Reflections on Education Reform in NOLA, Ten Years On
By Carrie Stewart
Before the storm
Before Hurricane Katrina, public schools in New Orleans had a reputation as some of the worst schools in the country. The district served 65,000 students, but most parents chose private schools for their children if their family resources allowed it. The majority of the public schools were failing both academically and physically. Buildings were crumbling. Children were not being sufficiently educated. Families, especially ones in the poorer communities, had limited access to public education options and resources for their schools.
It was July 2005, about a month before the storm, and I found myself on assignment at New Orleans Public Schools’ Central Office as the interim treasurer. I was joined by at least two dozen colleagues from our consulting firm to work on various parts of business management for the school district. We were brought in by the Louisiana Department of Education after years of financial and operational mismanagement at the Orleans Parish School Board. After a few days on the job, reasons for the dilapidated school district became clear: the district lacked financial oversight, process, and accountability.
The federal government was questioning over $70 million of the district’s grant spending. Payroll fraud ran rampant –the FBI occupied two conference rooms in the central office when I arrived. Some employees were on paid leave for over three decades, and the district employed doctors who had lost their license to practice, but were reviewing and approving the paid leave requests. Principals’ requests for purchases were left unanswered and unprocessed for more than six months, literally piled on central office employees’ desks with no process in place to address them. The district had not received a clean financial audit in years. There were material discrepancies in the financial statements and large unreconciled differences. We found several undeposited checks just sitting in central office employees’ desk drawers, some four months old. With the school year coming upon us, there was a cash need in order to make payroll. However, the district’s credit made it difficult to know if the ability to obtain financing was even possible. The community was disenfranchised and had lost hope in the school district. Little appetite existed for reform in New Orleans Public Schools at this time. The bureaucratic school system was broken. Schools were left to fend for themselves on a daily basis, yet with no fiscal or operational autonomy to do so.
A new beginning: redesigning and rebuilding a system of schools
After the devastation of Hurricane Katrina, the resilient people of New Orleans had to rebuild their lives and communities from the ground up, including their public education system. This set in motion a structural overhaul of an urban school district and allowed New Orleans to build a public education system with aligned academic, financial, and operational strategies to better serve families, build trust with the community, and improve academic outcomes for students.
The state took over all failing schools and the former district was left to manage a small handful of non-failing schools. Charter schools were started throughout the city under state and local oversight, and as of now, all but six public schools are public charter schools. Over time, reform took root and public schools in New Orleans became a system of effective schools rather than simply a failing school system.
From a financial perspective, the district’s overhaul put in place structures to better align academic, fiscal, and operation systems for success – which other urban school districts across the nation can adopt to better support the evolving needs of their public schools and ultimately improve educational outcomes for students.
1. Fiscal autonomy
Today, most schools in New Orleans, with the exception of the sixOrleans Parish School Board district-managed schools, receive per pupil funding and have autonomy over how those funds are used within the restrictions of the funding sources. This decentralization of school decision making from central office to schools has empowered individual schools with freedom in staffing, compensation, school scheduling, and technology use such that they can design them in the best ways to serve their particular students’ needs. The outcome – a unique set of schools throughout the city – some focused on blended or personalized learning, others focused on arts, STEM, IB, and other programs. If a school wants to focus on building school culture by promoting athletics and extracurricular activities, it can do so. This reform is in sharp contrast to the system in place before the storm where principals had no fiscal autonomy and the central office was too broken to process payroll correctly or execute on any kind of basic purchases for schools.
2. Financial accountability
In addition to fiscal autonomy for schools, the charter school authorizers – the state Recovery School District (RSD) and Orleans Parish School Board (OPSB) – have put in place financial accountability standards along with academic and governance accountability processes, and actively make the granting of a charter and the charter school renewal or closure decisions based off those standards and processes. In cases where charter schools have fallen into financial or academic difficulty, actions can be taken by the authorizer to correct the situation and in some cases to close the school. However, this structure has not stopped corruption or financial incompetence. Recent mishandlings of public school finances at several New Orleans charter schools are evidence of that. The difference is that now these instances are limited to impacting a single school site rather than the school system as a whole and the systems are in place to fix the problems when they occur.
3. A clean financial audit and building of credit worthiness
During the rebuilding of the local school district, the district’s financial staff was retooled and focused on enacting improved accounting. Financial reporting standards and infrastructure were put in place to get the books in order. A fund balance and reserve has been built within OPSB, establishing strong credit worthiness and a Aa3 debt rating.
4. Increasing community involvement in public schools and budgetary decisions
With the increased number of charter public schools, there are now over 400 New Orleanians serving on public charter school boards, in addition to the elected Orleans Parish School Board members. These community members are all helping to shape resource allocation decisions and financial policy to guide individual public schools. Prior to the storm, these are some of the same people who had lost hope. More can and needs to be done around community engagement in public schools, but an infrastructure is now in place to cultivate it and more meaningful opportunities exist today for community member involvement.
5. Building trust with the community – and ultimately earning taxpayer support
As was learned in New Orleans through failed property tax millages prior to the storm, cultivating taxpayer support is impossible when there is no fiscal management of funds and no clear connection between investments and improved academic outcomes for students. That is why it’s critical for school districts to invest in stabilizing academic and financial infrastructure and then communicating it effectively, transparently, and often to the public every step of the way. As reforms happened and improvements took place in New Orleans over the last ten years, those results have been widely communicated both nationally as well as locally through publications like Educate Now! and the Cowen Institute for Public Education Reform at Tulane University. In 2014, there was an opportunity to extend an existing property tax millage to provide for $15.5M of ongoing preservation of public school buildings – building preservation funds that had not existed before. Voters passed the millage with 60% of the vote and 91% of the precincts voting for it, despite organized opposition from anti-charter activists, demonstrating an improved understanding of the schools’ needs and trust in the infrastructure in place.
On the horizon for continued improvements
While dramatic academic and financial improvements have been made, there are challenges ahead for New Orleans’ public schools to ensure effective reforms continue to progress.
Most schools in New Orleans remain under the state’s control. More than 30 schools had a chance to return to OPSB this year and only one voted to do so. Those 30 schools are by and large improving under the RSD, but eventually an exit/entry strategy from state to local control is needed. OPSB must build trust that it can govern effectively in the long term, and so far it has not done so.
As part of building trust in its governance, OPSB’s financial policy and reporting must continue to evolve with community needs for fiscal transparency and align to the decentralized nature of school governance that exists today. The Bureau of Governmental Research published a report in April 2013, “The Accidental Steward: The Orleans Parish School Board as a Resource Manager in the Reform Era”. This report highlighted OPSB’s critical role in the finances of all public schools in the Parish and made recommendations for significant changes to be made in the way that OPSB budgets for and records revenues and expenditures. The work ahead for OPSB to act on those recommendations presents a significant opportunity to develop a comprehensive school funding system that is equitable and a school reporting system that is transparent, while continuing to promote the significant fiscal autonomy that the current structure of decentralized school governance intends. This work also presents an opportunity to develop a road map for how public school districts across the nation might think about restructuring centrally-managed resources toward more intentional and equitable resource allocation and service delivery. The result will be a system that the community understands and continues to earn the trust that it is serving the best interest of all public school students.
View powerful photos from the first day back to school in December 2005 at the newly formed Algiers Charter School Association – an inspiring reminder of why we do this work! Photos courtesy of NOLA.com.
About the author
Carrie Stewart is CEO and co-founder of Afton Partners, which helps school districts and charter management organizations to better align resources to achieve stability and sustainability, so they can improve student outcomes. Carrie is based in Chicago.