15.4 22.3
12.8
12.8
10.3
9.5
8.8
5.5
According to LAUSD’s general counsel, based on the types of
claims filed and the district’s success in defending claims, he
believes there is a direct, if not measured, relationship between
the improved internal legal advice and the subsequent reduction
in cases filed and judgments levied. However, other factors
outside LAUSD’s control also contribute to annual settlement
and judgment costs, including the number and type of cases
filed against the district. Thus, isolating the effect of any one
factor is difficult.
lAuSD Did not fully Develop the Performance Metrics it
Proposed in the legal expansion Plan
The costs of legal services and of settlements and judgments
were only two of the six performance metrics that LAUSD
proposed to develop to measure the success of expanding legal
services. It proposed to measure these six performance metrics
to ensure that it is achieving the goals established in the plan,
and the board of education adopted the use of the proposed
metrics when it adopted the plan. As shown in Table 5, although
LAUSD has tracked most of the data for these metrics, it has not
fully developed any of them by setting quantifiable goals and
measuring itself against those goals.
TAble 5
Performance Metrics Proposed to Measure the
Results of the legal expansion in 2001
Metric is fully
Performance Metric Metric is Tracked Developed
Cost of outside legal services Yes No
Departmental use of outside legal services Yes No
Number of cases filed against the district Yes No*
Costs of settlements and judgments Yes No*
Use of in-house counsel and related staff Yes No
Timeliness of counsel responses No No
Source: Plan for Reorganization of Legal Services (legal expansion plan) submitted by the
Los Angeles Unified School District (LAUSD) to the LAUSD Board of Education in February 2001.
* Although these metrics were proposed in the legal expansion plan, as noted in the
previous section, we are unsure how LAUSD would fully develop them. Nevertheless, it
has not performed an analysis to determine whether these metrics are viable.
For instance, in measuring the cost of legal services, LAUSD’s
plan contemplated decreasing these costs, particularly outside
litigation, but recognized short-term costs may rise as it uses
more in-house counsel for preventive advice while it begins
to cut back on the use of outside legal counsel. Although
LAUSD anticipated this general trend in spending, it did not
set measurable performance benchmarks to evaluate whether
the trend was reasonable, such as a goal to decrease overall
legal costs by a certain percentage in a specific time frame. The
general counsel contended that his office sets such performance
26 California State Auditor Report 2005-132
goals when it develops annual budgets for outside legal costs.
Since December 2002 the Office of the General Counsel has been
asked to report quarterly to the board of education on actual
costs compared with budgeted costs for current and past fiscal
years, but the information it provided us does not demonstrate
that it uses this data to set future performance targets.
Another performance metric proposed by LAUSD was to measure
the use of in-house legal staff. For instance, the plan proposed
establishing legal budgets within individual operating units and
charging in-house legal costs against those budgets to prevent
the operating units from overusing services. According to the
general counsel’s chief of staff, this change was not implemented
due to resistance from operating unit managers and the belief
that restricting operating units to their legal budgets would
dissuade them from seeking preventive counseling.
Additionally, LAUSD did not track or develop its metric to measure
the timeliness of counsel responses. The chief of staff believes this
metric cannot be measured easily because the data needed for the
performance measure would consume too much time to track and
because comparisons among tasks often would be misleading.
In response to why the Office of the General Counsel did not
follow through on the metrics proposed in the plan, the chief of
staff indicated that he believes the board of education adopted
the concept of the plan and that minor plan modifications
do not require board approval. However, under the law, the
WWiitthhoouutt eessttaabblliisshhiinngg school district’s board of education is the policy-making body.
ggooaallss aanndd ppeerrffoorrmmaannccee When the board adopted the legal expansion plan, the plan
ttaarrggeettss,, LLAAUUSSDD llaacckkss became policy that LAUSD was then obligated to follow or seek
aann oobbjjeeccttiivvee wwaayy ttoo a change from the board. LAUSD occasionally has updated the
ddeetteerrmmiinnee wwhhiicchh ggooaallss ooff board of education on data that it tracks since it expanded its
tthhee lleeggaall eexxppaannssiioonn ppllaann legal staff, such as annual costs of legal services, settlement
iitt iiss mmeeeettiinngg aanndd wwhhiicchh costs, and judgment costs. Nevertheless, without establishing
oonneess iitt iiss nnoott.. such goals and targets, it lacks an objective way to determine
which goals it is meeting and which ones it is not, which will
aid in reevaluating its operations. The chief of staff stated that
LAUSD would develop additional performance metrics. These
metrics will include reinstating performance evaluations for
legal staff, and better ways to use data it tracks to manage its
legal resources. It also issued a survey recently to measure client
satisfaction with timeliness of assistance and other factors.
California State Auditor Report 2005-132 27
THe neW AVenueS fOR PARenT AnD COMMuniTY
ACCeSS CReATeD bY THe 2000 ReORGAniZATiOn,
THOuGH uneVAluATeD, APPeAR ineffeCTiVe fOR
THe MOST PART
The 2000 reorganization established advisory councils
intended to provide new ways for parents and community
members to communicate with district administrators, but
LAUSD has not ensured that they are functioning as intended,
and it has not measured their effectiveness. According to the
OOnnee ooff tthhee pprriimmaarryy reorganization plan, a primary purpose for creating local-level
ppuurrppoosseess ffoorr ccrreeaattiinngg districts in 2000 was to enable greater contribution from parents,
llooccaall--lleevveell ddiissttrriiccttss iinn students, teachers, administrators, classified employees, and the
22000000 wwaass ttoo eennaabbllee community at large toward increasing student achievement.
ggrreeaatteerr ccoonnttrriibbuuttiioonn The plan proposed a 19-member advisory council in each
ffrroomm ppaarreennttss,, ssttuuddeennttss,, local district consisting of parents, community members, and local
tteeaacchheerrss,, aaddmmiinniissttrraattoorrss,, district employees.
ccllaassssiififieedd eemmppllooyyeeeess,,
aanndd tthhee ccoommmmuunniittyy aatt These councils were intended to allow parents and community
llaarrggee ttoowwaarrdd iinnccrreeaassiinngg members to provide feedback on the development and review
ssttuuddeenntt aacchhiieevveemmeenntt.. of performance toward local district educational goals and plans.
The advisory councils also were to participate in reviewing the
performance of the local district superintendents. In addition,
the councils were to serve as a communication link
among the school communities, the local district superintendent,
and the board of education. The plan provided general guidelines
for the advisory councils, but decisions regarding the activities
each would be involved in were left up to the local district
superintendents and the advisory councils themselves. According
to one local district superintendent, there was no guidance from
the central office regarding what the advisory councils would do.
In addition to the advisory councils, each local district operates
committees for parents of economically disadvantaged students
and limited English-proficient students. According to the assistant
superintendent for specially funded and parent/community
programs, these committees meet monthly with their respective
local district superintendents to provide direct input into the
expenditures for parent and other activities related to their needs.
Select members of the advisory council and the two committees
at each local district participate on the Parent Collaborative.
Among other responsibilities, the purpose of the Parent
Collaborative is to bring together parent representatives from
the local districts and organizations to make recommendations
to meet the needs of the local schools and offer suggestions for
change and to implement LAUSD policy.
2 California State Auditor Report 2005-132
Although the 2000 reorganization plan created an advisory
council in each local district, only four of the eight local districts
currently have active advisory councils, and only two of them
appear to be functioning as the plan intended. For example,
OOnnllyy ffoouurr ooff tthhee eeiigghhtt a parent ombudsperson stated that one of these advisory
llooccaall ddiissttrriiccttss ccuurrrreennttllyy councils has created two parent organizations. One provides
hhaavvee aaccttiivvee aaddvviissoorryy training to parents during monthly meetings depending on
ccoouunncciillss,, aanndd oonnllyy ttwwoo their needs, while the other has school representatives who help
ooff tthheemm aappppeeaarr ttoo bbee develop the training for the monthly meetings of parent groups
ffuunnccttiioonniinngg aass tthhee ppllaann at the schools. The advisory councils at two other local districts
iinntteennddeedd.. are still operating, but they serve only to receive information
from district administrators. According to a local district
superintendent, the advisory council at her district has struggled
since the 2004 reorganization and is currently working to
redefine its role.
There are several reasons why the other advisory councils are no
longer operating. According to the current Parent Collaborative
chairperson, the advisory council in a fifth local district stopped
meeting because of the frequent turnover in the local district
superintendent position. Each new local district superintendent
brought a new culture to the advisory council and parents
became frustrated with the frequent changes and the inability
to make an impact. According to another local district
superintendent, a sixth advisory council disbanded after the
2004 reorganization because there was no guidance from the
central office on how to reorganize the advisory council within
the new district. However, he stated that the other parent groups
within the local district continued to meet and to provide a
forum for parent input. For the remaining two advisory councils,
the parent ombudspersons were unsure why the advisory
councils were no longer meeting.
LAUSD has not taken steps to measure the impact advisory
councils may have on access to district administrators
and the policy-making process. According to the assistant
superintendent, LAUSD has not conducted parent satisfaction
surveys since the late 1990s. Given the problems with
establishing and maintaining the advisory councils at each local
district, and the lack of evaluation of their effect, it is apparent
that the advisory councils are not serving the purpose that the
2000 reorganization plan intended.
California State Auditor Report 2005-132 29
ASSeSSMenTS Of THe 2000 ReORGAniZATiOn ReSulTS
AnD AuDiT ReCOMMenDATiOnS ARe liMiTeD
LAUSD has made some efforts to assess the impact of the 2000
reorganization but has not tracked its status in implementing
recommendations from our 2001 audit report. When the board
of education adopted the reorganization plan to create 11 local
WWhheenn tthhee bbooaarrdd ooff district offices, it required LAUSD to perform some follow-up
eedduuccaattiioonn aaddoopptteedd tthhee studies. For example, the 2000 plan established a corrective
22000000 rreeoorrggaanniizzaattiioonn ppllaann action team to monitor implementation of the reorganization
ttoo ccrreeaattee tthhee llooccaall ddiissttrriicctt and report any significant changes to the board of education.
oofffificceess,, iitt rreeqquuiirreedd LLAAUUSSDD The corrective action team submitted three progress reports
ttoo ppeerrffoorrmm ssoommee ffoollllooww-- to a board of education committee between June 2000 and
uupp ssttuuddiieess.. January 2001, but the executive administrator who led the team
(executive administrator) could only provide documentation
on the latter two reports. The team updated a committee of the
board of education on the number of budgeted central office
and local district positions, the anticipated legal expansion
plan and changes to other operating units and programs, and
other changes since the 2000 reorganization.
Additionally, in our 2001 audit we reported that the proposal
in the 2000 plan to move decision-making authority from the
central office to the newly formed local districts did not occur.
This shift was intended to allow local districts to tailor decisions
to address the needs of their smaller communities better, while
the central office’s role would change to providing technical
assistance to the local district offices. However, as we stated in
our earlier report, the local district offices had limited authority
over the use of their budgets, while the central office retained its
authority to develop instructional policy. Additionally, LAUSD
provided a decision matrix compiled by a team of local district
superintendents in 2001 to a committee of the board that
identified instructional responsibilities between the central and
local district offices. It also presented a decision matrix with a
breakdown of noninstructional responsibilities between central,
local district, and school levels to the same committee later that
year. Both documents indicated that the central office would
retain much of its decision-making authority.
The board of education also wanted the annual budget to include an
appendix on financial changes resulting from the reorganization.
However, we did not find an analysis of the net financial impact
from decreasing central office positions and creating local
district office positions in the fiscal year 2000–01 annual budget.
LAUSD’s deputy budget director did not provide us a response as
to why this analysis was not included. The board also required
30 California State Auditor Report 2005-132
LAUSD to reassess each district’s demographics one year after
the implementation to determine whether changes to the local
district boundaries were needed. According to the executive
administrator, LAUSD performs annual assessments of individual
school site boundaries rather than local district boundaries.
