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Content This dissertation has been
microfilmed exactly as received 68-13,586
RICHERT, Paul Henry, 1918-
SMITH, Clarence Eugene, 1922-
INNOVATIONS IN SCHOOL BUSINESS A D M IN ISTR A TIO N .
Both authors received degrees at
University of Southern California, Ed.D., 1968
Education, administration
University Microfilms, Inc., Ann Arbor, Michigan
INNOVATIONS IN SCHOOL BUSINESS ADMINISTRATION
A Dissertation
Presented to
the Faculty of the School of Education
The University of Southern California
In Partial Fulfillment
of the Requirements for the Degree
Doctor of Education
by
Paul Henry Richert
Clarence Eugene Smith
June 1968
This dissertation, written under the direction
of the Chairman of the candidate’s Guidance
Committee and approved by all members of the
Committee, has been presented to and accepted
by the Faculty of the School of Education in
partial fulfillment of the requirements for the
degree of Doctor of Education.
Date.
Dean
Guidance Com m its
J^r,.
Chairman
ACKNOWLEDGMENTS
The w riters would like to thank the school business officials,
city m anagers, county adm inistrative o fficers, and representatives
of business and industry who so generously responded to requests for
information, without which this study would not have been possible.
Tim e is a so rt of riv e r of passing events, and strong is
its current; no sooner is a thing brought to sight than it is
swept by and another takes its place, and this too will be
swept away. (2:1)
Meditations of M arcus Aurelius
TABLE OF CONTENTS
Page
ACKNOWLEDGEMENTS .......................................................... ii
LIST OF TABLES........................... viii
Chapter
I. STATEMENT OF THE PROBLEM, DEFINITIONS,
AND PROCEDURE . ............................................... 1
The Problem
Introduction
Statement of the problem
Importance of the problem
Definitions
Delimitations
Limitations
Assumptions
Procedure
Review of the literature
Approval, endorsement, and sponsorship
Research design
Selection of respondents
The interview
Organization of the Study
Chapter Summary
II. INNOVATIONS IN COUNTIES, CITIES,
BUSINESS, AND INDUSTRY .............. 14
Introduction
Chapter
III.
Selection of respondents
The interview
Organization of the chapter
Innovations in Personnel Adm inistration
Review of the literatu re
Interview responses
Innovations in Budgets
Innovations in the literatu re
Innovations reported in interviews
Innovations in Purchasing
Innovations reported in the literatu re
Innovations reported in interviews
General Innovations
Management consultants
Record program
Use of contract services
Form s control
Cooperative program s
Chapter Summary
INNOVATIONS IN SCHOOL DISTRICTS . .
Introduction
Endorsem ent of study
Response analysis
Responses by category
Innovations
Page
62
v
Chapter
Page
Budgeting
Maintenance and operation
Stores
Accounting
Food service
Purchasing
Personnel
Transportation
School planning and construction
Insurance
General innovations
Chapter Summary
IV. SUMMARY, MAJOR FINDINGS, CONCLUSIONS,
AND RECOMMENDATIONS................................ . 107
Summary
The problem
Importance of the problem
The procedure
Major Findings
Findings from school districts
Findings from business and industry,
city and county government
Conclusions
Recommendations
BIBLIOGRAPHY....................................................................... 125
APPENDIXES................................................................................ 132
vi
Chapter Page
Appendix A --L etter of Endorsem ent from California
Association of Public School Business
Officials ........................................ 133
Appendix B --L etter from Dr. Leonard Grindstaff
Requesting that Response Form s be
Completed and R e tu rn e d .................................... 135
Appendix C --R eturn Form from School D istric ts 137
. '
Appendix D--Copy of Reminder Card Sent to School
D istrict S uperintendents.............................. . 139
Appendix E --L ette r from R iverside City Manager
Requesting Cooperation from City
O fficials.............................................................. 142
Appendix F --L e tte r from R iverside County Admin
istrative Officer Requesting Cooperation
from County O ffic ials..................................... 144
Appendix G--Copy of L etter from Dr. Leonard
Grindstaff Requesting Cooperation from
City M a n a g e r................................................... 146
Appendix H --Counties, C ities, Businesses, and
Industries In te rv ie w e d 148 .
Appendix I--School D istricts Which R e sp o n d e d 150
vii
LIST OF TABLES
Table Page
1. Number of Innovations Reported by Area in
Counties, Cities, Business and Industry .................. 61
2. Number and Percentages of Responses by D istrict
E nrollm ent........................................................................ 64
3. Number of Mail and Interview Responses by
Business Administration A r e a ..................................... 66
viii
CHAPTER I
STATEMENT OF THE PROBLEM, DEFINITIONS,
AND PROCEDURE
The Problem
Introduction
There is evidence indicating that an appreciable lag in
teaching methods exists from the time an idea is conceived until the
idea is translated into regular classroom practice. M ort says, "The
average American school lags twenty-five years behind the best
p ra c tic e s." (11:181) A sim ilar problem exists in school business
adm inistration and is of nearly equal significance to the future of the
educational enterprise. Some new practices are being developed and
tried in scattered locations, however, they are not system atically
identified, evaluated, or dissem inated for wider use in school
d istricts. Woods emphasizes the problem inherent in delaying
change:
No longer can schools drift along and m aintain a "wait
and see" philosophy. On the contrary, schools are pressured
1
2
to be in the forefront of change, to make long-range plans
for instilling new programs and to "keep ahead" of other
districts. (16:12)
Practicing school business adm inistrators must be favorably
inclined toward creativeness and must be willing to make change.
Some of these changes may not be spectacular or dramatic; however,
continuous attempts toward improvement must be made. Gardner
stresses this when he says:
Many of the major changes in history have come about
through successive small innovations, most of them anony
mous. Our dram atic sense (or our superficiality) leads us to
seek out "the man who started it all" and to heap on his
shoulders the whole credit for a prolonged, diffuse, and
infinitely complex process.
It is essential that we outgrow this immature conception.
Some of our most difficult problems today are such as to defy
correction by any single dram atic solution. They will yield,
if at all, only to a whole series of innovations. (5:31)
Resistance to change is a natural tendency with most indi
viduals. As Nolting says: "Change can be frightening-- it certainly is
disturbing. But change offers an opportunity to innovate- -to make a
real contribution. " (39:280) However, this need not be the case.
Gardner believes that change need not be a disruptive influence.
The image of innovation as the shatterer of a serene
status quo is particularly inappropriate in the modern world.
Today, in the tumultuous sweep of technological and social
change, one would be hard put to find any placid status quo.
The solutions of today will be out of date tomorrow. The
system that is in equilibrium today will be thrown off balance
tomorrow. Innovation is continuously needed to cope with
such altered circum stances. (5:28)
3
With public aw areness and in terest in public education at
probably an all-tim e high, it would seem to be im portant that school
adm inistrators constantly im prove and update th eir practices. As
G ardner said, "People a re m ore likely to respond to innovation when
a c risis or a se rie s of c rise s puts people in a mood to accept
change." (5:29)
T here is an ev er-increasing p re ssu re for the tax dollar and
with this comes the need for the g reatest care being taken to assu re
efficiency in the business aspect of school d istrict operation.
Statement of the problem
It was the purpose of this study to identify and analyze
innovative or "prom ising practices" in business adm inistration
applicable to public school business management. Specifically,
answ ers w ere sought to the following questions:
1. In what are a s of business adm inistration are
innovations occurring?
2. What can school business adm inistrators learn
from business, industry, and government
regarding innovative practices?
Importance of the problem
Good business m anagers cannot afford the luxury of
4
continuing to do things in the sam e way year after year unless they
a re willing to run the risk of being rejected by a public which is
becoming increasingly aware of the need for better ways of doing
things. Dale puts it succinctly when he states:
No country and no company can expect to stay on top, or
near the top, if it continues doing things in the sam e old way
sim ply because that way has brought success in the past.
. . . Innovations m ust be developed by every m anager who
wants to be worthy of the name. (3:54)
Smutz em phasizes the sam e idea. He says,
All phases of school finance and business management
should undergo constant study, with emphasis upon providing
the highest possible educational value per dollar expended.
(51:4)
Hertz believes that the top m anager may come up with the
best new ideas because his thinking is not re stric te d to ways of doing
things with the m ost suitable theoretical base. He m ust involve
him self--"he m ust evince an in terest” in what new things a re being
done (25:49-50).
Definitions
W ebster defines innovation as something that deviates from
established practice. Wiles, in speaking of curriculum change, uses
the term s "innovation" and "change" synonymously (15:3). Miles
regards it as a species of the genus "change” and finds it useful to
define innovation as a deliberate, novel, specific change which is
thought to be m ore effective in accomplishing the goals of a system
(9:14).
Lippett speaks of innovation as a prom ising practice and
defines it as something which is atypical as far as the individual's
knowledge goes--atypical as a practice from what is going on cu r
rently in a school system (8:17).
Not all innovations ca rry with them the assurance of being
successful. Kleinschrod stre sse s this point when he says:
Innovation is purposeful, organized, risk-taking change
introduced for the purpose of maximizing opportunities. It
is the ability to look at the business as a system and to
provide the m issing elements which will convert the already
existing elements into a new and m ore productive whole.
(29:18)
Levitt of Harvard narrow s the meaning of innovation when
he says:
Strictly defined, innovation occurs only when something is
entirely new, having never been done before. By relaxing
this definition, we may say that innovation is for the first
tim e done in a given industry. (31:33)
For the purpose of this study, the term "innovation1 ' will be
defined as a prom ising practice which departs from that which
generally prevails among the m ajority of people who may be regarded
as the focus of directed change effort.
6
Delimitations
The study did not include innovations in educational data
processing or its related services and practices. No attem pt was
made to lim it the kinds and types of practices to those which a re
presently perm itted by the various statutes governing the operation
of school districts of California. This was especially true of those
■ i
which were found in business, industry, and the governmental entities)
which w ere contacted.
Lim itations
The research ers w ere lim ited by the fact that some of the
respondents may have tried to avoid self-approbation in reporting
their innovations. This would be particularly characteristic of those
who might have had some noteworthy item to rep o rt after the initial
letter but who did not do so in order to avoid being boastful. Those
persons who w ere later interviewed could have had the sam e reaction.
This would be m ore likely because respondents w ere asked to answer
an open-end type letter.
Assumptions
With a lim ited response to the letters to school districts and
a lim ited number of interview s, one can in fact determ ine innovations
in business adm inistration in California. F u rth er, it was assum ed
7
that innovative business adm inistration practices found in business,
industry, and city and county government m ay be applicable to public
school business adm inistration.
Procedure
Review of the literatu re
An extensive review of current literatu re was conducted to |
determ ine innovations in the various areas of business management.
This re se arc h indicated few innovations w ere being reported in
school business adm inistration, although th ere were numerous
innovations reported from business and industry.
Approval, endorsem ent,
and sponsorship
A fter the problem was delineated and the design determ ined, |
the study was presented to the Committee on Studies for approval.
Since the design of the study indicated that school business m anagers
in the state of California would be involved, it was decided to request
the endorsem ent of the California Association of Public School
Business Officials. Contact was m ade with Myron W. Hesse,
University Contacts Official of the Association, who gave the study
the association's official approval (see Appendix A). Sponsorship of
the study was granted by D r. Leonard Grindstaaf, R iverside County
Superintendent of Schools.
R esearch design
It had been determ ined previously that th e re was m inim al
reporting of innovation in the lite ra tu re . T here w ere indications that
this was caused by the reluctance of possible contributors to appear
presum ptuous in giving the name, "innovation," to th eir m ore
prom ising p ractices. F o r this reason, it was determ ined that the
interview technique would be the m ost effective m ethod to obtain the
responses necessary for a successful study. Using the sam e
rationale, it was decided that the interview itself m ust be com pletely
unstructured. Any effort on the p art of the interview ers to coach a
respondent to d escribe a practice as an innovation would clearly
lim it the validity of the study. C onversely, the prim ary effort on the
p art of the interview er was to (1) adequately define for the resp o n
dent the term "innovation" in an easy-to-understand way; (2) keep a
w arm , open atm osphere of discussion so the respondent would be
b etter able and m ore willing to re call his m ore prom ising practices
and rep o rt them to the investigators. It was also determ ined that
any type of recording device would undoubtedly se rv e to inhibit the
response. T hese requirem ents clearly indicated a joint interview
technique would be m ost effective in producing the d esired response.
9
A pilot interview was conducted with the city m anager of
R iverside. This interview assiste d the investigators in im proving
the interview technique and strengthening th eir confidence.
Selection of respondents
It was determ ined that the probability of obtaining inform a
tion on innovative p ractices was g re ater in the la rg e r school
d istric ts. This assum ption had som e basis in that m ore people a re
available to innovate in a la rg e r d istrict. The selection of school
d istricts for the study was th erefo re lim ited to those d istricts in
C alifornia with enrollm ent of over 2, 500.
The seven larg e cities in the southern p art of the state of
C alifornia w ere selected for the city section of the study. Again, the
determ ination was m ade that the probability of innovation was g re ater
as the size of the organization increased.
County governm ents selected for the study w ere the five
larg e st counties in southern C alifornia. The populations of these
counties ranged from 438, 000 to 6, 957, 200. The sam e rationale used
in the city selection was used for this process of selection. In both
the city and county design of selection, it was determ ined from a
p ractical point of view to selec t those public entitites within close
proxim ity to the investigators' bases of operation.
10
Businesses and industries to be interviewed w ere selected
with the assistance of the investigators' Committee on Studies. The
criteria for selection were as follows:
1. The company selected m ust be a leader in its
particular field.
2. The company must be generally thought of as
being on the "cutting edge" of new ideas and
practices.
3. There m ust not be duplication of specific fields
of endeavor by any two companies selected.
4. Companies m ust command respect on a world
wide basis.
The interview
In the school district section of the study letters were first
sent to those districts selected (see Appendix B). The letter briefly
explained the intent of the study and requested the respondent to
relate one or two innovative practices in business adm inistration in
his district. A simple response form was enclosed and contained
space for the relating of innovative practices (see Appendix C).
Approximately six weeks later a follow-up request was mailed to
those not responding and who were in districts with a 10,000 or over
1 1
student enrollm ent (see Appendix D). Of the 276 d istric ts included in
the original m ailing, eighty-eight, o r 32 p er cent, responded. Of the
eighty-eight respondents, twenty-two w ere selected for interview s.
In the city and county section of the study, contact was m ade
initially with the chief adm inistrator in the city of R iverside and the
chief adm inistrator in the county of R iverside. Each was requested
to give the in v estig ato rs' advice on the best method of m aking con
tacts with other city m anagers and chief county ad m in istrato rs. Each
agreed to w rite a le tte r of introduction to the chief adm inistrator of
the governm ental agencies selected, to endorse the study, and to
request the cooperation of th e ir colleagues (see Appendixes E and F).
This was followed by a personal le tte r to each chief adm in
is tra to r w ritten over the signature of the county superintendent and
explaining the purpose of the study (see Appendix G). Interview s
w ere then arranged at a m utually convenient tim e with each of the
I
selected respondents through personal telephone calls.
Initial contact with business and industry leaders was m ade
in a variety of w ays. In som e cases le tte rs w ere w ritten; in other
instances telephone calls w ere made; and in one situation a se rie s of
le tte rs w ere w ritten and telephone calls w ere m ade. Suggested names
w ere obtained from friends, from the unpublished lite ra tu re , from
contacts at m eetings, and at professional conferences. In some
12
instances the person eventually contacted in the firm designated a
different executive for the investigators to interview. In all cases
the investigators' requests for interviews were met with interest and
the utmost cooperation.
Organization of the Study
Chapter I has presented the problem and a brief outline of " * j
the procedure followed in conducting the study.
Chapter II presents the findings obtained from the interviews
with officials in counties, cities, business, and industry.
Chapter III presents the findings obtained from the m ail
responses and the interviews with school district business officials
in selected school districts of California.
Chapter IV presents a summary of the study and its findings,
conclusions, and recommendations.
The dissertation is concluded with a bibliography and
appendixes.
Chapter Summary
This chapter contained the statement of the problem, and
the term s used in the study were defined. The procedure followed
indicated that a letter of endorsement from the California Association
13
of Public School Business Officials accompanied a letter from the
R iverside County Superintendent of Schools to d istricts in California
with an enrollm ent of over 2,500. Following the retu rn of the
response form s, twenty-two interview s w ere held with business
officials in school d istricts. A dm inistrators in counties, cities,
businesses, and industries w ere contacted; and subsequently
seventeen additional interview s w ere conducted with these officials.
The chapter closed with an outline of the organization of the
study.
CHAPTER II
INNOVATIONS IN COUNTIES, CITIES,
BUSINESS, AND INDUSTRY
Introduction
It was the purpose of this portion of the study to identify
i
innovations in business adm inistration in counties, cities, busi
n esses, and industries. A secondary purpose was to determ ine the
business adm inistration areas in which innovations a re found.
