South Bend Community School Corporation · South Bend Community School Corporation Transportation...

South Bend Community School Corporation

Transportation Department Study

Date of Report: August 8, 2011

South Bend Community School Corporation Transportation Department Study

TABLE OF CONTENTS

EXECUTIVE SUMMARY............................................................................................................................................................. 1

OVERVIEW OF ENGAGEMENT .................................................................................................................................................. 2

SUMMARY OF OBSERVATIONS ................................................................................................................................................ 3

SUMMARY OF OBSERVATIONS – MANAGEMENT PRIORITIES .................................................................................................. 6

OVERVIEW OF TRANSPORTATION DEPARTMENT ..................................................................................................................... 7

SECTION I: OPERATIONAL STRUCTURE AND STAFFING ............................................................................................................11

1. Documentation of Policies and Procedures ........................................................................................ 14

2. Routing Analysis ................................................................................................................................. 15

3. Absenteeism ....................................................................................................................................... 16

4. Mix of Contract versus Corporate Drivers ........................................................................................... 17

5. Exempt versus Non-exempt Employees .............................................................................................. 18

6. Radio Dispatch Department Staffing ................................................................................................... 19

7. Routing Department Staffing .............................................................................................................. 20

8. Call Logs .............................................................................................................................................. 20

9. Performance Evaluations .................................................................................................................... 21

10. Communication of Student Route Changes ......................................................................................... 21

SECTION II: FINANCIAL ............................................................................................................................................................22

11. Documentation of Budget Assumptions ............................................................................................. 24

12. Benchmarking ..................................................................................................................................... 25

13. Medicaid Funds for Transporting Special Needs Students ................................................................... 25

14. Fuel Hedging ....................................................................................................................................... 25

15. Pay Rates used to Compensate Contract Drivers for Special Trips....................................................... 26

16. Billing Rates for Activities ................................................................................................................... 26

17. Bid Procedures for Maintenance Parts................................................................................................ 27

SECTION III: BUS FLEET AND MAINTENANCE ...........................................................................................................................28

18. Bus Replacement Cycle ....................................................................................................................... 31

19. Bus Fleet and Tire Leasing ................................................................................................................... 31

20. Mechanics versus Technicians ............................................................................................................ 32

21. Maintenance of School Corporation Vehicles ..................................................................................... 33

SECTION IV: INFORMATION TECHNOLOGY..............................................................................................................................34

22. Back-ups of System Data .................................................................................................................... 35

23. Payroll System .................................................................................................................................... 36

24. Process for Tracking Trips and Trip Cost Recovery .............................................................................. 37

25. Automated Calling System or Use of E-Link ........................................................................................ 38

1.

EXECUTIVE SUMMARY


Executive Summary

2.

OVERVIEW OF ENGAGEMENT

At the request of the School Corporation, we have conducted an evaluation of the business processes and procedures of the transportation department for the School Corporation. We have made inquiries of transportation management and staff, other school corporation officials, and contract drivers, and obtained readily available data. Specifically, we performed procedures and categorized observations and recommendations related to the following areas:

• Section I – Operational Structure and Staffing: Observations related to the levels and types of staffing and allocation of personnel and roles within the transportation department. This also considers the process for routing buses and use of personnel for transportation needs.

• Section II – Financial: Observations concerning the budgeting process, financial reporting, annual performance measurement, and billing procedures.

• Section III – Bus Fleet and Maintenance: Observations related to the replacement cycle, levels of repair parts, and usage of maintenance technicians.

• Section IV – Information Technology: Discusses capabilities and procedures surrounding the information systems used by the transportation department.

Each section provides more detail, and identifies personnel interviewed and data analyzed. We have included observations and recommendations for improvements to staffing, structure, procedures, and systems, based on both the results of our procedures and industry best practices, where applicable. We made an effort to estimate the potential savings associated with our suggestions, either in terms of labor hours or dollars. Some of the recommendations are choices that may overlap with one another; require implementation of one recommendation to influence another, or may conflict. Therefore, the total potential impact of our observations cannot be quantified and represents a range of possible results or savings.

PRIMARY CONTACTS During our engagement, we had discussions with and obtained information from the following key employees at the School Corporation:

• Mr. James Kapsa, Superintendent • Mr. Robert Orlowski - Executive Director • Mr. Richard Hammond – Director of Transportation • Mr. Mike Nolen – Safety and Training Supervisor • Ms. Jenise Palmer – Budget Director • Mr. Brent Perkins – Maintenance Supervisor

We also interviewed and interacted with other School Corporation personnel who are identified in the respective sections of the report.


Executive Summary

3.

SUMMARY OF OBSERVATIONS

We have identified 25 opportunities for the School Corporation to improve its processes and procedures and manage costs. They are summarized below in no particular priority order by each category. We have provided a priority and ease of implementation chart from management’s perspective following this summary, on page 6. Section I - Operational and Structure and Staffing:

1. Documentation of Policies and Procedures:

The lack of documentation of key policies and procedures presents a risk that the transportation department could lose critical knowledge if the employees possessing this knowledge retire or resign. We recommend that the Corporation documents key policies and procedures within the transportation department, in order to maintain high quality of service, follow rules, improve efficiencies, and help with learning to facilitate smoother integration of new employees.

2. Routing Analysis:

A routing analysis has not been completed in several years. We recommend that the Corporation conducts a full bottom-up routing analysis in order to help ensure that the routes used are as efficient as possible. The routing analysis can take into account different assumptions on tiered schedules.

3. Absenteeism: Absenteeism costs the transportation department time and money and impacts customer service. We suggest that the School Corporation enforce punctual attendance and consider incentives for drivers who use less than a certain number of sick days.

4. Mix of Contract versus Corporate Drivers: The Corporation should consider different mixes of contract drivers and corporate drivers, after conducting the routing analysis to determine the best fir for service capabilities.

5. Exempt versus Non-exempt employees:

The Corporation could save money by eliminating overtime pay for administration employees who may qualify as exempt employees based on job descriptions.

6. Radio Dispatch Department Staffing: There are opportunities to reallocate the assignments within the radio dispatch department in order for the transportation department to run more efficiently and effectively.

7. Routing Department Staffing: The Routing Supervisor role is a key position that should be filled to better support the department.

8. Call Logs: There is no written log of “customer” calls for the transportation department. The lack of a log and the use of paper forms present a risk that customer contacts may be lost, not communicated properly, or not tracked as recurring issues. We suggest that the School Corporation consider setting up the call logs in the information system.

9. Performance Evaluations: The School Corporation does not have a procedure in place for performing annual performance reviews of the administrative staff in the transportation department. We suggest that the School Corporation puts into place a written process for annual performance reviews within the transportation department.

10. Communication of Student Route Changes: There is not a clear protocol for changing student routes and this causes inefficiencies. We recommend that the procedure for student bus route changes is clearly documented and is distributed to all schools.


Executive Summary

4.

Section II - Financial:

11. Documentation of Budget Assumptions:

The assumptions used in arriving at the budgeted expenditures for the transportation department are not outlined in the recommended school budget or documented with the final budget. Therefore, it would be difficult to determine and replicate the exact calculations used each year and to explain variances in assumptions from year to year. We recommend that the School Corporation documents the assumptions used to develop the budget. A budget to actual variance report should be used as a tool for future budget creation, as well as the concept of zero-based budgeting.

12. Benchmarking:

Benchmarking or key performance indicators are not utilized by the transportation department to track financial and nonfinancial activity and their relationships. The School Corporation should establish an accountability mechanism for school transportation. An annual or semi-annual review of key performance indicators such as cost per mile, cost per student, cost per school, cost per bus, and costs of regular and special routes would provide the transportation department with better visibility as to the trends in expenditures and would also provide the Board with better information for making decisions. Reporting should reconcile to current general ledger information or databases.

13. Medicaid Funds for Transporting Special Needs Students:

The School Corporation transports many special needs students on a daily basis. During FY 2010, the School Corporation reported $726,552 in expenditures for driver salaries for transportation of special education students. The Corporation has not sought any reimbursement from Medicaid for these costs to date. We recommend that the School Corporation investigates whether they may apply for reimbursement of these costs, and what amounts may be recoverable.

14. Fuel Hedging: The Corporation has not engaged in hedging its diesel fuel purchases in recent years. Annually, the School Corporation may consider reviewing what opportunities, or risk mitigation, fuel hedging may provide to protect the Corporation against rapid swings in fuel prices. This will allow the Corporation to build a more stable budget, particularly for the transportation department which has a significant amount and volatility on fuel expenditures.

15. Pay Rates used to Compensate Contract Drivers for Special Trips:

The rates paid to contract drivers for special trips have not been updated in over 15 years. We recommend that the rates the transportation department uses to pay contract drivers for trips are reviewed during the budget process prior to the start of each school year. Comparisons could be made with other school districts.

16. Billing Rates of Activities:

Billing rates for trips are not updated regularly. Sports trips and after school activities are “free” to schools, exclusive of extra buses the schools may require. The School Corporation should bill the schools or students for sports trips and after school activities, or at a minimum, track the cost of providing this service to the School Corporation. Also, the Corporation my consider providing each school with an activities budget at the beginning of each school year, holding the school accountable to stay within the budget or pay extra fees.