Therefore, it did not initiate these reviews in response to the
reorganization as the board of education requested.
LAUSD also has not adequately tracked its status on implementing
recommendations from the 2001 audit report. It addressed less
than half of the recommendations in its one-year response to the
audit. According to the executive administrator, she was initially
responsible for drafting a corrective action plan to address the
recommendations but was reassigned to another project; this
responsibility was not transferred to another executive manager.
We report on LAUSD’s status in implementing our 2001 audit
recommendations in Appendix A.
ReCOMMenDATiOnS
When LAUSD makes major changes in its organizational
structure with the intent of improving its operations, it should
do the following to measure the effectiveness of these changes:
• Consider ways to track the impact of these organizational
changes on such factors as staffing and cost.
• Develop performance metrics with goals and quantifiable
benchmarks to evaluate itself on its progress in achieving the
planned improvements.
If LAUSD decides to continue with the advisory councils, it should:
• Evaluate why the advisory councils have not met the
objectives set out in the 2000 reorganization plan.
• Develop more specific guidelines on what the advisory
councils should accomplish, define the local districts’ roles
and types of assistance they would offer, and develop a
mechanism for monitoring and oversight to ensure that the
advisory councils operate as intended. n
California State Auditor Report 2005-132 31
Blank page inserted for reproduction purposes only.
32 California State Auditor Report 2005-132
CHAPTer 2
The Los Angeles Unified School District
Has Made Progress but Still Needs to
Improve Its Processes for Evaluating
and Compensating Executive Managers
CHAPTeR SuMMARY
Our 2001 audit of the Los Angeles Unified School District
(LAUSD) found that it did not establish specific, easily
measurable performance standards for certain high-level
administrators, and the performance standards that did exist were
vague and open to subjective interpretation. Although we found
that performance measures for the superintendent are well defined
and measurable, LAUSD still has not established performance
benchmarks for executive managers or consistently maintained
documentation of past evaluations. In addition, a January 2006
review of LAUSD by a peer group of other school administrators,
which the LAUSD Board of Education (board of education) brought
in, found little evidence that staff were evaluated on their ability
to attain goals and benchmarks or faced consequences for failing to
meet benchmarks.
Our 2001 audit also found that LAUSD did not have written
procedures for determining salary levels for some positions
and that it did not always follow the written procedures it did
have in place. In addition, LAUSD could not provide sufficient
documentation supporting the salaries it set, and in some cases
salaries were determined based on outdated job descriptions.
Although LAUSD has made improvements since 2001, it
needs to do more. The Personnel Commission uses updated
job descriptions but still does not have written procedures for
determining salaries and has insufficient documentation to support
salary recommendations presented to it. In contrast, LAUSD has
addressed most of our previous concerns over its method of setting
salaries for top executives and for certificated managers.
As part of our current audit, we conducted a survey of six
large school districts nationwide and the second largest
school district in California to compare LAUSD’s salaries for
27 high-level administrator and executive positions. Based on
the four responses we received, LAUSD pays higher salaries for
California State Auditor Report 2005-132 33
more than half of these positions, but factors such as cost of
living, size of enrollment, and differences in scope and range of
responsibilities may justify the differences.
lAuSD SHOulD eSTAbliSH PeRfORMAnCe
benCHMARKS AnD MAinTAin PAST eVAluATiOnS
fOR iTS eXeCuTiVe MAnAGeRS
LAUSD may not be able to assess the performance of certain
executive managers effectively because it has not established
specific and measurable performance standards. Furthermore, it has
not maintained past evaluations for most of its executive managers.
Executive managers are the most senior employees of LAUSD and
are employed under contract. Examples include the chief operating
TThhee bbooaarrdd ooff eedduuccaattiioonn officer, chief facilities executive, and local district superintendents.
hhaass eessttaabblliisshheedd ssppeecciifificc,, The board of education has established specific, easily measurable
eeaassiillyy mmeeaassuurraabbllee ggooaallss goals for the superintendent, but the superintendent has not
ffoorr tthhee ssuuppeerriinntteennddeenntt,, replicated this practice with his local district superintendents,
bbuutt tthhee ssuuppeerriinntteennddeenntt and he does not perform written evaluations of other executive
hhaass nnoott rreepplliiccaatteedd tthhiiss managers that report to him. Further, the performance measures for
pprraaccttiiccee wwiitthh hhiiss llooccaall local district superintendents are not associated with measurable
ddiissttrriicctt ssuuppeerriinntteennddeennttss.. performance goals. Additionally, a peer group found little evidence
that district staff were evaluated explicitly on their ability to attain
specific goals and benchmarks.
Performance Measures for the Superintendent Are Well Defined
and based on Measurable Goals
The board of education and the superintendent established
measurable three-year goals for LAUSD to evaluate his performance
in 2004. The superintendent has nine goals related to improving
student outcomes and one goal related to developing facilities.
The remaining goal is to meet requirements established by a
federal consent decree that requires LAUSD to improve various
performance indicators for students with disabilities. Each goal
is based on statistical metrics that include a benchmark and an
objective measure of progress. For instance, one goal is to reduce
the gap between LAUSD’s mean Academic Performance Index (API)
score by 20 percent of the state API target of 800 in three years, or
approximately 7 percent annually. Another goal is to decrease the
achievement gap between Caucasian students and African American
and Hispanic students in English language arts and mathematics
by 3 percent, or an average of 1 percent per year. These are good
examples of specific and measurable goals for the superintendent
3 California State Auditor Report 2005-132
to achieve; we believe he could use them as a basis for establishing
goals for local district superintendents and other executives
responsible for improving student outcomes.
The superintendent reported LAUSD’s progress in meeting his goals
in September 2005. The report showed that he was meeting some
of his goals and falling behind on others. For example, the report
indicated that LAUSD met the API goal but did not meet its goal
for decreasing the achievement gap in almost all areas. These are
clear and quantifiable performance measures because they are based
on statistical data that can be measured and monitored easily. This
data makes the progress of the district clear, so the superintendent is
always aware of the status of the performance measures he is being
evaluated against. According to the board’s executive officer, the
board of education has not formally evaluated the superintendent’s
progress in meeting these goals because the three-year period has
not ended yet, but that informal evaluations take place regularly.
unlike the Superintendent, local District Superintendents are
not evaluated Against Quantifiable Goals
Despite local district superintendents’ key roles in improving
student performance, the superintendent’s evaluation of them is
not based on explicit performance benchmarks or metrics that
local district superintendents are expected to meet. As will be
discussed in the next section, we were able to review a completed
evaluation for only one of the eight local district
superintendents. This evaluation, which LAUSD
examples of factors in the local District
indicated is the standard form used, is a one-page
Superintendent evaluation
document with 13 performance factors with yes
• “Open court [a reading program] data are and no boxes to check. Most factors address a local
utilized by Local Superintendent, Directors, and district superintendent’s ability to improve student
principals to increase program implementation
achievement in the classroom. We noted that data-
and improve student outcomes.”
driven performance measures could be attached to
• “Math periodic assessment data are utilized by
Local Superintendent, Directors, and principals most of the performance factors. For example, several
to design appropriate staff development and factors call for the local district superintendent’s
improve student outcomes.”
actions to “improve student outcomes,” but they
lack benchmarks and fail to indicate how much
Source: Local district superintendent evaluation
improvement is expected or how to measure progress
form for the 2004–05 school year.
objectively. See the text box for examples of factors in
the local district superintendent’s evaluation.
Further, the superintendent has not extended LAUSD’s specific
goals and performance metrics—which are outlined in the
board of education’s goals for him—to quantify goals and
performance metrics for the local district superintendents. For
example, one of the superintendent’s performance goals is to
California State Auditor Report 2005-132 35
increase the percentage of English learner students, reclassified
as fluent English speakers, by 6 percent over the three-year
period, with an average increase of 2 percent per year. Similarly,
the superintendent evaluates whether the “Local District
Superintendent provides effective leadership to District’s
ELL [English Language Learner] and SELL [Standard English
Language Learner] instructional improvement efforts.” Although
the goal established for the superintendent is specific and
measurable, the evaluation of the local district superintendent
is subjective—asking for only a yes or no response—and lacks a
specific, measurable goal to evaluate if the individual provides
effective leadership in this area.
The superintendent indicated that his evaluations of subordinates
are not solely statistically driven. Instead, he also evaluates local
district superintendents based on their ability to lead; handle
emergencies; deal with the public and media; and to hire, train,
and develop those under their supervision, but stated he does not
prepare a written evaluation that deals directly with these factors.
He also stated that these evaluations are made over time, through
a series of meetings and conversations. He and the local district
superintendents frequently review data regarding the academic
progress of the district, local districts, and smaller subsets. However,
he stated that no metrics are set as goals for the local district
superintendents to meet, even though the district maintains
TThhee ssuuppeerriinntteennddeenntt ssttaatteedd extensive data on student test scores and other indicators of
tthhaatt nnoo mmeettrriiccss aarree sseett aass performance. Local district superintendents are held accountable
ggooaallss ffoorr tthhee llooccaall ddiissttrriicctt for their job performance with a primary focus on student
ssuuppeerriinntteennddeennttss ttoo mmeeeett,, achievement and the improvement of instruction. Although we
eevveenn tthhoouugghh tthhee ddiissttrriicctt agree that factors the superintendent describes and his interactions
mmaaiinnttaaiinnss eexxtteennssiivvee ddaattaa with the local district superintendents provide valuable insights
oonn ssttuuddeenntt tteesstt ssccoorreess into their performance, using measurable performance standards
aanndd ootthheerr iinnddiiccaattoorrss ooff could make the evaluations more meaningful and useful to hold
ppeerrffoorrmmaannccee.. them accountable for improving student achievement.
lAuSD Could not Provide Performance Measures or
evaluations for 25 of the 2 executive Managers We Requested
Of the 28 fiscal year 2004–05 evaluations for executives that we
requested, LAUSD was able to provide performance measures
only for the superintendent and evaluations for one local
district superintendent and the deputy chief executive for school
building planning. Performance evaluations can be useful tools
to measure and direct the progress of LAUSD’s efforts to improve
student outcomes. A national peer group that reviewed LAUSD
agrees that the district must establish specific performance
measures and evaluate employees against them to hold them
36 California State Auditor Report 2005-132
accountable. Further, the 2000 reorganization plan stated that the
superintendent would evaluate the local district superintendents
annually based on achievement of education goals, effective use
of delineated authority, responsiveness to schools’ needs, and
recommendations of field and central office staff. Given that
LAUSD has recognized the need to improve student performance,
defining performance measures and tracking them against
benchmarks—such as improvement in standardized test scores
and reduction of dropout rates for local district superintendents to
achieve—would provide an objective way to measure progress. In
addition, performance measures along with specific goals would
provide greater accountability for other managers whose areas of
responsibility affect student performance. Managers who oversee
internal operations also should have performance measures tied
to their attainment of LAUSD goals.
