Honolulu Advertiser

Second Opinion

by Cliff Slater

March 17, 2003

Hawai’i education: Here’s the answer

With fortuitous timing for Hawai’i’s legislators, Professor William G. Ouchi (one of Hawai’i’s own) and his colleagues at UCLA’s Anderson School of Management have published the first ever comparative study [i] of the management practices of large school districts.

For the purpose of comparing centralized and decentralized districts, the authors chose three of each. The three centralized school districts chosen were, Los Angeles, New York and Chicago. The three decentralized districts selected were Seattle, Houston and Edmonton, Canada, which have recently changed to the type of decentralized plan that was first implemented in Edmonton in 1977.

The study essentially first determined how centralized each district was based on: (1) the relative number of employees directly controlled by the central office (many of whom may work in schools but not for the principal) [ii] ; (2) the percent of the school’s budget that is controlled by the school principal; and (3) what share of budgets reach the classroom.

Each decentralized school makes its own decisions of who to hire, how many part-time or full-time staff, which books and materials to purchase, how much to spend on electricity and computers, and how much of the budget to allocate to teacher training.

The small central office staff takes advantage of economies of scale only where it is efficient, such as handling insurance, payroll, and information technology. In addition, it monitors and audits the financial and educational results for the individual schools. Reflecting this greater local discretion, the central office also provides extensive budget training to school staff and has teams of experts available to answer questions. [iii]

The decentralized districts monitor the schools by using an “exceptions” approach, calibrating the degree of scrutiny to the past performance of a school, intervening only when they spot problems from financial and management reports.

The decentralized districts have adopted Weighted Student Funding (WSF) which provides each principal with funding arrived at by calculating, for each student, an amount that is the basic per-student allocation adjusted plus any state and federal funding available for gifted students, emotionally disabled or autistic students, poor students, and non-native English speakers.

That funding follows each student to the school they choose since these districts have all adopted a policy allowing students to attend any public school in the district.

Here are the effects of decentralization:

They found that while the school principals in centralized districts only control 10% of their budgets, those in the decentralized districts control 75%. In fact, Edmonton’s principals control 92% of their budgets. [iv]

And because each principal in these schools is responsible for, and has authority over, most of their budget, there are few excuses they can make for failures of student performance.

In Seattle, Houston, and Edmonton, the authors said they rarely met a principal who did not know the details of student achievement in every classroom, while in New York City, Los Angeles, and Chicago, they rarely did. Nor did they know how much money was in their budgets, while in the three decentralized districts; they knew it down to the last dollar. [v]

They found that decentralized districts put more money in classrooms. For example, Los Angeles District spends only 45% of its resources in the classroom, while Edmonton, Canada, had 60.5%. Thus, if Los Angeles were as efficient as Edmonton, it would have an additional $2,200 per student annually. [vi]

Principals are easy to recruit in decentralized districts. In the centralized system principals are held responsible for student outcomes, yet they have no control over the staffing or budgets of their schools, without which they cannot take the steps that will produce improvement. Thus, principals positions are much sought after in Edmonton, Seattle, and Houston whereas recruitment has become a problem in centralized districts. [vii]

This study found superior performance for all students, particularly minority ones, in the decentralized schools.

The authors concluded that they were able to “clearly and dramatically to establish that decentralized systems give principals greater control over their resources and that these systems drive more personnel and financial resources down to schools and classrooms … Most important of all, our results suggest that a properly organized school district can produce superior educational results for children, including those of low-income, minority homes.” [viii]

Hawai'i can do this.

It is a system popular with the very strong teachers’ unions of Edmonton and Seattle, as it is with the “weak” unions in Houston since the decentralized districts do not create a punitive environment for teachers.

Read the study. The lesson it offers is that once Hawai’i’s leaders recognize that there is nothing wrong with our students or our teachers, but that it is DOE management that needs reform, our schools can begin to be ones of which we can, once again, be proud.

Cliff Slater is a regular columnist whose footnoted columns are at www.lava.net/cslater


[i] There are two papers written about the study, which will be referred to in the footnotes as Organization and Impact, these being the first significant words in each title.

William G. Ouchi, Bruce S. Cooper, Lydia G. Segal, Tim DeRoche, Carolyn Brown, and Elizabeth Galvin. The Organization of Primary and Secondary School Systems. UCLA Anderson School of Management. 2003.

William G. Ouchi, Bruce S. Cooper, and Lydia G. Segal. The Impact of Organization on the Performance of Nine School Systems: Lessons for California. California Policy Options. 2003.

[ii] “We define a central office employee as any worker who reports to a central office administrator (rather than a principal) and is on the central office payroll rather than on the payroll of a school.  For example, in many districts, custodians and food service employees are paid out of central office budgets rather than school budgets and thus report to the central office. One might argue that our measure overstates the case, because most of these central office employees work every day at schools. However, it is apparent from our interviews that if principals had the money rather than the formulaic number of people sent to their school, they would use the money in different ways than those provided for by the central office.”  Organization. P. 35.

In particular, some districts, most notably the New York City Board of Education, have on their payroll large numbers of credentialed teachers who perform administrative tasks. Organization. P. 42.

[iii] With the exception of Seattle, the WSF districts also delegate to principals responsibility for the maintenance of school buildings, which ERF districts do not.  In Edmonton, for example, principals can hire outside contractors or central school workers to paint, make repairs, and renovate. Reflecting this greater local discretion, the WSF districts (other than Seattle), provide extensive budget training to school staff and have teams of experts available to answer questions. Organization. P. 44.

[iv] Table 2 shows that the average school in [centralized] districts controls only 10.7% of their own budgets, while the figure for [decentralized] districts is 76.5%. Impact. P.13.

Edmonton principals control nearly 92% of the district’s budget.  Edmonton has in place one of the best systems in North America for selecting and training new Assistant Principals, and another, rigorous program for selecting and training new principals. Impact. 20.

… teachers there told us that they were able to make adjustments quickly in adding reading coaches, math tutors, or re-arranging schedules, because they didn’t have to go “downtown” for approval.  They only needed to ask their principal. Impact. P. 13.

Principals are free to decide how to apportion these funds between credentialed teachers, paraprofessionals, clerical staff, materials, utilities, building maintenance, and so on. The result is that principals in these districts consult with their teachers on budget priorities, make local decisions about how to staff the school, and also decide at each school how much to spend on new painting, carpets, and computers. These consultations typically occur during the budget planning cycle each year, as well as during the school year as adjustments become appropriate.  In [centralized] districts, most of these decisions are made at the central office. Organization. Pp. 27-8.

In the [decentralized districts] for other matters, such as whether to have more credentialed teachers or more teachers’ aides, what professional development to offer to teachers, and what books to use, schools are the independent decision-makers.  Until very recently, no school districts in the U.S. used the [decentralized] approach, although it has for fifty years been the dominant form among U.S. companies, having outperformed the [centralized organization] that it replaced…. By centralizing that which makes compelling sense and decentralizing everything else. Impact. P. 11.

[v] Organization. P. 56.

[vi]   Organization. P.  38.

[vii] Impact. P. 26.

[viii] Organization. Pp.  65-6