SD6 - The Reorganization of the Department of Education

  • Published: 1992
  • Author: Joint Legislative Audit and Review Commission
  • Enabling Authority: Senate Joint Resolution 57 (Regular Session, 1990)

Executive Summary:
The Virginia Department of Education (DOE) is the State agency which conducts administrative, supervisory, and assistance activities to support public elementary and secondary education in the Commonwealth. The department assists the Governor's office, the State Board of Education, and the General Assembly in meeting their policy objectives and the State's constitutional requirements. The Superintendent of Public Instruction functions as the agency head of the department.

JLARC staff were directed by Senate Joint Resolution 57 of the 1990 Session to review the organization and management of the Department of Education. In September of 1990, the Superintendent of Public Instruction presented a major plan to reorganize the department. Because the department was to be reorganized, the focus of JLARC's review shifted to the reorganization plan and process.

The scope of the DOE reorganization is without recent precedent in Virginia State government. Of the agency's 453 classified positions, 288 (64 percent) were abolished. There were 228 new positions created, for which department employees had to apply and compete in an open recruitment process. The agency laid off 58 classified employees upon completion of the competitive hiring process. In the new organization, management initiated an effort to shift most of the department's work from performance by individual assignments to performance by multi-disciplinary project teams.

The department completed its reorganization hiring and layoff process in March 1991. This report is a review of the department's reorganization process, as well as the early stages of the new department's operations. As of the completion of this report, the department is still making the transition to its new processes and intended methods of operation. The report therefore identifies early indications of issues that the new department will need to address. It is too soon to reach conclusions about whether the reorganization will work.

There are three major findings that have resulted from JLARC's review of the reorganization. First, the competitive hiring process used by the department hindered the reorganization and the effectiveness of agency operations after the reorganization. The process also raises concerns about the future of employee protections under State personnel policies.

Second, there are some significant concerns about DOE's new operations. These concerns include:

• low employee morale and trust in management
• an inefficient method for assignment of projects
• the complexity of team operations
• lack of an employee evaluation system
• staffing allocations
• effectiveness of the new service delivery system
• lack of overall focus and planning
• lack of information about daily operations at the department

Third, the reorganization may have implications for the educational accountability of both school divisions and the department. The department intends to focus on outcome accountability and to reduce its compliance role. The General Assembly may wish to consider the effects of these changes on the ability of the State and school divisions to meet constitutional requirements, such as the Standards of Quality (SOQ). There is also a need for the department to further define its mission, and make clearer what it intends to accomplish. These actions would allow State policy-makers to understand, respond, and possibly redirect the department's plans where necessary.

They would also allow the department to be held accountable.

Reorganization Process Not Adequately Planned

The reorganization process was not adequately planned. The reorganization involved a major competitive hiring process that traumatized employees but, in the end, brought little change to department personnel, while placing the future of employee protections in doubt. Additionally, reorganization cost savings were low.

Agency planning was inadequate to prepare for the radical changes intended. For example, the Department of Personnel and Training and the DOE human resource director were minimally involved prior to the announcement of the reorganization proposal. Consequently, DOE management was not prepared to explain the mechanism for the personnel changes to employees after the announcement of the reorganization plan. Further, the department conducted the reorganization without a complete analysis of agency functions. In fact, almost a year after the intent to reorganize was announced, the department was still in the process of completing an assessment of the former agency's functions. Moreover, the approach taken to reorganizing was a high-risk approach, as key agency work processes were not pilot-tested at the department before the changes were made agency-wide.

A related concern is the extent to which the competitive hiring process was used to reorganize. A substantial number of positions were advertised that had similar counterparts in the former organization. Also, the competitive hiring process, as well as the rationales that were offered for that process, appear to be inconsistent with the objectives of State personnel policies. These policies indicate that employees affected by a reorganization should be affected in order of seniority. The conduct of the reorganization remained within the technical provisions of these personnel policies. However, the methodology used raises concerns about the future of public employee protections within the State personnel system.