17. Bid Procedures for Maintenance Parts: A formal review of purchases by vendor is not documented; such a practice could uncover opportunities for the Corporation to recognize savings by buying in volume or changing vendors. We recommend that the Corporation consider periodically reviewing total maintenance part purchases by vendor in aggregate for the year, in order to review the pricing for recurring purchases from the vendors where more significant total dollars are spent. Documentation should be maintained for all procurement decisions and should have segregation of duties.


Executive Summary

5.

Section III - Bus and Fleet Maintenance:

18. Bus Replacement Cycle: The Corporation’s replacement cycle is within a reasonable compared to best practices. However, there is an opportunity to gain some incremental capital cost savings over potential increased operating costs from extending the life of a vehicle. Also, the Corporation should reduce the number of spare buses in its fleet, because they are not being fully utilized.

19. Bus Fleet and Tire Leasing:

While it is not economically feasible for the Corporation to put its fleet on a five-year replacement cycle, the Corporation may consider leasing buses in order to enjoy the benefits of a newer fleet without the up-front capital outlay. We suggest that the Corporation investigates the potential cost benefit of leasing all or portions of its fleet instead of purchasing buses.

The transportation department uses between 300 and 350 tires per year, for a cost of $100,000 to $125,000 per year, including mounting, balancing, and rim repair. In addition, there is labor costs associated with tire maintenance. We recommend that the transportation department considers the option of leasing its tires.

20. Mechanics versus Technicians: Based on the type of maintenance work performed, we recommend that the School Corporation considers replacing some of the mechanic positions with technicians as mechanics retire or leave. Considering that 70% of time is spent on routine maintenance, a portion of employees could be retained at lower salary levels commensurate with the skill set of certain functions.

21. Maintenance of School Corporation Vehicles: The transportation department provides maintenance for 68 School Corporation vehicles, and provides the labor, oil, and grease free of charge. The estimated annual labor cost for maintaining the service vehicles is approximately $35,000. This amounts to approximately $500 per vehicle per year for routine maintenance. We recommend that the transportation department bill the maintenance costs to the facilities department, and also recommend that the Corporation considers outsourcing routine maintenance for Corporation vehicles to a third party, if it presents a net cost savings.

Section IV - Information Technology:

22. Back-ups of Information System Data: The Corporation does not have an off-site back up program and this places key information within the transportation department at risk. We recommend that the School Corporation invests in an off-site back up program.

23. Payroll System: The manual nature of the payroll system takes a significant amount of time to complete the payroll and presents the risk of human error, manipulation of time records, and loss of institutional knowledge related to completing the payroll. We recommend that the Department consider implementing an electronic payroll system, and document all processes supporting the system.

24. Process for Tracking Trips and Trip Cost Recovery: The manual, time consuming process for billing trips could be improved by implementing an automated system. We recommend that the School Corporation considers either upgrading the capabilities of the AS/400 system or considers implementing a new trip scheduling system that will eliminate manual billings. We also recommend that trip costs are accounted for and billed to users of the services.

25. Automated Calling System: Making live phone calls for routine, mass-communications is time consuming and could be streamlined by use of an automated calling system in appropriate situations.


Executive Summary

6.

SUMMARY OF OBSERVATIONS – MANAGEMENT PRIORITIES

The following chart represents management’s assessment of the priority and the ease of implementation (Time and Effort and Financial) of the recommendations. The rankings were based on a scale of 1 to 10 with the number “1” representing the highest priority and simplest implementation process. Therefore, the lower left quadrant of the chart shows what management believes has the highest priority and simplest execution or implementation considering financial and time and effort inputs.

Operational and Structure and Staffing:

1. Documentation of Policies and Procedures 2. Routing Analysis 3. Absenteeism 4. Mix of Contract versus Corporate Drivers 5. Exempt versus Non-exempt employees 6. Radio Dispatch Department Staffing 7. Routing Department Staffing 8. Call Logs 9. Performance Evaluations 10. Communication of Student Route Changes

Financial:

11. Documentation of Budget Assumptions 12. Benchmarking 13. Medicaid Funds for Transporting Special

Needs Students 14. Fuel Hedging 15. Pay Rates used to Compensate Contract

Drivers for Special Trips 16. Billing Rates of Activities 17. Bid Procedures for Maintenance Parts

Bus and Fleet Maintenance:

18. Bus Replacement Cycle 19. Bus Fleet and Tire Leasing 20. Mechanics versus Technicians 21. Maintenance of School Corporation Vehicles

Information Technology:

22. Back-ups of Information System Data 23. Payroll System 24. Process for Billing Trips 25. Automated Calling System


Executive Summary

7.

OVERVIEW OF TRANSPORTATION DEPARTMENT AND STATISTICS

The Transportation department of the South Bend Community School Corporation (“School Corporation”) serves approximately 16,000 students across 35 school buildings in South Bend, Indiana. The Transportation department employs 212 corporate bus drivers, 26 Corporation substitute drivers, 65 paraprofessionals, 8 maintenance personnel, and 11 administrative and managerial personnel. The School Corporation owns 247 buses, and utilizes an additional 33 buses which are owned and operated by independent contracted drivers. The School Corporation currently operates under a two-tier system, with the intermediate and high schools at one start time and the elementary schools at a second start time.

The Corporation runs 212 primary routes (“regular routes”), plus 22 additional “special” programs which are summarized in the following table.

1 Young Adults 12 Intern2 Pre-School 13 SAMP3 Altered Days 14 M to M4 Vocational Education 15 School Capacity5 Family Literature 16 Head Start6 Bright Beginnings 17 Early Head Start7 Kaleidoscope 18 Job Shadowing8 Homebound 19 Communities 9 APPROVE 20 Clinical

10 Mid-day Students 21 Indianapolis11 Title One 22 Bilingual

In addition to providing transportation for special programs, the Corporation also provides transportation for activities, which includes fieldtrips, athletic events, and various after-school activities. Special programs are provided free of cost to the students and the schools which those students attend. Certain activities are billed to students or the schools requesting the trips, however, certain fieldtrips and all athletics are provided free of charge to the schools or individual students.


Executive Summary

8.

Financial Performance Metrics - The table below summarizes key financial and nonfinancial metrics for the past two years and budgeted 2011. This information is utilized throughout the evaluation for observations and recommendations.

FormulaMetric Category 2009 2010 2011 Reference

Total Annual Expense:

Total Transportation Operating Expenses** 14,404,626$ 14,294,626$ 13,578,185$ (A) Corporate Bus Purchase Expenses^ 1,449,000 1,571,000 1,678,000 (B) Total Annual Expense 15,853,626$ 15,865,626$ 15,256,185$ (C)

Total Transportation Operating Expenses (A): Contractor Expenses** 1,352,173$ 1,254,190$ 1,240,000$ (D) Contract Driver Allocated Operating Expense** 99,900 99,900 99,900 (E) Corporate Operating Expense** 12,952,553 12,940,536 12,238,285 (F)

14,404,626$ 14,294,626$ 13,578,185$

Number of Buses: Total Corporated Buses Owned 248 247 247 (G) Corporate Buses on Actual Daily Routes 214 214 212 (H) Contracted Buses and Routes 33 33 33 (I)

Annual Mileage: Corporate 2,792,756 2,804,150 2,840,000 (J) Contractors 270,000 270,000 270,000 (K) Total 3,062,756 3,074,150 3,110,000 (L)

Number of Students Transported Per Day: Corporate 14,010 13,906 13,744 (M) Contractors 2,481 2,373 1,994 (N) Total 16,491 16,279 15,738 (O)

Operating Statistics:Average Annual Expense per Students Transported 961$ 975$ 969$ (B) / (O)Total Average Annual Expense per Mile 4.91$ (C) / (L)Total Average Annual Operating Expense per Mile 4.70$ 4.65$ 4.37$ (A) / (L)

Corporate Operating Expense per Mile 4.64$ 4.61$ 4.31$ (F) / (J)Corporate Total Cost per Mile 5.16$ 5.18$ 4.90$ (C+F) / (J)Contract Total Cost per Mile 5.38$ 5.02$ 4.96$ (D+E)/(K)

Corporate Expense per Bus Owned 58,071$ 58,751$ 56,341$ (B+F) / (G)Contract Expense per Contract Bus 44,002$ 41,033$ 40,603$ (D+E) / (I)

Data in the chart has not been audited. Data has been provided by the transportation department.

** These are budgeted figures.

(E) For YE 2009 and YE 2010. An estimate of $.37 per mile was provided by the Corporation for operating expenses to be allocated to contract drivers

^ Budgeted expendutures for Fund 42 which is less than appropriated amount.

(A) For YE 2010 and YE 2011, total transportation operating costs were reduced by $690,109 & $1,635,050, respectively,to account for the reduction due to property tax caps and non-collections.

(K) Contractor mileage is estimated based on regular routes of 247,000 miles and other activities of 23,000 miles for all 3 years.

(M) The number of students transported for 2008 to 2010 was not available. To estimate the figures, the percentage of students transported during 2011 to the total enrollment throughout the corporation (67.49%) was applied to total enrollment for each respective year.