Selection of respondents
For purposes of this study, it was decided to select the five
larg est counties in southern California. The counties ranged in
s
population from 438,000 to 6,957, 000, with a median population of
1,230,800.
C riteria used for the selection of cities were as follows:
1. The city should be located in southern California.
2. The city selected should be a large city in the
general population range of 100,000 to 600, 000.
15
3. The city should have a reputation of being a
progressive city. -
Cities actually selected had a population range of 85,100 to 670,000,
with a median population of 135, 600.
Businesses and industries w ere selected on the basis of
innovative leadership and national and worldwide respect.
A list of counties, cities, businesses, and industries
interviewed may be found in Appendix H.
The interview
A joint interview technique was used for the study. In the
county and city portions, interview s w ere held with the city m anager
and county adm inistrative officer, respectively. In many instances
the chief executives w ere joined by three or four additional m em bers
of the adm inistrative staff. The average length of interview was
approxim ately two hours, although a few lasted as long as three
hours. The interview s with business and industry representatives
w ere from one to two hours in length and w ere held with a single
executive.
Organization of the chapter
The rem ainder of the chapter is organized into the following
sections: innovations in personnel adm inistration, innovations in
budgeting, innovations in purchasing, general innovations, and
chapter sum m ary.
Innovations in Personnel Adm inistration
Review of the literature
John Simpkins, of the M etropolitan Life Insurance Company,
states that the m ost challenging task facing a business enterprise
today is to keep moving ahead at a fast enough rate to keep from
falling behind.
The problem is largely one of achieving maximum utiliza
tion of all m em bers of the management team , since they are the ones
who supply the drive and creativity that are needed for the organiza
tion to forge ahead. He believes that management by objectives is
one of the solutions to this problem.
Management by objectives is the setting of improvement
goals by all levels of management for things to be done by a
predeterm ined future tim e that will contribute to the achieve
ment of company goals, the doing of the things that are
required to attain these improvements and the recognition of
accomplishment by superiors. (42:32)
W riters agree that planning is a prim e feature in m anage
ment by objectives and suggest that planning should be done by
m anagers at all levels. Although it is very desirable for the organ
ization's top man to state the company's broad goals which then serve
17
as a general guide at all levels, the program of m anagem ent by
objectives can be started at any m anagerial level.
One of the key elem ents in such a program is the goal-
setting sessions at which the superior and subordinate jointly agree
to the la tte r’s perform ance objectives for the period under consider
ation. Although the subordinate's participation in this process is
fundam ental, the m anager m ust lead the way in selecting objectives
that a re in line with the demands of the position as well as with
departm ental or overall company goals (44:34).
In this technique, plans at each level a re subm itted to the
next highest level for coordination and tentative approval. A fter each
level has form ed its objectives, a final com prehensive lis t is given
to the top man in the chain for his review . If m odifications a re m ade
at the top, the concurrence of the subordinate should be obtained
(42:33).
Objectives can relate to (1) im provem ent in productivity
(i. e . , getting the job done for less cleric al, m achine, or other
expense); (2) im provem ent in quality (i. e. , the production of a better
product o r one with few er m istakes); and (3) im provem ent in serv ice
(i. e. , doing the job in such a way as to provide g re ater satisfaction
to custom ers o r u sers of the products).
It is im portant to note that not all objectives can be m easured
18
quantitatively. In these cases evaluation of performance becomes a
m atter of qualitative judgment which should be agreed upon in
advance.
A program of management by objectives must consist of the
following sequential steps in order to be successful:
1. The determination by the boss of the end results to
be achieved and the downward communication of this to
lower levels of management.
2. The formulation of realistic goals by various levels
of management, beginning at the lowest levels. The goals
must be compatible with the end result expectations.
3. The establishment of activities, methods, or other
means in the various areas of the company's operations that
will contribute toward the end result expectations within the
time specified.
4. The follow-up of the progress made towards the
accomplishment of goals, the evaluation of achievements and
the pay-off. (42:34)
It is essential that the expression of end result expectations
be in term s of when and how much. Although most objectives are set
to be achieved a year hence, it is sometimes desirable to set them
for a closer or m ore distant date. Some managers set a series of
interm ediate goals which will lead to the ultimate objective.
It is considered important for objectives to be focused on
the job and not the man. For example, the objective should not state
that Joe Smith should achieve a 20 per cent increase in sales next
year. Rather, it should say that Joe Smith, as sales manager,
should achieve a 20 per cent increase in sales in carrying out the
19
duties of that position as it is form ally described, in accordance with
the policies, procedures, and methods specified by the company
(44:39).
T e rry stre sse s that harmony between the overall objectives
of the enterprise and the m anagerial objectives within that en ter
p rise are of m ajor significance. In addition, harmony among goals
of m anagers within the enterprise is vital. Each m anager's goals
should supplement and a ssist the goals of his colleagues (13:34).
When objectives have been established for a certain period
of tim e, it is fundamental under a program of management by objec-
*
tives to have periodic interim reviews as well as a final review.
The frequency of the interim reviews should be at intervals no less
frequent than quarterly. By this method, management is kept aw are
of the objectives so that none a re forgotten or overlooked. In
addition, objectives can be revised by mutual consent in light of
changed objectives at higher levels of management, and to provide
for flexibility and to allow for the unexpected. Furtherm ore,
corrective action can be initiated if a need is indicated (42:36).
A new program of perform ance m easurem ent should make a
modest beginning with a few objectives and without a radical change
in philosophy of m anagerial adm inistration. The program m ust be in
keeping with the prevailing attitudes in the company regarding the
20
extent to which authority can be delegated. It should be com patible
with other program s used for the control, development, and rew ard
of m anagers. M ost im portant, a clim ate of excellence should be
developed in o rd er to get high quality of perform ance (14:19).
As an example, in one larg e internationally-based in stru
m ent company, goal orientation as opposed to authority orientation
is encouraged. The distinction between these approaches is subtle,
but significant, in determ ining the adm inistrative clim ate of the
organization. The goal-oriented person is m ore likely to see job
goals as a meaningful part of the broader organizational objective,
and as steppingstones to his long-range personal goals. Unlike the
authority-oriented person who becomes overdependent on his boss
for direction and affirm ation, the m ore "inner-directed” goal-
oriented person receives meaningful feedback and satisfaction
directly from work itself and the achievem ent of goals. His grasp
of the job enables him to initiate self-correction and to grow with his
accom plishm ents (36:66).
Interview responses
Management by objectives was reported as being used by
respondents in th ree of the five companies interviewed. One company
m anager believed that management by objectives was closely related
21
to the innovative process--explaining the setting of objectives and
the meeting of objectives required innovativeness. Prior to using
management by objectives the innovative process was retarded
because of the necessity of obtaining clearance from high level
management in determining courses of action. He considered
management by objectives as a way of making things happen rather
than letting things happen. His company used a quarterly bench
m ark to evaluate progress toward accepted objectives.
The dignity and worth of the individual is the underlying
philosophy in all personnel policies and procedures in a large
company with 200,000 employees. The area resident manager of the
firm reported that management maintains an "open-door” policy for
all employees at every level. If the employee does not get satis
faction at one level, he is encouraged to seek the next highest source.
An employee at any level could conceivably pick up the telephone and
talk to the chairman of the board in New York City.
Every two years an independent research firm surveys the
attitudes of all employees. After completion, the unsigned question
naire is mailed directly to the research firm and scored. The
results from the survey are studied by the management review board
of the company. If there appears to be a pattern of negative
responses regarding a certain policy, changes are made. The last
2 2
question on the form is open-ended and is commonly re fe rre d to as
the "brick-bats and bouquets" question. It allows the employee an
opportunity to comment on any subject.
In addition to this form of "feedback” the company m aintains
a suggestion plan called "speak u p ." A suggestion may be signed or
it may be anonymous, but those signed get a reply. If the suggestion
is m eritorious, the respondent can receive a m onetary aw ard of
from $25 up to $30,000.
The company’s benefit program includes group insurance
hospitalization and m ajor m edical coverage. In addition, there is a
stock option plan available at a cost of 85 per cent of net price.
As part of the in -serv ice education program , new employees
receive a booklet entitled "About Your Company. " During this tim e
management stre sse s the policy of providing the best possible
custom er service by doing everything in a superior fashion.
A w ritten appraisal of each employee is provided once each
year with follow-up counseling, if recommended. Management does,
however, subscribe to the principle that "you ca n 't change spots on a
leo p ard ." A file is kept on each employee which includes a skills
inventory updated each six m onths. This file, which rem ains con
fidential, includes conference reports, appraisals, employee rank
ings, and a complete history of the employee in the company.
23 I
j
The m anager sum m arized the company philosophy by saying
| that through these personnel practices the employee knows the
: 1
i company is looking out for his best in terests. It is interesting to
note this company has never had a labor union.
The vice-president and area adm inistrator of a large bank
ing firm reported that his bank is committed to, and is using the
system of management by objectives (MBO). This company uses
: fifteen area perform ance c rite ria in m easuring goal accom plish
ment. Some examples of the c rite ria used a re staff turnover, over
time, income from business services, deposits, operating losses,
„ and resu lts of service and courtesy program . ;
He commented that the net effect of the MBO program is
decentralization of authority and responsibility. This in turn reduces
the number of reports to be filed and elim inates much other paper
work. j
i
"N urturing and maintenance of people" is the personnel
philosophy of a large aerospace industry, as reported by the
f i
assistant adm inistrator of the m issiles and space division. He
: believes that personnel m ust have the sam e degree of attention as j
other areas such as maintenance and operation. Just as a machine i
i has a certain maintenance and replacem ent cost, so does an !
| employee.
24
In the company MBO program , agreem ent between m anage
ment and employee on objectives is required. The objectives m ust
be m easurable with an audit at the end of the year. A point system
with several categories is used in making the evaluation. The
m anager stressed the point that the personal objectives of the
employee a re extrem ely important and basic in establishing company
goals. A comprehensive incentive program is made an integral part
of the program . In addition, an in-service training program in
cooperation with a local junior college offers assistance to the
employee in meeting his personal objectives.
The area m anager of an internationally-based business
management consulting firm believed the newest and m ost im portant
innovation in the area of business management was the management
by objectives program . According to this m anager the main concept
of the program is the required close relationship of the personal
objectives of the individual employee and those of the company.
Stated another way, the employee should be able to answer the
question, "What is your function in the overall m ission of your
company?" The objective then becomes the im provement of this
function.
To this m anager, MBO is m ore than sim ply a management
p ro g ra m --it's a new way of life. The main difference between this
25
and other methods of management is that it is results-oriented
rath er than techniques-oriented and is specifically tied to a philos
ophy of decentralization.
He believes there are three basic steps in establishing an
MBO program . The firs t step is to properly orient all employees to
the program . This can be partially accomplished by distributing
reading m aterial. The second step is for the staff to establish
m ajor functions of the company. The third step is to establish
realistic objectives which are agreed to by all employees and are in
m easurable term s.
In making a comparison of private and public enterprise,
this manager observes that education does not have a profit motive
and therefore must have an incentive to improve. He believes the
MBO program can replace the profit motive in education and serve
as an adequate substitute. He further believes school districts using
the MBO program should not be interested in how well they are doing
compared to how well other school districts are doing--but how well
they a re doing compared to how well they ought to be doing. He
noted that in the MBO program improvement begins early, but
cautions the manager to not expect too much the first year. In
concluding, he emphasized the pointjthat if,,the MBO program is to be
successful, it must involve the key concept of self-motivation.
26
Creating a "sp irit of change" in employees is the m ajor
goal of personnel management in a rapidly growing large city.
Department heads' offices and the city m anager's office a re inten
tionally located close together on the sam e floor so that new ideas
can be quickly and easily discussed. The m anager believes that
recommendations for change coming from lower echelons of em
ployees a re m ore acceptable than those coming down from above. To
help spur this effort, the city has a m onetary.awards program which
allows 10 per cent of estim ated savings the first year as an award
for employee suggestions accepted.
Another city manager gave a description of his city's intern
ship program . In order to be accepted, the intern m ust be at the
senior student level or higher in public adm inistration in one of the
colleges o r universities. He m ust work three days each week at
mutually agreed upon hours for a salary of $2. 07 per hour (June,
1967). He works under the direction of a third level adm inistrator
(immediately below department head level) who m ust submit periodic
reports and evaluations to the department head.
This city also reported an interesting training program for
employees through the cooperation of a local state college. The city
participates financially in the program by paying for tuition and
texts. The only m ajor requirem ent for employee participation is that
27
the training acquired be of benefit to the city. At the professional
level the city may finance up to the dollar amount the employee is
contributing to his own educational program . Approximately 2 per
cent of this category of employees were taking advantage of this
program .
As is tru e of all public agencies in the state of California, a
city cannot sign a labor contract. This particular city developed an
excellent substitute in their "Memo of Understanding." The memo
covers wage scales, salaries, working conditions, and fringe benefits.
In essence, it covers the same areas that would be contained in a
contract and is signed by both the city and the union. This memo
specifically provides that the union shall not conduct any strik es,
slowdowns, or work stoppages against the city and further provides
that if any provision of the memo be contrary to law, the rem ainder
of the resolution shall rem ain in effect.
A chief county adm inistrative officer gave an account of a
cooperative arrangem ent with another governmental agency in the
area of personnel selection and recruitm ent. In this situation the
county personnel officer and his staff provide the recruitm ent,
screening, and testing of applicants, while the other public agency
assists in making an annual salary survey of the county. When the
cooperating agency has openings to fill, the county agency provides
2 8
screened and tested applicants for their selection.
Another county chief adm inistrative officer sum m arized his
county's philosophy of personnel management in an interesting way by
saying the best leadership management can give to employees is to
"get out of their way and keep from 'demotivating' th em ."
Innovations in Budgets
Innovations in the literature
It is becoming m ore common to observe statements which
indicate that budgets for the m ost part do not meet the requirem ents
for m anagerial decision-making. In addition, the typical operating
budget is often somewhat insufficient in performing its prim ary
function of providing the necessary information for planning, co
ordinating, and controlling the operation of the business. Various
budgeting techniques contribute significantly toward the development
of a m ore meaningful budget but, individually, are often insufficient
to satisfy the specific requirem ents. To satisfy all the requirem ents,
a tailor-m ade budget has to be developed.
Neth's analysis of the traditional functional budget demon
strated a significant limitation in that its structure lim its m anage
m ent's ability to discern the spending flow in term s of the total
operation. The knowledge of planned expenditures for individual
29
products, especially when considered in relation to forecasted sales,
would be as valuable to management planning, controlling, and
decision-making as the function and object for which spending occurs.
He concludes that convenience, understandability, and
comparative analysis favor the continuation of the functional budget.
However, the inability to obtain specific product information lim its
its usefulness. The method selected to solve this problem was to
maintain the functional structure and to acquire sufficient additional
information by converting the functional budget to a format m ore
meaningful to management, which he calls the program budget.
To establish the program budget, it was first necessary to
identify the program fo r which data was desired. Consequently, a
set of criteria was established to guide the selection. Some of the
c rite ria used in this company w ere as follows:
“ ■ ' 1. The program m ust represent a significant
contribution to the total dollar sales volume.
2. The program m ust make a significant contribution
to the future of the company.
3. The program m ust be considered of interest to
management.
Although Neth concedes that some criticism could be made
of possible inaccuracies created through the use of percentage
30 i
allocation for converting the functional budget to the program budget,
he maintains the budget is not m eant to be exact, but rath er the best
estim ate of future plans. The second lim itation is m ore significant.
Without com puterization, there is no effective m eans of co n tro l--i. e.,
com parison of actual spending to budget. In the place of the computer
it is necessary to routinely review with each departm ent the amount
and type of expenditure and apply the sam e conversion technique used
to convert from a functional to a program budget.
The program budget for Neth's m arketing group was not a
radical new development but ra th e r the blending of other budget
techniques and the desires of management for a practical "what and
how" of a m ore effective budget. Although program budgets are not j
without shortcom ings, it is anticipated that in due tim e m ost prob
lem s can be elim inated. The prim ary concern is that a m ore
meaningful tool is now available to management for decision-m aking ;
assistance (38:9). ;
Hill and Mattox, in a questionnaire survey of forty-tw o
i
county, city, state, and federal agencies--including large businesses |
--found the respondents ranked the purposes of program budgeting
in the following order: (1) allocation of financial resources in term s
of total needs and priorities; (2) evaluation of present program s;
(3) evaluation of program proposals in term s of objectives; (4) to
31 ;
make the budget m ore understandable; (5) appraisal of program
perform ance; and (6) assistance in cost control and analysis (50:77).
The program budget was introduced nationally in 1965 when
President Johnson announced that he was asking the heads of all
federal agencies to introduce "a very new and revolutionary system
of program budgeting. " Staffs of experts would define goals using
m odern methods of program analysis and would find the m ost effec
tive and least costly way to accom plish the goals. ;
Banker and Kotz m aintain that program budgeting has no
standard definition. The general idea is that budgetary decisions I
should be made by focusing on output categories like governmental
goals, objectives, and products, or program s, instead of inputs like !
personnel, equipment, and m aintenance. It lays s tre s s on estim ating;
the total financial cost of accom plishing objectives (19:283).