According to LAUSD administrators, some performance evaluations
were not available because the superintendent does not perform
written evaluations for some positions; others were unavailable
AAccccoorrddiinngg ttoo LLAAUUSSDD because the records could not be located or had been destroyed.
aaddmmiinniissttrraattoorrss,, ssoommee For example, we requested evaluations for various operating unit
ppeerrffoorrmmaannccee eevvaalluuaattiioonnss managers who report to the chief operating officer or the chief
wweerree nnoott aavvaaiillaabbllee bbeeccaauussee financial officer. Both executive managers were new to their
tthhee ssuuppeerriinntteennddeenntt ddooeess nnoott positions in fiscal year 2005–06, and neither could locate any
ppeerrffoorrmm wwrriitttteenn eevvaalluuaattiioonnss fiscal year 2004–05 performance evaluations performed by their
ffoorr ssoommee ppoossiittiioonnss,, aanndd predecessors. We also requested evaluations of several local district
ootthheerrss ccoouulldd nnoott bbee llooccaatteedd superintendents and other administrators who report to the
oorr hhaadd bbeeeenn ddeessttrrooyyeedd.. executive officer for educational services, but an LAUSD official told
us that the individual formerly holding that position had shredded
her files when she left the district. One local district superintendent
was able to provide us with her own evaluation because she had kept
a copy. The superintendent’s chief of staff said the superintendent
does not complete written evaluations for most senior staff, but
he does conduct ongoing evaluative conversations with them. She
also stated that several senior staff members have experienced
negative consequences due to a less than satisfactory performance
evaluation, including termination, demotion, and having their
contracts shortened or not renewed. However, without copies of the
evaluations to draw on, LAUSD may limit its ability to track and hold
executive managers accountable for their performance over time.
The Council of the Great City Schools Also found Accountability
lacking for executive and Administrative Manager Positions
The Council of the Great City Schools (schools council)
completed a review in January 2006 of LAUSD’s organization
and operations. Among its findings, the schools council
California State Auditor Report 2005-132 37
observed little evidence that staff at any level were evaluated
explicitly on their ability to attain goals and benchmarks or
TThhee sscchhoooollss ccoouunncciill faced consequences for failing to meet performance goals.
oobbsseerrvveedd lliittttllee eevviiddeennccee The schools council describes itself as a non-profit coalition
tthhaatt ssttaaffff aatt aannyy lleevveell of 66 of the nation’s largest urban school systems that has
wweerree eevvaalluuaatteedd eexxpplliicciittllyy conducted more than 100 instructional, management, and
oonn tthheeiirr aabbiilliittyy ttoo aattttaaiinn operational reviews in more than 30 large city school districts
ggooaallss aanndd bbeenncchhmmaarrkkss over the last several years. In October 2004 the school board
oorr ffaacceedd ccoonnsseeqquueenncceess and superintendent of LAUSD asked the schools council to
ffoorr ffaaiilliinngg ttoo mmeeeett review the district’s organization and operations and make
ppeerrffoorrmmaannccee ggooaallss.. recommendations for improvement.
In its report to LAUSD, the schools council indicated that
the effective operation of any organization, especially a large
urban school district, and the ability of the organization to
meet its mission requires clear goals, measurable indicators
of progress on goals, evaluation of efforts toward the goals,
and a mechanism for holding people accountable for the
attainment of these goals. The schools council recommended
that LAUSD improve the accountability of executive managers
by tying district goals directly to employee contracts and
revamping the evaluation process to ensure that they are
evaluated explicitly on the goals. In addition, it recommended
that a goal of controlling costs without compromising services
be included in the performance evaluations of executive
managers. The schools council also advised LAUSD to place
local district superintendents on performance contracts tied
to the attainment of academic goals and benchmarks of their
local districts. LAUSD has hired a consultant to help analyze
and implement the recommendations proposed in this review.
The consultant indicated to us that his efforts will address the
organizational and accountability concerns expressed in the
schools council’s review.
ClASSifieD SAlARieS PROPOSeD bY THe PeRSOnnel
COMMiSSiOn APPeAR SubJeCTiVe Due TO lACK Of
WRiTTen POliCY AnD inCOnSiSTenT DOCuMenTATiOn
The Personnel Commission does not have written procedures
for determining salary levels for classified administrative
positions. See the text box for examples of classified employees.
It used several methods to set salaries for the positions we
reviewed, and many of its files do not sufficiently document the
analysis that supports these salaries. We had similar concerns
in our 2001 audit. The Personnel Commission consists of a
three-member board that provides human resource services for
3 California State Auditor Report 2005-132
classified employees with staff who are supposed to perform
the analyses needed to support these decisions. The Personnel
Commission board members conduct public
meetings to approve salary recommendations
provided by its staff and to allow stakeholders
Classified employees
the opportunity to voice their opinions at these
These are employees whose positions do not meetings. However, the lack of comprehensive
require certification qualifications. Examples written procedures and insufficient documentation
include Information Technology, Finance, and
leaves the Personnel Commission vulnerable to
Facilities Services staff.
criticism that the process it uses to set salaries lacks
objectivity, thoroughness, and consistency. The
Personnel Commission is a public agency whose
special authority makes it mostly independent from the school
board, so it has a responsibility to make sure that its use of
public resources is reasonable and appropriate.
The Personnel Commission Does not Have Written Procedures
for Determining Classified Salaries
The Personnel Commission has only partly resolved our
concern about lack of written procedures for setting classified
administrator salaries, which we identified in our previous
audit. In 2001 we reported that the Personnel Commission used
internal alignment, salary surveys, employment consultants,
and consideration of market factors. (We describe these practices
in the Introduction.) At that time the deputy personnel director
asserted that all these practices were accepted in the personnel
profession; however, we noted that the Personnel Commission
had not put them in writing to ensure their consistent application.
The Personnel Commission has created written guidelines since
our 2001 audit, such as suggestions for conducting a salary survey.
However, according to its chief human resources specialist, who is
responsible for overseeing classified salary studies, these guidelines
serve only as a resource for staff and not as policy that staff must
follow because every salary study has different circumstances. We
also found that these guidelines are vague concerning methods
for staff to follow, unlike the Human Resources Division, which
has detailed procedures that describe the process for staff to
follow when developing salary recommendations. For instance,
the Personnel Commission’s guideline for conducting a salary
survey describes various sources that may be used to determine
comparable organizations to survey. However, this guideline
does not describe the information to collect, how to synthesize
California State Auditor Report 2005-132 39
it, or factors to consider when determining whether information
is from an organization comparable to LAUSD. Additionally,
although the guideline states in general terms the types of
organizations to survey, it does not give criteria for the minimum
or maximum number of organizations staff should survey.
The chief human resources specialist asserted that Personnel
Commission staff possess the proper education and training
on standard industry practices for determining salaries. She further
explained that multiple reputable sources on determining salaries
offer courses on such methods but that different organizations
may vary on which approaches to adopt as practice. We do not
question that staff are educated properly and qualified to conduct
salary studies; nor do we question the techniques they use. However,
it is prudent for the Personnel Commission to establish clear and
objective written procedures for setting salaries to ensure that its staff
apply these methods consistently, especially when several methods
exist. Also, as discussed in the next section, the commission’s files
lack documentation to demonstrate clearly how each salary-
setting decision was reached. Having established rules lends
further objectivity and transparency to the salary determination
process, which is essential for a public agency with a stewardship
responsibility over the use of public funds.
Most Salary-Setting Decisions for Classified Managers lack
Documentation to Justify Them
The concerns we raised in our 2001 audit regarding the
Personnel Commission’s lack of sufficient documentation to
support salary-setting decisions remain mostly unchanged.
For 11 of the 15 salary-setting decisions we reviewed for this
report, the Personnel Commission did not maintain sufficient
documentation to demonstrate how it determined the salaries
IItt iiss iimmppoorrttaanntt ttoo awarded. It is important to establish reasonable procedures,
eessttaabblliisshh rreeaassoonnaabbllee follow these procedures consistently, and document them
pprroocceedduurreess ffoorr sseettttiinngg adequately to limit the appearance of subjectivity.
ssaallaarriieess,, ffoollllooww tthheessee
pprroocceedduurreess ccoonnssiisstteennttllyy,, To evaluate the Personnel Commission’s process for determining
aanndd ddooccuummeenntt tthheemm classified administrative salaries, we reviewed the salary-setting
aaddeeqquuaatteellyy ttoo lliimmiitt tthhee decisions for 15 of the highest-paid positions filled during 2004
aappppeeaarraannccee ooff ssuubbjjeeccttiivviittyy.. and 2005. Table 6 describes the salary determination methods
used for these positions. The salary-setting decisions show a lower
average percentage of change than the sample of 20 salaries we
reviewed in 2001. The largest salary increase in the current review
is 10.2 percent, compared with a 66 percent increase in one of the
salary-setting decisions we reviewed in 2001.
0 California State Auditor Report 2005-132
California
State
Auditor
Report
2005-132
1
TAble 6
Methods used to Determine Salaries for 15 Classified Positions
Methods used in Salary Study
Percent up-to-Date Salary Salary new Steps Salary
Contracted Salary or Salary Change from Job Historical Survey Survey Market internal Added to Determination is
Position Position Range Prior Salary* Description Precedent Conducted used factors Alignment Range fully Documented
General counsel $228,375 No change †
Chief facilities executive 192,618–214,999 7.18%
Chief of staff, office of the general counsel 177,625 New position
Deputy chief financial officer 161,528–170,654 No change ‡
Executive director of charter schools 126,494–157,605 New position
Personnel director 123,401–150,692 7.64
Director of maintenance and operations 122,318–151,080 10.23
Director of school building planning 122,318–151,080 New position §
Deputy chief human resources officer 109,072–135,185 4.57
Deputy personnel director 109,072–135,185 7.20
Deputy director of maintenance and
operations (planning and standards) 101,842–126,742 8.94
Chief deputy director of environmental
health and safety 98,188–121,626 New position ll
Director of community outreach 95,787–118,664 8.73
Program and policy development advisor 95,787–118,664 New position
Director of information systems, facilities 93,908–116,341 (14.27)
Sources: Bureau of State Audits’ review of files from the Los Angeles Unified School District’s (LAUSD) Personnel Commission.
Note: We also reviewed the salary set for the special counsel to the board of education position, but, according to the chief human resources specialist, the LAUSD Board of Education
(board of education) negotiated this salary. Personnel Commission staff conducted a salary survey to determine whether the salary set by the board of education was appropriate.
* The percent change from prior salary is calculated from the high end of salary ranges.
† The general counsel position was moved from certificated service. The salary remained the same.
‡ A lower step was added to the position of deputy chief financial officer. The higher step of the range remained unchanged.
§ The director of school building planning position was reestablished with the salary range it would have been assigned had it never been abolished.
ll The chief deputy director of environmental health and safety was created to oversee the other deputy directors of environmental health and safety and a central business advisor
position. The salary is a 2.5 percent increase over the central business advisor, the highest position supervised.
The Personnel Commission used internal alignment, salary
surveys, market factors, and historical precedent when
determining salaries for the classified positions we reviewed. It
also added a salary step to an existing salary range in one case
we reviewed. We believe these methodologies are reasonable
if followed and documented sufficiently. However, we found
a range of documentation in the Personnel Commission’s files
we reviewed. Its lack of written procedures contributes to this
situation because it has no standard for the documentation and
analysis that staff should retain in the files.
Of 15 salary-setting decisions we reviewed, the files for only four
have appropriate documentation to justify the salaries provided.
These four decisions were simple salary studies for which staff
WWee rreevviieewweedd 1155 ssaallaarryy-- used either historical precedent or internal alignment, or added
sseettttiinngg ddeecciissiioonnss mmaaddee bbyy pay steps to an existing salary range. The documents provided
tthhee PPeerrssoonnnneell CCoommmmiissssiioonn clearly showed how staff derived the salaries awarded. For
aanndd ffoouunndd tthhaatt tthhee fifilleess ffoorr instance, the Personnel Commission set the salary for a recently
oonnllyy ffoouurr hhaavvee aapppprroopprriiaattee reestablished position that previously was abolished. It simply
ddooccuummeennttaattiioonn ttoo jjuussttiiffyy adjusted the position’s salary to the level that would have been
tthhee ssaallaarriieess pprroovviiddeedd.. in place had it not been abolished.
For 10 of the remaining 11 positions, Personnel Commission staff
conducted salary surveys of organizations with similar positions,
coupled with some combination of internal alignment and market
factor considerations. However, staff used only survey results to
justify the final salary recommendations for seven positions and
did not explain why they did not consider the survey results for
the remaining three positions. Additionally, for the seven positions
staff only used results reported by some organizations surveyed,
but they did not provide justification for why they selected these
organizations and not others. Personnel Commission staff aligned
the eleventh position to an existing LAUSD position, but did not
sufficiently document why it determined these two positions to
be comparable.