Transportation MetricsFor Year Ending December 31


Executive Summary

9.

Operating Costs - Following is a summary of the direct and indirect costs that are included in transportation operating expenses in the table above.

Category 2009 2010 2011 % for 2011

Direct 12,431,196$ 12,331,196$ 11,742,255$ 86%Indirect 1,973,430 1,963,430 1,835,930 14% Total 14,404,626$ 14,294,626$ 13,578,185$ 100%

Composition of Budgeted Transportation Operating Costs

For 2010 and 2011, total budgeted direct costs were reduced by $690,109 & $1,635,050, respectively, to account for a budget reduction due to property tax caps and collections. Direct costs include salaries and benefits of corporate drivers, paraprofessionals, and bus maintenance, and the costs of bus supplies (fuel, oil, parts, etc.).

Special Activities and Programs - The School Corporation provides transportation for a variety of special activities and after school programs, in addition to transporting students to and from school each day. We have provided summary information on the estimated cost of various special programs and activities. It is important that the School Corporation have visibility to the costs of all activities to help assess various initiatives and to determine whether resources are allocated appropriately based on the Corporation’s priorities. Following is a summary of the estimated breakdown of total 2011 projected mileage for Corporate Drivers.

Daily Miles DaysEstimated

Miles% Total Miles

Estimated Cost^

"Regular" 9,673 180 1,286,109 46% 5,543,130$ "Regular" special ed 3,099 180 893,736 32% 3,852,002 Special programs 2,076 180 373,639 12% 1,610,384 Activities 263,621 9% 1,136,207 Other** 22,895 1% 98,677

Total budgeted miles 2,840,000 100% 12,240,400$

**Other includes dead head miles and budget to actual variations in mileage^ Based on corporate operating expense per mile of $4.31/mile, per the previous Transportation Metrics table.

Corporate Driver Mileage SummaryYear ending December 31, 2011

Special programs include 22 activities such as Title One and Head Start, among others, that are outside of the regular routes and activities for K through 12 classes. Activities include busing for athletics, fieldtrips, and other various recreational and educational programs.


Executive Summary

10.

The following table summarizes the estimated projected cost of each of the special programs for 2011.

ProgramEstimated

MilesEstimated

Cost*% Total

Cost

APPROVE 43,350 186,839$ 12%SNAP 82,980 357,644 22%Powerhour (AKA PALS) 13,104 56,478 4%Head Start 58,752 253,221 16%SAMP 22,733 97,979 6%YAS (Goodwill) 15,840 68,270 4%Mid-days (various schools) 49,320 212,569 13%Homebound 10,880 46,893 3%Intern 33,480 144,299 9%Indy Deaf & Blind Schools 43,200 186,192 11%

Totals 373,639 1,610,384$ 100%

Estimated cost computed using the estimated cost per mile for corporate drivers from theTransportation Profile in Section I of this report.

Note that certain programs of the 22 total programs are excluded from this summary. Excludedprograms are rolled up into current runs and do not incur any additional costs, or are so immaterialthat they w ould not represent a signif icant cost to the Corporation.

Special ProgramsYear ended December 31, 2011

The following table summarizes the resources spent on various activities for 2011. It is important to note that some activities are serviced by contract drivers.

Estimated Miles*

Estimated Cost^ % Total Cost

Corporate driversAfter-School Activities (1) 186,544 804,005$ 64%Excursions (2) 30,409 131,063 11%Sports (3) 46,668 201,139 16%

263,621 1,136,207 91%

Contract driversAfter-School Activities (1) - - 0%Excursions (2) 1,595 7,816 1%Sports (3) 21,215 103,954 8%

22,810 111,770 9%

Totals 286,431 1,247,977$ 100%

*2011 miles are annualized based on the actual mileage to-date in May 2011. ^Estimated cost computed using the average annual cost per mile from the Transportation Profile

in Section I of this report. (1) After-School Activities include any activity that is not a field-trip or sports.(2) Excursions include any field-trip in or out of town that is driven by a corporate driver(3) Sports includes all sports activities and trips driven by corporate drivers.

ActivitiesYear ending December 31, 2011

SECTION I: OPERATIONAL STRUCTURE AND STAFFING


Section I: Operational Structure and Staffing

12.

STAFFING OVERVIEW The following chart summarizes the staffing within the transportation department.

Director of Transportation

Executive Secretary

Safety and Training Supervisor

Routing Supervisor

Radio Dispatchers (3)

Maintenance Supervisor

Mechanics (8)

Parts and Payroll Clerk

Corporation Drivers (212)

Substitute Drivers (26)

Bus Para- professionals (65)

Contract Drivers (33)

Routers (3)

The corporate drivers are unionized under Local 686. The Local 686 union contract with the School Corporation expired on December 31, 2009. The paraprofessionals are unionized under Local 364. The Local 364 union contract with the School Corporation expired on July 31, 2010. Both union contracts automatically renew for one-year increments unless a notice is made that either party wishes to renegotiate. Such notice must be given at least 60 days prior to the respective anniversary date. The contract drivers operate under an association format which allows them to negotiate a contract which is then executed by each individual driver. The contract drivers are currently operating under a four-year contract which expires in 2014.



13.

Payroll and benefit costs represent over 82% of the 2010 actual operating expenditures, as graphically represented below.

32%

21%9%

5%

4%

5%

2%

3%1% 18%

Total YE 2010 Expenditures

Corporate driver wages

Corporate driver benef its

Contracted driver wages

Paraprofessional wages

Paraprofessional benef its

Of f ice staf f wages

Off ice staf f benef its

Maintenance wages

Maintenance benef its

Insurance, supplies & other

OPERATIONAL REVIEW PROCEDURES

We conducted the following procedures during the on-site visit.

• Interviewed the following individuals regarding operational structure and staffing: • Mr. Robert Orlowski, Executive Director • Mr. Richard Hammond, Transportation Director • Mr. Mike Nolen, Safety and Training Supervisor • Ms. Judy Jernigan, Radio Dispatch and Trip Coordinator • Ms. Alberta Garrison Dispatcher • Ms. Christina Rock, Router • Ms. Jennifer Haas, Router • Ms. Felecia Taylor, Router • Mr. Brent Perkins, Maintenance Supervisor • Ms. Stacy Buss, Parts/Payroll Clerk • Mr. Thomas Johnson, Corporate Driver/Trainer • Mr. Dan Meert, Contract Driver, Representative of Contract Drivers • Ms. Deb Ward, Union President, Local 686

• Obtained an organizational chart and reviewed job descriptions for the personnel in the

transportation department. • Read the union contracts for the paraprofessionals (Local 364) and the corporate drivers (Local

686). • Read the agreement between the School Corporation and the contracted drivers.



14.

OBSERVATIONS AND RECOMMENDATIONS

1. Documentation of Policies and Procedures

Observation: There has been recent turnover of key employee positions, and some employees in the transportation department are nearing retirement age. Three employees who have each spent more than 10 years with the department are planning to retire in the next few years. These employees, among a few other seasoned employees in the transportation department, possess a great deal of operations and procedural knowledge which is not currently documented.

• Mr. Nolen, Safety and Training Supervisor, has been with the School Corporation for 12 years and he indicated that he plans to retire in the near term. Mr. Nolen is responsible for conducting safety visits at schools; overseeing driver absences; ensuring that drivers, paraprofessionals, and substitute drivers are scheduled appropriately; visiting accidents; coordinating training; and addressing complaints from drivers, parents, and guardians. Mr. Nolen has at times in his tenure served as a temporary Transportation Director and has extensive knowledge of the various routes, drivers, and schools in the Corporation.

• Mr. Johnson, a corporate driver who is also the primary trainer for new drivers, has been with the Corporation for 11 years. During our interview with Mr. Johnson, we learned that while there are some experienced drivers that help him with training, Mr. Johnson provides the primary structure for the training program. There is not a clear succession plan for a new trainer should Mr. Johnson retire. The curriculum of this training program is not documented.

• Ms. Rock, Ms. Haas, and Ms. Taylor, Routers, noted that the procedures for routing are not

documented, and, given the recent retirement of the routing supervisor, it has been challenging to determine the appropriate way to complete routine tasks. All of the individuals in the routing department have less than two years of experience.

• Ms. Garrison and Ms. Jernigan, Radio Dispatchers, both have extensive knowledge of the

procedures in place in the radio dispatch department. However, there is no documentation of these procedures. Ms. Garrison and Ms. Jernigan have been with the School Corporation for 30 years and 10 years, respectively, and both plan to retire in the next few years.

• Mr. Perkins, Maintenance Supervisor, has been with the Corporation for 30 years. Mr.

Perkins has knowledge of the time to buy certain parts and from which vendors, the procedures surrounding bus replacement and bidding, and preparation for the annual state police bus inspections. These policies and procedures are not formally documented beyond some lists of vendors used and a checklist for mechanics to follow in preparing for the annual state police inspection.

• Ms. Buss, Parts/Payroll Clerk, has been with the Corporation for eight years. She prepares

payroll on a bi-weekly basis. No documentation exists for the payroll process, and no other individual in the transportation department knows the specific detail of how to prepare the payroll. This presents a risk of loss of knowledge and a potential inability to pay employees on a timely basis if Ms. Buss were not available to prepare the payroll information.

