SMITHFIELD – The Johnston County Public School Board received a copy of a 46 page Wellness Audit Monday night during a special called online budget meeting. Dr. Don Martin and Mr. Kerry Crutchfield presented the findings which provided some details on how Johnston County Schools ended up millions of dollars short this fiscal year. The report did recommend adding one Central Office cabinet position, eliminating 15 jobs, and also contracting out a number of services now performed by school system employees including some drivers ed, nutrition, custodial, and printing jobs.
Dr. Martin said 25 interviews were conducted with district leaders including interim superintendent Dr. Benjamin Williams, Deputy Superintendent Dr. Paula Coats, three Chiefs, six officers and fourteen executive directors.
The audit reviewed financial records beginning with the 2016-17 fiscal year to present day. The report said an increase in Exceptional Children (EC) program costs significantly impacted budgetary shortfalls along with funds being transferred to charter schools for eligible students transferring to those schools.
The audit showed a total of $1,786,529 was transferred to charter schools in Johnston County during the 2016-17 school year, $1,912,994 during 2017-18 and $2,949,747 in 2018-19. This year that amount is projected to be $3,359,448.
In 2016-17, Johnston County Schools used $9,770,864 in local funds from County Commissioners to pay for teacher supplements. That amount increased to $14,287.659 in 2017-18 and $15,696,883 in 2018-19. At the same time local matching retirement and health insurance costs have climbed each year from $6,152,964 in 2016-17 to $6,911,230 in 2017-18 and $7,831,878 in 2018-19. Martin said while the state supposedly increases allotment rates to match benefit cost increases it has been his experience the funding increases never cover the full costs of the increases.
Dr. Martin said JCPS have been able to increase their fund balance this year due to the unfortunate closing of schools because of COVID-19.
Exceptional Children Costs
The auditor recommended JCPS reduce the student population needing Exceptional Children (EC) services to potentially saves millions of dollars each year. Currently, over 16% of the total student population needs EC services, but the state caps the funding at no more than 12.75% of the total student population. In Johnston County, about 1,200 students receive EC services over the 12.75% cap but the school system cannot draw state funding to pay for those services, Dr. Martin said in his report.
The report suggested JCPS employ instead of contracting out several expensive categories of EC services including speech and psychology services. Martin said there are “too many high-paid licensed staff paid from the state (EC) dollar allotment.” The findings recommended adjusting EC pre-kindergarten screening to reduce newly-identified exceptional children headcounts.
By implementing a Multi-Tiered Support System (MTSS), which should reduce EC headcounts, “the program needs to be less costly in terms of central office positions,” Martin said in his report. He also recommended paying more high-salaried licensed EC staff from state position allotments instead of using local county dollars, saving $1.4 million per year.
Overtime
As of mid-April, 2020, JCPS had paid $1,020,000 in overtime to employees. By June 30, 2020 that figure is on track to be at $1,500,000. Most of the overtime was being paid to employees who serve dual roles such as custodians/child nutrition workers, bus drivers/child nutrition workers, and teacher assistants/bus drivers. Dr. Martin said he is no legal expert but he did recommended consulting with a knowledgeable attorney to find ways to save on overtime pay.
He also recommended training supervisors to find ways to reduce overtime compensation costs. The consultant recommended implementing a “duty-free time” of at least 30 minutes between the end of one role and the beginning of the other role for dual role employees. “Such time would not be considered time worked and therefore not compensable time.” The 30 minute break would save approximately $2,600 per year per employee based on a 8.5 hour workday.
“Many classified employees with only a single job role have become accustomed to receiving time-and-a-half pay for overtime worked”, Dr. Martin said. “Since the Fair Labor Standards Act allows JCPS to compensate overtime as compensatory time off if employees are notified in advance of the intent to do so, investigate eligibility to switch to providing compensatory time off.”
The report also recommended eliminating as many dual role jobs as possible, creating as many 6+ hour per day bus routes as possible, exploring contracting for janitorial services, managing cafeteria labor hours, and generating additional Child Nutrition funds to increase hourly pay rates for workers.
Local Supplements
JCPS provides annual bonuses to licensed employees but the formula and payment method have drawbacks. The audit recommended switching from a percentage-generated amount to a flat rate supplement increase. Additionally, by making the supplement payment monthly instead of yearly it could also save an additional $100,000 annually.
Child Nutrition
The audit found the Child Nutrition Program had insufficient cash reserves which creates a lack of cash flow each summer requiring a loan from the General Fund. The program also lacks funds to replace aging cafeteria equipment and other assets.
The report suggested a one-time infusion of cash to replace aging assets using state Restart Schools funding. Dr. Martin also recommended JCPS contract for Child Nutrition management, while keeping all school-based nutrition staff as JCPS employees. “Several other districts in N.C. have successfully partnered with contractors to enhance profitability…”
Driver Ed Training
The audit found JCPS Driver Training hires hourly instructors at $25 or $30 per hour which accounts for nearly all of the state-allotted budget earmarked for the program. The current model does not leave enough state funds to replace vehicles on a regular basis, fully pay for vehicle liability insurance or for program instruction. Aging drivers ed vehicles also are in need of more repairs than newer vehicles, driving up the costs.
The report suggested contracting the Drivers Training Instruction position and either: (a) operate the program with JCPS owning the vehicles and employing one program supervisor (b) the contractor owning the vehicles and the district employing one program supervisor or (c) a phased-in program as turnover occurs with the current staff.
