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01 Aug

KU ELPS professor’s study shows consolidating nonteaching services doesn’t always equal savings

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Thomas DeLuca, assistant professor of educational leadership and policy studies, authored a study in which he analyzed Michigan’s efforts to consolidate noninstructional services such as accounting, payroll, transportation, human resources, food service and custodial services. While he found the arrangements did in fact produce savings in some cases, it was not across the board. And in cases where savings were realized it did not always equate to more funding for instructional services, but in other cases, the result was service quality improvement.

“I was expecting to see some substantial savings, but they just weren’t there,” DeLuca said. “I was also expecting some improvement in service quality, but not to the extent I found.” Among the most significant findings were that while the intent was to save money, service consolidation did not always equal automatic savings. However, when they did not, service quality often improved. In many cases this was due to certified public accountants providing services that previously were not available, especially in smaller districts.

While in some cases savings were re-allocated into instructional services, the amounts were typically very small. Service consolidations are often enacted to achieve savings through “economies of scale,” or reducing redundancies. The key to that goal, however, is that service quality must remain the same, if not improve, for it to be a true savings due to economies of scale. The research showed that services did not always maintain their quality, and in some situations, such as special check requests, accounting assistance to parent teacher organizations or extracurricular booster clubs declined.

A variety of factors including technological innovations such as Internet access and virtual private networks play into whether consolidation of certain services such as accounting, payroll and human resources accomplished savings. In other words there is no black and white, one-size-fits-all answer to whether such consolidation is the universal right move. “That’s the key to any policy initiative, setting the right expectations,” DeLuca said. “Policy makers should identify and articulate the goals of any policy initiatives designed to reduce spending or improve service quality through consolidation.”

Read the full article on KU News.

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