The potential near term loss of human capital and lack of documentation of key policies and procedures presents a significant risk that the transportation department operations effectiveness and efficiency.



15.

Recommendation: We recommend that the Corporation documents key policies and procedures in order to maintain quality, improve efficiencies and learning when turnover does occur, and to facilitate smoother integration of new employees. Also, we recommend that the Corporation puts together a plan for filling the planned vacancies due to retiring employees in the near future, so that training and sharing of knowledge may occur prior to the retiring individuals leaving the Corporation. We understand that it is not always feasible to have two employees holding the same position at one time, but, we would like to stress that a transition plan will be an important factor to promote the efficiency of the transportation department and to help contribute to the success of both the new individuals hired and to the transportation department as a whole. While the efficiencies associated with documenting policies and procedures and allowing for a smooth transition cannot be quantified in terms of cost or time savings, we believe these initiatives are important to the success of the School Corporation.

2. Routing Analysis

Observation: A comprehensive routing analysis, including building the bus routes from the “bottom up” within the routing software, has not been completed since 2005. The routes that are used are historical in nature with no major changes made from one year to the next. The typical routing process for a new school year includes obtaining the student promotions between grade levels and information on students that have moved within, or are entering, the School Corporation for the first time. That information is used to modify the current routes as necessary. However, as these changes have evolved over the years, a comprehensive re-routing has not been conducted. This may cause inefficiencies. Routes could potentially be combined or consolidated to run more efficiently. Best practices in the student transportation industry indicate that a periodic routing analysis is essential to running routes as efficiently as possible. The maps within Versatrans (the routing software that the Corporation uses) have not been updated for approximately 10 years. It is estimated that the cost of updating the maps would be approximately $10,000. We understand that the process of completing a new routing analysis is not as simple as running a program. The Corporation must first input certain restrictions and other information that needs to be considered as the routes are developed by the system (such as busy streets that students should not cross to board the bus, rail roads that the buses are not allowed to cross over, and inaccessible streets that are too narrow for buses). None of these types of restrictions are formally documented currently. The routes that are output by the routing software must be manually paired by someone, as the program does not output “round trips” for the day. The length of time to complete this entire exercise varies depending on the expertise of the person doing the routing, and we were not provided with a clear estimate of the time to conduct a rerouting exercise. With the recent departure of the routing supervisor, and the routing personnel being relatively new, it is not clear whether someone in routing would currently possess the appropriate expertise to conduct the routing analysis. The Training and Safety Supervisor, Mr. Nolen, possesses the appropriate knowledge of the routes, drivers, and restrictions to complete the re-routing; however, his retirement is approaching. Certain experienced drivers may be able to assist with reviewing the routes and



16.

ensuring the appropriate restrictions are added based on their knowledge of the routes. Individuals we interviewed felt strongly that some preliminary review and dry runs must be completed prior to a full new re-routing being implemented otherwise problems with putting the plan to work would inevitably occur and cause disruption in the transportation of students. Recommendation: We recommend that the Corporation conducts a full bottom-up routing analysis in order to help ensure that the routes used are as efficient and effective as possible. We suggest that the Corporation invests in updating the maps in its routing software before this analysis is completed, in order to ensure that road and street changes are reflected. As part of this process, the assumptions and procedures related to the routing analysis should be documented in order to ensure that this process can be replicated efficiently and more frequently in the future. We recommend that the School Corporation ensures that qualified personnel assist in the new routing and that new personnel are involved in the process as well so that they can learn the process for future years. Industry best practices indicate that the routing of buses should be periodically rebuilt each year as opposed to rolled forward, in order to ensure the most efficient use of resources. In addition, the Corporation may consider the feasibility of different bell-systems than the current two-tier system that it is using, in order to assess whether a different system could present potential savings. Although the potential net savings associated with conducting a full re-routing is not estimable, we strongly believe that based on the fact that such an analysis has not been completed in several years, the School Corporation will gain efficiencies by performing a comprehensive analysis for the upcoming school year and on a periodic basis going forward.

3. Absenteeism

Observation: During one day of our review work, we noted that in the morning there were already 29 individuals who were absent for the day. We viewed absentee logs from the prior month and we noted that the volume was similar on a daily basis. Typically about 40% of absentees are on long-term leave; 15% are on workers’ compensation, with the remaining 45% on a pre-approved personal day or an unplanned sick day. Many individuals that we spoke with throughout the School Corporation indicated that absenteeism is a frequent problem due to the nature of the job. Drivers get 12 total sick and personal days off per year. Many drivers utilize all of the days off.

In response to the level of absenteeism, the Corporation employs a total of 26 substitute drivers. The substitute drivers are used on a daily basis and are guaranteed a minimum of 4.5 hours per day. The substitutes do not receive benefits and are paid a slightly lower hourly rate than corporate drivers. The total compensation paid to substitute drivers amounted to approximately $330,000 during the year ended December 31, 2010. The number of substitute drivers could potentially be reduced if attendance related to unplanned sick days was better among the corporate drivers. Beyond the salary cost of having substitute drivers available, we were informed that absenteeism costs individuals in the routing and dispatch departments about one to two hours per day in additional work, due to the need to reschedule routes. This amounts to up to 500 hours per year in additional work related to absenteeism. While reducing those hours does not equate to a position being eliminated in the routing or dispatch department, the hours could be spent on other initiatives such as documenting policies and procedures and working on refining the routes to be more efficient.



17.

In addition, although it is difficult to quantify an impact in terms of dollars or hours, the use of a substitute instead of the normal driver on a route may increases the amount of student behavior issues and parent complaints due to the unfamiliar driver and potential issues with lateness due to a substitute’s unfamiliarity with the route. The highest quality programs are ones where the same drivers are on the same routes every day. Those drivers develop a familiarity with the students, and recognize when something doesn’t look right in a location, as they are more attuned to safety issues than substitutes who are trying to follow a route. Absenteeism costs the transportation department time and money. Controlling the factors that are in the power of the Corporation could result in cost savings and better customer service. Recommendation: We suggest that the School Corporation enforce punctual attendance and consider incentives for drivers who use less than a certain number of sick days.

4. Mix of Contract versus Corporate Drivers

Observation: The Corporation uses contract drivers primarily to service rural routes and to provide transportation for long-distance fieldtrips and athletic events that are beyond the boundaries of the school district. Under the current union contract with the corporate drivers, there is no required ratio of corporate to contract drivers. Over the past five years, the number of contract drivers has decreased from 40 to 33 due to attrition according to management. There are numerous financial and operational factors to consider. Contract drivers typically service rural routes that would be costly and time consuming for corporate drivers to reach after first visiting the vehicle facility in the morning. In addition, contract drivers do not charge for “dead head” miles (those miles when no students are on the bus), which is an advantage when considering rural routes. In addition, contract drivers typically cover the longer distance field trips that may strain the corporate drivers’ schedules. Contract drivers are required to provide their own substitutes when they are not able to come to work, eliminating this burden from the Corporation. As a result of this requirement, there are fewer absences among contract drivers. Contract drivers purchase and maintain their own buses, eliminating the Corporation’s responsibility to do so. In addition, there is a perception that contract drivers take additional “ownership” in their jobs due to the capital investment they make and entrepreneurship they experience by being an independent contractor. During our interviews we heard concerns that due to the fact that routes have not been re-assessed since 2005, both contract and corporate drivers may not be used to the best of their capabilities and efficiencies. For example, some contract drivers are concerned that corporate drivers have been utilized to transport some students in rural areas that would be more efficient for contract drivers to service. We have recommended that the transportation department conduct a comprehensive re-routing study, which would include an analysis of allocating routes between corporate and contract drivers. Financial data suggests that the cost per mile is slightly higher for contractors ($4.96 vs. $4.90), but the contractor cost per bus is lower than the corporate cost per bus ($40,603 vs. $56,341). The primary difference is related to dead head miles, capital costs, and the efficiency of the contract routes.



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Recommendation: We suggest that the Corporation continues to utilize its current contracted drivers, and we believe that a comprehensive routing analysis, as suggested previously, will help to ensure that the drivers are utilized as efficiently and effectively as possible. We suggest that the Corporation inquire whether any corporate drivers would be interested in becoming independent contractors. We understand that the key barrier to entry of becoming a contract driver is the capital investment. In order to address these potential pitfalls of converting corporate drivers to contracted drivers, we suggest that the Corporation considers keeping its fleet and leasing buses to corporate drivers who wish to become contract drivers if enough drivers are interested. The Corporation would save time and money by eliminating the responsibility of the Corporation to pay for maintenance of the buses and to provide substitute drivers when corporate drivers are absent. In addition, the enhanced career ownership that comes with being a contracted driver may potentially boost employee morale and decrease absenteeism. It is important to note that the Corporation does not pay contract drivers any benefits. Benefits paid to corporate drivers represent approximately 21% of expenditures in Fund 41 for the Corporation. While some of the corporate drivers receiving benefits may not wish to convert to a contract driver should they lose their benefits, other corporate drivers may have another job or a spouse who has benefits that they could use and may not be detracted by the loss of benefits associated with becoming an independent contractor. Not all corporate drivers use benefits, either; approximately 20% of drivers do not use benefits. .