The chief human resources specialist explained that in some
instances her staff might determine that a position surveyed
is not comparable. However, she indicated that the Personnel
Commission does not have a written standard governing how
similar a position at another organization needs to be before
it can be used in a salary comparison. Rather, this decision is
left up to the staff person conducting the study. In that case we
would expect to find a comparison of the two job descriptions
and an analysis showing how the positions are different, such as
in job responsibilities and scope of work. However, none of the
salary study files contained such justifications.
2 California State Auditor Report 2005-132
For instance, the Personnel Commission conducted a salary
study for the chief facilities executive in 2006 that included
responses on 20 positions from organizations it surveyed. The
salary recommendation listed nine of the 20 surveyed positions
and noted that although these positions are compensated
at a higher rate, staff recommended a lower salary because
of LAUSD’s budget constraints and internal alignment
considerations. However, the salary study file does not contain
a justification for why staff considered only the nine positions
and did not consider the remaining 11. Further, the file lacks
an analysis of the internal alignment considerations that were
mentioned in staff’s recommendation. Without documentation
of this analysis, the Personnel Commission cannot
demonstrate that it used reasonable and objective methods to
determine salaries.
THe HuMAn ReSOuRCeS DiViSiOn’S PROCeDuReS
fOR SeTTinG nOneXeCuTiVe CeRTifiCATeD SAlARieS
GeneRAllY ARe Well DOCuMenTeD AnD fOllOW
WRiTTen POliCY
The Human Resources Division has clear and objective
written procedures for determining salaries for certificated
nonexecutive administrators, which it follows
consistently. See text box for example of
Certificated employees certificated employees. During a job study,
two specialists independently rate a position
These are employees whose positions require based on level of supervision and other factors,
a certification or credential. Examples include
and combine these ratings to determine
teachers, principals, assistant principals, and
local district superintendents. the appropriate salary range. The Human
Resources Division then forwards its salary
recommendation to the superintendent’s
Certificated Salary Council (salary council) for approval. We
describe these procedures in more detail in the Introduction.
Based on our review of the Human Resources Division’s
procedures for determining three certificated administrator
salaries, we determined that it has resolved the concerns we raised
in our prior audit. Our 2001 audit found that it sometimes relied
on old studies to set salaries, or did not sufficiently document
internal alignment when determining salaries. Our current
review showed that the Human Resources Division has taken
steps to address our concerns by relying on current studies to set
salaries. Additionally, its files are now well documented, and staff
follow written procedures for determining the proposed salary
levels, as shown in Table 7 on the following page.
California State Auditor Report 2005-132 3
TAble 7
Salaries Determined by the Human Resources Division for
Three nonexecutive level Certificated Positions
Method is fully Documented
Percent Change Job Study and based on Current and
Position Salary Range from Prior Salary* Performed Relevant information
Administrators, division of adult and
career education† $99,898–124,601 1.65%
Director, teacher certification programs 99,898–124,601 7.34
Coordinator, standards-based promotion 98,293–122,579 5.60
Sources: Bureau of State Audits’ review of files from the Los Angeles Unified School District’s Human Resources Division.
* The percent change from prior salary is calculated from the high end of salary ranges.
† There are two administrators; one oversees the Adult Education program and the other oversees the Career Education program.
In selecting our sample of nonexecutive level positions, we
originally selected a fourth salary decision that was made by the
superintendent or his staff, not the Human Resources Division as
we initially thought. The superintendent created the administrator
of instructional technology position to perform several duties,
including providing direction and leadership in integrating
technology into the classroom curriculum, and recommending
policies and programs to promote increased use of technology
in instruction. According to the executive officer of the Human
Resources Division (executive officer), no job study was performed
to establish the salary level for this classification. LAUSD also could
not locate records showing that the salary council approved it. The
executive officer indicates that the superintendent approved the
position and set the salary. This appears to be an isolated instance.
bASeD On THe liMiTeD DOCuMenTATiOn We fOunD,
THe SuPeRinTenDenT AnD THe bOARD Of eDuCATiOn
uSe ReASOnAble AnD COnSiSTenT MeTHODS TO SeT
eXeCuTiVe-leVel SAlARieS
The superintendent determines salaries for executive-level
certificated positions hired on employment contracts. The board of
education approves the superintendent’s salary recommendations
and determines salaries for executive-level positions that report
to it. The superintendent uses internal alignment or historical
precedent to set salaries, and the board of education relies on
internal alignment or salary studies conducted by the Personnel
Commission. The superintendent and the board of education do
not have written procedures for determining these salaries, nor did
California State Auditor Report 2005-132
they maintain detailed documentation to support salary levels set for
the 12 positions we reviewed. However, based on our interviews and
review of what limited documents exist, the superintendent and the
board appear to use reasonable practices consistently.
The superintendent used internal alignment to determine the salaries
for the 10 certificated executive-level positions we reviewed, as
indicated in Table 8. For example, he horizontally aligned the salaries
for the deputy superintendent, two chief instructional officers, and
two executive officers to each other because they report directly to the
superintendent and are directly responsible for the implementation
of instructional initiatives. Additionally, their salaries were aligned
vertically within LAUSD’s existing organizational structure between
the superintendent and the local district superintendents. In another
instance, the superintendent internally aligned the salaries of two
assistant superintendents to the salary that already had been set for
existing assistant superintendents.
TAble
Salary Determinations for 12 executive-level Positions
Salary Percent Change internal Alignment Method
Position Determined by Salary from Prior Salary Appears Reasonable
Chief operating officer* Superintendent $215,000 New position
Chief instructional officer—elementary Superintendent 165,000 New position
Chief instructional officer—secondary Superintendent 165,000 New position
Deputy superintendent Superintendent 165,000 (5.77%)
Executive officer, field operations Superintendent 165,000 New position
Executive officer, office of the superintendent Superintendent 165,000 (2.94)
Executive officer, human resources Superintendent 160,000 New position
Chief of staff Superintendent 150,000 (6.65)
Assistant superintendent—specially funded
and parent/community programs† Superintendent 123,697 (9.54)
Assistant superintendent—student
integration services† Superintendent 123,697 (9.54)
Director of educational policy Board of education 130,000 New position
Director of budget and financial policy Board of education 125,000 New position
Sources: Bureau of State Audits’ review of files from the Los Angeles Unified School District’s Human Resources Division.
* The chief operating officer position was changed from classified to certificated.
† These assistant superintendent positions were used to replace the associate superintendent for specially funded and parent/community
programs. The salary change indicated in the table reflects the change from the last salary of the associate superintendent position.
California State Auditor Report 2005-132 5
According to its executive officer, the board of education used
internal alignment for determining the salary of two policy
directors. It determined the incumbent for these positions
should possess the same knowledge and experience required of
branch directors, and the salaries were set at this level.
THe inCReASe in THe nuMbeR Of COnTRACT
MAnAGeMenT POSiTiOnS APPeARS JuSTifieD
The number of high-level executives and administrators that
LAUSD employs on a contract basis has increased significantly
since the 2000 reorganization, especially those who are classified
employees. Currently 74 classified and 32 certificated positions
at the highest level within the organizational structure are
under contract. While the California Education Code does not
specify any limits to the number of certificated positions that
LAUSD may employ as managers on contracts, this number has
remained fairly steady in the last five years.
LAUSD is on the merit system, which requires a school district
to hire and promote classified employees based on merit. Two
provisions of state law limit the number of classified managers
on employment contracts at a school district of LAUSD’s size to
six positions. The law also allows the school district to request
a waiver of this requirement from the State Board of Education
(state board). Additionally, the law limits these positions to
high-level managers with district-wide policy-making authority
or program administration responsibilities, or those who act as
a fiscal advisor to the superintendent. As shown in Table 9, the
state board has approved waivers of multiple positions for LAUSD
six times since 1994, granting it 68 classified contract managers,
for a total of 74 positions allowed. We are aware of only three
other school districts within California that received approval for
similar waivers. The school district closest in total to LAUSD has
seven such positions but has only 23,000 students.
Based on the information LAUSD provided in the waiver requests,
the reasons for these positions appear justified. For instance, 31 of
the 74 positions are located in the Facilities Services Division,
which is carrying out a $19.3 billion school construction and
modernization program as described in the Introduction. LAUSD
decided in 2002 to expand its Facilities Services Division to
manage this program in-house instead of employing management
consultants and contractors so it could reduce costs and improve
program management. Ten of the 74 positions are attorneys, most
6 California State Auditor Report 2005-132
of whom were hired as part of the district’s legal expansion plan
in 2001, which we discuss in Chapter 1. Comparing the cost
for staff to the use of private consultants and outside law firms,
it appears that LAUSD achieved savings in both facilities and
legal services. Most of the remaining positions are managers who
oversee various operations, such as financial, risk management,
and business services.
TAble 9
Classified Contract Management Positions
Positions Approved
Waiver or Statutory Requirement or Allowed
1994 waiver 5
2000 waiver 10*
2001 waiver 10
2002 waiver 24†
2005 waiver 12
2006 waiver 7
Positions allowed under the California Education Code 5
Position allowed by another California Education Code
section for facilities management 1
Total classified contract managers 7
Sources: Waiver requests that the Los Angeles Unified School District submitted to the
State Board of Education.
* The 2000 waiver includes five temporary positions in facilities management.
† The 2002 waiver includes conversion of the five temporary positions previously approved
in 2000 into permanent positions in addition to the 24 positions listed above.
In a 2005 response to the board of education’s questions, LAUSD
stated its waiver requests are needed because many of its second-
and third-level managers have the same level of policy-making
decisions and scope of responsibilities as higher-level directors in
smaller school districts, and they supervise larger numbers of staff.
It also reasoned in its most recent waiver request that employing
some classified managers on contracts allows LAUSD the flexibility
to quickly fill these key positions. Additionally, in its analysis of
the 2005 waiver, the California Department of Education indicated
that LAUSD’s larger size poses more administrative challenges on
operations than smaller school districts have, but that LAUSD
should decrease the number of contracted positions authorized
under waivers in the Facilities Services Division when most of
California State Auditor Report 2005-132 7
its facilities projects are complete. The California Department of
Education, which reviews the waivers before the state board decides
on them, has generally been supportive of LAUSD’s waiver requests.
MulTiPle fACTORS COnTRibuTe TO DiffeRenCeS
in SAlARieS PAiD bY lAuSD AnD OTHeR SCHOOl
DiSTRiCTS SuRVeYeD
We compared 27 high-level executive and administrative salaries
at LAUSD with salaries for comparable positions at four other
large school districts. LAUSD pays a higher salary than the
other school districts for more than half of these positions. We
considered an LAUSD position to have a higher salary if it was
more than 15 percent higher than the combined average salary of
the responding school districts, calculated by using the high-end
of the salary ranges. Contributing factors may include differences
in student enrollment in each school district, cost of living in the
areas, and differences in job duties and responsibilities.
Salary Comparisons Must Take into Account a number of factors
To compare the salaries of high-level LAUSD administrators to
those at other schools districts, we identified other school
districts that are comparable in size and organization. We sent
surveys to the six largest school districts in the country, and
the second largest school district in California. The out-of-state
school districts have similar organizational structures to LAUSD
with local level districts reporting to a central office.
We received responses from four of the school districts.
They are listed in Table 10. Enrollments differ significantly
among these school districts, ranging from 366,000 students
to 128,000 students. Three school districts we initially
surveyed did not submit responses to us. Officials from
the New York City Department of Education (with an
enrollment of 1,011,000 students) and Chicago Public Schools
(405,000 enrolled students) informed us that they would go
through major reorganizations in the 2006–07 school year
and many of the positions we surveyed will be affected. The
Clark County School District in Las Vegas (292,000 enrolled
students) chose not to submit a response.
