Tuesday, November 18, 2008

Let's Talk Travel Audit!

Last week the State Auditor's Office released a report on school district travel practices. You can read more about it here from the Evergreen Freedom Foundation, or here from the Spokesman-Review.

In the cover letter to the report Brian Sonntag goes on record as saying the auditors discovered $1.1 million dollars in five-year savings; on the next page, they share that the audit cost $777,564 to run, which lowers the savings to about $320,000. Not insignificant--that's enough to pay the salary and benefits for four teachers, after all--but also not much in the big scheme of things. If total travel across the state in the last three years adds up to $75 million (3/10 of 1% of the education budget), then the identified savings are only 1/75th of that amount. Again, all savings are good, but context matters as well; if the "waste" is such a small fraction of the whole, are we looking at the wrong spending problems?

Additionally, some of the conclusions that the auditors came up with are rather hard to support. Take applying the "Federal Lodging Limit" to the lodging that districts pay for when they attend conferences, for example. Apparently the Feds have a price and a multiplier that can be applied to any city to determine how much money you should pay to stay there, but the hotels that host these conferences (I'm looking at YOU, Sea-Tac Hilton!) often are some of the most expensive. If you don't stay at the host location you have to rent a car, which adds costs. In some cases the report faults districts for spending $19 a night more than the per diem rate, which seems kind of silly.

When you put it all together this particular criticism of the districts amounts to nearly $500,000, or half of the identified savings, and I'm not sure the charge really sticks. If people are staying in the penthouse, that's a problem. If they're doubling up in a room that's an extra $19 a night? Not so much.

Consider, too, the other big share of the recommendation: off-site retreats and meetings. Here the auditors identified $540,000 in five-year savings, but again there are problems:
  • The biggest share of those costs were incurred by the Clover Park School District. The auditors identified about $109,000 in questionable spending on retreats; $87,000 of that was from Clover Park alone.
  • Similarly, it's that $109,000 figure that the auditors multiplied to get the $540,000 in savings, but if Clover Park is such a large share of the pie that throws the reality of the total savings way off kilter.
  • A lot of the money we're talking about here isn't state money, it's Federal. All taxpayer money matters, sure, but I'd expect our state auditor to spend more time on state money.
The picture gets even muddier when you read the litany of complaints responses from the audited school districts, where they raise several objections to the conclusions. As an example, the auditors said that school districts should use the state travel contract more; Spokane SD pointed out that Alaska/Horizon Air, the main carrier between Spokane and Seattle, doesn't honor the state rate for that trip. This is the state's fault for not negotiating it into their contract, and it's not something the district can correct unilaterally.

The total effect of the report is rather underwhelming. The initial press release hits you like a ton of bricks, especially the stories of waste they cite, but the foundation that their conclusions are based on doesn't really stand up to close scrutiny.

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Anonymous Anonymous said...

I'm a state employee, taxpayer and parent of kids in middle and high schools. I am sick and tired of the waste I see in the Olympia School District and I'm glad the Auditor issued this report (although I find it hard to believe it cost so much money--THAT is a waste of taxpayer money).

The Olympia School District was faced with cutting $2 million from the budget this summer and if little budget savings could have been undertaken YEARS AGO (2005), when it was known they were going to run into trouble in 2008 because they kept spending from their reserves, maybe they wouldn't have needed to cut 19.5 teaching positions this school year (while keeping all but one of their overpaid administrators--they even added several more administrators, in TOSAs, after the budget cuts).

As a state employee I routinely organize conferences and make travel arrangements for my boss. I have yet to book a hotel that would not offer state rates on lodging and meals and most of the time, they will throw in the meeting rooms for free if you meet a minimum meal purchase (which is easy to do, even using per diem meal rates).

You mentioned the SeaTac Hilton which I know OSPI likes to use. (OSPI is a great waster of money.) Did you know the SeaTac Radisson will honor state rates and give great deals on meeting rooms, especially if meals are provided? The audit should have gone after OSPI for not booking conference hotels that would honor the state meal and lodging rates.

Also, if someone's job is to book a hotel for a conference, calling more than one hotel to get a quote is not too time-consuming. There are hotels all around the state that offer state rates (even some very nice ones--Skamania Lodge comes to mind).

I voted no on our local district levy for the first time this last spring because district administrators were not making any attempt to save money even though they knew they were going to have to make big cuts. Taxpayers are watching and every little bit in savings helps when it comes to district budgets. Districts need to at least make the attempt to appear to not be wasting taxpayer money (even federal grant money is taxpayer money).

Also, it appears the school districts are on the Cooperative Member List (Political Subdivisions/Non-Profit Organizations) https://fortress.wa.gov/ga/apps/coop/Default.aspx and are able to use the state airfare contract. It looks like it costs $400 per biennium to join the cooperative if they don't spend more than $3 million on their state contract purchases. BTW, oftentimes, the non-contract, non-refundable airfare is cheaper than the contract rate.

There are about 290 school districts in the state and the audit was only for 13 schools. If you only multiply the savings over five years by 10 (they audited some large districts and the smaller ones most likely won't have such large savings--although look at Clover Park), you have now saved over $10 million statewide. How many teachers could districts buy for that much money? Or, how many trainings could OSPI fund for that much money (with no cost to the districts)?

Little savings here and there add up. Until I start seeing OSPI and the Olympia School District managing their money better, I'll continue to vote no on local levies and will send e-mails to legislators pointing out the waste at OSPI. Maybe eventually OSPI and local districts will start to manage their funds better.

BTW, I don't think schools and teachers waste money--it is all at the administrative level.

7:55 PM  

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