The Planning-Programming-Budgeting (PPB) system of the
United States Government is the specialized name given to the
i
p resident's plan. PPB is a stru ctu re with key stru ctu ral m em bers so j
interdependent that com prehension m ust extend to all, or true per- j
ception of the "building" is impeded. The base of accountability is j
the citizen m arket. T herefore, the objectives m ust be product, j
supply, and distribution. Accordingly, program s a re conceived and I
executed as production/distribution entities. Progress is viewed and
32 ;
m easured in term s of output/distribution tim ing and effectiveness
versus planned timing and effectiveness (24:271).
The early beginnings of program budgeting in the United
States can be traced back to the Controlled M aterial Plan of the W ar
Production Board during W orld War II. L ater, in 1961, Robert
M cNamara introduced the system into the United States Departm ent
of Defense. Program budgeting relies upon a stru ctu red program
budget. The chief feature of this budget is its output orientation;
that is, it allows the activities of several agencies or departm ents to
be assem bled in term s of specific output packages, such as program s
and sub-program s of various convenient levels of aggregation. F or
example, economic and social development of our human reso u rces
is one of the nation's goals. It is a planning and management
process. Perhaps a b etter term is effectiveness planning and budget
ing. It is best understood in relation to the economic theory of
choice over tim e, or capital theory. Program budgeting by aiding in j
the development of operationally meaningful inform ation on inputs I
and outputs, and paying due regard to objectives, costs, and tim e !
I
i
dimensions should help to overcome som e of the m ajor shortcom ings j
of the existing federal budget (26:261).
Schick believes the PPB system that is being developed in the
United States Government portends a radical change in the central
33
function of budgeting. The budget system of the future w ill be a
product of past and em erging development; th at is, it w ill em brace
both the budgetary function introduced during e a rlie r stages of
reform as well as the planning function which is highlighted by PPB.
PPB is the first budget system designed to accom m odate the m ultiple
function of budgeting--that is, planning, management, and control
(40:243).
An inherent uncertainty in forecasting the future is the
m ajor problem in capital expenditure budgeting. Woodfield believes
that uncertainty, like risk, can be viewed as related to statistical
probabilities. With proper techniques and the judgm ent of m ature
executives a range of probabilities can be established, based on
subjective opinion. The reliability of the estim ates w ill, in part,
depend upon whether the individual is faced with a ris k o r uncertainty.
When the knowledge of the outcome of future events is im perfect and
the probability of the event cannot be objectively determ ined, the
area of ignorance should be re fe rre d to as uncertainty. j
The forecast of economic events w ill always include j
elem ents of uncertainty since th ere are always variables j
whose value cannot be objectively m easured. It is not j
re a listic to assum e that uncertainty is ignored in the
decision process. Each assum ption, im plicity o r explicity
m ade includes its own degree of uncertainty. The assum p
tion may be thought to have a m inor effect on the accuracy j
of the final re su lt when in fact the total effect m ay be
m aterial in amount. (48:52)
Woodfield used a com puter to sim ulate the capital budgeting
session. The distribution of each variable, such as sa le s, was
I
assigned a number ranging from 0 to 99. The size of the group of ;
num bers assigned was dependent upon the subjective probability of
the factor under consideration. F o r example, if there was estim ated
to be a 15 per cent chance that sales would be X dollars, num bers
00 to 14 w ere assigned to that particular level of sales. This sam e
procedure was duplicated for each factor having a range of values.
Based on the factors, a range of ra te s of retu rn with likelihood of
occurrence was determ ined. By sum m arizing the ra te s of retu rn
obtained, a range and frequency of each was obtained. A probability ;
equal to the frequency of occurrence was then assigned to each ra te
i
of return. I
The data was then put in the form of a graph with probability
of reaching indicated retu rn on the vertical a x is. T hus, the prob
ability of reaching an 18 per cent retu rn may be .95, w hereas the
probability of reaching a 27 per cent rate of retu rn may be less than j
. 05. |
Woodfield concludes that probability estim ates such as |
these a re subjective in nature and therefore subject to human e rro r.
Because the resu lts are no better than original estim ates, the
individuals who make the estim ates should be persons of experience
35
in are a s affected (48:51).
M yers states that to date capital budgeting control system s
have been concerned p rim arily with analyzing an investm ent before
it is initiated. Today, however, one of the chief concerns of
executives is whether they are getting the full potential of investm ent
im provem ent from the operating floor and whether the firm is giving
its m anagers an opportunity to im prove th eir understanding of
investm ent management by com paring th eir investm ent decisions
against actual perform ance.
M yers' solution is the investm ent perform ance review
system . Some of the advantages to incorporating such a review in
the capital budgeting control system are:
1. Management can profit in the future by avoiding
m istakes of past investm ent decisions. Audits provide
m anagement with the hindsight of experience that can high
light areas w here im proved techniques of forecasting,
planning, and budgeting can lead to better investm ent
decisions.
2. Perform ance review a ssists in focusing attention
on those responsible for the capital budgeting process.
Individuals responsible for estim ates and evaluations would
tend to be m ore careful if they wore- assureds that th eir
projections would be com pared closely with actual resu lts.
3. Top management may want to filter out of invest
m ent proposals the personal bias of junior officers. P er
form ance review provides a way of determ ining the extent
to which a "bias correcto r" may be applied to the projected
retu rn from a proposal. (37:21)
M oller stre sse s what he calls the post-com pletion audit to
36
capital expenditures and states that the actual results are what
counts, not the predictions on the strength of which management's
decisions w ere made. He cautions that in good tim es the favorable
total results take the urgency away from a searching audit which may
uncover a multitude of sins (35:31).
A cash budget system is described by M iller as a method
for planning future cash needs in order to avoid the necessity of last-
minute loans. The cash budget is an all-inclusive forecast of cash
income and outflow that helps determ ine cash balances expected at
the end of a future period. Its m ajor purpose is to portray the
utilization of existing and anticipated cash resources needed to
finance operations, pay debts, pay for needed expansion, and yet -
maintain a satisfactory liquid position. He emphasizes many
companies can show a profit on their income statem ents but be on
the verge of bankruptcy because of cash shortages.
The cash budget seeks to predict when and in what quantity i
receipts of cash will come into a firm , and when and in what quantity |
expenditures of cash will be made. To develop the cash budget, the |
operating budget m ust be translated into its resulting cash receipts
i
and disbursem ents. From this point, the cash forecaster proceeds
with the necessary adjustm ents and revisions in the program s to
j
provide a safe financial course for the company. j
37 I
The cash budget is m erely a projection of cash flows based j
on estim ates and m ust be adjusted when projections prove incorrect.
It is a guide to good judgment, not a substitute for good judgment.
Because predictions are seldom entirely correct, budgets developed
from such predictions must be adm inistered with some degree of
discretion and understanding of their limitations (34:11).
Innovations reported in
interviews
A plan for a six-year capital expenditure program in a
medium -sized city was reported by its city m anager. The plan is in
the form of a capital outlay budget for the current year and the !
following five years. The purpose is to project both capital income
and expenditures so that adequate lead time is available to adjust the ;
spending program as necessary. This particular document consists
of 158 pages, 8-1/2 inches high by 14 inches wide. The width allows ;
adequate space so that the six-year sequential budgets of income and j
expenditure can.be placed side by side.
The capital budgets are in two sections. The firs t section j
consists of the proposed six-year capital improvement program , j
i
which is to be financed from existing revenue sources. The second
section consists of proposed six-year capital improvements either
necessary or desirable, but wfiich will require financing from new
38
revenue sources. The budget is replete with descriptions of each
improvement with a commentary explaining the sources of revenue.
The le tte r of transm ittal, consisting of eighteen pages, sets the
foundation for full and complete explanation of budget detail.
Another city m anager reported the use of a capital im prove
ment committee to make a five-year projection of capital im prove
m ents. When the projections are presented to the city council for
official action the inform ation is released to the public. This serves
as a commitment by the city to the public, although the program can
be slowed if funds w ere to become lim ited.
Each budget sheet is provided with ample information such
as departm ent, function, fund, account number, code number, and
item . The m anager also details the number of employees by current ;
actual, current budget, and request; actual expenditure past fiscal
year; estim ated expenditures current fiscal year; and estim ated
expenditures next fiscal year.
A system of program budgeting Was described by a m anager j
of another city. It was developed by an adm inistrative team consist- j
ing of the budget analyst, director of the budget, adm inistrative |
assistant, a department of personnel representative, and the
executive assistant.
Individual program s are established by function, department,j
39
and activity. For example, the activity, M school crossing guard" is I
in the police department, which is part of the function of Public
Health and Safety. Expenditures are recorded by m ajor object and
by fund. The m ajor object includes commodities and salarie s and
wages; w hereas, fund includes the general reserv e fund and the
traffic safety fund. As part of the activity budget program inform a
tion, work load indicators, salary and wage detail, and non
personal service detail (food and clothing) are included.
A second budget, consisting of a condensed version of the
larg er document consists of sixty-five pages and is for distribution
to the general public. This publication, as well as the parent
document, includes many graphs and charts with supporting
statistics.
The budget document in still another city includes budget
detail by departm ent--such as fire. Within the departm ental budget
there is a m ore detailed analysis by activity, such as adm inistration
1
or fire prevention. An additional analysis is made of personnel by j
position and salary. Each departm ental budget has a com m entary |
preceding the actual budget figures and includes significant work j
i
load statistics, such as number of alarm s received during the past
year.
One county adm inistrator reported on the extensive use of j
40
budget form ulas. The budget is established to reflect the existing
level of service in all classifications. This makes it necessary for
the board of supervisors to take action on only those items which .
reflect an increase in level of service. F or example, by budget
formula, a specific number of clerical employees a re assigned to a
department reflecting an "existing level of service. " If the city
grows in population, a form ula could relate the population of the city
with the number of clerical employees needed and would automatically
indicate the increase in clerical staff required. This increase would
not require board action, since it represented an "existing level of
se rv ic e ." On the other hand, if a request had been submitted to
i
increase the number of clerical employees over and above the
automatic increase, it would be considered a policy m atter and |
would require specific board approval.
A unique feature of the budget document is the use of color
coding to indicate action required by the board of supervisors. The !
white pages contain those budget item s which reflect an existing
i
level of service; pink indicates a recommended increased level of j
|
service, and a light yellow color indicates a requested increase in j
level of service as recommended by a department head but not
recommended by the county adm inistrative officer.
Another county adm inistrative officer uses a very simple
41 !
technique to evaluate those requests for in crease in budget expendi
tu res., He recom mends in those situations, the adm inistrator ask
i
the question, "Why? What would happen if it w ere not included in j
the budget?" When these questions a re answ ered, a follow-up
request should be made. "Show me your evidence that will indeed
happen. " This county uses a sophisticated budget calendar co n sist
ing of five pages, forty-four dates, and seventy-eight specific
planning actions which m ust be taken during the budget year.
Several counties and cities reported a staff position with the
responsibility for making budget analyses. Although the titles
differ, the function was essentially the sam e, and in all cases the
officer holding the position was directly responsible to the chief
adm inistrator. All reported a high degree of satisfaction with this j
form of budget control.
Innovations in Purchasing
Innovations re p o rted in j
the lite ratu re i
... i
Dodd reports a trouble-saving practice in the purchasing |
i
departm ents of many progressive com panies. This practice is i
based on the rule of thumb principle which guides system s analysts.
If th ere a re m ore than two pieces of related p ap er, th ere is an j
42 ;
excellent chance there is too much paper (22:56).
The problem of too much paper may be easily encountered
i
in the purchasing-receiving-accounts payable operation where the j
purchase order, receiving report, and invoice are filed separately
and then matched before disbursement is made. If a combination
purchase order and delivery receipt form were used, only two
documents need be m atched--the delivery receipt and the invoice.
In the case of a partial shipment a xerox copy of the delivery receipt
is held for recording subsequent shipments.
Purchasing should not receive invoices unless the accounting i
department cannot match the price or term s of the invoice and '
purchase order. In this system accounts payable matches only the
delivery receipt and the purchase order. j
Kodak uses a sm all value order (SVO) system . The problem
is to eliminate paperwork for sm all local purchases. The program
has three basic ground rules:
1. Select local vendors only are used. j
2. All m aterials must be immediately available from j
i
1
the supplier's stock.
|
3. There is maximum dollar lim it on any one order.
When a requisition is received the buyer determines if it
i
meets the criteria for a SVO. If so, the buyer gives the order by
43
phone. The vendor, in making shipment, staples two copies of the
delivery slip to the outside of the package and sends it to the buyer.
One copy of the delivery receipt lists the price and serves as an
invoice. All information generally on an invoice is included such as
requisition number, description, unit price, cash discount, and
delivery point.
When the shipment is received the delivery slips a re
stamped with the date and signed. The priced copy goes to the buyer
where prices are checked. If prices are correct, the delivery slip
is attached to the requisition and sent to accounting for payment.
The other copy of the delivery receipt remains attached to the pack
age so that the internal delivery service knows where to deliver the
shipment (47:72).
A blank check purchase order system is reported by Sloane,
purchasing agent fo r Columbia University. The procedure has
accomplished the following:
1. It has saved the university money because m ost
vendors give extra discounts for ’’cash with.order. "
2. It has considerably reduced check writing and
keypunch time in the controller's department.
3. It has stream lined paperwork and helped purchas
ing's relationship with requisitioning departments.
4. It has enabled purchasing executives to cut sm all
orders loose in a hurry, so they can concentrate on m ore
important m atters. (43:83-84).
The system works in this way. After the buyer receives a
44
requisition for $100 or le ss , he codes the requisition form to indi
cate it is a blank check purchase order form , fills in the vendor's
name and price data, and sends it along to the typist. The typist, in
w riting the ord er, uses a Standard R egister Company eight-part
snap out. The firs t two copies go to the purchasing agent for signa
tu re. The first copy is printed on safety paper and is a blank check.
The second copy is the purchase order. The other copies a re
sim ilar to those in the standard purchase order snap out.
Vendors usually deposit the checks quickly. Virtually all
checks are deposited and returned within ten days. The purchase
order form instructs vendors to make complete shipments only and
to send duplicate invoices m arked paid. When a cash check purchase
is complete the controller’s office is left with four docum ents--the
cancelled check, the signed receiving rep o rt, the purchase order
copy, and the paid b ill--all with the sam e number.
Some of the problems and solutions reported by Sloane are:
1. Problem : The vendor deposits the check before
the goods a re received.
Solution: T his is hot worth worrying about.
2. Problem : D iscrepancies between purchase o rd er
amount and check amount occur.
Solution: Purchasing queries the vendor on large
discrepancies, but sm all unexplainable differences
a re passed.
Problem : T here a re m ore individual transactions.
Solution: C lerical work has been alm ost elim inated.
Problem : Some departm ents refuse to sign the
purchase o rd er receiving rep o rt copy until the last
m agazine in a subscription has arrived.
Solution: Remove the receiving rep o rt and send it
to the controller when the purchase order is issued.
Problem : L arge companies using data processing
don’t know what to do with blank checks and tend to
bill Columbia in th eir regular, program m ed style.
Solution: F orget it. If the check is m ailed back,
send them a regular purchase order.
Problem : A vendor sends out only 75 per cent of
the item s ordered.
Solution: The vendor fills out the check for only
75 per cent of the quantity price. If charges are
received for the full amount, use the telephone
im m ediately. When the rem aining 25 per cent is
shipped, another invoice is m ailed in the usual
m anner.
46
7. Problem : Some vendors forget to give cash
discounts previously negotiated.
Solution: Since it costs m ore than is saved by
attem pting to c o rre c t it, action is taken only
in those cases where a vendor is chronically
forgetful. (43:84-86)
A method of reducing the num ber of purchase ord ers issued
yearly is reported by a purchasing agent for a larg e concrete pipe
m anufacturer. An open o rd er board within a rm 's reach helps the
purchasing agent accum ulate non-rush requisitions on a weekly basis.
Once a week a purchase o rd er is typed for all item s from a single
source.
Some of the requisitions on the open board have been placed I
by telephone, and the weekly purchase o rder is sim ply a confirm a
tion. In these cases the vendor’s copy of the purchase o rd er is
destroyed (21:84).
A purchasing agent for a large equipment m anufacturer has j
i
described an "instant" purchase o rd er system . When item s are j
removed from stock, the inventory card is pulled and the withdrawal j
is noted. If this transaction brings stock of the item below minimum
level shown, a translucent purchase o rder m aster is pulled contain
ing vendor’s name, shipping instructions, re o rd e r quantity, price,
! and term s. A fter m arking the date on the m aster, two copies a re
I m ade on the copying machine. With a quick fold one copy is slipped
j :
i into a window envelope. Tim e expended; two m inutes, fifteen !
seconds--at a cost of one cent. It was em phasized this sytem is
especially tailored to fast turnover purchasing (33:276).