Savings
Dr. Martin said by implementing the findings of the audit at least $1.5 million of recurring saving should impact next year’s local budget.
Create New Department And New Cabinet Position
The report suggested creating a new Technology Department led by a Chief Technology Officer (CTO) that reports directly to the superintendent and serves on the superintendent’s cabinet. The new CTO would assume the duties of the current Technology Infrastructure Officer who would supervise the Executive Director of Information Services and the Director of Digital Learning.
When questioned about the CTO position, Martin said he would elevate an existing JCPS employee to the new CTO position and increase their salary accordingly.
Create a K-12 Curriculum and Instruction Department consisting of content area support staff, the Career Readiness Department and a new Instructional Support department that would be led by a K-12 Curriculum and Support Officer and report to the Deputy Superintendent of Curriculum, Instruction, and Accountability.
Eliminate Positions / Reassignments
The Beginning Teacher Program should be moved into the Human Resources department with principals evaluating first and second-year teachers to determine if two Beginning Teachers Directors positions are really needed. This could potentially eliminate the two director positions.
The report said principals should complete one of the two required teacher reference checks currently completed by Human Resource staff for all new teacher hires. By switching the responsibility to principals, it would eliminate the hiring of administrators part-time during the summer to complete the reference checks.
Martin recommended reassigning all district psychologists from the Exceptional Children’s department to the Student Services area. Also, reassign the Title III Parent Liaison and 5 Family Engagement Assistants from the Federal Programs to Student Services area.
The Exceptional Children’s, Federal Programs, and Accountability and Assessment departments would report to the Deputy Superintendent for Curriculum Instruction and Accountability.
The Driver’s Education and Hospital/Homebound staff should report to the Chief of Equity and Student Services rather than the Executive Director of Social and Emotional Learning.
The implementation of all recommended staffing changes in Curriculum, Instruction, and Accountability would result in a net reduction of 3 executive directors, 3 directors and 9 specialists/coordinators.
Contracting
The wellness audit suggested the school board explore contracting for custodial services, food service management, ground maintenance, HVAC repair, printing services and Driver’s Education moving forward. Outsourcing printing work would allow for the reduction in a Printing Technician’s position. Other position savings can occur if the areas are transitioned to contracting but the savings would not be realized until the 2021-2022 fiscal year.
Johnson says cut from the top and not the bottom
School board member Ronald Johnson reacted to the wellness audit report telling Johnston County Report, “My interpretation of the audit attributes the majority of the budget shortfall to providing services for Exceptional Children and overstaffing at the Central Office level. In the past two years, we have made Central Office cuts but there have been some central office positions added.”
“Unfortunately, the wellness audit and the current budget situation are conflicting. It does not make sense to champion the wellness audit and advocate for a reduced budget, pick your side. Specifically, there was no budget cuts or expenditure savings found in the audit equating to our current shortfall. Simply, we did not get enough cuts to fall within our projected budget. The COVID 19 incident has significantly reduced a substantial revenue (sales tax) for Johnston County and that is a hard reality we will have to face next school year.”
“I, personally, am in disagreement with some of their proposed cost saving measures,” Johnson said Wednesday.
“The auditors mentioned contracting out custodians, bus drivers, driver’s education, and other positions. I am committed to keeping those jobs in the school system. If you contract those jobs and supplemental duties away from our employees, it will eliminate their jobs and reduce some of their incomes. Some of our employees are already below the poverty level. I want to save the county money, but I can’t start with bus drivers and custodians. I am not the only board member who feels this way about custodians, bus drivers, and maintenance workers. I have spoken to some of my fellow board members, who also assert we will not cut jobs of frontline employees. We are working hard to save money, but not at the expense of the ones who make the least and work the hardest.”
“Let me be clear, I am holding out for a Superintendent to come in and make these decisions. However, if you leave it up to me, we will continue cutting at the top and not the bottom.”
“The auditors discussed creating a Chief Technology Officer, Director of Math, and Director of Reading which appear to be more central office positions. It just seems counterproductive to contract out the blue collar employees while we create central office positions. We eliminated 8 Operations Directors from Central Office to save money, and if we need to cut more positions in Johnston County School we need to look at the central office positions created and filled within the last five years.”
“Interestingly enough, the auditor stated the creation of a Chief Technology Officer would allow us to eliminate an Executive Director position. Under this logic, is it possible to hold the other departments to the same standard? I certainly would not want a duplication of administrative and leadership duties.”
“An additional item of major concern is replacing instructional support (MTSS) with Directors. The auditors mentioned taking away positions from the MTSS division to add two director positions. It is my understanding the MTSS framework is mandated for use by the end of 2020. If this is true, I believe we would be non compliant with the State Board of Education. We are expected to use the MTSS framework to identify students with learning disabilities.”
“I can’t with a clear conscience eliminate support that impacts students who are already struggling in our system. Also, I believe we will become vulnerable to lawsuits if we don’t meet the compliance standards associated with MTSS therefore I am not willing to consider cutting or “reallocating” these positions for more director positions.”
“Lastly, the haste to act on this potential restructure and reassignment of employees reminds me a lot of the “Reset” initiative before I was elected where people were pulled out of their jobs and replaced with other employees. The “Reset” initiative is part of the reason why Johnston County Schools is facing such a deficit. I am hopeful the current and future members of the Johnston County Board of Education will proceed in a more competent and productive manner when making cuts to Central Office staff.”
School board vice chair Dr. Peggy Smith declined to comment on the audit referring all questions to chairperson Todd Sutton.