California State Auditor Report 2005-132
TAble 10
los Angeles unified School District Compared to the
four School Districts That Provided Survey Responses
District enrollment* local level Offices Cost-of-living index†
los Angeles unified School District 727,000 local districts 15
Miami-Dade County Public Schools 366,000 6 regions 104‡
Broward County Public Schools 255,000 4 areas 104‡
Houston Independent School District 193,000 5 regions 95
San Diego City Schools 128,000 none 127
Sources: School districts’ responses to Bureau of State Audits’ surveys and various Web sites.
* Figures include only kindergarten through 12th grade enrollment.
† The cost-of-living index measures differences in the price of goods and services to determine standard of living and is based on
a nationwide average equal to 100. These cost-of-living indices are reported in the U.S. Census Bureau, Statistical Abstract of the
United States: 2001 Edition.
‡ The cost-of-living index listed for these two Florida school districts is for the West Palm Beach–Boca Raton metropolitan area.
In addition to differences in enrollment, cost-of-living indices
differ for the areas where these districts are located. As shown in
Table 10, LAUSD is in an area with a higher cost-of-living than
the other school districts that responded to our survey, which
would affect its salaries.
Additionally, the market from which a school district draws
candidates could be a factor. LAUSD’s Personnel Commission
staff surveys both private and public sector employees to
determine salaries for classified positions. The chief human
resources specialist asserted that this is done because market
competitors for classified managers and many technical staff
include municipalities and private sector entities rather than
school districts. She further asserted that aligning salaries solely
to other school districts would not attract the right candidates
with the appropriate competencies.
Another major factor in the amount of compensation is the
duties and responsibilities required for administrator positions.
For that reason, the major focus of our survey was to compare
positions in other school districts that were similar to each
other with respect to duties and responsibilities regardless of the
job titles used for these positions. The survey we administered
listed the title and a brief job description of 27 high-level
LAUSD administrator positions. We asked the surveyed school
districts to provide salary, job descriptions, and the number of
California State Auditor Report 2005-132 9
staff supervised for each position. Using the job descriptions,
we could compare the similarities in duties and responsibilities
and determine if variations could explain differences in
salaries. However, because the districts provided limited or
no information about the number of staff supervised for the
positions in our survey, we could not compare the number of
staff supervised by other districts’ high-level positions to the
number supervised by LAUSD’s high-level positions.
Lastly, we compared only salaries. We did not evaluate other
forms of compensation that positions at LAUSD and other
school districts may receive, such as bonuses, benefits, car
allowances, reimbursement for relocation expenses, and other
perks. The results of our survey comparison may be affected if
the total value of the compensation package for each sampled
position is taken into consideration.
lAuSD Salaries Are Higher Than Other School Districts for
More Than Half of the Positions Surveyed, but Several factors
Could Account for the Differences
For 15 of the 27 positions we surveyed, differences in salaries
between LAUSD and the four school districts that responded to
our survey range from 7 percent lower to 115 percent higher. As
we previously noted, district-wide factors such as enrollment and
DDiissttrriicctt--wwiiddee ffaaccttoorrss cost of living would affect salary levels. In addition, differences in
ssuucchh aass eennrroollllmmeenntt the scope and range of responsibilities may explain why LAUSD
aanndd ccoosstt ooff lliivviinngg,, iinn pays a higher salary for a particular position.
aaddddiittiioonn ttoo ddiiffffeerreenncceess
iinn tthhee ssccooppee aanndd rraannggee There appear to be obvious reasons for the salary differences in
ooff rreessppoonnssiibbiilliittiieess,, mmaayy some of these positions. For example, while the positions for chief
eexxppllaaiinn wwhhyy LLAAUUSSDD ppaayyss facilities executive, deputy chief executive of school building
aa hhiigghheerr ssaallaarryy ffoorr aa planning, and deputy chief executive of existing facilities generally
ppaarrttiiccuullaarr ppoossiittiioonn.. receive the highest salaries among comparable positions at the
other school districts, LAUSD’s effort to construct and modernize
schools is also the most aggressive, as Table 11 indicates. Salaries
for positions comparable to LAUSD’s facilities executives at these
other school districts appear to reflect their respective efforts in
this area, as San Diego City Schools pays the lowest while Broward
County and Miami-Dade County Public Schools generally pay
more than San Diego but less than LAUSD. Similarly, the LAUSD
chief information officer receives a higher salary than the districts
surveyed. However, the Information Technology Division has
increased staffing over the past several years because it is developing
and implementing new data systems, including a replacement of
LAUSD’s payroll and accounting systems. The general counsel
50 California State Auditor Report 2005-132
at LAUSD is also paid more than comparable positions in the
districts responding to the survey. This may be because the Office
of the General Counsel expanded its in-house legal staff in 2001 to
provide more preventive counseling, oversee legal responsibilities
that had been performed by outside law firms, and manage outside
legal contracts.
TAble 11
Comparison of facilities Programs at Various School Districts
number of new Schools number of existing Amount of funds Available
School District* to be Constructed Schools to be Modernized (in billions)
los Angeles unified School District 150 00† $19.3
Broward County Public Schools 56 382 3.4
Miami-Dade County Public Schools 47 256 3.3
San Diego City Schools 16 193 1.5
Sources: Los Angeles Unified School District (LAUSD) and survey responses.
* The Houston Independent School District did not provide responses to all our survey questions about its facilities projects.
† This figure is an estimate from LAUSD.
For some of the positions surveyed, LAUSD’s salaries were either
comparable to or lower than those of the four responding
districts. We considered a LAUSD salary comparable if it was
within approximately 15 percent of the combined average of the
other districts’ highest salary. For example, the survey results show
that the salary for the LAUSD superintendent is generally in line
with the salary of superintendents at other school districts.
The survey from the 2001 audit showed that the LAUSD
superintendent was the highest-paid among the six school
districts responding to our survey. At that time, LAUSD paid
its superintendent a salary of $250,000, which was 2 percent
to 67 percent more than the amount paid by other school
districts. Currently, the LAUSD superintendent receives a salary
of $256,250. According to the current survey, the LAUSD
superintendent’s salary is now from 16 percent less to 10 percent
more than the amount paid by the other school districts.
For the school districts surveyed, the LAUSD superintendent’s
salary was only higher than the Broward County Public Schools
superintendent’s salary. However, as we mentioned previously,
LAUSD’s superintendent may compare differently with the
California State Auditor Report 2005-132 51
superintendents at the other four school districts if total
compensation is taken into consideration. For five LAUSD
positions we surveyed, responding school districts either had
no comparable position (executive officer, educational services
and associate superintendent, extended day programs) or only
one comparable position (assistant superintendent, student
integration services; director of school fiscal services; and
business manager).
Appendix B shows the position titles and salary information
for the 27 high-level executive and administrative positions we
surveyed and the differences between LAUSD salaries and those
of other school districts.
ReCOMMenDATiOnS
To measure the effectiveness of key administrators directly
involved in affecting student performance, LAUSD should:
• Establish specific, measurable, and reasonable goals for these
administrators that are aligned with district-wide goals related
to student performance.
• Develop the goals in conjunction with its consultant’s efforts
to implement recommendations made by the Council of the
Great City Schools.
• Evaluate these administrators in writing based on their ability
to meet their goals and hold them accountable for their
performance.
• Ensure that it retains written evaluations of administrators for
a reasonable time period.
Similarly, to measure the effectiveness of key administrators who
oversee operating units, in conjunction with its consultant’s
efforts, LAUSD should establish specific, measurable, and
reasonable goals for these administrators and evaluate them
in writing on their ability to meet such goals. In addition, it
should retain the evaluations for a reasonable time period.
To avoid the appearance of subjectivity and lack of thoroughness
in setting salaries for classified administrators, the Personnel
Commission should:
52 California State Auditor Report 2005-132
• Establish written guidelines for setting salaries and ensure that
it consistently follows them for determining administrative
compensation.
• Maintain complete records of its salary determination process,
including what methods it followed and what information it
used to support its decisions.
LAUSD should maintain complete records to support salary
determinations for executive-level administrators to show that
these determinations are based on reasonable and objective criteria.
We conducted this review under the authority vested in the California State Auditor by
Section 8543 et seq. of the California Government Code and according to generally accepted
government auditing standards. We limited our review to those areas specified in the audit
scope section of this report.
Respectfully submitted,
ELAINE M. HOWLE
State Auditor
Date: September 14, 2006
Staff: John Baier, CPA, Audit Principal
Fae Li
Salvador Sanchez
Leonard Van Ryn, CISA
Benjamin W. Wolfgram
California State Auditor Report 2005-132 53
Blank page inserted for reproduction purposes only.
5 California State Auditor Report 2005-132
APPenDIx A
Los Angeles Unified School District’s
Status on Implementing Our 2001
Audit Recommendations
Table A shows the progress of the Los Angeles Unified School
District (LAUSD) in implementing recommendations we
made in our July 2001 report titled Los Angeles Unified School
District: It Has Made Some Progress in Its Reorganization but Has Not
Ensured That Every Salary Level It Awards Is Appropriate (2000-125).
LAUSD has fully implemented certain recommendations, but it
either has not implemented or only partly implemented most
of the remaining recommendations concerning performance
measurements and salary-setting procedures.
TAble A
implementation Status of 2001 Audit Recommendations
finding Recommendation Status of implementation
Organizational Structure
Local districts do not have the level of Los Angeles Unified School District (LAUSD) Fully implemented.
authority over financial resources or should periodically report to the LAUSD Board of
instructional programs as described in Education in open meetings on the extent of the
the reorganization plan. discretionary budgeted resources allocated to local
districts, and the extent to which local district
superintendents can have decision-making authority
over instructional matters.
LAUSD could not identify actual staffing LAUSD should continue its efforts to develop a Fully implemented.
cuts resulting from the reorganization system that provides an accurate accounting of the
in 2000. number of people it currently employs and allow it to
reconcile its budgeted positions to filled positions.
Performance Measures
Measures for the superintendent are in LAUSD should develop more well-defined Fully implemented.
some instances too vague to allow for an performance measures for its superintendent.
objective assessment of this position.
The performance measures for the local When it establishes measures to evaluate its local Partially implemented. Although LAUSD
district superintendents hold these district superintendents, LAUSD should address has established performance factors for
individuals accountable for student the current potential inconsistency between the local district superintendents that appear
achievement even though the central authority given to them and their accountability for consistent with their authority, it has not
office retains the authority to develop improving student achievement. developed metrics to evaluate and measure
instructional policies that would affect the local superintendents’ progress in
student achievement. achieving them.
LAUSD has yet to create adequate LAUSD should develop performance measures for Not implemented. In a January 2006 report,
measures to evaluate the job those administrators who are currently without them. a peer group found little evidence that
performance for many high-level district staff had been explicitly evaluated
administrators. on their ability to attain specific goals and
benchmarks.
continued on the next page
California State Auditor Report 2005-132 55
finding Recommendation Status of implementation
Salary-Setting Procedures
In some cases, LAUSD lacked guidance To avoid the appearance of subjectivity and lack of
when determining the compensation of thoroughness in setting salaries, LAUSD should do
certain high-level administrators and was the following:
unable to provide much documentation
detailing how it sets some of these salaries. • Establish written guidelines for setting salaries Partially implemented. The Personnel
and ensure that it consistently follows processes Commission has established written guidelines
for determining administrative compensation. on determining salaries for all high-level
(Personnel Commission only.) administrators, but they are not specific and
staff are not required to follow them.
• Maintain complete records of its salary Partially implemented. Although the Human
determination process, including what methods Resources Division’s records are complete,
it followed and what information it used to the Personnel Commission has not changed
support its recommendations. its method of record keeping since the
2001 audit.
