Report 2000-125 Summary - July 2001

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

HIGHLIGHTS

Our review of the Los Angeles Unified School District's (LAUSD) recent reorganization and its executive and administrative compensation practices revealed that:

RESULTS IN BRIEF

Since it began implementing its reorganization in July 2000, the Los Angeles Unified School District (LAUSD) has continued to incorporate the changes outlined in its reorganization plan (plan) and to monitor its progress. A major goal of the plan, developed to address criticisms that LAUSD was failing to provide an adequate education to many of its students, is to move decision-making authority from LAUSD's central office to 11 newly formed local districts. These districts, the plan argued, will be better able to tailor decisions to address the needs of their smaller communities. This decentralization effort involves eliminating some positions from the central office and shifting to the local districts the control over the freed-up resources. Decentralization was also intended to shift to the local districts the autonomy to make most decisions regarding instruction.

LAUSD asserts that it has implemented the reductions in positions described in the plan and transferred the discretion over these freed-up resources from the central office to the local districts, but it has not yet demonstrated that it has made all these specific changes. Although the Los Angeles City Board of Education (Board of Education) continues to be the governing body of LAUSD, the plan describes the new role of the central office as a service provider and indicates substantial budgetary and instructional decision-making authority would shift to the local districts. However, the local districts have not been given the ability to make extensive decisions over the use of their budgets and the central office still retains the authority to develop instructional policies. Finally, LAUSD continues to implement its reading program, as the plan described.

With the reorganization, LAUSD faced the task of reassessing its current administrative positions, creating new administrative positions, and establishing the appropriate salaries for the positions. Our survey of school districts in California and the United States showed that the salaries for certain high-level LAUSD administrators vary widely from similar positions at other school districts. Because the New York City school district is the largest and has the highest cost of living of the districts we surveyed, we expected it to have the highest salaries. However, in comparison to out-of-state districts, LAUSD has the highest salaries for some positions. For LAUSD's local district administrative positions, which we compared to central office administrative positions of in-state districts, salaries were lower, at least in part because LAUSD's local district administrators had less authority and responsibility.

Since the reasons for these differences in pay were not always apparent in the responses to our survey, we looked at the process LAUSD followed in determining its compensation levels for 46 high-level administrative positions, such as the general superintendent and chief financial officer, to understand how and why it set salaries at these levels. Because of the reorganization, LAUSD needed to update the job descriptions for many positions; however, it has yet to do so in some instances, and two newly created positions have no job description at all. By determining salary levels without thorough documentation of each position's responsibilities, the process LAUSD followed raises doubts as to the appropriateness of the compensation levels awarded.

LAUSD also has not provided sufficient guidance for determining the compensation of certain high-level administrators and was unable to provide much documentation detailing how it set some of these salaries. Salaries of administrators are set by three different groups within LAUSD, depending on whether the administrator holds a certification and on how high the position is in the organizational structure of the district. One of these groups-the Human Resources Division-has established guidelines, while two of these groups-the Personnel Commission and high-level administrators-lack thorough written procedures for setting salary levels. All of the groups relied on compensation studies, salary surveys, historical precedent, or internal alignment to set administrators' salaries. The process of internal alignment involves identifying other positions with responsibilities similar to those of the position being studied and setting the salary accordingly, and it ensures salaries awarded fit within the current hierarchical structure of the district. Other methods LAUSD used to set salaries included relying on the recommendations of an employment consultant or determining an offer that would attract a candidate it deemed desirable.

Regardless of the method used to set salaries, LAUSD was not always able to provide documents demonstrating that it did a thorough analysis for each position before setting salaries. The lack of guidance for determining when and how to use each method for determining compensation levels and the limited recordkeeping give rise to the appearance of subjective decision making regarding certain administrative compensation levels.

It should be noted that the process of writing a job description and performing the appropriate salary studies can take a considerable amount of time, especially when numerous positions are being reassessed or created, as was the case during the reorganization. However, the personnel departments had only a few months to accomplish the hiring and identify job changes needed to implement the reorganization.

In addition to these issues when setting salaries, LAUSD has yet to create adequate measures to evaluate job performance for many high-level administrators, and its measures for the general superintendent are in some instances too vague to allow an objective assessment of the performance of this position. Moreover, the performance measures for the local district superintendents hold these individuals accountable for student achievement even though the central office retains the authority to develop instructional policies. This level of responsibility may not match the local district superintendents' level of authority.

RECOMMENDATIONS

To avoid raising public expectations that it believes are not realistic, LAUSD should ensure that there is a clear and complete convergence between what it states in public documents it will do and what it subsequently does. Regarding the reorganization plan, LAUSD should periodically report to the Board of Education in open meetings both the extent of discretionary budgeted resources allocated to local districts and the extent to which local district superintendents have decision-making authority over instructional matters.

When it establishes measures for evaluating the performance of its personnel, LAUSD should ensure that the level of authority is consistent with what the administrator is held accountable for. In particular, LAUSD should address the current potential inconsistency between the limited authority that local district superintendents can exercise over financial resources and lack of authority for developing instructional policies and their accountability for improving student achievement.

To avoid the appearance of subjectivity and lack of thoroughness in setting administrative salaries, LAUSD should do the following:

AGENCY COMMENTS

LAUSD generally finds that the recommendations contained in our report are reasonable. It does, however, believe we overstate its intentions regarding certain statements made in the plan, such as that it planned to review all positions to determine the effect of the reorganization. LAUSD also believes that we understate the level of local district superintendents' authority over financial resources and instruction, since the local districts do have authority over a greater amount of resources than before and control the implementation of instructional programs. LAUSD also contends that we are too conservative in both our salary comparisons, having limited them to other school districts, and our opinions over the adequacy of documentation provided to us in support of salary decisions.