5. Exempt versus Non-exempt Employees

Observation: We noted that 12 of the 13 administrative personnel within the transportation department are considered non-exempt employees. These individuals are paid an hourly rate and are eligible for overtime wages. Given that many of these personnel appear to have supervisory responsibilities, some individuals may qualify as exempt employees and be offered an annual salary as opposed to an hourly rate with overtime pay. The total average annual regular wages was approximately $390,000 for the last there years and the average annual overtime was $134,000, or approximately 34% of the regular wage. The Corporation could save money by eliminating overtime pay for employees who, by means of their job description, should qualify as exempt employees. Recommendation: We suggest that the Corporation consider re-evaluating the staffing roles and responsibilities to determine which positions better match up with the definition of an exempt employee. Compensation would need to be reviewed to determine new base salaries for exempt employee positions. The Corporation would likely be able to recognize savings from this initiative. The savings realized from reducing unexpected overtime time may allow the Corporation to be able to pay for adding positions or filling the vacant positions, and will also allow the Corporation to budget for payroll better. In addition, reducing overtime and adding the suggested positions will also allow for work to be completed more effectively, due to reduced overload, and will allow for the transportation department to allocate time to initiatives such as reworking the routing and documenting policies and procedures.



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6. Radio Dispatch Department Staffing

Observation: The radio dispatch department handles a high volume of calls and also is responsible for many duties beyond addressing calls. The quantity of work may potentially contribute to errors and customer service may suffer. During our interviews in the radio dispatch department, we witnessed a high volume of calls, even outside of the typical morning rush, including parent complaints, re-routing requests and notifications of bus driver absences. The radio dispatch department currently consists of Judy Jernigan, Alberta Garrison, and Milt Pittman (who is also responsible for security). Mr. Pittman normally works nights but has taken on a split shift to help out with dispatch during the busy morning rush, in addition to his nighttime security shift. There is not currently a dedicated supervisor for the radio dispatch department. Mr. Nolen and Mr. Hammond both oversee the radio dispatch department and address issues as they arise, and may also answer phones or address complaints directly during extremely busy times. In addition to radio dispatch, Ms. Jernigan and Ms. Garrison are also responsible for the following duties:

• Scheduling field trips and after school activities • Tracking bus driver attendance, including identifying substitutes or rearranging routes • Rescheduling buses on rain days for after school activities • Invoicing schools for trips and activities • Posting and tracking bids for drivers to work extra trips • Documenting and addressing complaints from parents, drivers, and schools

As discussed further in the “Financial” and “Information Technology” sections, many of the processes that the radio dispatchers perform are manual in nature and the time that they spend doing certain activities such as invoicing, recording attendance, and scheduling trips could be reduced if the capability to do these tasks in the information system was available. We also noted that there is a significant volume of disparate work, which we believe could be performed more efficiently if responsibilities were re-aligned and a supervisory position were to be added. There are opportunities to reallocate the assignments within the radio dispatch department in order for the transportation department to run more efficiently and effectively. Recommendation: We recommend that the School Corporation consider re-allocating the work within the radio dispatch department so that the dispatchers can focus on answering the high volume of calls and communicating schedule changes, in order to better serve the parents and schools. We suggest that the School Corporation creates a position for a supervisor in the radio dispatch department, and consider having that individual work on coordinating trips, posting bids, overseeing invoicing, and assisting with complaints as necessary, in order to consolidate the responsibilities that are not directly related to dispatch. Although we are not able to measure the cost savings related to streamlining these operations, we believe that it would allow the transportation department to run more efficiently and to provide a higher level of service.



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7. Routing Department Staffing

Observation: The position of Routing Supervisor is currently vacant. There are four Routers in the routing department and these individuals have collectively split up and taken on the responsibilities of the Routing Supervisor. The Safety and Training Supervisor, Mr. Nolen, currently oversees the Routers. One of the primary responsibilities of the Routing Supervisor was to set up the routes for activities and make day to day revisions of those routes as games are scheduled or weather causes rescheduling needs. A significant amount of overtime wages is paid to the Routers that could be reduced if the work could be spread around, and a supervisor likely would help ensure that work is delegated in an efficient manner among the Routers. Recommendation: We recommend that the Corporation pursues filling the Routing Supervisor position and ensures that work is allocated appropriately amongst the Routers and the Routing Supervisor. Although we are not able to measure the cost savings related to streamlining these operations, we believe that it would allow the transportation department to run more efficiently and to provide a higher level of service. Update: Subsequent to the time of our review, the transportation department promoted one of the routers to Routing Supervisor, filling the position, and hired a new router.

8. Call Logs

Observation: There is no written log of “customer” calls received for the transportation department. The majority of the calls are received by the radio dispatch department, although some calls are also taken by routing and transportation department supervisors during busy times. When complaints are received, a “transportation problems” form is filled out by hand and is routed to Mr. Hammond or Mr. Nolen. The radio dispatch department or routing department does not keep a copy of the complaint form before routing it to supervisors in the transportation department. The lack of a call log and the use of paper forms present a risk that customer inquiries and solutions may be lost, not communicated properly, or not tracked as recurring issues. Recommendation: We suggest that the School Corporation set up the call logs in the information system to track customer contact and responses. A form can be utilized for tracking purposes within the system. Creating an electronic log of customer contacts and responses would provide the School Corporation with the ability to summarize common types of interactions that are occurring, in order to identify chronic issues and better assess needs for improvement.



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9. Performance Evaluations

Observation: There is no procedure in place for performing annual performance reviews of the administrative staff in the transportation department. Some employees who have been with the Corporation for more than ten years have not had more than one performance review. With current and pending retirements and transitions, maintaining personnel, providing performance feedback and developing an experience base in the transportation department is important. Recommendation: We suggest that the School Corporation puts into place a written process for annual performance reviews within the transportation department and that all employees are informed of what format they will receive feedback and how often they will receive it, and how the evaluation process will influence their career progression and compensation. While this suggestion may not have a quantifiable impact on the Corporation in terms of dollars or hours saved, we believe it is important for the Corporation to foster a positive work environment where employees are engaged in their careers, in order to continue to promote the success of the School Corporation.

10. Communication of Student Route Changes

Observation: We noted during interviews with the Routers that the protocol for communicating changes in student addresses and bus routes requires that parents or guardians fill out a request with the school that the student is attending in order to validate the change in route. The school will then communicate the change via email, fax, telephone, or some combination of these methods, to the transportation department. In practice, personnel at the schools often tell parents that they can call the transportation department directly to make bus route changes. This results not only in additional, unnecessary calls, but also results in complaints from parents when the transportation department tells them they cannot make the changes prior to receiving approval from the student’s school. There is not a clear protocol for changing student routes and this causes inefficiencies. Recommendation: We recommend that the procedure for student bus route changes is clearly documented and is distributed to all schools. Furthermore, this information should be provided to all personnel at the schools who will be responding to questions regarding student bus transportation. We suggest that the transportation department discusses the protocol with the individuals at the schools responsible for these changes to ensure that they are clearly communicating that the parents will be notified within two to three business days after the request is placed at the school. This will help to avoid unnecessary calls and frustration. In addition, we suggest that a standard method for the schools to report the requests be implemented. The variety of forms in which communication of these changes comes from the schools makes the process inefficient. Particularly with a phone call, there is no permanent documentation of the requested change. We recommend that requests are sent via email to an address shared by the routers in order to streamline the process. These measures could save at least one to two hours a week in the routing department, which could provide for up to an additional 500 hours per year for the personnel to dedicate to adjusting routes to use resources most efficiently and documenting policies and procedures as suggested previously.

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SECTION II: FINANCIAL


Section II: Financial

23.

OVERVIEW

The following table summarizes the actual and budgeted results of Fund 41 for the year ending December 31, 2010, and the budget for 2011.

2010 (Actual) 2010 (Budget) Variance 2011 (Budget)Administration

Salaries 589,196$ 637,750$ (48,554)$ 637,750$ Benefits 220,065 352,180 (132,115) 352,180 Professional Services 6,000 6,000 - 6,000 Property Services 5,000 5,000 - 5,000 Other Services 13,939 14,500 (561) 12,000 Supplies 23,056 25,000 (1,944) 25,000 Equipment 1,000 1,000 - 1,000

Total Administration 858,256 1,041,430 (183,174) 1,038,930

Bus OperationSalaries 5,076,228 5,181,380 (105,152) 5,115,680 Benefits 3,415,459 3,102,000 313,459 3,079,500 Supplies 7,844 20,000 (12,156) 20,000 Equipment - - - - Other 498 500 (2) 500

Total Bus Operation 8,500,029 8,303,880 196,149 8,215,680 Bus Monotoring

Salaries 28,306 59,405 (31,099) 59,405 Benefits 7,673 29,660 (21,987) 29,660

Total Bus Monitoring 35,979 89,065 (53,086) 89,065 Bus Maintenance

Salaries 450,519 462,000 (11,481) 462,000 Benefits 189,510 301,160 (111,650) 301,160 Professional Services 237 300 (63) 300 Property Services 145,381 155,000 (9,619) 155,000 Supplies 1,579,094 2,339,850 (760,756) 3,234,050 Equipment 551 550 1 550

Total Bus Maintenance 2,365,292 3,258,860 (893,568) 4,153,060

Bus Insurance 450,000 450,000 - 450,000 Bus Liabilitiy Insurance 100,000 100,000 - 100,000 Bus Contracted Services 1,254,190 1,545,000 (290,810) 1,095,000

Bus Other Pupil TranspSalaries 20,042 38,000 (17,958) 20,400 Property Services 3,736 5,000 (1,264) 17,600 Other Services 42,895 40,000 2,895 - Supplies 301 85,000 (84,699) 5,000 Equipment - 1,000 (1,000) 1,000

Total Bus Other 66,974 169,000 (102,026) 44,000

Health Services 21,983 27,500 21,983 27,500

Grand total 13,652,703$ 14,984,735$ (1,304,532)$ 15,213,235$

Expenditures For Year Ending December 31,

The actual approved budget was $15,134,301. The approved amount was not provided by object code. It is important to note that transportation expenditures are made from Fund 41, while bus purchases are made from Fund 42, and comingling of the funds is prohibited.