Since the 2000 reorganization, LAUSD Create job descriptions for new positions and Partially implemented. The Personnel
has yet to update some job descriptions update job descriptions for existing positions when Commission uses updated job descriptions
and create job descriptions for a few duties change to ensure that administrators are when conducting salary studies. Although the
new positions. receiving salaries commensurate with their current Human Resources Division does not always
job responsibilities. maintain updated job descriptions, it relies on
other information, such as staff interviews, to
determine appropriate salary levels.
use of Consultants
LAUSD did not follow a competitive To ensure that it secures and receives the services Fully implemented.
process when obtaining the services of of the best available contractors and administrators,
a facilities consultant whose fees totaled LAUSD should advertise the availability of contracts
$477,250 over a one-year period. and positions widely and actively.
To determine the compensation for one LAUSD should require contractors to meet all Fully implemented.
high-level administrative position, LAUSD contract terms and submit all contract deliverables,
used an employment consultant who was not and retain these contract deliverables in its files.
independent of the salary-setting process.
When it uses an employment consultant to set Fully implemented.
salaries, LAUSD should refrain from basing the
consultant’s fees on the salary being determined.
Source: Bureau of State Audits’ interviews, document reviews, and analysis.
56 California State Auditor Report 2005-132
APPenDIx B
Salaries for 27 High-Level Positions
at Los Angeles Unified School District
Compared With Salaries at Other
Large School Districts
We surveyed seven large school districts from
throughout the United States to gather salary data
and job descriptions to compare with 27 positions
of the Los Angeles Unified School District (LAUSD). Table B on
the following pages is a compilation of the answers of the four
districts that responded.
For each of the 27 positions listed in Table B, we calculated the
percentage difference between the salaries paid by the other
school districts and the salary that LAUSD pays. When comparing
two salary ranges, we calculated the percentage difference of
the two high-end salaries and the percentage difference of the
two low-end salaries. We then bolded the lines containing those
positions that LAUSD pays more than 15 percent higher than
the average combined salaries of the responding school districts,
calculated at the high end of the salary range.
California State Auditor Report 2005-132 57
5
California
State
Auditor
Report
2005-132
TAble b
Comparison of High-level Salaries With four Other large School Districts
lAuSD San Diego Houston broward County Miami-Dade
Superintendent of schools—$256,250 Superintendent of schools—$258,750 Superintendent of schools—$278,100 Superintendent of schools—$233,950 Superintendent of schools—$305,000
Percent by which Los Angeles Unified School
District (LAUSD) pays more (or less) (1%) (8%) 10% (16%)
General counsel—22,375 General counsel—105,97–135,6 General counsel—19,50 General counsel—16,130 School board attorney—215,000
Percent by which LAUSD pays more (or less) 115 to 6 53 23 6
Chief operating officer—220,375 Chief administrative officer—191,75 Chief operations officer—15,100 no comparable position Deputy superintendent, business
operations—190,550
Percent by which LAUSD pays more (or less) 15 39 — 16
Chief facilities executive—195,700 Chief facilities officer— Senior project executive— Deputy superintendent, facilities and Chief facilities officer—165,903
101,1–129,207 121,31–197,51 construction management—137,510
Percent by which LAUSD pays more (or less) 93 to 51 61 to (1) 2 1
Chief information officer—195,700 executive director, information no comparable position* Chief information officer—153,571 executive officer, information
technology—91,513–117,061 technology—136,310
Percent by which LAUSD pays more (or less) 11 to 67 — 27
Chief financial officer—195,000–20,219 Chief financial officer— Chief financial officer—166,3 Chief financial officer—156,573 Chief financial officer—159,650
105,97–135,6
Percent by which LAUSD pays more (or less) to 51 17 to 23 25 to 30 22 to 2
Chief instructional officer† Deputy superintendent—191,475 Chief academic officer—180,900 Deputy superintendent, curriculum and Deputy superintendent, curriculum
(two positions)—169,125 instruction student support—145,320 instruction and school improvement—
185,000
Percent by which LAUSD pays more (or less) (12) (7) 16 (9)
Executive officer, educational services— No comparable position‡ No comparable position No comparable position No comparable position§
169,125
local district superintendent—161,56 Assistant superintendent— District superintendent—120,000 Area superintendent—15,919 Regional superintendent—
101,1–129,207 112,226–10,1
Percent by which LAUSD pays more (or less) 60 to 25 35 11 to 15
Chief human resources officer— Chief human resources officer— executive general manager, Associate superintendent, Human resources officer—9,0
1,111–179,52 101,1–129,207 human resources—132,20 human resources—133,377
Percent by which LAUSD pays more (or less) 2 to 39 9 to 36 to 35 6 to 2
California
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59
lAuSD San Diego Houston broward County Miami-Dade
Associate superintendent, extended day No comparable position No comparable position No comparable position No comparable positionll
programs—$142,961
Associate superintendent, executive director, special Assistant superintendent special executive director, student support Assistant superintendent, office of
special education—12,961 education—$96,365–122,936 education—$91,950 services and exceptional student special education, alternative outreach
education—$103,15 and psychological services—$109,263
Percent by which LAUSD pays more (or less) to 16% 55% 39% 31%
Deputy chief executive of school building Director, instructional facilities no comparable position executive director, facility facilities planning officer—122,670
planning—12,70–177,55 planning —7,090–111,796 management, planning and site
acquisition—106,02
Percent by which LAUSD pays more (or less) 6 to 59 — 35 to 67 16 to 5
Deputy chief executive of existing Deputy chief facilities officer— no comparable position no comparable position Maintenance officer—10,1
facilities—137,260–170,69 96,365–122,936
Percent by which LAUSD pays more (or less) 2 to 39 — — (2) to 22
Assistant superintendent, elementary No comparable position Regional superintendent— Executive director, core curriculum— Assistant superintendent, elementary
instruction and school support services— 90,913–147,293 109,011 instruction, curriculum, instruction and
129,325 school improvement—125,000
Percent by which LAUSD pays more (or less) — 42 to (12) 19 3
Assistant superintendent, instructional no comparable position Assistant superintendent, student executive director, educational Assistant superintendent, leadership
support services—129,325 support services—7,050 programs—97,611 development—13,12
Percent by which LAUSD pays more (or less) — 9 32 ()
Assistant superintendent, planning, Executive director, standards, assessment, Assistant superintendent, research and Associate superintendent, research, Chief of accountability and systemwide
assessment, and research—129,325 and accountability—96,365–122,936 evaluation—131,065 evaluation, assessment and performance—165,903
boundaries—118,428
Percent by which LAUSD pays more (or less) 34 to 5 (1) 9 (22)
Assistant superintendent, student health executive director, student services— no comparable position# Director, health education services— no comparable position**
and human services—129,325 96,365–122,936 75,66
Percent by which LAUSD pays more (or less) 3 to 5 — 71 —
Assistant superintendent, student No comparable position No comparable position Director, diversity and cultural outreach— No comparable position‡
integration services—129,325 93,022
Percent by which LAUSD pays more (or less) — — 39
Business manager—125,867–153,977 Chief business officer—101,184–129,207 No comparable position No comparable position No comparable position††
Percent by which LAUSD pays more (or less) 24 to 19 — — —
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lAuSD San Diego Houston broward County Miami-Dade
Director of environmental health and no comparable position no comparable position‡ Director of safety—$,765 inspections officer—$122,667
safety—$125,67–153,977
Percent by which LAUSD pays more (or less) — — to 2% 3 to 26%
Controller—123,127–153,390 Director, accounting operations— Controller—$132,762 no comparable position‡ Controller—109,763
$91,513–117,061
Percent by which LAUSD pays more (or less) 5 to 6% (7) to 16% — 12 to 0
Director of legislative affairs and Executive director, government No comparable position Director, officer of government Associate superintendent, office of
government relations—120,824 relations—96,365–122,936 relations—78,817 intergovernmental affairs—165,903
Percent by which LAUSD pays more (or less) 25 to (2) — 53 (27)
Director of communications and media Director, communications— Press secretary—151,981 Director, communications and Chief communications officer—165,903
relations—114,984–142,532 91,513–117,061 media relations—98,304
Percent by which LAUSD pays more (or less) 26 to 22 (24) to (6) 17 to 45 (31) to (14)
budget director—112,37–139,2 Director, budget operations— no comparable position Director, budget—101,57 Chief budget officer—115,000
91,513–117,061
Percent by which LAUSD pays more (or less) 23 to 19 — 11 to 37 (2) to 21
Director of school fiscal services— No comparable position No comparable position No comparable position‡ Executive director, school budgets—
106,018–131,335 102,934
Percent by which LAUSD pays more (or less) — — — 3 to (28)
Chief of police—101,412–126,102 Chief, police services—91,513–117,061 Chief of police—93,569 No comparable position Chief of police/district security—154,500
Percent by which LAUSD pays more (or less) 11 to 8 8 to 35 — (34) to (18)
* The school district reported a position that performed the duties of two LAUSD positions. After reviewing the job description, we determined the position more closely matched the duties of LAUSD’s chief
operating officer.
† LAUSD has two chief instructional officers—one for elementary education and another for secondary education.
‡ The school district provided a position, but after reviewing the job description we determined the position was not comparable.
§ The school district reported a position that performed the duties of two LAUSD positions. After reviewing the job description, we determined that the position more closely matched the duties of LAUSD’s
director of legislative affairs and government relations.
ll The school district indicated the duties were performed by several positions at various levels.
# The school district reported a position that performed the duties of two LAUSD positions. After reviewing the job description, we determined that the position more closely matched the duties of LAUSD’s
assistant superintendent, instructional support services.
** The school district reported a position that performed the duties of two LAUSD positions. After reviewing the job description, we determined that the position more closely matched the duties of LAUSD’s
associate superintendent, special education.
†† The school district reported a position that performed the duties of two LAUSD positions. After reviewing the job description, we determined that the position more closely matched the duties of LAUSD’s
chief financial officer.
Agency comments provided as text only.
Los Angeles Unified School District
Administrative Office
333 South Beaudry Avenue, 24th Floor
Los Angeles, California 90017
August 24, 2006
Elaine M. Howle, State Auditor*
Bureau of State Audits
555 Capitol Mall, Suite 300
Sacramento, CA 95814
Dear Ms. Howle:
Attached you will find the response of the Los Angeles Unified School District to your draft report,
Los Angeles Unified School District: It Has Increased Administrative Positions for Various Reasons
and Although Making Progress, Its Performance Evaluation and Salary-Setting Procedures for
Managers Still Need Improvement (2005-132). We hope that you find the response attentive to the
issues raised by your audit team.
As I am sure you recognize, management of an organization the size of Los Angeles Unified School
District is as much art as it is science, particularly when it comes to the challenge of managing
change and supervising the core team of executives whose talent and wisdom are called upon to
push aggressively the sort of reform agenda that I have been honored to lead for the past six years.
As I have discussed with your audit team, the principal focus of my administration has been on the
improvement of instruction for each of our pupils and the creation of one of the largest and most
successful school-building programs this nation has witnessed. In the course of that work, I have not set
a priority on whether the District remains loyal to the reorganization plan crafted six years prior. To the
contrary, it has been my expectation that this organization, large though it is, shift and adapt its structure
and methods whenever appropriate in service of our primary mission, the improvement of the delivery
of instruction to children. For that reason, it continues to be my belief that the most important measure
of our work is the level of improvement in the performance of our students and I continue to welcome
the suggestions and critique regarding how we can do that work better. To that end, I welcome the
recommendations of your audit team as suggestions for how I and my management team could better
document and measure the utility of the organizational changes we undertake while recognizing that it is
change itself that is constant, not our specific plans for engineering that change.
I thank your staff and commend them for their thoughtfulness and professionalism in the work that
they have done.