It appears the department could and should have accomplished its reorganization objectives by creating and advertising only positions that truly represented areas of expertise for which the agency did not already have qualified employees. The extensive competitive process cost the organization substantial time and effort that could have been devoted to developing and piloting planned work processes, and communicating planned processes to employees and local school divisions. It also cost the good will of many organization employees, at least for the time being, as indicated by survey data from employees in May of 1991.

The process was highly stressful for employees. Further, the process did not result in a substantial change in the composition of personnel in the agency. Many positions were only advertised for one week. In the new organization, 89 percent of the positions of the new DOE were filled by employees of the former department.

In the end, the reorganization saved the State approximately $530,000 or about 2.6 percent of the personnel costs of the former agency. By comparison, total compensation for the 58 laid-off employees was $2,234,588 or approximately 11 percent of agency personnel costs. Cost savings from the layoffs and from attrition were offset to a substantial extent by factors such as the hiring of some positions from outside of the agency, salary increases to some of the employees hired back from the former DOE, and funding to establish a university consortium.

Recommendation. The Department of Personnel and Training should develop a comprehensive policy on agency reorganizations, to require detailed implementation plans and more stringent criteria for what constitutes a "new" position.

Recommendation. The General Assembly may wish to evaluate current policies related to agency-wide reclassifications of positions to ensure that such policies are comprehensive and consistent with the intent of the State Personnel Act.

Eventual Success of New Department Still Uncertain

Although some of the changes made to the former department are supported in concept, such as increasing the use of teams to perform the work, a large degree of uncertainty exists about whether the operations of the new department will prove successful. Eight concerns have surfaced with regard to some key aspects of the new organization that require immediate management attention.

Employee Morale. The first concern involves the status of employee morale. Employee morale is an important factor for a number of reasons. Positive employee morale is important to the effectiveness of an organization, because it can affect job commitment, performance, productivity, and motivation. In contrast, poor morale over a long period of time can lead to increased turnover, absenteeism, lateness, low productivity, and low performance.

Data from DOE employees in May of 1991 indicated substantial morale problems. Only 10 percent of employees agreed with the statement that agency morale is good, and only 12 percent agreed with the statement that employee trust in management is good. Further, only 14 percent agreed with the statement that employees believe the new organizational structure will function as intended, and only 34 percent agreed that the new organization is advancing toward the objective of minimizing bureaucracy. Of approximately 250 open-ended employee comments received on the surveys, about 10 percent were essentially favorable and about 90 percent essentially unfavorable to the reorganization.

Project Selection. The second concern relates to the viability of the agency's new method for the selection of agency projects, the internal RFP (request for proposal) process. The purpose of the process is to enable department management to have control over project work selection in the agency and to stimulate the development of alternative, creative project proposals. The department's goal is to perform 75 to 80 percent of agency work through the RFP process.

However, the process is still unproven, appears inefficient, and may operate problematically on the scale the department contemplates. The process is lengthy, and can take a minimum of four to seven weeks before project development can begin. In addition, the process seems unnecessary for many mandated, technically specific, or small-scale projects. It can cause counterproductive internal competition and create duplication of effort. The financial incentive that is inherent to an external RFP concept in the private sector is lacking, so there is concern about the amount of participation on important but relatively uninteresting assignments.

Team Operations. The third concern about the reorganized department is the viability of DOE's intended approach to team operations. While multi-disciplinary team-based operations are supported for some applications, there are concerns about the complexity of managing team operations on the scale that DOE proposes. DOE has over 140 RFPs identifying potential project team work, and many more projects may be developed to handle on-going agency functions covered by the former department. It appears that management is seeking to impose upon most divisions an unproven notion that approximately 75 to 80 percent of agency work should be team-based work.