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REVIEW PROCEDURES

We conducted the following procedures regarding finances during the on-site visit.

• We interviewed the following individuals: • Mr. Robert Orlowski, Executive Director • Mr. Richard, Hammond, Transportation Director • Ms. Jenise Palmer, Budget Director • Ms. Christy Heim, Purchasing Supervisor • Ms. Judy Jernigan, Radio Dispatch and Trip Coordinator • Ms. Alberta Garrison, Dispatcher

• Obtained copies of the FY 2009, FY 2010, and FY 2011 proposed and adopted budgets for Fund

41 and Fund 42.

• Obtained a summary of the actual expenditures for Fund 41, by object, for FY 2009 and FY2010.

. OBSERVATIONS AND RECOMMENDATIONS

11.

Documentation of Budget Assumptions

Observation: The operating, financial and nonfinancial assumptions used in arriving at the budgeted expenditures for transportation are not documented. For Fund 41, Mr. Nolen provides the budgeted calculation for driver’s pay, using historical information and considering the number of current drivers and administration personnel on staff. Ms. Palmer applies standard benefit rates and assumes that all vacant positions are filled, with benefits, for budget. The price of fuel is estimated based on historical costs and future expected trends. For Fund 42, the Corporation’s bus replacement schedule is used and Ms. Heim obtains competitive bids on the portion of the fleet that needs to be replaced for the upcoming year. These assumptions and details are not outlined in the recommended school budget or documented permanently anywhere. Therefore, it would be difficult to determine and replicate the exact calculations used each year and to explain variances in assumptions from year to year. In some budget categories, the budgeted amount each year has not changed, while actual results have fluctuated. Recommendation: We recommend that the School Corporation documents the assumptions used to develop the budget, in order to help understand and explain variances from budget to actual results. In addition, we recommend that the Corporation uses a zero based budgeting process and includes a listing of key assumptions as a preface to the recommended budget for Fund 41 and 42 each year, including the cost of fuel, number of drivers and personnel compared to current staffing levels, cost of living adjustments, number and type of buses scheduled for replacement, and any other significant assumptions taken into account when developing the budget. This practice will help the Board to better understand the components of the budget and reasons for fluctuations from the previous year.



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12. Financial Benchmarking

Observation: The transportation department receives monthly financial reports showing the budgeted expenditures compared to actual, and Ms. Palmer indicated that Mr. Hammond will periodically request details of certain expenditure accounts as part of his analysis of the results. However, no benchmarking or key performance indicators are prepared by the transportation department. Recommendation: The Corporation should establish an accountability mechanism for school transportation. An annual or semi-annual review of key performance indicators such as cost per mile, cost per student, cost per school, and cost per bus would provide the transportation department with better visibility as to the trends in expenditures and would also provide the Board with better information for making decisions. In addition, the Corporation should internally review or audit the inputs for accuracy. We recommend a summary of metrics such as those included in the Executive Summary of this report. The Corporation should compare its performance to those of peer schools as well as against established benchmarks. Transportation department performance metrics should be reported on a regular basis. These reports should reconcile to general ledger detail and activity reports.

13.

Medicaid Funds for Transporting Special Needs Students

Observation: The School Corporation transports many special needs students on a daily basis. The cost to transport these students tends to be higher than others, because of the required use of a paraprofessional, and there are typically longer wait times in between stops in order to allow for loading and unloading. The Corporation has not sought reimbursement from Medicaid for eligible costs. During FY 2010, the School Corporation reported approximately $725,000 in expenditures for driver salaries for transportation of special education students. Recommendation: We recommend that the School Corporation inquires whether they may apply for reimbursement of these costs.

14.

Fuel Hedging

Observation: The Corporation has not engaged in hedging its diesel fuel purchases recently, although it has done so in the past. Gas and lubricants represented approximately $1.1 million of the Corporation’s expenditures in 2009 and 2010, and is budgeted to account for $1.2 million of total expenditures in 2011. Diesel prices have continued to climb from a retail price of approximately $2 per gallon in January 2009, to a price of over $3 per gallon in May of 2011. It should be noted that $1.2 million is the budgeted figure, however, the actual results and price increases will start to be felt in December 2011 and management estimates this will have a significant impact on the budget. Recommendation: The School Corporation should consider annually reviewing what opportunities, or risk mitigation, hedging may provide to protect the Corporation against rapid swings in fuel prices. This will allow the Corporation to build a more stable budget amount for fuel expenditures. Many state and local municipalities follow a practice of negotiating fuel-hedging contracts to cover 30-75% of the diesel the agencies will use, with the remaining percentage purchased at either market rate or subject to an option.



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15.

Pay Rates used to Compensate Contract Drivers for Special Trips

Observation: Pay rates used to compensate contract drivers for special trips are not updated regularly. The School Corporation posts bids soliciting contracted bus drivers to drive special trips, which include field trips or special activities. During our interviews, we learned that the rates for out of town field trips have not been updated in over 15 years. There are flat rates offered to contract drivers for each standard trip location, (for example, Chicago’s museum campus, or the Indianapolis metro area), and then there is an additional fee per extra mile and for time spent on the route in addition to the normal time for such a trip. Contract drivers receive a fuel rate adjustment to their pay for regular routes when fuel exceeds a predetermined amount; however, special trips are paid at a predetermined dollar amount that has not recently been adjusted to compensate for fuel costs. When special trips are not able to be allocated to contract drivers, the School Corporation must then have a corporate driver perform the trip instead. This typically means that a substitute driver will have to handle the corporate driver’s normal route on the date of the trip. The School Corporation has a limited number of substitute drivers available and often resorts to using all of the available substitutes to simply cover absences on a given day. In addition, the School Corporation must pay corporate drivers an hourly rate plus overtime for these extended trips. All things considered, it is to the School Corporation’s advantage to be able to utilize contract drivers for special trips whenever possible. Recommendation: We recommend that the rates the transportation department uses to pay contract drivers for trips are reviewed during the budget process prior to the start of each school year. For trips that are billable, a comparison should be made to the billing rates that are charged to the schools.

16. Billing Rates for Activities

Observation: Billing rates to schools for trips are not updated regularly. Sports trips and after school activities are “free” to schools, exclusive of extra buses the schools may require. However, the transportation department does bill schools for certain field trips. The billing rates used by the transportation department to charge the schools for trips have not been updated since the 2005 school year. Although these costs are all internal within the overall Corporation, it is important to understand and keep accurate accounting for costs in order for the School Corporation to assess the cost for different types of activities across the schools. Given the volatility of fuel costs in particular, it is important for these rates to be updated annually. During 2010, the transportation department billed an estimated $274,000 in costs related to activities. A similar amount of billings is expected for 2011. Based on the mileage driven for activities during 2011, the internal costs of these activities was actually $1,248,000. Recommendation: We recommend that the rates the transportation department uses to bill schools for trips be reviewed during the budget process prior to the start of each school year. Accurate estimates of the costs to provide transportation for various activities and trips will assist the School Corporation in assessing programs to determine how they will be funded and will support analysis of ways to possibly combine trips or consolidate rides in order to reduce costs within the School Corporation as a whole. In addition, we recommend that the Corporation tracks the cost of all trips, including “free” ones, in order to better assess the cost-benefit of the programs and educational opportunities that are being offered. The Corporation may consider providing a budget for trips to each school at the beginning



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of the school year, and holding each school accountable for staying within budget, with additional fees charged for excess requests. Other school systems across the country have started charging and billing all activities to the schools using the full cost of the service. This would require budget process changes for the schools and the transportation department.

17.