If you have any questions, or require further information, please contact Kevin S. Reed, General
Counsel, at 213.241.6601.
Sincerely,
(Signed by: Roy Romer)
Roy Romer, Superintendent
* California State Auditor’s comments begin on page 71.
California State Auditor Report 2005-132 61
Los Angeles Unified School District
Office of the General Counsel
333 S. Beaudry Avenue, 24th Floor
Los Angeles, California 90017
August 24, 2006
Elaine M. Howle, State Auditor
Bureau of State Audits
555 Capitol Mall, Suite 300
Sacramento, CA 95814
Dear Ms. Howle:
The Los Angeles Unified School District is pleased to respond to your draft report, Los Angeles
Unified School District: It Has Increased Administrative Positions for Various Reasons and Although
Making Progress, Its Performance Evaluation and Salary-Setting Procedures for Managers Still
Need Improvement (2005-132).
At the request of the Joint Legislative Audit Committee, the Bureau of State Audits (BSA) conducted
an audit of the District’s implementation of its 2000 and 2004 reorganization plans and the District’s
implementation of recommendations made in the BSA audit of 2001 entitled Los Angeles Unified
School District: It Has Made Some Progress in Its Reorganization but Has Not Ensured That Every
Salary Level It Awards Is Appropriate.
Listed below are the recommendations of the current BSA audit and the District’s responses.
When LAUSD makes major changes in its organizational structure with the intent of improving its
operations, it should do the following to measure the effectiveness of these changes:
Recommendation 1: LAUSD should consider ways to track the impact of these organizational
changes on such factors as staffing and cost.
LAUSD Response to Recommendation 1:
As noted in the report (page 9-10)*, LAUSD undertook the reorganization in 2000 with the
overarching goal of improving student academic achievement. While efficiency gains were desirable
and expected, they were not, in and of themselves, the over-arching reason for the reorganizations.
We appreciate the report’s prefatory acknowledgement that the District has made measurable
progress in the areas of student achievement and school construction, and we continue to believe
1
that these achievements are a more profound measure of the success of the District’s management
structure than an evaluation of the efficiency gains proposed in the 2000 and 2004 reorganization
plans. We acknowledge that the audit objectives stated on page 16 do not allow for a thorough
discussion of the District’s gains in the instructional arena because this was not something the
BSA was asked to consider by the Joint Legislative Audit Committee. However, given that the
2
LAUSD’s primary mission is that of instructing students, we persist in our believe that it would
have been appropriate to examine in more depth the instructional impacts that resulted from the
reorganization, not simply the impacts related to organizational structure and positions.
* Text refers to page numbers in an earlier draft version of the report.
62 California State Auditor Report 2005-132
Elaine Howle
August 24, 2006
Page 2
The District agrees that improved mechanisms are necessary for measuring the cost impacts
of organizational changes, and for developing metrics that will help gauge progress toward the
achievement of planned improvements. The ability to have such information available was one of the
main incentives for the District’s decision to embark on a $100 million Enterprise Resource Planning
Initiative that will greatly enhance the District’s ability to manage and monitor costs. The reporting
tools that will be available to the District as a result of the ERP system were not previously available to
the District, and impacted the ability to develop an effective performance monitoring system.
The District is currently working on the implementation of Business Tools for Schools (“BTS”), an
enterprise resource planning initiative that should give the District a comprehensive way of tracking and
analyzing a robust array of data from the District’s business, financial and human resources functions.
While full implementation of BTS is still a couple of years away, core elements of the financial module
are currently being activated. The District expects that this tool, when fully implemented, will greatly aid
in future analysis of how organizational changes impact staffing and cost.
To date, the District has been able to gather information relative to the impact of organizational
changes in aggregate form. The annual budgeting process of the District provides considerable
longitudinal data showing trends of expenditures by program, department, and project and has
been used in evaluating the cost-effectiveness of District initiatives, though the data available may
not always readily allow for discrete analysis of whether specific organizational changes have
brought about a quantifiable amount of cost savings. The District has historically avoided creating
redundant accounting systems or hiring dedicated staff that might be required for the purpose of
tracking trends specific to individual organizational changes, preferring to focus, instead, on the
more fundamental task of ensuring that resources are deployed in a manner that supports board
policy and superintendent initiatives. It is hoped that the full implementation of BTS will allow the
District to track the impact of organizational changes without adding to bureaucratic overhead.
We note that this recommendation is related to findings in the report that there has been an
increase in central administration since the 2000 reorganization plan and are concerned that this
3
finding could be misread as a conclusion that the District has somehow failed to faithfully implement
that reorganization plan, an interpretation with which the District would vigorously disagree. As the
report notes, the majority of increases in support services staff since the 2000 reorganization have
been in facilities and information services, both of which are in the midst of major, and long-overdue
expansion plans. Accordingly, while the proposed staff reductions may not have been achieved, it is
reasonable to assume that some of this was due to the necessity of augmenting staff to support two
of the most important initiatives in the District’s history: The Building Program and the Enterprise
Resource Planning Initiative.
It may be true, as the report states, that the 2000 reorganization plan did not account for these
3
staffing increases. In that case, a fair assessment should consider whether these staffing increases
were consistent with and supportive of the District’s strategic plan, and not simply whether they
were consistent with a 2000 reorganization that may not have accounted for them.
California State Auditor Report 2005-132 63
Elaine Howle
August 24, 2006
Page 3
It should also be noted that as the building program progresses, and as more schools continue to
be built, the number of school services staff, and in all likelihood, the cost associated with these
staff, compared to the number and costs of support services staff, should inevitably rise, a trend
that was originally envisioned by both the 2000 and 2004 reorganization plans.
Recommendation 2: LAUSD should develop performance metrics with goals and quantifiable
benchmarks to evaluate itself on its progress in achieving the planned improvements.
LAUSD Response to Recommendation 2:
The District understands this recommendation to be directed primarily at the BSA’s critique of the
implementation of the Office of General Counsel’s 2001 reorganization plan.
As noted in the audit report the reorganization of the LAUSD Office of General Counsel has
reduced the costs of providing quality legal services by at least $3 million since inception. The
report further notes that the performance metrics contained in the reorganization plan have not
been fully developed and recommends the setting and tracking of goals and benchmarks for each
of the original metrics against which performance would be reported. As explained below, the
Office of General Counsel did set what it intended to be at least the equivalent of goals for future
performance based on the metrics data it was collecting. It used as benchmarks a comparison to
prior year numbers on both quarterly and annual amounts.
The legal reorganization plan suggested several metrics against which performance could be
measured. With the exception of timeliness of counsel responses the OGC immediately began to
collect data concerning the metrics. (The quality of the collected data improved over time as the
reorganization became fully implemented and staff gained experience.) These data were assessed
by management of the OGC on an at least a monthly basis and each year, goals were set to do
more, spend less, and reduce cases and risk over the previous year. The “goal” was to do better
than last year and OGC progress on that account was reported to the Board in various regular
reports, including quarterly settlements and judgments reports and quarterly outside counsel
expenditure reports, as well as board committee presentations. The “benchmark” was a quarterly
assessment of how spending on outside counsel was going as compared to the previous year and,
over time, the past several years for each of the seven in-house legal teams as well as the OGC
as a whole. The OGC trend with respect to costs of legal services, case filings and judgments/
settlements was consistently downward over a five year period, while spending by the individual
teams varied.
It is apparent, based on the recommendations and suggestions of the auditors that the OGC
method lacked sufficient clarity as to goals and benchmarks, and reporting of these goals and
benchmarks to the board. In the future the goal in each metric category will be articulated as
either a dollar amount or a percentage reduction. Benchmarks will be projected and examined on
a quarterly basis as to progress towards the achievement of those goals, with reports to the board
at regular intervals. Finally, an attempt to measure client perception on the timeliness of counsel
responses has been incorporated into the revised OGC customer satisfaction survey, the results of
which are expected by the fourth quarter of 2006.
6 California State Auditor Report 2005-132
Elaine Howle
August 24, 2006
Page 4
If LAUSD decides to continue with the advisory councils, it should do the following:
Recommendation 3: LAUSD should evaluate why the advisory councils have not been
successful in meeting the objectives set out in its 2000 reorganization plan.
LAUSD Response to Recommendation 3:
The main intent of the creation of Parent/Community Advisory Councils (PCACs) was to have the
councils serve as conduits linking the Local Districts with the parents and community, review fiscal
plans, and give parents and communities an avenue to share their views and ideas on LAUSD
goals and effectiveness, though the PCACs are but one element of, and augmentation to, a
comprehensive system of parent involvement and decision-making within the District.
Although not all Local Districts continued with the exact PCAC defined configuration after the
reorganization of 2004, all Local District Superintendents do meet with parent and community
leaders as a regular Local District council. As the draft audit report acknowledges, all Local
Districts have functioning and legal Compensatory Education Advisory Committees (CEAC) and
English Learner Advisory Committees (ELAC) which meet at a minimum on a monthly basis with
the Local District Superintendents. These are the parent/community committees that deal with the
implementation of programs and services for students with the greatest needs in the District. These
groups provide direct input into the categorical expenditures for programs and activities at the Local
District level. Indeed, the Local District CEAC holds the Local District Superintendent responsible
for “ensuring that statutory council/committees receive the plan and budget prescribed… and obtain
approval” according the District’s Title I Parent Involvement Policy.
Since the reorganization of 2004, a new position of Parent Ombudsperson has been added to the
parent/community education component of each Local District. Although the parent/community
education component was identified in the 2000 reorganization plan, there was not a certificated
position on the team who could serve as a liaison between parents, teachers, principals, and
District administrators. Parents and community now have an additional resource for sharing views,
ideas, and concerns.
The District’s Parent Community Services Branch has requested a comprehensive evaluation of all
services, programs, committees, and councils involved with parents and communities, including the
PCACs. The study has been initiated this month by LAUSD’s Program Evaluation and Research
Branch. In addition, a Parent Involvement Survey developed by parents for parents has also been
conducted (with approximately 30,000 responses received) by the Parent Collaborative. The
objective of this survey was to gather information from parents to enhance the Parent Collaborative
work in updating the current District Parent Involvement Policy. Because the survey instrument was
developed by a parent committee, and not by the District, we do not anticipate that it will provide a
comprehensive critique of how well the District has historically provided support to parents. We do
anticipate, however, that the survey will provide the District insight, from the voices of parents, into
how best we can involve parents in their children’s education.
California State Auditor Report 2005-132 65
Elaine Howle
August 24, 2006
Page 5
Despite the fact that there currently exist many avenues for parents to give input into District
decisions and programs, it is the intent of the Assistant Superintendent of the Parent Community
Services Branch and the Executive Officer of Educational Services to examine why PCACs have
not been implemented in all local districts according to the plan, seek input from all stakeholders in
the Local Districts on the effectiveness of the existing PCACs, and develop stronger oversight from
the Parent Community Services Branch to all parent/community services, councils, committees,
and activities in the Local Districts. The ongoing progress in implementing the recommendations
made and results of the in-depth self-review will be reported according to the required timeline.
Recommendation 4: LAUSD should develop more specific guidelines on what it hopes for
the advisory councils to accomplish, define the local districts’ role and types of assistance
they would offer, and develop a mechanism for monitoring and oversight to ensure that the
advisory councils operate as intended.
LAUSD Response to Recommendation 4:
See response to Recommendation 3.
To measure the effectiveness of key administrators directly involved in affecting student
performance, LAUSD should do the following:
Recommendation 5: LAUSD should establish specific, measurable, and reasonable goals for
these administrators that are aligned with district-wide goals related to student performance.