Innovations reported in interview s
Of the twelve counties and cities surveyed, five reported
' [ innovations in the area of purchasing. One county reported a com bi- 1
nation requisition-purchase order system . The requisition originates
with the departm ent head such as the a sse sso r o r tax collector and is
then transm itted to the purchasing agent who, if he approves, routes ;
; i
copies to the auditor-controller and the originating departm ent.
Detail such as buyer, bid num ber, date of payment, and item code
num ber are included on the purchase order.
The fo u r-p art form , used for all types of purchases, requites
; the departm ent head ordering to complete and sign the following
; |
I statem ent, which is placed on the face and at the bottom of the form : j
■ !
I hereby certify upon my own personal knowledge that j
the articles or services specified above w ere necessary and j
w ere ordered either j
! As a petty cash expenditure; or j
i ________ As an em ergency purchase under Section 258 of the
1 County Government Code; or
________ As a purchase against a fixed p rice contract :
i previously negotiated between Purchasing Agent
| and Vendor; o r !
48
With payment in advance for purchase of postage,
books, publications, subscriptions, and like item s
at established prices w here this is the generally
accepted p ractice under Section 254 cf the County !
Government Code: j
by me for use by the departm ent and for the purpose
indicated above. That the item s billed have been delivered
o r perform ed as per invoice except as otherw ise indicated
in rem arks above. That no p art thereof has been previously
paid.
In the case of a petty cash expenditure the invoice or receipt
is attached to the auditor’s copy when the requisition-purchase o rd er -
is routed to the purchasing agent.
An ” instant money" system was described by another county ,
chief adm inistrative office. It is-also called a "purchase order-
check system ," and "purchase o rd e r-d ra ft." In this particu lar
county, in a recent fiscal year 15,235 purchase orders w ere issued--!
each having individual values of less than $25 and a total value of ^
$169, 527. This was 13 per cent of the total number of ord ers listed ,
but represented only one-third of 1 per cent of the total dollar !
volume. Basically, the system is sim ila r to that reported by Sloane, |
i
above. Inform ation and regulations covering its use are as follows: j
1. A "purchase o rd e r account" in the amount of
$50,000.00 w ill be established in a com m ercial bank for the j
use of the Purchasing Agent and his deputies.
2. Its use will be re stric te d to purchases of $25.00 or
le ss for books, periodicals, pam phlets, and other services
and supply item s w herein combination o rd ers are not
feasible. This system will not be used in any way to re stric t j
competitive bidding. I
49
3. The deputy purchasing agent will determ ine the
source of supply and indicate the issuance of purchase order-
check (P. O-C).
4. The vendor will be provided with a purchase o rder
and a signed blank check lim ited to $25.00, payable to his
account. All checks are void after 90 days.
5. The requisitioning department will be provided with
two copies of a "report of goods received," one copy of
which, after completion, will be forwarded to the Auditor -
Contr oiler.
6. The Auditor-Controller will be provided with two
copies of an "invoice for m erchandise delivered," one copy
of which, after sum m arization, will be forwarded to the
requisitioning department.
7. The Purchasing Agent will retain one copy of the
order-check for statistical and record purposes.
8. The Purchasing Agent will reconcile monthly his
file of issued orders with the cancelled checks and bank
statem ent.
9. The Auditor-Controller will audit monthly the above
reconciliation, will file a claim for reim bursem ent of the
purchase order account with the value of audited cancelled —
checks, and will prepare an exception listing of those checks
which exceed an established variance.
10. The Purchasing Agent will examine the exception
listing to determ ine whether or not the variations are
warranted.
11. A form letter, shown on page 9, will accompany
initial mailings of the new order form to the vendor.
A form cover letter is sent with the purchase order-check
and gives the following instructions:
As soon as you have shipped the order and calculated
the amount due you, you need only do the following:
1. Complete the detail of the invoice section of the
check and fill in the amount due you on the face of the check.
Be sure you allow applicable cash discount. If order is
priced, your check entries m ust conform thereto.
2. Detach the check and endorse it.
3. Deposit it in your bank.
50
The letter also requests the vendor to observe these rules ;
in handling this type of purchase:
i
1. No back orders are allowed. The order will be
considered complete as shipped. If you are unable to ship,
please advise us at once, returning both check and order.
2. Please ship on a prepaid basis. Add any freight
charge assessable to us to your invoice and include this
charge in the check amount.
To further insure the co rrect processing of the purchase
order-check, the following instructions are printed at the lower
portion of the face of the check.
1. Complete invoice portion of check for item s and
quantities shipped.
2. Allow applicable cash discount. I
3. E nter net amount on check. !
4. Do not send separate invoice. j
5. If o rd er is priced, your check entries m ust
conform thereto.
6. If you collect California Sales or Use Tax, show j
your perm it number on check.
7. Detach check, endorse, and deposit in your bank.
8. All shipments must be fully prepaid to destination.
Several counties and cities reported a centralized purchas- |
ing system . This system precludes any departm ent or person from
buying and requires all requests for buy-outs to be channeled to a
I
central purchasing official. The advantages generally mentioned I
were:
1. It is easier to obtain wholesale prices.
2. It m akes it possible to reduce the number of
51
emergency purchase o rd ers.
3. It makes it possible to reduce the number of
purchases.
4. It makes it possible to bid m ore orders through
consolidation of requisitions.
A cooperative purchasing arrangem ent was described by
chief adm inistrative officers of two different counties. This is an
arrangem ent whereby the county cooperates with other governmental
agencies in pooling buying power in order to obtain substantial
savings. Before going to bid, the county notifies the other agencies
of item s to be included and gives the specifications. Other agency
officials are requested to complete a form , listing quantities desired
and delivery point. The request m ust be signed by an authorized
officer of the agency and returned by a specified deadline date.
Item s available range from large pieces of equipment,
including passenger vehicles, to the sm allest item s of s to re s,
including paper clips and bulk fuel. It is reported that savings on
some of the larg er item s may be as high as 30 per cent.
General Innovations
Management consultants
The president and chief executive officer of a half-billion
dollar en terp rise used fifty consultants at a cost of $2, 500,000 j
during 1966. His theory of operating a company is that he and a
sm all group of aids should act as a general staff pinpointing the
problem s and then presenting them to the specialists--th e consultants'
--fo r solution. He doesn't want consultants to tell him what is wrong
because he and his staff have to be able to determ ine that. The
consultant is th ere to solve the problem . He cites these advantages
in using consultants:
1. Consultants a re m ore likely to stay up-to-date in
such fast-m oving and sensitive areas as law,
taxes, insurance, and new manufacturing m ethods, I
than is a staff departm ent in the field.
2. Consultants provide the corporate and division
staffs with flexibility, because they can be added
or subtracted to suit the work load. With people
on the payroll it isn ’t so easy because of the
em otional attachm ent.
j
3. Consultants often aid in management development !
j
j
within the corporation they serve. This elim inates
the necessity for sending officers to graduate
management courses. (20:93)
An interesting new type of consultant called a ”captive"
53 I
consultant is being used to som e extent in som e of the la rg e r
industries. Over the years as business enterprises in this country
j
have grown ever la rg e r and m ore complex, both in organization and
in function, professional consulting services have been increasingly
in demand. Until a few years ago the management expertise cam e
alm ost entirely from the outside consultants. Recently, many of the
nation’s larg est corporations have decided that their recu rrin g needs
for expert advice on many subjects justify the use of full-tim e c a re e r :
consultants. This approach is said to be m ore economical and the
company gets the benefit of the consultant's first-hand knowledge of !
i
corporate affairs. Finally, the company is able to keep confidential
inform ation from "leaking o u t.’’ (46:57) ;
Consultants are used by industry and government in the
following areas: (1) when a one-tim e problem m ust be solved;
(2) when specialized skills a re needed part-tim e; (3) when an inde- ;
pendent outside viewpoint is desired; (4) when executive manpower i
is overloaded; (5) when a new company or program is being |
organized; (6) when an objective appraisal is needed; and (7) when j
the organization becomes too ingrown.
In selecting a management consultant the first step is to
define the areas of service. The next step is to carefully select the
consulting firm . R epresentatives should be carefully interview ed
54 ;
before any attempt is made to make a final selection. The third
step is to decide on the exact scope of the consultant’s work. This
may well involve a prelim inary study which would result in a —
detailed proposal setting forth the goals of the study and giving cost
estim ates (45:59). -
One city manager reported that his city uses consulting
engineers for all engineering services in the city. In addition, all
legal work is done by non-staff lawyers. His basic philosophy is
that he can obtain a high level of service and at the same tim e reduce
payroll. |
i
An official of county government highly recommends the use I
of consultants. He cautions that before employing a consultant the
manager should have clearly in mind why he requires the consultant. ;
He recommends giving the consultant status and involving him to the
fullest extent possible for greatest effectiveness. The employment ;
period usually lasts three or four months and until the specific job is j
completed. He believes the consultant can act as a buffer for the j
j
adm inistrator in bringing in recommendations which may be contro- j
versial but have the support of the administration.
Another city makes use of a large nationally-based
consultant firm exclusively for feasibility studies in several areas of
city government. The city manager was enthusiastic about the
55 !
results obtained and emphasized it relieved him personally from the j
specific responsibility of managing the studies.
Record program
How to update a company record program has been a prob
lem for m ost business m anagers. French poses a list of questions
which must be answered satisfactorily before one can hope to have a ;
successful record program .
Who should do it? The job can probably be done best by a
staff organization within a company rather than by a person closely
allied to one particular department.
How do you do it? F irst there must be a detailed survey of
what records have been retained. This involves a department-by
department review to determine who keeps what records how long and
for what purpose. This may involve bringing up-to-date the depart
m ent records destruction manual. j
i
What kind of record program is needed? The record pro
gram must fit the company requirem ents. The volume of reference, j
speed of reply necessary, and completeness of vital detail all bear j
on the type of system warranted.
How do you-file your records? A study of filing bottlenecks
may indicate a need for a modified system , different equipment or
56
techniques. Sometimes flow charts are helpful in revealing useless
steps.
Do you really need the record? The key is the relationship
between the cost of keeping a record versus the potential hazard of
not having it at all.
Above all, French believes the business m anager should
keep him self oriented to what others are doing in the record field to
im prove their system (23:30),
The record management problem in a large county has been
partially solved by giving the responsibility to a records coordinator, j
i
He works with the people in the various departm ents on a continuing
basis to a ssist them in finding adequate solutions. The chief admin- |
istrative officer believes m ost of the rem aining problems could be
solved by the California legislature changing some outdated laws.
Use of contract services
Service industries have produced a far higher growth ra te
in the last few years than the economy as a whole. One large
{
company increased annual revenues from $41,000,000 to $90,000,0001
I
in a period of six years. Cleaning and maintenance contract services
in the company have enjoyed a 10 to 12 per cent compounded annual
growth. Studies show that this could increase as much as 300 per j
57
cent over the next ten years.
This particular company recently contracted for the cleaning:
and maintenance of 12,000 apartm ents with 12,000,000 square feet o f !
floor space and housing some 50, 000 people (28:23).
The enthusiasm for contract cleaning and maintenance
service is shared by at least one county official. His. county has
contracted for this service for the past several years with very few
complaints and problem s. This m anager believes the work and the
general supervision is better than when the county had its own
maintenance and cleaning staff. He em phasizes the contractor, by
being specialized, is able to m aintain awareness of the newest and
m ost efficient methods and products. j
Form s control
A system s analyst is placed in charge of form control in a
county governmental agency. The control works in this way. When
a department head has a need or problem , procedural or otherw ise, >
he w rites a memo to the analyst stating his case. After discussing j
the situation with the analyst and if deemed advisable, the department-
head assigns one or two men to a junior analyst who studies the
problem by asking what is presently being done and converts the
answ ers into a flow chart. An im portant aspect of the procedure is j
58 |
that the analyst works by function and is able to cross over depart
ment lines.
i
After studying all information, a new flow chart is made.
If there appears to be an application to data processing, the computer
consultant is requested to analyze the situation and make cost
studies. The development of new form s or the retention of the old
ones is an outgrowth of this entire analysis. Additional form control !
is exercised through a central reproduction department. i
Another county government official delegates department
heads to be responsible for form control. He believes they need
ask only one incisive question to evaluate a request for a new form:
’’Why do you need it?”
Cooperative program s
Symbiotic m arketing is the term given to the practice of
mutual cooperation in m arketing between firm s and people. In the
i
- i
natural world symbiosis refers to the harmonious living together of
dissim ilar organisms in a mutually beneficial relationship. F or j
i
i
example, the African buffalo bird lives on the back of the buffalo. In !
return for a free mobile home and a food supply consisting of the
gnats and other insects also residing on the host’s back, the buffalo
provides a valuable service. When danger impends, the bird with its
fine sensory equipment em its a loud squak and flies off the buffalo's j
back--thereby warning its host of the danger.
There are two m ajor modes of symbiotic marketing:
1. One company deals with another on either a one-
shot or long-term basis but without any major
innovation in organization.
2. Two companies create a third entity. That entity
may range from a tem porary joint study group to
a separately organized corporation owned by the
two parents.
An example of the first mode is in the Florida citrus
industry. Florida producers of fresh citrus items used to have a j
i
considerable problem m arketing their w ares in large northern urban |
m arkets until they perceived that the established retail and home
delivery distribution networks of dairy companies w ere tailor-m ade
for their needs. Hence the emergence of what was once regarded as I
• i
an improbable product--orange juice in waxed milk containers. j
Adler says that to manage change, rather than be managed |
l
by change, forward-looking m arketers will seek partners to join j
them in development efforts. Symbiotic m arketing will enable
companies to take better and faster advantage of new opportunities.
It will increase the vigor of competition, the rate of innovation, and J
the excitement of business in a dynamic economy (17:59).
Several city and county governments reported cooperative
program s with other governmental agencies. One city reported a
cooperative arrangem ent with another city in maintenance. This
manager is so pleased with the way it is working he is seeking other
ways of expanding cooperative agreem ents. Already reported above
were several cooperative arrangem ents between governmental
agencies in the purchasing departments.
Chapter Summary
Innovations in business management found through inter- '
views in five counties, seven cities, and five businesses and j
industries w ere related in this chapter. The number of innovations
reported in each by business management area is shown below in
Table 1.
!
|
A total of fifty-four innovations w ere reported in interviews; !
i
!
twenty-one in counties, twenty in cities, and thirteen in business j
and industry. More innovations w ere reported in the area of per- |
sonnel adm inistration, followed by the areas of budgeting and j
j
purchasing.
No tabulation by area was made for innovations reported in
the literature. Selected innovations from the literature and
61
TABLE 1
NUMBER OF INNOVATIONS REPORTED B Y
AREA IN COUNTIES, CITIES,
BUSINESS AND INDUSTRY
Area Counties Cities
Business
and
Industry
Total
Personnel 2 7 13 22
Budgeting 5 5 0 10
Purchasing 7 3 0 10
General 7 5 0 12
Total 21 20 13 54
innovations related in interviews have been reported as m ajor find
ings in Chapter IV.
CHAPTER III
INNOVATIONS IN SCHOOL DISTRICTS
Introduction
This phase of the study had as its purpose the locating of
innovative practices in school business adm inistration already being
used by certain school districts in California. In o rder to determ ine
which districts w ere using promising practices that could be adopted
by others, it was decided that practicing school business adm inistra- :
to rs would be contacted by letter.
Endorsement of study
The endorsement of the California Association of Public
School Business Officials and Dr. Leonard Grindstaff, Riverside
County Superintendent of Schools, was obtained. _Ar:opy of the letter :
|
of endorsement from CAPS BO accompanied an originally typewritten |
letter from Dr. Grindstaff to each California school superintendent inj
j
school districts exceeding 2,500 enrollm ent as shown by the j
California Administrative D irectory for 1967. The letters were
62
63
individually typed on a tape machine which was made available by a
firm selling office machines in southern California.
Response analysis
It was expected that the chief school adm inistrator of each
district receiving the letter would delegate responsibility for respon
ding to the individual assigned to the business adm inistration function.
This expectation proved to be correct, since virtually all those who
responded w ere, in fact, the assistant superintendents of business or
equivalent position.
Approximately six weeks later about 22 per cent or sixty-
one persons had responded. At this time, a follow-up return postal
card was sent to those unified districts having over 10,000 enrollm ent
who had not responded--rem inding them of the letter and asking them ;
to notify the research ers if they needed an additional letter and
response form . j
Following the rem inder cards, the total m ailed responses
i
rose to eighty-eight for a final total of 32 per cent. The list of
districts responding is given in Appendix I.
The breakdown of districts by size to whom letters w ere
sent, and the number and percentage of districts in each enrollm ent
category who responded is shown in Table 2.