Bid Procedures for Maintenance Parts

Observation: The School Corporation’s policy is that legal quotes are required for all purchases in excess of $50,000, and legal bids are required for all purchases in excess of $150,000. The transportation department does not regularly purchase more than $50,000 at one time due to the nature of its operations, with the exception of bus and vehicle purchases. Therefore there are typically no legal quotes or bids required within the maintenance department for maintenance parts. The Purchasing Supervisor usually gets a verbal quote from at least three vendors for anything greater than $25,000 and less than $50,000. The School Corporation has a conflict of interest policy for a high dollar quote or bid, but there is no formal conflict of interest or related party policy for smaller purchases. The Maintenance Supervisor seeks out the best vendors for the specific parts the transportation department needs based on knowledge of local vendors and the specifications required. The Purchasing Supervisor is not involved in the vendor selection process for items less than $25,000, although she will perform vendor acceptance procedures for any new vendor requested to be set up. A formal, documented review of purchases by vendor is not conducted; such a practice could uncover opportunities for the Corporation to recognize savings by buying in volume or changing vendors, and reduce the risk of conflict of interest. Recommendation: We recommend that the Corporation consider periodically reviewing total maintenance part purchases by vendor in aggregate for the year, in order to review the pricing for recurring purchases from the vendors where more significant total dollars are spent. This will help provide the Corporation with additional assurance that the prices from vendors represent competitive pricing for the Corporation. This will also provide an internal control regarding vendor relationships. We also recommend that significant purchase decisions be made using a team approach to create the specs, bid information and bid scoring.

SECTION III: BUS FLEET AND MAINTENANCE


Section III: Bus Fleet and Maintenance

29.

OVERVIEW

The Corporation owns 247 buses, and utilizes an additional 33 buses which are owned by contract drivers. Of the fleet of 247 buses, 212 of the buses are used on routes and the remaining 35 are held as spares. The School Corporation also owns 4 service vehicles. The Corporation employs 8 mechanics, plus one Maintenance Supervisor and one Parts/Payroll clerk. The mechanic staff and the Maintenance Supervisor are ASE Certified (National Institute for Automotive Service Excellence).

The School Corporation maintains two types of bus lines and chassis. Repair parts are generally interchangeable within lines. The mechanics have knowledge to work on any of the buses, but each mechanic has their own fleets that they are responsible for. Having two types of buses allows the Corporation some flexibility if one model became problematic or they experienced issues with vendors in the future, while still allowing a small enough variation between vehicle types to gain efficiencies related to similar parts and economic order quantities, and the ability of mechanics to become highly proficient on servicing the chassis. The Corporation is on a 12 year replacement cycle and currently requires a five year bumper to bumper warranty on all new buses purchased. Following is a summary of the current fleet and the replacement cycle.

Replacement Year

Number of Buses

2011 202012 202013 162014 192015 192016 252017 222018 222019 222020 232021 192022 20

247

Replacement ScheduleFor the Current Fleet

The projected cost per bus could vary each year not only due to the inflationary increases, but also due to the type of buses that are being replaced. Currently, the cost of a “conventional” 66-passenger yellow school bus is approximately $88,000. Rear-engine buses and special-needs lift buses are more expensive, ranging from $100,000 to $110,000. Costs are expected to increase in the future due to inflation, additional emissions standards, and other new technology or requirements.



30.

The Corporation provided details on the cost to maintain the fleet. The table below provides a summary of the cost by each age group of buses to maintain and run the fleet. The average age of the fleet is 6.3 years.

Bus Age (Years) # of Buses Parts Cost Labor Cost Fuel Cost Total Cost

Usage (Miles)

Average Miles

Total Cost per Mile

Total Cost per Bus

Fuel Cost per Mile

1 21 533$ 3,263$ 31,079$ 34,875$ 113,417 5,401 0.31$ 1,661$ 0.27$ 2 20 8,937$ 12,801$ 93,988$ 115,726$ 294,441 14,722 0.39$ 5,786$ 0.32$ 3 20 19,473$ 17,138$ 98,094$ 134,705$ 336,679 16,834 0.40$ 6,735$ 0.29$ 4 25 28,251$ 20,538$ 116,229$ 165,018$ 421,535 16,861 0.39$ 6,601$ 0.28$ 5 22 27,097$ 21,334$ 104,656$ 153,087$ 354,552 16,116 0.43$ 6,959$ 0.30$ 6 22 32,693$ 20,676$ 88,092$ 141,461$ 324,193 14,736 0.44$ 6,430$ 0.27$ 7 32 48,933$ 36,032$ 112,498$ 197,463$ 392,745 12,273 0.50$ 6,171$ 0.29$ 8 12 21,718$ 12,960$ 40,218$ 74,896$ 113,890 9,491 0.66$ 6,241$ 0.35$ 9 17 30,097$ 20,034$ 53,012$ 103,143$ 177,132 10,420 0.58$ 6,067$ 0.30$

10 12 21,751$ 13,217$ 40,855$ 75,823$ 132,702 11,059 0.57$ 6,319$ 0.31$ 11 and 12 44 57,846$ 41,095$ 94,639$ 193,580$ 375,443 8,533 0.52$ 4,400$ 0.25$

247 297,329$ 219,088$ 873,360$ 1,389,777$ 3,036,729 12,294 0.46$ 5,627$ 0.29$

Total 1-5 y 108 84,291$ 75,074$ 444,046$ 603,411$ 1,520,624 13,987 0.40$ 5,587$ 0.29$ Total 6-10 y 95 155,192$ 102,919$ 334,675$ 592,786$ 1,140,662 11,596 0.52$ 6,240$ 0.29$ Total 11-12 y 44 57,846$ 41,095$ 94,639$ 193,580$ 375,443 8,533 0.52$ 4,400$ 0.25$

Equipment Cost Summary by FleetYear ended December 31, 2010

It is important to note that the buses that are 11 and 12 years old are primarily used as spares. Therefore the total mileage and cost per bus declines slightly in the later years. If these buses were used as frequently as the newer buses, the repair costs may be higher.

REVIEW PROCEDURES

We conducted the following procedures during the on-site visit.

• Held interviews with the following individuals related to maintenance and capital assets:

o Mr. Richard Hammond, Transportation Director

o Mr. Brent Perkins, Maintenance Supervisor

o Ms. Stacy Buss, Parts/Payroll Clerk

• Obtained a listing of the bus fleet by age and estimated replacement cost.

• Obtained details on the cost per bus for the year ended December 31, 2010.



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18.

Bus Replacement Cycle

Observation: The School Corporation currently has a 12 year replacement cycle for its buses. The average age of the current fleet is 6.3 years. The March 2011 issue of School Bus Fleet Magazine indicated that the average fleet age is 8.5 years and the average bus retirement age for fleets where road salt is used is 12.7 – 14.1 years. Given the significant amount of snow and salt in South Bend, the Corporation’s replacement schedule does not appear unreasonable. The fleet has 44 (or 18%) of vehicles in the 11-12 year range. Spare vehicles represent 35 of the 247 vehicle fleet. Therefore, many of the older vehicles are used as spares. However, there would likely be incremental capital cost savings of extending the life of buses beyond the additional operating cost for maintaining older vehicles. Based on maintenance data provided in this section overview, the average cost per mile does not fluctuate significantly ($.40 per mile to $.52 per mile) when looking at 1-5 years, 6-10 years, and 11-12 years aging of buses. In addition, it appears that the School Corporation’s fleet age is approximately 2 years less than the national average. In addition, the Corporation only uses an average of six to eight of the 35 spares per school day, with 11 being the greatest number of spares used on any given day. There does not appear to be a need for 35 spare buses. This would allow for reduction of capital costs and operating costs for maintaining buses.

Recommendation: We recommend that the School Corporation consider extending the life of a portion of the vehicle fleet because the capital cost of purchasing a bus exceeds the additional operating cost of maintaining a vehicle. The estimated average cost of a new bus is $88,000 to $110,000, and the Corporation has spent an average of $1,566,000 in capital per year over the past three years. For each bus maintained an additional year, the capital cost savings would approximately $1,000. In addition, buses in the 6-10 year range have significantly less average mileage utilization (11,600 miles vs. 16,100, or 38%) then buses in the 1-5 year range, which impacts the productivity cost of the vehicle. Actual cost savings can be calculated using a variety of scenarios. We also recommend that the Corporation reduces the amount of spares in its fleet. Based on the actual usage of spares, there is an opportunity for the Corporation to save capital and operating costs. 19.

Bus Fleet and Tire Leasing

Observation: Bus Fleet: The Corporation currently purchases its bus fleet outright through use of designated monies in Fund 42. The Corporation may consider leasing a portion of buses in order to enjoy the benefits of a newer fleet without the up-front capital outlay. The bus could be purchased at the end of the lease term if the vehicles value exceeds trade-in value. Several school districts and transit authorities have moved to leasing all, or portions, of their fleets. Leasing a fleet may allow the Corporation to have newer buses which would be less expensive to maintain. Also, the lessor would likely be responsible for the maintenance of the fleet. This would allow the Corporation to gradually decrease its maintenance costs, limiting the staffing to only the level of personnel necessary to provide preventative maintenance or quick repairs on-site. Also, the Corporation would be able to decrease the inventory of parts and supplies on-hand. During the time of our review, the transportation department had approximately $260,000 of parts and supplies inventory for maintaining its bus fleet.