By seeking an immediate as opposed to evolutionary approach to the use of teams at the department, there are concerns that management may impose team processes upon work activities that may be more appropriate for individual assignment, and the agency may become overloaded with projects with limited ability to respond to new concerns. An agency financial accounting system to provide cost accountability at the project level has not yet been developed; and monitoring that data may be an enormous task. There are concerns that large numbers of teams may lead to poor internal agency communications, duplication in work activities, and a potential loss of the big picture. There are also concerns about the difficulty teams may have in scheduling meetings.

Employee Performance Evaluations. A fourth concern involves employee performance evaluations. Although the department intends to have a new employee evaluation system by the fall of 1991, no such system was developed or in use at the time of this review. Management has been aware of this need for many months, but gave inadequate attention to addressing the issue. Until a system is in place, employees will be involved on many different projects and work for different division chiefs, without an idea of how their overall performance will be assessed.

Staffing Allocations. There is also concern about whether the new DOE staff have been appropriately allocated across the agency. Current staffing allocations are based on rough estimates by the management team for the reorganization. There are concerns about staffing allocations, such as in vocational education, teacher certification, and clerical work. The department needs to collect time-allocation records and other information necessary to provide a systematic means to measure and reassess staffing levels.

Services to Local School Divisions. The sixth concern about the new operations of the department is whether the new system for providing services to the school divisions is viable. The department has created a field service representative position to provide a link between the department and the school divisions. The field service representative is to serve as a broker of services from the department to the school divisions.

The major concern about this arrangement is whether it will be adequate. With one representative and one half-time secretary per office, it may be difficult for field representatives to be both highly accessible and spend substantial time in school visitation, as they indicate they want to do. In some of the larger regions, there is a concern that the representatives could be overwhelmed with requests. Since all other DOE staff are located in Richmond, it may be difficult for DOE staff to provide adequate support - in terms of customized, on-site assistance - in response to needs identified by the field service representatives. Travel time and costs could potentially minimize staff presence in the field or be inefficient.

Agency Planning and Priorities. The seventh concern about DOE operations is whether DOE has an appropriate method in place to guide management decision-making in selecting projects. The department plans to rely upon the submission of "IDEA" papers to determine the content of most agency work. This system means that agency work is defined on an ad-hoc basis - and not by leadership, goals, and strategy. Instead of advance planning, the department intends to let its clients and staff know what its priorities are, as well as what work will be done, on a case-by-case management review. As a result, it appears that DOE will lack a planned focus. Consequently, the department will lack a comprehensive strategy; management will not have a roadmap for decision-making; there will be substantial potential for duplication, misallocation of resources, or the overlooking of important activities; and employee ability to understand the new DOE and to perform may be impaired.

Lack of Information. The final concern about the new DOE is the lack of information for employees about daily operations. In the May 1991 employee survey, DOE employees indicated that they understand the concepts behind the new work processes, but are uncertain as to how management expects those concepts to translate to their work, or to many of the agency's responsibilities. Reasons for a lack of clarity are that the job descriptions of the new agency are vague about the work expected; final decisions have not been made as to what and how on-going functions will be performed; the new operations have not been explained at a detailed level; and performance expectations are unclear.

JLARC staff developed several recommendations to address these concerns. The following summarize some of the major recommendations.

Recommendation. The Department of Education should sharply curb its use of the RFP process, until a thorough analysis of the process to date has been performed to determine if and when its use is appropriate for internal agency operations.

Recommendation. The DOE internal audit should monitor the management of projects, team-based operations, and other daily work processes. Information should be provided to the Superintendent on an ongoing basis.

Recommendation. The department should immediately develop an employee performance evaluation system. The system should accommodate the uniqueness of different positions and units.

Recommendation. The department should develop a system for manpower planning. Staffing levels in some areas of the new organization need to be reevaluated.

Recommendation. After a reasonable period of time, the department should reassess and evaluate the staffing level and operations of the regional field service representative program. If the provision of customized on-site assistance in the southwest portion of the State is a problem due to travel costs, then DOE may want to consider a regional satellite office to be staffed with specialists.