64
TABLE 2
NUMBER AND PERCENTAGES OF RESPONSES
BY DISTRICT ENROLLMENT
Enrollm ent
Range
L etters
Sent
Responses
Received
Per Cent
Responding
2, 500 to 5,000 97 23 24
5,001 to 10,000 90
_ - 23
26
10,001 to 20,000 62 30 48
20,001 to 40,000 20 11 55
40,000 and up 7 1 14
Total 276 88 32
After the returns had all been received, a careful analysis
of the response form s was made to determ ine which d istricts would
be studied in depth by personal interview s with the business official
designated by the superintendent. I
Responses by category j
The analysis revealed that the areas of business management
w ere readily divided into the categories of school business adm inis
tration ordinarily delegated to the business official in the school
d istrict. As might be expected, the larg est num ber of responses w as
in the areas of budgeting, maintenance and operations, and j
purchasing. Some school districts had one practice to report, while j
the m ajority reported two, as was requested on the response form .
One district reported twelve different practices.
Each district was asked whether they wished a copy of the
results sent. All the districts answered this in the affirmative. A
few districts had no items to contribute but nevertheless asked for a
copy of the re su lts. The results of the returns by area are reported
in Table 3.
Innovations
In this and succeeding sections of this chapter, findings
derived from the response form are presented. Each section con-
I
sists of the m ajor areas of business administration regularly !
adm inistered by the business official of the typical school district.
Additionally, the results of interviews with public school business
officials are reported, especially in those cases where the interviews!
elicited m ore detailed information. |
S
Budgeting
Four districts reported using a budget committee which is
made up in various ways. One medium-sized unified school district
establishes such a "Budget Committee" each year. The committee is
66
TABLE 3
NUMBER OF MAIL AND INTERVIEW
RESPONSES BY BUSINESS
ADMINISTRATION AREA
A reas of Business Mail Interview
Management Responses Responses
Budgeting 19 6
M aintenance and operations 19 10
Stores and inventory 9
4
Accounting 9 3
Food service 9 6
Purchasing 6 6 —
Personnel 5 4
T ransportation 5 3
School planning and construction 3 3
Insurance 2
G eneral 21 12
Total 107 57
67
form ed early in the year and consists of the assistan t superintendent,
business se rv ic e s, as chairm an; the superintendent; a principal
from each school level; two m em bers of the certificated professional
organization; and two m em bers of the classified association. T hese
la tte r four also serv e as sa la ry representatives in th e ir respective
organizations. This com m ittee is a reaction group in the process of
budget developm ent, and various facets of the procedure a re ex
plained in o rd er that feedback may occur with the various employee
groups.
The com m ittee is involved with such item s as replacem ent
and equipment purchases for the ensuing year as well as requests
related to personnel, special pro jects, and supplies. The annual
budget document is the culm ination of the com m ittee’s efforts,
together with a m essage to the governing board and re la te d details
to explain the budget to the public and the staff. The d istric t
reported th at the com m ittee expresses opinions freely and that the
thinking of the com m ittee is combined and placed into the tentative
budget document and presented to the board.
Another unified school d istric t, located in a m etropolitan
area, reported that a detailed budget analysis is prepared annually
for use with the adm inistration, officers of employee organizations,
P.T . A. board m em bers, and other interested individuals in the
68
community. A budget sem inar is held for community leaders who
are invited by the board of education. A sim ilar m eeting is held for j
all school personnel. The response from the community and school
staff has been favorable.
This d istrict operates with the philosophy that the facts
should be m ade known to the public and that fiscal m atters a re open
to everyone. Since this is done before the form al budget-m aking
process begins, it is well accepted.
A larg e high school d istric t sends budget folders to each
departm ent in order that each teach er may contribute requests in the !
"200" se rie s of the budget. Following this, the adm inistrative ■
council acting as a budget com m ittee sets up allowances per student
based on past experience and policy. After the tentative budget is j
established, changes a re made as the enrollm ent in creases with each
school receiving a re p o rt periodically. The principal m akes his
decisions on the basis of policy--not on a certain amount per child.
i
t
These policies are m ade at the adm inistrative council level, and with !
I
j
this total participation it is understood by those affected. j
I
!
Another unified district arranges its public presentation of
the budget into sixty-eight m ajor functions o r activities. The local
newspaper commented favorably upon the way the budget was
presented and stated that it was the first tim e it could be understood.
69
T his d istrict also asks the principals to submit needs in th ree
categories: (1) "m u st,” (2) "should," and (3) "n ice." This allows
the cabinet to m ake revisions on a p rio rity b asis, and the governing
board is kept inform ed on what is going on in these revisions.
A newly-unified d istric t found itself in the position of
mounting p ressu re with resp ect to the adoption of salary schedules
p rio r to knowledgeable inform ation concerning revenues. In o rder
to dram atize the problem all salary accounts for certificated person
nel w ere listed first, showing the related percentages. The sam e
thing was also done for classified sa la rie s, together with fringe
benefits. The purpose was to dram atize what was happening with
resp ect to m aintenance and operations and the other portions of the
i
budget. The d istrict reported that it was received very favorably by j
the board resulting in a m ore cautious approach to salaries early in
the spring.
A unified d istric t located in northern California p repares its j
budget by program s with the objectives of each program and the J
S
means employed to attain them given in a brief narrative. A com- |
j
parison of anticipated funds to pay the costs is m ade with the actual j
income for the two y ears preceding. Included in this prelim inary
stage of budget planning are the num ber of pupils who will be served
by a particular program and the cost per pupil by source of funds for
70
the next three years. This is programmed on data processing to
make the plan feasible.
One large unified district uses a technique in the general
fund budget preparation which has been helpful to them. Essentially,
the technique divides the undistributed reserves into two parts--one
called undistributed reserves, the other called prior year's payables.
The prior y ear's payables are not liabilities charged to the previous
year’s budget, but are budgeted expenditures which were to be
completed during the current year which were not completed and m ust
therefore be carried forward to the next year’s budget. Any item j
that has been budgeted for the current year is not resubmitted as a
budget item for the next year even though the transaction will not be
I
completed during the current year.
After July 1 the prior year’s payable list is arranged by
budget account and amount. The district maintains complete
integrity in the system by including only those purchase orders which j
j
were budgeted during the previous year and were actually ordered or !
|
contracted for during the prior year. In this way the confidence of !
the staff, the board, and the public is maintained.
The district believes that there are several advantages in
this system. Among them are the following:
1. The next y ear's budget preparation proceeds
71 1
without concern for the problem of whether
or not the transaction is completed during the
current year.
2. The last-m inute problem of completing the
transactions on given purchases is eliminated.
3. The next y ear's budgeted amount is not inflated.
4. The entire month of July can be used to identify
the expenditures and since the amount is in a
lump sum in undistributed reserve, a budget
revision is not necessary.
Explanatory notes on the left side of a d istrict's budget
document assist the board and the public to better understand the
dollar figure on the right hand side of the page. The district report- j
ing this practice feels that it is helpful to anyone using it.
One large district is trying a system of preparing the budget i
i
on a departmental basis. The five m ajor divisions are: (1) instruc- j
tion, (2) pupil personnel, (3) business services, (4) district
administration, and (5) federal projects. The account numbers
have been so designed as to make conforming to the standard state
budget relatively simple. This system will require some data
processing to make the transition.
The use of a "cumulative factor” to project certificated
salarie s is used by an elem entary district. The salary schedule is
prepared with the base salary given as a factor of 1. Each step and |
range on the schedule is shown as a relationship to the base. By
listing the number of teachers at each step and range on a work
sheet, it is a sim ple m atter to multiply the number of teachers on
each step by their respective factor and adding the results gives the
"cumulative fa c to r." This factor is then multiplied by the base
salary. The total needed to be budgeted for certificated salaries is
then readily ascertained. Increases in the base salary also show the
total amount needed to support any change in the salary schedule. j
Likewise, any new funds which become available to the d istrict can
be divided by the cumulative factor to see how much the base salary
can be raised. It is assum ed that the relationship of each step and
range is determined by board policy. It was reported by the business
official that this system makes it possible to have immediate answers!
at board meetings with virtually no effort or confusion. j
j
When a program changes, one district revises its budget
which has the effect of releasing money for other purposes. It is
amazing to note the actual money made available when not needed,
due to such things as a program change or receiving lower prices on
m aterials.
D istricts have tried numerous ways to facilitate the develop
73 ;
m ent of the annual budget. One unified d istrict uses different colors !
of paper for each particular kind of request, such as one color for
i
requesting supplies and another color for justifying replacem ent of j
equipment.
One district described the following group of practices in the
are a of budgeting. One of th eir budget policies is that the principal
gets a lump sum when a new school is opened in addition to his
regular budget for textbooks, other books, and other expenses of 1
instruction. The district reported that this gives the principal an
opportunity to use his staff in developing with innovative and im agina-;
j
tive ideas in the instructional area. The district believes that this
method lets the classroom teacher know that the adm inistration is
supporting new ways of doing things. This business manager also j
perm its the principals to m ix budget classification accounts 230--
textbooks, 240--other books, and 290--other supplies in their school j
budgets. This allows them to make decisions concerning their pro- j
I
gram without minute and detailed bookkeeping. It was reported that j
the district works under the assumption that schools are made of j
people, not rules and regulations.
Maintenance and operation
Most school business adm inistrators consider the
74 i
maintenance and operations area as a very important part of school
business management. Without adequate service being given in this i
1
area the educational program can be greatly hindered in efficiency, j
The respondents to the letter had the second largest number
of replies in the area of maintenance and operation. Some of the
items reported in the responses follow.
One business office publishes a list of incomplete work
orders each month, together with those jobs which have been
completed in order that the principals may know what is being
planned for the particular school and that the work order is not being j
I
ignored. This same district also sends its maintenance men to
m anufacturer-sponsored schools of one to ten days’ duration. Such I
examples as typewriters, projectors, calculators, and televisions j
were cited. In this way their own personnel are trained to do most
repairs to equipment of this type and the service is completed
sooner. j
i
Most districts use their own staff to do the gardening work j
as needed. One of the problems which this generates is that during j
the season of the year when little work is required the staff may be
too large and the converse is true during the growing season. One
district has been contracting its gardening with an independent firm .
In order to obtain bids they write specifications and let it out to bid.
75 ;
A perform ance bond is required of the successful bidder. New
schools a re cared for by the district staff for the firs t year and
i
i
added to the contract. The district reported that the grounds look j
better and that eight gardening positions had been eliminated- - re su lt
ing in an actual saving to the district. The contractor is able to do
the job with fewer men and seasonal employees. The d istrict need
contact only one person who is responsible for his own crew. The
d istrict is satisfied with the program and recommends it to others.
Another m atter which school districts find to be a problem
is that of the sum m er maintenance program . School business I
i
i
officials are frequently faced with a large amount of work to be done
and a lim ited tim e in which to do it. One d istrict has come up with j
a workable program by dividing the entire maintenance and operations!
departm ent into work crews for the summer. These crews cover all
custodial, grounds, and maintenance operations. Examples of these j
divisions of responsibility are such groups as floor crew s, painting j
crew s, and crews responsible for grounds. Included in this system j
I
is a preventative maintenance program for all mechanical equipment.
The district reports that breakdowns have become a negligible factor
in their operations and that by scheduling vacations with the least
interference they receive m ore work.
At the close of the sum m er maintenance program a detailed,
)
76 j .
w ritten report is made by the supervisor of the program . This j
report goes to the adm inistration and the board and is used as a
j
method of communicating the results of the sum m er’s efforts. The
district expressed satisfaction with the effectiveness of this program .
Most business m anagers would agree that it is im portant to
keep school principals informed about the maintenance which is to be
done in their school. A northern California d istrict uses a "Work
O rder Requisition, ” with distribution of the various copies to only
those persons directly concerned with the particular job. The prin
cipal is given a completion date, and the district has achieved a
" !
record of completing 85 per cent of the jobs on tim e. The m orale of j
the maintenance crew has been improved, and teachers feel that ;
something is being done for them. By keeping files of the types of j
tasks which were perform ed, the maintenance department was able
to develop a ’’preventative maintenance” program . This system
further eliminated troublesom e -breakdowns of equipment during the j
year. j
The concept of work orders was mentioned by several
districts with variations. One district accomplished this by telephone
and named it "Phon-Q-Gram, ” with one copy of the work order going
to the department involved and the other being centrally filed.
A coastal unified district has a self-contained gardening
77
departm ent which is responsible for the appearance of the school
grounds and also m aintains its own m echanical equipment. This
la tte r is different in that m ost districts assign that function to the
m aintenance departm ent. The gardening departm ent also transports
all in tra -d istric t furniture and equipment, since they have the
necessary manpower and trucks. The d istrict quite well satisfied
with this arrangem ent can get the job completed in a tim ely m anner.
By changing the work week to a Tuesday through Saturday
schedule, one d istrict is able to m ake better use of its painting crew.
It was reported that the men like it and the d istrict benefits.
A large m etropolitan d istrict has several well developed
ways of expediting work in the area of m aintenance and operations,
which are listed below.
1. Telephone bid form and policy.
2. Pre-approved lists of standard non-stock m aterials
O. K. to purchase for maintenance.
3. Standard specifications for repetitive re p a ir work
such as repainting, repairing, and placing of
asphalt concrete surfacing.
4. Annual contracts for m aterials and services.
5. Using a Megohmmeter, the resistan ce of the
conductor insulation is m easured annually and as
78
required. This is perform ed in o rd er to detect
potential failures and also to anticipate rem aining
usefulness. The d istrict plans replacem ents at
minimum cost and inconvenience and has achieved
a minimum of m ajor breakdowns which caused
interruptions to norm al school activities.
6. Use of high level custodian supervisors as adult
education in stru cto rs in the teaching of basic
custodian sk ills.
7. Development of communications between the dep art
m ent and labor organizations for the purpose of
settling grievances at the firs t instance of complaint.
It was reported by a high school d istric t that it has con
verted its custodial schedules from a square footage per man basis
to a unit system . The business official explained that each unit value
has a twenty-m inute tim e period and classroom areas are assigned
a unit value based on size and use which is determ ined by an inspec
tion of the area. The system allows for the changing of custodial
schedules with very little effort on the p a rt of the business office and
assu res a m ore equitable assignm ent of custodial duties.
Another d istric t uses art outside consultant to work with the
head custodian in each school to a ssist local personnel in perfecting
ways to better the janitorial service. Business Week comments about;
this in describing a large corporation's use of outside consultants.
They a sse rt that outside consultants are m ore likely to stay up-to-
date in their specialty and that they provide for flexibility in the staff
since they can be brought in only as they a re needed (20:94).
Stores
In this section item s pertaining to warehousing, inventory,
and related m aterial are included. An elem entary d istrict mentioned
that it had developed a "warehouse catalog” so that each page could
be used as a warehouse requisition and delivery slip. These
separate pages w ere used as needed by the school secretary by
simply filling in the quantity desired. The original and duplicate
w ere sent to the warehouse and when the o rd er was filled the school
secretary signed as the m aterial was received. The business office
copy was used as a reco rd of the amounts expended by each school. !
j
It was reported that typing tim e is reduced at the schools and that I
e rro rs are eliminated. Since all requisitions have item s in the sam e
sequence, orders can be combined quickly and easily. Several
d istricts also reported variations of this process. The use of data
processing to decrease the amount of "paper work" and to expedite
delivery is increasing and was reported by several d istricts.
80 !
Accounting
j
A large elem entary d istrict in the San Joaquin Valley
j
reported that a cost accounting system for th eir maintenance work
had been developed. This is accomplished by the use of form s and
the preparation of a m aterials book making it possible to detail labor
and m aterials for all maintenance work done by the skilled trade
[
employees. One advantage cited was that w ork load and actual cost
information facilitated budget preparation.
Several districts have taken steps to use data processing
equipment in the day-to-day financial statem ent and budget reports I
in order that management decisions can be intelligently made.
The entire system of accounting in the districts is in cre as
ingly being assum ed by mechanized equipment. Since this study is
not prim arily concerned with data processing, it will not be further !
elaborated upon. j
With the expansion of various types of federal projects in j
the school d istricts, it has become necessary to a greater extent than
ever that rather detailed accounting be done on the projects.
Business offices m ust check for availability of funds, determ ine
whether the equipment is approved in the proposal, and whether the
proper account is being charged before approving purchases. This
detailed record keeping enables school officials to keep up to date
81
on transactions and changes as they occur during the life of the
project. Until an acceptable plan of program accounting has been j
adopted, this alternate method may need to be followed.
One d istrict keeps a running balance on every account in the
purchasing departm ent. This enables the departm ent to process
requisitions without sending them to the accounting office. The
accounting system , as maintained by the accounting office, has not
been changed--according to the d irecto r of operational services of
the district.
A large high school d istrict in northern California has
developed a system of internal control for the handling of cash. The !
d istrict office is bypassed by tran sferrin g the cash by arm ored car
i
directly from the school to the bank on a daily basis. The cash I
record is kept in each school in account books. The business official5
believes that the key to the success of the system is that all money
received in a school is collected in one central place with the cash |
reg ister tapes kept as records. I
i
The student body accounts a re kept on a d istrict basis, with j
i
each school’s record kept separately. All checks on these accounts
I
are w ritten in the central office upon the receipt of a requisition.
