Monday, April 7, 2014

Operational Efficiency #7: Ten Tentative Conclusions

Based on my previous posts, here are ten tentative conclusions that I've drawn:

1. It is important to think critically about operational efficiency, particularly the way the data is presented and the conclusions drawn from it. Board members and citizens have, in some cases, drawn erroneously conclusions based on a misunderstanding of what the data indicates.

2. Bigger schools do tend to do better in terms of operational costs than smaller schools, but there are a significant number of exceptions particularly as schools reach 300 students or if smaller schools used mixed-grade classrooms effectively.

3. We need to pay better attention to when new administrative help is needed to run a larger school. There are some elementary schools where an Assistant Principal is hired, and more that have School Administrative Managers. At whatever point we decide that this extra help is needed, it will cut against the operational efficiency of a school. Financially, it may make more sense to stop just before reaching this point. It would be helpful if there was greater clarity about when the decision to add more school administrative help occurs and on what basis. I think this is a good reason that operational efficiency is more mixed between 300-student schools and 400+-student schools.

4. If a school has at least 300 students, the number of exceptions to (2) grow a great deal. The likely reason is that if a school has 300+ students, then it likely has a sufficient number to fill two classes in every grade in a sustainable way. Nevertheless, the cost of having 300 person schools is that class sizes will sometimes be lower and sometimes be higher than we might prefer, and having these types of schools likely means that the district shouldn't respond unless the class sizes are grossly out of line.

5. If a school has fewer than 300 students, then it probably makes the most sense financially (a) to share some administrative and support positions with other smaller schools and (b) to have mixed-grade classrooms (with appropriate training and support for conducting those classes well). If mixed-grade schools are unacceptable for academic reasons, then that is a significant mark against having schools with fewer than 300 students.

6. We should control for the use of special education and at-risk funds. The "total cost to operate" a school can be useful, but it is seriously and egregiously misleading when it is compared to the per student general education allocation. Furthermore, the use of special education and at-risk funds is largely a function of board and administrative decisions (e.g., the location of Hoover's autism special education classes), and it is deceptive to compare the overall operational costs at such schools with schools that need few resources in those areas. There are various ways to control for these costs, as I discussed previously, and we should pay attention to how its done. We also need to make it clear to the administration and the board that this needs to happen when it's not done.

7. We need to be skeptical of the ability of new schools to offer a savings, even over some of our least efficient schools, at least in the first five years of the school's existence. Sometimes the total cost per child information has been used to make it seem as if they do better than they do. But that has been because of a low proportion of special education and at-risk funding at the school.

8. The $500K figure for opening a new school is not the amount that would be saved by closing a school. That figure depends on the relative operational cost of a school and other factors. The $500K figure is useful because it tells us that we need to prepare for our newer, likely to be inefficient, schools.

9. The operational efficiency of a school depends on much more than simply its size. The demographics, income levels, administrative decisions, and so forth play a much greater role than is often presented to the public.

10. Before proposing the closure of a school on operational efficiency grounds, we need to consider ways to have it become efficient (which doesn't just mean expanding it.).

Prior Posts in the Series:

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