LAUSD Response to Recommendation 5:
The Superintendent welcomed the inclusion, in his employment contract, of specific, measurable,
and reasonable goals, primarily related to student achievement and progress in the District’s
aggressive school building and repair program. He has thus far, however, refrained from including
specific numeric goals in his contracts with individual administrators. He has made this choice
out of his conviction that the leadership skills that are of fundamental importance to his top
management team are not easily quantifiable, coupled with a concern that a “management-by-the-
numbers” approach to accountability carries unacceptable risk that managers will be penalized
for sub-goal outcomes that were ultimately beyond the control of those managers and, more
importantly, might drive managers to suppress initiative that involves some leadership risk in pursuit
of the achievement of numeric benchmarks that might, in the long run, prove less important as a
measure of success. Just as test scores are not the sole measure of student achievement, the
meeting of numeric goals are but one measure of a manager’s skill. The Superintendent resisted
a two-dimensional yardstick for evaluating his management team for fear that it would be incapable
of capturing or valuing significant skill sets in that team in the areas of leadership, initiative,
collaboration (with colleagues, parents, students and teachers) and risk-taking.
Central to the Superintendent’s strategy to evaluate staff is the creation of a strong belief system,
or a culture, of shared values around instructional improvement that combines the work of senior
management, central and local district administrators and teachers into a coherent set of actions
and programs. Like most other belief systems it is not written but rather it is expressed regularly in
the words and actions of people in the system.
66 California State Auditor Report 2005-132
Elaine Howle
August 24, 2006
Page 6
The principle in the evaluation process is that the work of everyone in the system, from central
office administration to principals, to teachers and support staff in schools, is about providing high
quality instruction to students and increasing equity in achievement.
District staff is accountable to organize its time around work with specific schools based on its
assessment of its unique challenges. The instructional improvement process is not an end state in
any static sense, but a process of continuous instructional improvement unfolding over time. The
major emphasis is to demonstrate improvement in the core subject areas including reading, writing,
mathematics, science and social studies.
Senior management evaluations are conducted through several mechanisms. On-going dialogue/
inquiry related to the essential questions are conducted during twice-weekly senior staff meetings,
weekly Local District Superintendent meetings and senior management retreats. Through these
activities, staff discusses district wide goals and determines specific performance outcomes as they
relate to their individual responsibilities.
The Superintendent addresses each dimension of the evaluation process by analyzing student
achievement data, monitoring instructional philosophy, and conducting on-going evaluative
conversations with senior staff.
During the past four years, several senior staff members have been terminated and or experienced
negative consequences due to a less than satisfactory performance evaluation. The data gathered
indicates that one executive was terminated, ten senior management contracts were not renewed,
two senior managers were demoted and three senior managers received shortened contracts.
Still, the District does not fundamentally disagree with these recommendations, and this is the
reason that the board and the Superintendent requested that The Council of the Great City Schools
perform a comprehensive review of school district operations in FY 2006, to help identify gaps in our
methods for measuring performance. Plans are being formulated to address the issue of measuring
the effectiveness of key administrators who oversee operating units. As is discussed more thoroughly
in the District’s response to Recommendation 6, the District is currently in the process of developing
a set of performance contracts with senior managers that will incorporate comprehensive goals and
metrics in a balanced approach towards manager accountability. This work is being conducted in
response to the review conducted by The Council of the Great City Schools.
Recommendation 6: LAUSD should develop the goals in conjunction with its consultant’s
efforts to implement recommendations made by the Council of the Great City Schools review.
LAUSD Response to Recommendation 6:
As is discussed in Chapter 2 of the audit report, in 2004-05 the District commissioned The Council
of the Great City Schools to thoroughly review LAUSD. The Final Report was received in January
2006, embraced by the Board and the Superintendent, and implementation began immediately. An
accountability prototype has been developed spanning the Board to school administrators, and is
being implemented. As part of the prototype, a new form of private sector strength management
contract has been implemented for those eligible and has been signed by 36 senior managers, and
will eventually be signed by all senior managers. The detailed Job Descriptions and Accountability
Standards that will be embedded in these contracts are in final draft. The senior managers will be
California State Auditor Report 2005-132 67
Elaine Howle
August 24, 2006
Page 7
reviewed periodically against the Accountability Standards [quarterly at first], and oral and written
evaluations will be prepared and corrective actions taken as required. The written evaluations will
be signed by both the senior manager and the evaluator[s] and will be part of the senior manager’s
permanent file. Additionally, an Office of Accountability reporting to the Superintendent has been
established with very detailed objectives relating to cultural change, leadership, performance,
transformation and innovation. This office is currently preparing a new draft five year strategy
for LAUSD as well as the detailed job description, accountability standards, and proposed
management contract for the new Superintendent. The accountability standards will align with
the strategy and with senior managers’ accountability standards so there will be clear, consistent
sets of standards from Board to senior managers and then from senior managers to school
administrators with adjustments for certain rights of non-management-contract administrators.
Finally, a major restructuring of LAUSD led by Instruction is underway.
Recommendation 7: LAUSD should evaluate these administrators in writing based on their
ability to meet their goals and hold them accountable for their performance.
LAUSD Response to Recommendation 7:
See response to Recommendation 6.
Recommendation 8: LAUSD should ensure that it retains administrators’ written evaluations
for a reasonable time period.
LAUSD Response to Recommendation 8:
See response to Recommendation 6.
Recommendation 9: To measure the effectiveness of key administrators who oversee
operating units, in conjunction with its consultant’s efforts, LAUSD should establish
specific, measurable, and reasonable goals for these administrators and evaluate them in
writing on their ability to meet these goals. In addition, it should retain these evaluations for
a reasonable time period.
LAUSD Response to Recommendation 9:
See response to Recommendation 6.
To avoid the appearance of subjectivity and lack of thoroughness in setting salaries for
classified administrators, the Personnel Commission should do the following:
Recommendation 10: The Personnel Commission should establish written guidelines
for setting salaries and ensure that it consistently follows processes for determining
administrative compensation.
6 California State Auditor Report 2005-132
Elaine Howle
August 24, 2006
Page 8
Personnel Commission Response to Recommendation 10:
Staff follows common recognized processes in recommending salaries to the Personnel
Commission. Whole Job Ranking is used to evaluate complexity, difficulty, and importance of
classes. Market Pricing is also used and involves surveying current market rates to determine a
job’s value to an organization and ensures an organization’s competitiveness in the marketplace.
These methods are tempered by internal alignment factors when District hierarchical considerations
4
may preclude the use of higher salary rates. We believe this process is sound and cannot be
reduced to a simple formula.
Staff routinely uses numerous training guides and manuals and attends professional development
workshops on compensation practices. In addition, a reference guide on conducting salary surveys
is available for their use. All salary recommendations undergo a rigorous review process by
supervisory and management level Personnel Commission staff. Staff takes deliberate actions to
involve affected incumbents and their supervisors, and, where relevant, union representatives. All
recommendations are vetted in a council meeting, distributed to stakeholders and presented in a
public meeting to the Personnel Commissioners.
We accept the recommendation by the auditors that calls for increased written internal guidelines
used by staff to conduct salary surveys. The District will take action to improve and augment those
5
documents. Staff will enhance our guides and research best practices regarding salary setting
guidelines and policies to better reflect the complex processes staff follows in recommending
salaries to the Personnel Commission.
Recommendation 11: The Personnel Commission should maintain complete records of its
salary determination process, including what methods it followed and what information it
used to support its decisions.
Personnel Commission Response to Recommendation 11:
The public reports presented to the Personnel Commission clearly delineate the salary setting
5
processes. All reports clearly state the internal considerations and comparable external data that
were considered by staff in their recommendation. All reports are done in a consistent format.
We agree that record maintenance is important. Staff will review and enhance guidelines and
improve the description of the criteria staff uses when recommending a salary.
Staff is currently implementing a new database system designed to track and organize data to
enhance reporting capability. Staff will explore its capability to assist in the tracking and reporting
of survey methodology. In addition, staff is expecting the implementation of a document storage
system for the District (Filenet) to assist in this endeavor.
California State Auditor Report 2005-132 69
Elaine Howle
August 24, 2006
Page 9
Recommendation 12: LAUSD should maintain complete records to support salary
determinations for executive-level administrators to show that these determinations are
based on reasonable and objective criteria.
LAUSD Response to Recommendation 12:
The District understands that this recommendation, insofar as it relates to salary determinations for
classified executive-level administrators, has been addressed in the response to Recommendation 11.
To the extent this recommendation relates to salary determinations of executive-level certificated
administrators, the District notes that this recommendation is directed solely at the issue of
maintaining documentation of salary-setting determinations. It is the finding of the audit that “the
superintendent and board of education use reasonable and consistent methods to set certificated
executive-level salaries.” (Draft Report, p. 57.)
Certificated executive salaries are set infrequently and involve a small handful of people.
The majority of certificated executives of the district hold the ranks of Assistant or Associate
Superintendent and receive salaries determined by the District’s Master Salary Table established
by the Human Resources Division. Less than a dozen certificated senior executives of the District
have salaries set outside of that Table. Those salaries are recommended by the superintendent
6
and approved by the board of education in public meetings. Records of those meetings are
currently maintained by the District.
Nevertheless, the District will work with its Human Resources Division to establish record-keeping
protocols for each newly established certificated executive salary level.
The District appreciates the opportunity to provide a response to the draft report. Once the final
report is issued, the District will provide a progress report within sixty days. If you have any
questions, or require further information, please contact me at 213.241.6601.
Sincerely,
(Signed by: Kevin S. Reed)
Kevin S. Reed
General Counsel
70 California State Auditor Report 2005-132
CoMMenTS
California State Auditor’s Comments
on the Response From the
Los Angeles Unified School District
To provide clarity and perspective, we are commenting
on the Los Angeles Unified School District’s (LAUSD)
response to our audit report. The numbers below
correspond with the numbers we have placed in the margins
of LAUSD’s response.
1
We appreciate LAUSD’s belief that student achievement is a
more profound measure of success than evaluation of the gains
proposed in the reorganization plans. Nevertheless, as stated
on page 7, LAUSD intended to improve academic achievement
by assigning the local districts decision-making responsibility, by
reconstituting the central office to provide support services to
local districts, and by focusing district-wide efforts on teaching
students to read. Therefore, the importance of tracking the impact
of organizational changes on several factors including staffing and
costs is critical to measuring the success of the reorganizations.
2
While LAUSD may believe it would have been more appropriate
to examine the instructional impacts resulting from the
reorganizations, that was not within the scope of the audit that
the Joint Legislative Audit Committee requested.
3
We disagree with LAUSD’s concern. Our finding is clearly written
and includes a description on pages 17 and 18 of the expansion
plans for its Facilities Services Division and information
services units.
4
Contrary to LAUSD’s assertion, we do not recommend that the
salary setting process be reduced to a simple formula. As we
state on page 53, we recommend the Personnel Commission
establish written guidelines for setting salaries and ensure that
it consistently follows processes for determining administrative
compensation and maintains complete records of the support
for its salary determinations.
California State Auditor Report 2005-132 71
5
As stated on pages 38 through 43, we found the Personnel
Commission lacks comprehensive written procedures and
sufficient documentation to set salaries. Therefore, on page 53 we
recommend the Personnel Commission establish written guidelines
for setting salaries and ensure that it consistently follows
processes for determining administrative compensation. The
purpose of such written guidelines is to avoid the appearance of
subjectivity and lack of thoroughness in setting salaries.
6
We do not dispute that the salary recommendations made by the
superintendent were approved by LAUSD’s Board of Education
in public meetings and the meeting records are maintained.
However, as we state on page 53, LAUSD should maintain complete
records to support salary determinations for executive-level
administrators to show those determinations are based on
reasonable and objective criteria.
72 California State Auditor Report 2005-132
cc: Members of the Legislature
Office of the Lieutenant Governor
Milton Marks Commission on California State
Government Organization and Economy
Department of Finance
Attorney General
State Controller
State Treasurer
Legislative Analyst
Senate Office of Research
California Research Bureau
Capitol Press
California State Auditor Report 2005-132 73