The business m anager believes that the school personnel
should be kept in a good light and that a good reputation is m ore
8 2 ;
im portant than a few dollars. In order to do th is, all schools are
kept system atically informed regarding each activity--including such
item s as student stores, student body accounts, and cafeteria
accounts.
To give further responsibility to the school principals, each
junior high school is given a revolving cash account of $50 and each
senior high one of $500. This is used for sm all purchases with a $5
lim it per purchase.
Only one district reported on a program of investment of
idle district funds not immediately needed for meeting financial
obligations. Shaerer wrote that the key to any investment program ■
is a cash flow statem ent which must be prepared periodically. He
pointed out that leaving uninvested funds in the treasury resu lts in j
losses that cannot be overlooked. He recommended that districts
invest even for one, two, or three days in order to realize the
greatest amount of profit (41:79). The above-mentioned d istrict j
also files a claim for refund of state gasoline taxes paid on fuel used i
|
for non-highway purposes, such as forklifts, pumps, m owers, and j
j
sim ilar equipment. |
Food service
A ''Labor Allocation Chart” has been developed for use in
83 !
the elem entary school cafeterias of one unified school d istrict. It
j
serves as a guide for the allocation of labor in the schools. It was
reported that the number of hours required to operate the cafeterias j
has been reduced substantially. Some cafeteria m anagers try to
"best the ch art," resulting in further savings. The chart is based
on the number of lunches served daily, with staffing changes made on
the first working day of the month directly following that in which a
lunch count pattern has been reflected. Principals were reported as >
having accepted the staffing pattern based on the application of the
form ula. !
A food service supervisor reported that the d istrict is
concerned only with the entire cafeteria operation being "in the
i
black” rath er than the individual school. This allows for some
variation and does not penalize the particular school if it is located
in an area which cannot readily keep from operating at a loss. When j
a new recipe is developed for use in the cafeterias it is introduced at j
j
only one school as a "pilot" to ascertain whether it will be acceptable j
to the m ajority of those pupils eating in school cafeterias. j
j
Another d istrict buys ready-to-serve foods when possible, j
The business official believes that vendors who specialize in iarge
scale food production can surpass anything that can be done by the
district. Included in the items which are purchased in this way are
84 !
such things as sandwiches and apples, which are subsequently dis- j
pensed in vending machines. ;
A m edium -sized elem entary d istrict achieves cooperation J
between the school nurse, the cafeteria m anager, and the pupils by
combining the study of good nutrition with social studies. School
lunch participation has increased as a re su lt of this program . For
social studies units pupils plan special lunches within the fram ew ork j
of the "Type A" lunch program . An example would be a Japanese
m eal in culminating a study on Japan. On such days there is 100 per ;
cent participation by the classes involved.
An in-service program of training cafeteria employees has I
been instituted in one unified d istrict which responded. The high
school m anager is used as the supervisor of training on a continuous |
basis. It has been an excellent means of providing orientation to the 1
philosophy of the food service operation of the d istrict. The program;
is used to train substitute employees as w ell as those already working
i
i
!
in the various cafeterias. The d istrict reported that it considered j
this practice as advantageous to employer and employee. Future
m anagers are selected from the ranks of those employees who go
through the program .
The decentralization of food purchases and menu manage
ment, together with placing new responsibilities and authority upon
I
I
85 i
cafeteria m anagers, was credited by one d istrict as having revital- I
ized their food service program . They believe that m anagers should j
i
be allowed to use th eir abilities with the purchasing officer coordinat-j
ing the operation.
Collection of lunch money in elem entary schools frequently
causes problem s of loss of cash by the pupils and all its attendant
difficulties. If the money is collected the first thing in the morning,
reco rd keeping becomes voluminous; and if it is collected at noon, i
the aforementioned problem develops with many children because
they have no place to keep money. One d istrict has reduced this I
problem to a minimum by collecting the money in the morning, j
before school sta rts, and stam ping a flourescent ink m ark on the
back of the hand of each person who pays. This elim inates all record'
keeping by pupils’ names and allows quick passage through the lunch !
line when the m eal is served.
The following item s w ere mentioned by a m etropolitan j
district in response to the request for practices which would be j
i
applicable in other sm aller d istricts. ]
1. Manpower formulas have been developed on the
basis of work loads rath er than m eals per day.
2. C afeteria supervisors are required to put on
uniform s and work at least one full day each
86
sem ester in each cafeteria kitchen under their
supervision. They rep o rt that it gives the super
visors better knowledge of the operation and
better rapport between them selves and the m anager
and w orkers.
3. All standard recipes use weight m easurem ents
rath er than volume m easurem ent because of
greater accuracy and speed of handling.
4. Foods a re purchased on bid after being tested,
with all identification rem oved. A sam ple is
retained for com parison with the delivered item .
The low bidder does not n ecessarily receive the
award since quality is very im portant to this
district.
5. A paid in -serv ice training program is conducted
during the school year for m anagers and cooks.
Purchasing
An elem entary d istric t reported that a group of school
d istricts in the area used a system of cooperative purchasing in
which the key factors are: (1) a standard advertising date, (2) a
standard bid closing date and tim e, and (3) a standard vendors’ list.
87
The system enables the vendors to consider their bids for a group of j
school districts in a common area, thereby enabling them to bid on
i
larger quantities and to reduce the tim e involved in preparing bids
and securing information from suppliers. It was reported as being
advantageous to the school districts involved.
A unique plan to avoid the need for central warehousing has
been developed in one district. The business office requires that
orders for the period of November 1 through October 31 be sent in
prior to May 31. These orders are combined and prepared for
receiving bids on a district wide b asis. The bids call for delivery of !
one-third of the total order to each school on or about October 31, j
one-third on or about January 31 (following year), and one-third on
i
or about May 31. The district reported several advantages. It i
avoids the suppliers peak periods of bidding and delivering, and
school personnel who initiate the order are on hand at the time of
delivery to receive, check, and store the supplies. The business j
i
i
i
official also reported disadvantage in that an adequate quantity of j
supplies may not be on hand in September to carry through October
I
31. A second problem cited was that school principals m ust antici
pate their needs over a portion of two fiscal years, realizing that the
grade levels in the school may change somewhat from one fiscal year
I
r
to the next. i
88 I
The elimination of unnecessary paper work is the constant
goal of the practicing business official. One district reported that by;
j
placing purchase orders in each school it has eliminated one clerk
who did nothing but type purchase orders. The form is sent to the
business office to be validated by the business m anager's signature
having previously been approved by the school principal. The
district reports satisfaction with the control and efficiency.
A high school district reported that their purchase of
library books is handled on "book order s lip s ." The book slips are
3 inches by 5 inches and come in sets of four for distribution to the
library, purchasing department, and to the vendor. The slip con- I
tains places for all pertinent information about the book to be ordered!
such as publisher, title, and price. All slips going to a common
vendor are attached to a regular purchase order and sent out in the
regular way. As the library receives the individual title, the book i
order slip for that book is sent to the business office for payment,
thus avoiding the problem of "back o rd erin g ." The district reported j
i
that this procedure has drastically reduced their paper work and j
confusion in buying library books. i
One of the largest unified school districts in southern
California reported on a practice of conducting a conference of all
local vendors at the sta rt of the year with an outside chairman and j
sponsorship by the Cham ber of Com m erce. This gives opportunity
for comments or "gripes" and ends with a general session.
i
This sam e d istric t also publishes a booklet called "Doing
Business With Your School D istrict. " In it a re given salient facts
regarding the school d istrict and its purchasing policies. The
vendor can read the booklet in a few m inutes, since it is in a sim ple
and uncomplicated form .
One business office keeps a log on the status of requisitions. j
Since each requisition is num bered in sequence, anyone inquiring ;
about the status of the requisition can get this inform ation very
quickly by going to the sequentially num bered log.
j
A large unified d istrict in northern California awards bids
i
by category of supply item and enters into annual contracts. It was j
claim ed that it has resulted in a 10 per cent reduction in costs as
well as elim inating paper work, buyer’s tim e, and faster delivery. :
It was found that this procedure lends itself to standardization. The j
i
contracts run for twelve months but not necessarily for the fiscal :
i
y ear. This is done in order that the process of going to bid and all |
i
|
related m atters a re not all due at one tim e of the year. ;
School d istricts frequently request quotations from vendors
for item s which are below the statutory lim its which would n ecessi
tate going to bid. To sim plify this pro cess, a school d istrict has
90
«
developed a form called "R equest for Quotation." By an arran g e
m ent of carbons it produces th ree "originals" and three carbons,
with each of the "originals" being m ailed to a different bidder. Since
only one bidder’s name appears on each "o rig in al," he responds to it
in the usual way. All this is achieved by typing the request once. On
the right side of the purchasing departm ent's copy are columns for
entering the three quotations so that by visual inspection com parisons
m ay be m ade, and the decision as to who w ill be awarded the bid can j
be quickly determ ined.
Personnel
An elem entary d istrict felt that it was too sm all to use j
m ultiple c rite ria and testing in employing classified staff. The
business m anager was am azed with the "phenomenal" resu lts after
they began using a personnel te st, as well as shorthand and typing
tests as pre-em ploym ent screening. Much greater success was
experienced with this system than with the interview system which j
i
had been used before. i
i
]
Good em ployer-em ployee relationships a re maintained in j
j
one d istrict by holding the classified departm ent head meetings twice
each month on the day following the board of education meeting. The
firs t part of this m eeting is spent in getting all actions of the board
to the classified staff before rum ors can spread. This is followed b y !
the reg u lar m eeting to discuss mutual problem s.
i
!
In the in terest of good m orale one d istrict issues a c e rtifi
cate, suitable for fram ing, to all certificated staff m em bers who
have been granted tenure. This d istrict also aw ards a certificate of
m erit to any employee who has rendered unusual service. It was
reported that these a re well received by the staff.
An assistan t superintendent for business holds a regular j
m eeting, on a one-to-one basis, with each departm ent head. The
purpose of this is to ascertain what the departm ent head is doing for I
his staff. It was reported that this has achieved good resu lts in
im proving output by the various departm ents.
i
T ransportation
Efficient use of school busses is the goal of every school
business official. This becomes a problem because pupils m ust be !
j
brought to school in the m orning and returned to th eir homes in the j
I
afternoon. A unified d istric t mentioned the fact that by varying the j
starting tim e of their schools they have saved the purchase of five to
I
seven busses, plus operating costs of these vehicles. The d istrict
is com posed of a large geographical area. It has found a workable
plan by startin g the outlying elem entary schools e a rlie r, thus allow
ing the busses to continue to the high schools which a re centrally
92
located and s ta rt at a later tim e.
Pupil discipline on busses is an issu e which besets m ost
transportation departm ents of school d istric ts. In o rd er to cope with
this, one d istrict devised a bus d riv e r's rep o rt form which has bus
ru les printed on it. When bus discipline problem s a re reported the
form is distributed as follows: one to the parent, one to the principal
one to the head of transportation, and one stays with the driver. The
use of this procedure has resulted in im proved bus behavior.
One d istrict has developed a clim ate among its employees
which m otivates them to invent or develop better ways of doing
things. The m echanics have worked out procedures and developed
tools which reduce tim e on the repetitive jobs. An example of this
is a pump built from surplus m aterials which has reduced the tim e
needed to change oil in a diesel engine from thirty-five m inutes to
two m inutes. Sim ilar changes have resulted in savings throughout
the transportation departm ent.
Another unified d istrict has evolved a form for requesting
special bus trip s. It is initiated by the teacher or person requesting
the trip and routed through the business office to the transportation
departm ent. The last copy of this form is the "hard copy" for the
bus driver on which he records such details as m ileage and pupil
conduct. The "hard copy" is less subject to loss or damage than a
93
reg u lar paper copy. The business office uses the com pleted form in
the preparation of the state transportation rep o rt.
This d istric t also distributes a bus d riv e r's m anual which
gives pertinent aspects of the d istric t’s transportation policy as w ell
as state laws and regulations, together with form s to be used and an
explanation of th eir use. The school principals a re asked to send in
a lis t of new pupils who w ill req u ire transportation in the fall in
o rd er that bus routes m ay be worked out and schedules sent to the
parents. This practice re su lts in few er inquiries regarding the
transportation system , since parents a re inform ed of bus routes and
tim es as well as bus safety procedures and ru les.
School planning and construction
A total of three responses w ere received in the are a of
school planning and construction. This num ber, as com pared to the
num ber of responses in the other categories may be an indication of
the p rio rities which have been attached to the various aspects of
school business management.
One d istric t reported that it sends a card to all subcontrac
to rs involved in the particu lar construction project when a pro g ress
payment is m ade. When the notice of completion is filed, a form
le tte r is sent to all the subcontractors inform ing them of this fact.
94
It was reported that this practice alleviates many problem s when
payments a re slow from the general contractor to his subcontractors.
Several subcontractors have indicated their approval by le tte r, in
which they stated that this was the firs t tim e that any owner had done
this.
A high school d istrict reported that it has instituted a
com m ittee which review s minimum standards for such things as
chalkboards, tackboards, storage cabinets, and audio-visual facili-
M
ties. The d istric t establishes a budgetary amount for each category
with the purpose of gradually bringing all classroom s to the sam e
basic minimum standards. A survey of the present status of c la ss
room facilities is an im portant part of this procedure.
Another d istric t has achieved a reduction in the amount of
tim e and delay usually associated with change o rd ers. On changes
which involve less than $1,000 all the necessary decisions at a
regularly scheduled job m eeting are made when the architect,
contractor, and d istrict representative are in attendance. At this
m eeting, after resolving the problem s, the change o rder form is
filled out by hand and signed by all parties. The form is then sent to
the business office for processing. T here is no further need for any
discussion or price transm ittals on these item s. When an item is of
such nature that the estim ate can be accurately made by multiplying
the unit price tim es the num ber of units, such as slabs or painting,
the $1, 000 lim it is not adhered to.
A large unified d istric t in southern C alifornia reported that !
it has developed a handbook for building inspectors. The d istrict
m akes every effort to use the sam e inspectors for their projects.
i
These men have developed the proficiency to make plan checks to see
that d istric ts' standards a re being followed. This has resulted in a
reduction in the number of change o rd ers. During the construction
period they make frequent checks on the quality of the work, includ
ing such things as laboratory tests on thickness of paint and insuring :
that the work being perform ed will im prove the future m aintenance
situation. The d istrict reported that this procedure tends to bring
I
in better and m ore reputable building contractors.
This d istrict also employs a landscape architect who plans
such things as drainage and plantings and checks building plans to
assu re that d istrict standards are being m et in this area. The
d istrict reported that it has resulted in b etter schools. |
Only one d istric t reported that it was using a relatively new j
process in the planning and construction of school buildings. The
method is called the "C ritical Path M ethod." It was first used by
engineers and m athem aticians from Du Pont and the Sperry Rand
Corporation in 1957 for scheduling com plicated design, construction,
96
and plant m aintenance projects (7:5). Horowitz defines C ritical Path j
Method (CPM) as a "system for planning, scheduling, and controlling j
I
a p ro je c t." (7:1) Hansen says that CPM is a variation of a system
called Program Evaluation and Review Technique (PERT), which was
developed when the United States Navy was faced with the problem of
producing the Polaris M issile System in reco rd tim e (6:1, 21).
In CPM the steps or operations necessary to complete
the project a re shown in a graph called a network. The net
work also shows the o rd er in which the operations m ust be i
completed; which tasks can be done together; and which
m ust follow other operations.
When the network is com plete, the planner estim ates
how long it w ill take to do each operation. Obviously, the
tim e for completing the entire project is not the sum of the
individual operation tim es, since som e things can be done
at the sam e tim e. Actually, a sm all number of operations
control the project completion tim e. These tasks, called
critical operations, form a chain through the network
called the critical path. This is the origin of the name
C ritical Path Method. (7:3)
Building construction lends itself to CPM, and the construc
tion industry made wide use of the method from the sta rt. Horowitz j
i
also lists the following one-tim e projects as suitable for this method: !
j
1. Setting up a new departm ent i
2. Introducing a new product I
3. R esearch and development projects
4. Engineering o r architectural design
5. Producing a Broadway play or a television show
6. Assem bling a large piece of m achinery or
a irc raft. (7:4)
The school business official re fe rre d to above reported that
97 !
the planning and construction of a new high school took less than two j
years. He indicated that the average time for this process is approx
imately three years, resulting in making the new school available to
m eet the growth problems of the district. He related that the plan
worked well overall, although some of the subcontractors resisted at
first.