Recommendation. Based upon an assessment of potential workload, DOE should develop clear goals, objectives and strategies for the agency and each functional (division) area and should involve DOE staff in the process.

Recommendation. The department should develop a detailed implementation plan explaining how the reorganized agency will operate. The plan should not just contain a vision of how the agency will function, but should include operational procedures which outline what work will be performed and how the agency will carry out all of its work and help the State meet constitutional responsibilities. The department should present a summary of this plan to the General Assembly standing committees on education before the 1992 session.

Concerns About Education Accountability

The reorganization of the Department of Education is intended to affect the way both the department and local school divisions conduct the business of education. The changes that have been implemented or are being considered raise some issues about the accountability of school divisions and the department.

First, it is not clear whether DOE's current activities are sufficient to ensure compliance with State standards (the Standards of Quality, or SOQ, and the Standards of Accreditation, or SOA). The new department has effected a change, originally announced by the interim Superintendent, to eliminate on-site monitoring of SOQ and
accreditation items. The department has reduced accreditation staffing levels, and has eliminated administrative reviews for SOQ and SOA items. The result is that to a greater degree than in the past, compliance with SOQ and SOA is largely a paper certification process, with no systematic on-site reviews by the State.

The second issue relates to the role of input standards and outcome indicators in holding school divisions accountable. The department intends to shift the focus of school division accountability to outcomes. However. while significant work has been done for and by the department on outcome indicators, a comprehensive system of outcome accountability will not be ready for several years. It is therefore premature, and may not be ultimately desirable, to phase out input standards, such as required pupil-teacher ratios.

The report of the Governor's Commission on Educational Opportunity, as well as department staff remarks to the Board of Education in the spring of 1991, supported an objective of working toward a phase-out of input standards - making inputs suggested guidelines rather than standards. In its response to this JLARC report, DOE indicates that it intends to advocate keeping those input standards that have a demonstrated relationship to outcomes (student performance). The department still needs to consider that some input standards, even if not proven to relate to outcome test scores, may be valuable for other reasons. An obvious example is pupil-teacher ratios in vocational education intended for safety reasons. The department needs to develop a balanced accountability approach.

Finally, the new DOE mission statement, calling for improving the delivery of services and increasing student learning, is still vague, and needs additional clarification if DOE is to be held accountable.

With regard to improving the delivery of services, local school division satisfaction levels will be a function of timeliness, quality, and extent of service. DOE's RFP process appears to represent a willingness of DOE management to reduce the timeliness and extent of what DOE does in exchange for work of higher quality. The department's approach to assessing its delivery of services is to examine the outcomes of its RFP projects. While this approach may address the quality of individual projects, it does not appear adequate to address the overall tradeoffs that may exist between quality, timeliness, and extent of service.

With regard to increasing student learning, DOE needs a comprehensive, unified plan for explaining how it will go about meeting this part of its mission. The department still has not addressed many questions, such as: Based on a client assessment, what are the types of assistance from the new department that are most commonly needed? How much of the need for assistance can DOE meet through its resources? What are the criteria, or under what conditions (When, where, and how) will DOE provide assistance? Is the program of pilot school experiments DOE proposes a centerpiece of its plan for increasing student learning, or only one of many activities? DOE should address these types of questions, and be held accountable for accomplishing its mission based on objective criteria and data.

Recommendation. The Department of Education should report to the 1992 session of the General Assembly on the steps it will take to verify the self-reported local school division data submitted for the SOQ and accreditation process. The Board of Education should determine whether the department's compliance activities and capabilities are sufficient to meet its constitutional and statutory requirements.

Recommendation. DOE should develop a balanced and comprehensive approach to local school division accountability. The department should fully consider the relationship of inputs to outcomes, and the need to retain or increase certain input standards.

Recommendation. The General Assembly may wish to direct a review of the reorganized department in approximately two years, to assess items such as: (1) achievement of the department's mission, (2) local school divisions' satisfaction with the new DOE's provision of services, and (3) whether student learning is being affected by DOE activities.