Babigian wrote:
The Critical Path Method is a device which will give
school board members and school adm inistrators a better
understanding of all the activities involved in the design and
construction of a school building. The program breaks down
all the steps in the design and construction of a school build
ing and arranges them into a specific, logical order. It takes
into consideration the interrelationships and coordination of
all contractors and their subcontractors listing all the activ
ities on a periodic progress report. The method highlights
critical activities and detects trouble spots early, giving
the school adm inistrator the ability to react rapidly to
changing conditions. Emergency situations can be overcome
in the most efficient manner. It provides a simple means of
analyzing projects and accounts for precise increments of
work, pinpointing individual responsibilities. Most important
of all, the method gives certain assurances that a school will
be completed on time and if delays do occur, immediate
action can be taken at minimum expense. (18:26) j
A representative of a large aerospace company told the
researchers in an interview that if a school district uses CPM for
planning and construction of a new school, the specifications for the
building should include reference to the fact that this process is to be
used. In a letter written at a later date, he reiterated this when he
98
said:
I strongly recommend that the actual CPM networking
and data processing be the responsibility of the "owner" or
his designated representative; i.e., a consultant. There
are few general contractors who are capable of effectively
performing this service. (52)
He also pointed out the necessity for computer processing to insure
accuracy, save time, and allow for flexibility in reporting. The
cost for this service is nominal, considering the advantages.
Horowitz lists some of the benefits derived from the use of CPM.
1. The network diagram shows the relationships between
the various jobs that go to make up the project, and it
shows the dependency of one job on another. Thus, it
provides a much better picture of the job than was
possible by a bar chart or other scheduling device.
2. CPM forces the project manager to think the job through
thoroughly to completion. It demands careful, detailed
planning.
3. Properly applied, CPM helps to identify bottlenecks and
potential problem areas before they occur.
4. As soon as personnel are trained in its use, CPM
provides an easily understood, graphical model of the
job.
5. Through CPM the planner can determine the most
effective use of personnel, equipment, and other
resources.
6. A powerful use of the method is in providing manage
ment with a means of studying different courses of
action.
7. By identifying the critical operations, CPM focuses
attention on those jobs that control overall completion
time. (7:11)
Babigian substantiates what the district business official
related, that there are three basic divisions regarding the various
I
99
job activities involved:
1. What immediately precedes a particular job activity
2. What immediately follows a particular job activity
3. What can be done concurrently with a particular job
activity. (18:27)
With this technique, it is possible to fix responsibility for
delays by observing the periodic reports.
Insurance
A growing, newly-unified school d istrict reported that they
w rite specifications for all phases of their insurance program . This
allows for competitive bidding by interested insurance agencies. The
district reports that it has been accepted by the various agents. They
believe that it has resulted in a savings of money for the entire
program .
A northern California district reported a "Package Plan" on
all their district insurance. They have realized a savings of 25 per
cent on prem ium s. By having just one contact, a savings in tim e on
claim s and recovery was also reported.
General innovations
Items which could not be placed in any of the foregoing
categories are reported in this section. They tend to be of a m ore
generalized nature and may possibly fall under the heading of "office
100
m anagem ent," although some are difficult to classify.
One district has developed a training program for sem i
skilled employees in areas such as heating and ventilating, custodial
care, certain types of clerical duties, and foreman practices.
Certain of their own employees are used as teachers under a Class D
o r Standard Designated Services credential. Where only a few
students are involved because the course is rather specialized, they
combine with other districts in order that minimum class attendance
may be maintained. "C ertificates of Completion" are awarded to
those employees who complete the training courses or groups of
courses within the program .
A large district reported that they have developed a
"Procedures" booklet for people who are new to the district or have
been assigned new positions. It covers nearly all the things which
are normally done on the job. It is w ritten on the basis that the
employee be perm itted to do what he feels is right and answer to his
supervisor only when a problem develops.
Another large elem entary district has developed a plan of
cooperation between the city and the district in the joint use of land
for schools and parks. The program has been in use for several
years and was reported as working successfully. The success of the
plan was attributed to the good working relationship between the
101 |
d istrict superintendent and the city m anager. F or a fee of $50 per
school per month the city furnishes the water and the mowing on
school sites which are jointly owned.
A large elem entary district annually prints a sm all brochure
giving salient facts about the school district. When folded, it is the
size of a business card and is distributed throughout the community.
Most district business offices experience certain difficulties
in keeping in close contact with their maintenance and operations
personnel. A unified district reported that a short wave radio
system has been installed in the central office and in certain district
vehicles. The supervisor of custodians, the head electrician, and
the supervisor of maintenance drive these vehicles, enabling them to
respond quickly to emergency situations. This eliminates delays,
and the district expressed satisfaction with the system . "Walkie-
talkie" radios are used for crews where one man goes into ducts.
This serves as a safety m easure and also speeds up the jobs which
a re being done.
Another district reported that extra equipment is kept in the
central office to loan to schools when machines are broken down.
Included are such items as projectors and calculators. It was
reported that this assists the schools in a way which enables them to ;
i
function while the equipment is being repaired.
102
Two districts reported on the development of large maps
hung in the respective board room s. These maps are used for such
things as planning of bus routes, future building site s, attendance
boundaries, and planning for saturation. One of the districts r e
ported that growth can be computed by sections, because the map is
divided into sections. Both districts reported that the map was
worthwhile.
A unified district reported a unique plan for the leasing of
unused or surplus land. This d istrict's enrollment is dropping,
which has resulted in certain school sites being abandoned for school
purposes at this tim e. There are three parcels with a total of
approximately eight acres. This land is leased for a period of
thirty-five years. All monies received from the lease will be either
deposited in the general fund for operating expenses, with the sub
sequent loss under the miscellaneous receipts form ula or deposited
in the building fund without this loss where it could be used for
expenses as provided by statute. The buildings on the land would be
placed on the tax rolls under the possessory interest law. It was
ascertained that the land value will be returned to the district by the
combination of leasehold rental or taxes about every seven years.
One district has developed a "Certificated (or Classified)
Personnel Assignment Order" printed in a carbon set which becomes
the employing agreem ent. This document accomplishes one of six
possible things for an employee simply by filling in the appropriate
section. The six item s are: (1) employment, (2) change of status,
(3) reassignm ent, (4) leave of absence, (5) term ination, and
(6) return from leave. One of the copies is for the employee to sign
in a place that states: "I accept the above term s and conditions. "
This form , a copy of which goes to the superintendent (board), makes
it possible to transact any item in behalf of an employee with one
form and requires only one-time typing. When the board acts, it
acts on them by groups numbered serially. Copies are on the table
during the meeting for their review. The d istrict reported that many
hours of typing have been eliminated in the management of this task.
A high school district reported that the County R egistrar of
Voters list was cross-checked against a list of parents to determine
who was and was not registered to vote. This information was used
for registration campaigns, and lists were developed for telephone
committee activities.
Another district instituted a program of security service
with patrol dogs. A contract was entered into between the district
and a private investigation firm to patrol school grounds with trained
dogs. This is one facet of their broad program to reduce vandalism.
It was reported that there w ere fewer thefts and less vandalism.
104 i
This reduction was attributed to the actual and psychological effect of
the use of dogs for this purpose.
The problem of the development and use of form s is one that j
troubles many d istric ts. One d istric t has developed a system w here
by the authorship, design, specifications, purchase, production,
storage, use, and disposal of all form s is review ed. A basic design
and form layout in conform ity with efficiency and economy has been
established. All form s and procedures a re subject to review period
ically.
D istricts a re fequently concerned with the disposal of
surplus and obsolete school property. If they sell it, they could be
charged with selling to favored individuals. One d istric t rep o rted on
a practice of conducting an annual auction as the m eans of selling all
obsolete, economically w orn out, o r otherw ise surplus school
personal property. The sale is well received by the public and
produces approxim ately $2,000 a year in revenue.
School business officials a re frequently faced with the need
to explain the m ajor expenditures in capital outlay and m aintenance
which a re placed in the budget. One d istric t reported that they use
35 m m . slides in color to a s sist the board in reaching decisions. If
the item s are approved, a second sequence of slides is taken and ;
shown to the board along with a financial re p o rt of the item . It has
105 j
I
been found that it w orks particu larly well with such item s as sprink
le r system s, retaining w alls, and m ajor painting pro jects.
T his d istric t also operates a w ork-training program for
older trainable m entally re ta rd ed pupils. The classified staff m eets
with ad m inistrators and teaching staff each fall. T he children a re
then assigned to the cafeteria, custodial staff, the publications office,
and for w arehouse delivery. Selected classified personnel a re
advised how to give directions and what is to be expected in the way
of assistance. It was rep o rted that the w ork-training program has
been highly successful from an educational point of view. The
classified staff has developed a better understanding of the pupils’
problem s as well as im proving the public relations program , acco rd
ing to the business m anager.
Chapter Summary
C onsideration was given in C hapter III to innovative p ra c
tices reported by C alifornia school d istric ts. L etters w ere initially
sent to 276 school d istric ts with enrollm ents of ov er 2, 500. Of 1
these, eighty-eight d istric ts responded, reporting a total of 107
innovative p ractices. Personal interview s w ere then conducted with
business ad m in istrato rs in twenty-two of the responding d istric ts w ho;
related an additional fifty-seven innovations. In considering the
106
innovations, no differentiation was made between those reported in
interviews and those reported in m ail responses.
The practices reported were subdivided into categories
which normally are considered the responsibility of the district
business official. These categories were budgeting, maintenance
and operations, stores, accounting, food service, purchasing,
personnel, transportation, school planning and construction, insur
ance, and a group classified as general innovations.
Size of district did not seem to be a criterion for whether or
not school business officials reported on practices. There appeared
to be almost unanimous interest in receiving the results of the study,
since virtually every respondent requested a summary.
CHAPTER IV
SUMMARY, MAJOR FINDINGS, CONCLUSIONS,
AND RECOMMENDATIONS
Sum m ary
The problem
The purpose of this study was to identify and analyze innova
tions in business adm inistration applicable to public school business
m anagement. Specifically, answ ers w ere sought to the following
questions:
1. In what areas of business adm inistration are
innovations occurring?
2. What can-school business adm inistrators learn
from business, industry, and government
regarding innovative practices?
Im portance of the problem
Each year the financing of public schools is becoming
increasingly m ore difficult. As this occurs, school d istricts are
107
108
faced with trying to "stretch the tax dollar." To do this adequately
good business management becomes m ore important. The innovative
school business adm inistrator will be m ore likely to succeed than
the one who tries to maintain the status quo. This study attempted
to bring together in one place some of those prom ising practices
which could remedy this situation.
The procedure
A review of the literature indicated some innovations were
being reported by business and industry, but few w ere being reported
by public agencies including school d istricts.
The purpose of the study and the procedures to be followed
w ere reviewed with representatives of the California Association of
Public School Business Officials and with Dr. Leonard Grindstaff,
Riverside County Superintendent of Schools. This resulted in offers
of endorsement and assistance from them.
L etters from these officials requesting the school admin
istrato r to list one or two innovative practices were sent to school
districts in California with an enrollm ent of 2,500 and over. Con
currently, letters were sent to five southern California counties and
seven cities within the counties. These letters were accompanied by
letters of endorsement from the Riverside County Administrative
109
Officer and the R iverside City M anager, respectively, and requested
an interview with the endorsers' counterparts.
Following the re tu rn of responses from eighty-eight school
d istricts, twenty-two d istricts w ere selected for personal interview s.
A dm inistrative officers of the seven cities and five counties w ere
also interviewed. In addition, interview s requested through a variety
of ways with leading representatives of business and industry w ere
granted without exception.
Through the use of an unstructured joint interview technique
without recording device, the re se a rc h e rs w ere able to establish and
m aintain a w arm open atm osphere of discussion. No attem pt was
made to coach a respondent to describe a practice as an innovation.
M ajor Findings
Findings from school d istricts
1. A "Budget Committee” consisting of the assistant
superintendent, business services; the superin
tendent; a principal from each school level; two
m em bers of the certificated professional organiz
ation; and two m em bers of the classified organiz
ation is form ed each year. It acts as a reaction
group in the process of budget development. The
110
combined thinking of the com m ittee is placed into
the tentative budget document and presented to the
board.
2. A detailed budget analysis is prep ared for use with
adm inistration, teachers and classified officers,
P.T . A. board m em bers, and other interested
individuals in the community. Budget sem inars for
community leaders and school personnel a re held
several tim es during the year.
3. School d istricts are striving to develop a system of
program budgeting. One way is to prepare the
budget by a predeterm ined group of program s and
give a brief n arrativ e description of each, together
with the m eans employed to attain it. Com parisons
of anticipated funds is made with actual income for
the two years preceding.
4. The undistributed re se rv e is divided into two p a rts--
one called undistributed re se rv e; the other p rior
year’s payables. The p rio r y e a r's payables are
not liabilities charged to the previous year’s budget,
but are budgeted expenditures which w ere to be
completed during the current year but which were
not completed and must therefore be carried
forward to the next y ear's budget.
The salary schedule is prepared with the base
salary given as a factor of 1. Each step and
range on the schedule is shown as a relationship
to the base.
Explanatory notes are placed on the left side of
the budget document and the dollar amount on the
right side of the page.
The principal of a new school receives a lump sum,
in addition to his regular budget for the purpose of
permitting him to develop innovative and imagina
tive ideas in the instructional area.
Contract gardening is used on all existing schools
in one district.
A business office publishes a list of incomplete work
orders each month, together with those jobs which
have been completed for a particular school.
Work orders are phoned into the district office and
written on "Phon-O-Gram s,” with one copy sent to
the department involved and others being centrally
filed.
112
11. Painting crews a re placed on a Tuesday through
Saturday work week.
12. A ’’ warehouse catalog” is published so that each
page serves as a warehouse requisition and
delivery slip.
13. Custodians are assigned by twenty-minute tim e
periods, with classroom areas designated as a
particular unit value.
14. An outside consultant is used to work with head
custodians in perfecting ways to better the
janitorial service.
15. G reater internal control is achieved by transferring
cash deposits directly from the school to the bank
by arm ored car. — J
16. Idle d istrict funds a re invested in government bonds
and other form s of securities. A careful control of
the cash flow is made.
17. Revolving cash accounts, as a part of the d istric t's
account, a re established in each junior and senior
high school. The principal is responsible for its
use for lim ited amount purchases.
18. A "Labor Allocation C h art,” based on the number
113
of lunches served daily, controls the staffing
pattern in school cafeterias.
19. School cafeterias are kept M in the black" on a
district basis rather than on a school-by-school
basis.
20. Lunch money is collected before school from
elementary pupils, and flourescent ink marks are
placed on the back of the hand of each person who
pays.
21. Standard recipes use weight rather than volume
measurement.
22. Foods are purchased on bid after being tested. A
sample is retained for comparison with the delivered
item.
i
23. Several school districts use a system of cooperative
purchasing.
24. Purchase orders are prepared in each school and
validated in the central office by the business
manager’s signature.
25. Orders for m aterials and supplies are placed to
have shipment three times yearly to each school
rather than to a central warehouse.
114
26. Purchases for lib rary books are m ade on book o rd er
slip s, with all slips for one publisher attached to the
regular purchase order.
27. Category ra th e r than item supply purchases a re
m ade on an annual contract basis.
28. The Cham ber of Com m erce sponsors an annual
conference with all local vendors and the school
d istrict.
29. Special, one form , requests for quotations a re used
to obtain the necessary quotations from the three
required vendors.
30. A certificate of m erit is issued to all teachers who
are granted tenure. C lassified employees who have
rendered unusual service a re given a sim ilar
certificate.
31. A bus d riv e r's re p o rt form with ru les printed on it,
is issued to pupils with bus discipline problem s,
with copies going to the parent, principal, head of
transportation, and the driver.
32. Notices of progress payments a re sent to all sub
contractors. They are also sent a letter inform ing
them of the fact that the notice of completion has
115
been filed.
33. A com m ittee is form ed which review s minimum
standards for such item s as chalkboards, storage
cabinets, and audio-visual item s.
34. A handbook for building inspectors has been
developed. An effort is m ade to employ the same
inspectors for the various projects.
35. Decisions on the details concerning change orders
under $1,000 are m ade by the architect, contractor,
and the d istrict representative on the job for later
processing by the business office and the board.
36. The C ritical Path Method for planning, scheduling,
and controlling the process of pre-planning and
construction of new school buildings is being used.
37. Insurance specifications a re w ritten and used for
obtaining com petitive bids on all phases of
insurance.
38. C ertain d istric t em ployees in the classified service
a re used as teachers in a training program for
sem i-skilled employees under a C lass D or
Standard Designated Services credential.
39. A plan of cooperation between a city and a school
116
district has been developed for joint use of land for
schools and parks.
40. Short wave two-way radio contact is maintained
between the district central office and certain dis
tric t vehicles used by maintenance personnel.
41. Dropping enrollment has created the problem of
surplus land which has led to the development of a
long-term lease of such property with the income
made available for district use.
42. A Certificated (or Classified) Personnel Assignment
O rder is used to change the status of employees in
one of six ways.
43. A security service was issued a contract to patrol
schools with trained dogs at night.
44. A work training program for older trainable,
mentally retarded pupils has been developed with
the cooperation of the cafeteria, custodial, publica
tions office, and warehouse delivery staffs.
45. It was impossible to make this study without noting
many innovations in data processing; however,
these were not included in the study.
Findings from business and
industry, city and county
government
1. The program of management by objectives was
used to achieve maximum utilization of all m em bers
of the management team in supplying drive and
creativity in achieving stated goals.
2. An underlying philosophy of the dignity and worth of
the individual was the basis for m ost personnel
policies.
3. An independent research firm biennially surveyed
the attitudes of all employees and made the data
available to management for study and possible
future action.
4. An employee suggestion plan was in operation and
provided m onetary awards of from $25 to $30,000
for m eritorious suggestions.
5. Nurturing and maintenance of people was the philos
ophy supported in the personnel management program .
6. An in-service training program at local colleges for
all employees was financially supported, up to 50
per cent of costs.
7. A "memo of understanding" for employees covering
118
wage scales, salaries, working conditions, and
fringe benefits was used to replace the cum ber
some illegal labor contract in a public agency.
8. A cooperative arrangem ent between two govern
mental agencies was used in personnel recruitm ent,
screening, and selection.
9. The philosophy of personnel management was
expressed in simple term s: "get out of the
employee’s way and keep from 'de-m otivating’
him. ’’
10. By acquiring sufficient additional information and
using a form at m ore meaningful to management,
the traditional functional budget was converted to a
program budget.
11. In capital budgeting, forecasting the future is
accomplished through the use of probability
statistic s.
12. In order to profit from past m istakes, past-
completion audit techniques w ere used comparing
capital budget decisions with actual perform ance.
13. As a method of proper planning and to avoid the
need for ’’last-m inute" cash loans, a cash budget
119
system was used.
14. A six-year capital outlay budget for the current
year and the succeeding five years was adopted
to provide adequate lead time for adjustment of
the long-range spending program .
15. A condensed form of the complete budget document,
including supporting graphs and charts, was printed
and made available for general distribution to the
public.
16. Through the adoption of budget form ulas, budget
dollar amounts reflecting an existing level of
service w ere increased automatically as budget
bases increased.
17. A sophisticated budget calendar was adopted con
sisting of seventy-eight specific budget planning
activities to be taken during the year.
18. A budget analyst, responsible only to the chief
adm inistrator, was provided to accomplish budget
analysis and control.
19. A sm all value order system , involving telephone
orders and providing delivery receipts and invoices
attached to the delivered shipment, eliminated
120
excessive purchase order paper work.
20. A blank check purchase order system incorporating
a purchase order accompanied by a signed blank
check was adopted in order to reduce clerical tim e.
21. A combination requisition-purchase order form was
used to eliminate one of the two separate forms
traditionally required in making a purchase.
22. In order to pool buying power and realize subsequent
savings, a cooperative purchasing arrangem ent was
established by two governmental agencies.
23. Outside consultants w ere employed to solve company
problems by bringing in up-to-date thinking while
providing management with work load flexibility.
24. The assignment of a staff position called "record co
ordinator1 ' was made to assign responsibility for
reducing the problem and costs of record management.
25. Contract cleaning and maintenance service was used
to obtain a better level of service at a reduced total
cost.
26. Form s control was the responsibility of the system s
analyst who worked by function and crossed over
departmental lines.
121
Conclusions
1. Many fine innovations in business adm inistration
practices a re taking place in school d istricts as
well as in business and industry, cities and
counties.
2. T here is considerable variance in the amount of
innovative interest and concern shown in each of
the business adm inistration areas by school dis
tric ts , counties, cities, and business and industry.
3. School district innovations in business adm inistra
tion practices are passed to others largely by
word-of-mouth and hearsay. An effective method
of dissem ination has yet to be developed.
Recommendations
The findings and conclusions of this study support the
following recommendations:
1. It is recommended that a system atic way of dis
sem inating new and prom ising practices be
developed to allow the interchange of new ideas
among school business officials.
F u rth er investigation should be m ade to perm it
school d istricts to use the purchase order-check
with a specified maximum dollar amount.
It is recom m ended that school d istricts make
g reater effort to develop cooperative program s
with other school d istric ts, counties, and cities to
bring about savings of tax money.
A m ore understandable method of presenting the
budget to the public should be developed. This may
be a form of program budgeting.
A plan of form control and records management
should be adopted by school d istricts in o rd er to
reduce the amount of excess paper and the resultant
storage problem s.
It is recom m ended that school d istric ts use the
C ritical Path Method for pre-planning and construc
tion of school buildings.
School d istricts should use budget com m ittees with
representative m em bership to a ssist with and react
to the budget-making process.
A budget-making calendar should be used to a ssist
in good budget planning during the school year.
123
9. School business officials should seek to institute
atm osphere which allows for the continual up
dating and im provem ent of procedures and
p ra c tic e s.
10. School d istrict business ad m inistrators should
subscribe to the standard publications of business
and industry, such as H arvard Business Review,
Purchasing, P ersonnel, and Management
Accounting.
11. A program of m anagement by objectives should be
studied- -with a view tow ard adoption, in order to
achieve maximum utilization of all m em bers of the
m anagem ent team .
12. It is recom m ended that a philosophy of personnel
m anagement be adopted which will perm it a m ore
innovative clim ate.
13. It is recom m ended that school d istricts move
forw ard in developing m ore sophisticated budgeting
practices, through the use of program , capital, and
cash budget concepts.
14. Purchasing system s for sm all o rder buying, such
as the blank-check purchase order and the sm all
124
value order should be studied for possible adoption.
15. It is recommended that a combination requisition-
purchase order plan be adopted for the types of
purchases where responsibility can be readily
delegated to req u isitio n ers.
16. School business adm inistrators should be a le rt to
finding new and better ways of managing the business
affairs of school d istricts.
17. Although this study did not include innovations in
data processing, further re se arc h in the use and
development of this tool is recom mended.
BIBLIOGRAPHY
BIBLIOGRAPHY
Books
/ " - :
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APPENDIXES
APPENDIX A
LETTER OF ENDORSEMENT FROM CALIFORNIA ASSOCIATION
OF PUBLIC SCHOOL BUSINESS OFFICIALS
COPY
CALIFORNIA ASSOCIATION OF PUBLIC SCHOOL
BUSINESS OFFICIALS
A pril 19, 1967
Gentlemen Who a re Young in H eart:
1 w aited a long tim e for, and I look forw ard with keen anticipation to,
a d issertatio n study entitled "Innovations in School Business
A dm inistration." The gentlem en undertaking this study define
"Innovation" as a prom ising p ractice which departs from that gener
ally prevailing. If they are able to hold to this constructive goal, the
findings could quickly become required reading for those still "young
in h e a rt."
The endorsem ent of the C alifornia A ssociation of Public School
Business Officials is given this study. You a re urged to participate
constructively by subm itting those practices of which you speak with
pride. I would like to think that "Innovation" is synonymous with
"Im provem ent."
Please join in this excitement!
Sincerely,
/ s / Mike H esse
M. A. H esse, Chairm an
U niversity Contacts Com m ittee
MAHrlh
APPENDIX B
LETTER FROM DR. LEONARD GRINDSTAFF REQUESTING
THAT RESPONSE FORMS BE COMPLETED AND RETURNED
COPY
OFFICE OF RIVERSIDE COUNTY SUPERINTENDENT OF SCHOOLS
4015 Lemon Street
Riverside, California 92502
The Office of Riverside County Superintendent of Schools is support
ing the study being conducted by C. Eugene Smith and Paul H.
Richert, Consultants in the Business Division, on the topic:
"Innovations in School Business Administration. ” It is our belief
that school districts are using promising practices in school business
adm inistration which could benefit other districts.
Your district has probably developed and has been using a new
method, system, or practice which has proven successful. The
innovation may be quite simple or very complex. It may be in any
one of the several areas of school business administration such as
purchasing, transportation, personnel administration, food service,
budgeting, accounting, warehousing, maintenance, etc.
Would you or your business manager briefly describe on the attached
form one or two new practices, which you believe might be of
interest and help to other districts, and return it in the enclosed
envelope. Although the prim ary purpose of this study is not the
investigation of rapid data processing, you may include practices
which employ it in some incidental way.
Mr. Smith and Mr. Richert will be pleased to mail the results to you
if you so desire. Your assistance in providing this information is
highly appreciated.
Sincerely,
/ s / Leonard Grindstaff
Leonard Grindstaff
Superintendent of Schools
s r
Enclosure 136
APPENDIX C
RETURN FORM FROM SCHOOL DISTRICTS
COPY
School D istrict
INNOVATIVE PRACTICES
1.
2 .
Signed
T itle _
Date
If you wish the resu lts sent, please check here
138
APPENDIX D
COPY OF REMINDER CARD SENT TO SCHOOL
DISTRICT SUPERINTENDENTS
COPY OF POSTAL CARD
OFFICE OF RIVERSIDE COUNTY
SUPERINTENDENT OF SCHOOLS
Dear Dr.
About three weeks ago, we sent to your superintendent a
request for inform ation on innovations in the area of school business
adm inistration that your d istrict has found successful.
We are particularly anxious to have your reply and would be
happy to forw ard to you a copy of our previous communication if you
so desire.
In order to know the status of your response, we would
appreciate your completing the attached postal card and returning it
to us.
Thank you for your assistance.
Sincerely yours,
/ s / Leonard Grindstaff
Leonard Grindstaff
Superintendent of Schools
NO POSTAGE NECESSARY
POSTAGE HAS BEEN PREPAID
Dr. Leonard Grindstaff
Superintendent of Schools
R iverside County
P. O. Box 868
R iverside, California 92502
140
COPY OF POSTAL CARD
141
SCHOOL DISTRICT
(ADDRESSEE)
Request has been mailed to you.
The request has not been mailed to you, but
we will do so as soon as possible.
We have m isplaced your previous request and
would appreciate receiving another copy.
S igned________________________________
School D istrict
County
APPENDIX E
LETTER FROM RIVERSIDE CITY MANAGER REQUESTING
COOPERATION FROM CITY OFFICIALS
COPY
CITY OF RIVERSIDE
CALIFORNIA
A pril 19, 1967
M r. W alter Hahn
City M anager
City A dm inistration Building
Community Concourse
San Diego, California
Dear W alter:
I am pleased, through the medium of this le tte r, to introduce to you
Gene Smith and Paul R ichert, consultants in the Business Division of
the Office of the R iverside County Superintendent of Schools, with the
hope that you will give them a few m inutes of your valuable tim e in
o rd er to provide assistance to a project which they have convinced
m e may be of considerable value to the field of school business
adm inistration. Not only do I know Gene and Paul professionally, but
quite by coincidence they a re the fathers of some of the Wentz
children’s best friends, and thus I can assu re you that from several
points of observation I have assured m yself that they are fine persons
and are pursuing a worthwhile goal.
I have spent several hours with Gene and Paul describing financial
p ractices here in the city of R iverside and relating to them what I
think m ight possibly be innovations, at least from the school’s point
of view. It is this type of action which I hope you will consider
em ulating. I have provided to these two school officials the nam es of
several outstanding city m anagers, and I have attem pted in so doing
to be highly selective and to re fe r them only to you who I believe will
really have something constructive to offer in your p articu lar field.
Such is the p rice of a good reputation!
Sincerely,
/ s / John
John B. Wentz
City M anager
JBW :ms 143
APPENDIX F
LETTER FROM RIVERSIDE COUNTY ADMINISTRATIVE OFFICER
REQUESTING COOPERATION FROM COUNTY OFFICIALS
COPY
M arch 15, 1967
M r. Lin Hollinger
Chief Adm inistrative Officer
Los Angeles County
713 Hall of Adm inistration
500 W. Temple
Los Angeles, California 90012
Dear Lin:
Gene Smith and Paul R ichert, consultants in the Business
Division of the Office of the R iverside County Superintendent of
Schools, are conducting a study in the area of Innovations in School
Business Adm inistration. Through their office, they provide con
sultant services to the various school districts in R iverside County.
They are very much interested in learning about innovations
in county government which can be applied to school district
adm inistration.
T here is considerable evidence indicating school districts
may lag behind in adopting and using new business practices. They
believe these new practices are being developed in county govern
ments at a greater ra te than every before, but many have not been
identified, evaluated, and made available for use by school admin
istra to rs. Through interviews with representatives of leading
counties in southern California, they plan to assem ble data which can
be adapted to school d istrict use in making their business operation
m ore effective and efficient.
They are in the process of writing a doctoral dissertation on
this subject and will appreciate very much the opportunity to in ter
view you to determ ine what new applications in county government
adm inistration can be applied to school d istrict adm inistration.
They will contact you in advance for an appointment and I
would appreciate it if you can find time to talk with them for approxi
m ately forty-five m inutes.
Cordially yours,
Robert T. Andersen
RTAroam Adm inistrative Officer
Also cc: Heglund, Hitchcock, Enoch, Covington, Im perial Co. CAO.
145
APPENDIX G
COPY OF LETTER FROM DR. LEONARD GRINDSTAFF
REQUESTING COOPERATION FROM CITY MANAGER
COPY
OFFICE OF RIVERSIDE COUNTY SUPERINTENDENT OF SCHOOLS
4015 Lemon S treet
R iverside, C alifornia 92502
M arch 24, 1967
M r. W alter Hahn, Manager
City of San Diego
City Adm inistration Building
Community Concourse
San Diego, California
Dear M r. Hahn:
Gene Smith and Paul R ichert, consultants in the Business Division of
the Office of the R iverside County Superintendent of Schools, are
conducting a study in the area of Innovations in School Business
Adm inistration. Through our office, they provide consultant s e r
vices to the various school districts in R iverside County.
T here is considerable evidence indicating school districts may lag
behind in adopting and using new business practices. They believe
these new practices are being developed in city governments at a
g reater rate than ever before, but many have not been identified,
evaluated, and made available for use by school adm inistrators.
Through interviews with representatives of leading cities in southern
California, they plan to assem ble data which can be adapted to
school d istrict use in making their business operation m ore effective
and efficient.
They have been told that your city is progressive and would be w ill
ing to share your latest innovations with them. M r. Smith or
M r. Richert w ill call you soon to schedule an appointment.
Your assistance will be greatly appreciated.
Sincerely,
/ s / Leonard Grindstaff
Leonard Grindstaff
Superintendent of Schools
LG :sr
147
APPENDIX H
COUNTIES, CITIES, BUSINESSES, AND
INDUSTRIES INTERVIEWED
COUNTIES, CITIES, BUSINESSES, AND
INDUSTRIES INTERVIEWED
Counties
Los Angeles
Orange
R iverside
San Bernardino
San Diego
Cities
Anaheim
Garden Grove
Glendale
Norwalk
Pomona
R iverside
San Diego
Businesses and Industries
Bank of America
Bekins Van and Storage Company
International Business Machines Corporation
Lybrand, Ross Brothers, and Montgomery
McDonnell Douglas Corporation
149
APPENDIX I
SCHOOL DISTRICTS WHICH RESPONDED
SCHOOL DISTRICTS WHICH RESPONDED
$
( D istricts Interviewed)
Alhambra City
Alvord Unified
Anaheim Union High
Arcadia Unified
Bakersfield City Elem entary
Baldwin Park Unified
Banning Unified
Bellflower Unified
Belmont Elem entary
Berkeley Unified
Beverly Hills Unified
Bonita Unified
Capistrano Unified
Cajon Valley City Elem entary
Chico Unified
Compton Union High
Coronado Unified
Covina Valley Unified
Davis Joint Unified
Downey Unified
East Whittier City Elementary
El Monte Union High
Fairfield Elementary
Fountain Valley Elem entary
Fullerton Elementary
Fullerton Union High
Garden Grove Unified
Glendale Unified
Grant Union High
Hanford Elementary
Hayward Unified
Hemet Unified
Hueneme Elementary
Lafayette Elementary
Laguna Salada Union Elem entary
Lake Tahoe Unified
151
152
Lancaster Elementary
Lodi Unified
Lompoc Unified
u
Los Angeles Unified
Los Gatos Union High
Lowell Joint Elem entary
it
Manhattan Beach Unified
Milbrae Elementary
Mill Valley Elem entary
*
Montebello Unified
Moreland Elementary
Moreno Unified
*
Mount Diablo Unified
Newport Mesa Unified
Orange Unified
Oxnard Elem entary
Palo Alto Unified
*
Palos Verdes Unified
*
Pomona Unified
Redlands Unified
Rialto Unified
Riverside Unified
Rowland Elem entary
San Bernardino City Unified
San Diego Unified
San Gabriel Elementary
Santa Ana Unified
San Mateo Union High
Santa Monica Unified
Santa Rosa City Elementary
Santee Elementary
Savanna Elementary
Sequoia Union High
Simi Unified
Sonoma Valley Unified
Sylvan Union Elementary
Temple City Unified
Torrance Unified
it
Tustin Union High
Vallejo Unified
Ventura Unified
Victor Valley Union High
V isalia Unified
Washington Unified
West Covina Unified
Willowbrook Elem entary
Whisman Elem entary

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