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In determining whether this initiative would save the Corporation money, the annual cost of the lease per bus should be compared against the savings of not purchasing the buses, the decreased cost per mile of a newer bus, and the potential reduction in maintenance salaries and parts costs. The Corporation may be able to pay for the lease expense out of Fund 42, subject to legal review. Tires: The transportation department has approximately $36,000 of tire and tire casings inventory. The transportation department uses between 300 and 350 tires per year, for a cost of $100,000 to $125,000 per year, including mounting, balancing, and rim repair. In addition, there is labor costs associated tire maintenance. Consideration should be given to mitigating carrying costs and potential cost savings from leasing tires. Under such an arrangement, the lessor would typically provide tires, perform monthly inspections, balance and rotate the tires, and correct air pressure twice a month. While some transit agencies have tire company techs on site to manage the tire leasing program and any necessary repairs, lessors offer the option to ship the tires to the transit agency and pick up the old tires once they have reached a set tread depth. Any tires that need repair, for instance, in case of a flat, would be taken to a local tire shop. Typically the cost of this service offered by a tire lessor is less than the cost for a transportation department to stock tires and to provide service on the tires internally. While tire leasing is highly popular for larger fleets, there are a growing number of smaller bus operations gaining cost efficiencies. The School Corporation may consider reaching out to national vendors to determine whether this may be a viable option in the future. Recommendation: Bus Fleet: We suggest that the Corporation evaluate the potential cost benefit of leasing all or portions of its fleet instead of purchasing buses. Tires: We recommend that the transportation department considers the option of leasing its tires. 20.

Mechanics versus Technicians

Observation: The School Corporation currently employs eight mechanics who service 247 buses. This represents a ratio of approximately 31 buses per mechanic, which is in line with industry averages. We noted that the average mechanic to bus ratio for fleets ranging from 100 to 299 buses, according to a March 2011 survey conducted by School Bus Fleet Magazine, is about 26 to 1. All of the mechanics are certified mechanics, although there is no requirement for all of the mechanics to be certified, as long as they are supervised by a certified mechanic. According to management, approximately 70% of the mechanics’ time performing pure bus maintenance functions is spent on preventative and routine maintenance (i.e., oil, lube, brake jobs, etc.), with the remaining 30% spent on repairs. However, a portion of time each day is spent on start up assistance, winter plowing, and bus wash, as described below:

• The mechanics provide assistance with bus start-ups in the morning. The Maintenance Supervisor and three of the mechanics assist with start-up each morning, which takes about 45 minutes. If the weather is below 15 degrees Fahrenheit, the start-up takes about an hour, as the mechanics will get there earlier to get the buses started.

• In the winter, the mechanics come in early to assist with plowing and to help drivers brush off the buses on days when there has been a heavy snow. The transportation department does not use a snow removal service. During the winter, the additional wear and tear on buses causes the shop to be busier with additional repairs and maintenance. This additional work plus the additional start-up and snow removal time often results in overtime wages.

• The mechanics also wash the buses by hand when they come in for oil and filter, because the automatic washer in the facility is currently broken.



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Based on the type of work the certified mechanics are performing, the Corporation should evaluate the use of mechanic time and look at utilizing technicians for routine services. Recommendation: We recommend that the School Corporation consider the following options: • Over a period of time, replace some of the mechanic positions, as they retire or leave, with

technicians. Considering that 70% of time is spent on routine maintenance, a portion of employees could be retained at lower salary levels commensurate with the skill set performed. This would potentially reduce labor costs and could provide a staff training source for transitioning technicians to become mechanics as staffing needs arise.

• Consider limiting the number of mechanics who participate in the bus start-ups in the morning. It

would be practical for the drivers to call in to the facility for a mechanic to come out if they did need additional assistance. The transportation department may consider limiting the start-up assistance to one mechanic on days that are not extremely cold, instead of four people. This could save the School Corporation as many as 600 hours per year, assuming the equivalent of three mechanics were kept inside to do other work instead of 45 minutes of start-up each day. The saved time could be use to complete maintenance and repairs, limit overtime, or time could be used to work on documenting certain policies and procedures in the areas of maintenance and training.

• Consider whether the grounds and maintenance department of the School Corporation, or an outside

third party, could provide snow removal services or bus washing for less than the mechanic’s hourly wage. This would save the Corporation some overtime costs in the winter and would allow mechanics to focus on maintaining the fleet.

21.

Maintenance of School Corporation Vehicles

Observation: In addition to maintaining the bus fleet, the transportation department provides maintenance for 68 School Corporation vehicles. The repair parts used for maintaining these vehicles are invoiced to the other departments through the Corporation, however, the transportation department provides the labor, oil, and grease free of charge. The estimated annual labor cost for maintaining the service vehicles is approximately $35,000. This amounts to approximately $500 labor per vehicle per year for routine maintenance. The cost of oil was not measured by management. This cost is not separately budgeted for in the transportation department’s financial results. Recommendation: We recommend that the transportation department separately budget these maintenance costs. We also recommend that the transportation department bill the maintenance costs to the schools or departments within the School Corporation. At a minimum, the transportation department should report the cost of labor on service vehicles to the School Corporation on an annual basis so that the Corporation can understand the cost related to the service fleet and use this information for decision making. In addition, segregating the cost of maintaining service vehicles within the transportation department’s results will help insolate the costs for transporting students. The Corporation should also consider outsourcing routine maintenance for the Corporation vehicles to a third party to determine whether the average cost can be reduced. This would reduce the time burden on mechanics.

SECTION IV: INFORMATION TECHNOLOGY


Section IV: Information Technology

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OVERVIEW The primary system used by the School Corporation is AS/400, which is a midrange service designed for small businesses and departments in large enterprises. The AS/400 holds a database of all of the student names, addresses, phone numbers, and their respective schools and grade in school. The AS/400 also is used for accumulating payroll data and for accumulating requests made by schools for fieldtrips and activities. The server for the AS/400 is housed in the administration building. The transportation department used Versatrans to build routes and to assist in determining the best routes for various schools and activities. The transportation department also uses CFA Software in its maintenance department. This is a fleet management tool that houses the inventory records for maintenance parts, and helps manage maintenance records and track when vehicles are due for preventative maintenance. In addition, the transportation department uses Synovia GPS software to track the bus fleet. The servers for Versatrans, CFA, and Synovia are all housed in the vehicle maintenance facility (VMF). REVIEW PROCEDURES We conducted the following procedures during the on-site visit.

• Interviewed Mr. Matt Monger regarding information technology.

• Discussed adequacy of information systems with individuals previously mentioned throughout this report.

• Obtained and reviewed sample reports from the information systems in order to assess the data available to the School Corporation for decision making.


22.

Back-ups of System Data

Observation: The AS/400 system and Versatrans are backed up nightly; however, CFA is only backed up at each month end, and Synovia has no backup. None of the back up tapes are stored securely off-site, although two of the routers take a back-up of Versatrans on a thumb drive each night. The storage of back up tapes on-site or on personal media presents a risk that data could be lost due to physical damage, and also limits the ability of the transportation department to operate offsite should the facility be physically damaged by flood or fire.

In addition, many users store important data on their work personal computers (PCs), which are connected to the School Corporation’s network. There is no written protocol for back ups of networked computers. Some users periodically back up their records on external disks, but this is not required by School Corporation policy. While the quantity of data on PCs is not readily measurable, given the volume of files that many School Corporation personnel create and utilize on a daily basis, the impact of losing data on any given user’s PC would clearly represent a significant loss of productivity. The Corporation does not have an off-site back up program and this places key information within the transportation department at risk.



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Recommendation: We recommend that the School Corporation invests in an off-site back up program. Many vendors will provide off site back-up storage or even the ability for a “cold-site” that the transportation department could operate from should damage occur to the building, for a nominal monthly fee. The benefit of protecting data and preventing significant costs in the future due to lost data likely will outweigh the costs of a storage service.

In addition, we recommend that the School Corporation considers implementing a back-up feature for PCs through the internal network. We also suggest that the School Corporation documents its back up policies and procedures and distributes the policy to all employees, in order to help ensure that the appropriate procedures are taken to safeguard data.

23.

Payroll System

Observation: The payroll system is based out of AS/400. Employee payroll data is submitted by hand-written time cards which are then manually entered into the payroll system by the Parts and Payroll Clerk. Over 200 time cards are collected weekly for entry into the system for the transportation department. Hours for activities such as field trips are entered on a separate “activity” form which is also handwritten, and is also manually keyed. The Clerk looks for any unusual hours or patterns as she enters the hours. She also reviews the records for accuracy after she keys them in, double checking the total hours to the total on the time cards for each employee. The Clerk keys in her own time card.

The process for inputting hours into the system is time consuming and vulnerable to human error. In addition, the Clerk is the only individual in the transportation department with the knowledge necessary to complete the current payroll process.

The manual nature of the payroll process presents the risk of human error and risk of manipulation of time records. The process also takes a significant amount of time to complete, and presents the risk that the institutional knowledge related to completing the payroll process could be lost.

Recommendation: We recommend that the Transportation Department consider implementing an electronic payroll system which will allow employees to input all of their own time into the system. This will reduce the risk of errors in translation and entering of payroll data, and will allow the Clerk to focus on reviewing and monitoring the records. We recognize that due to the nature of transporting students, many bus drivers may not be able to remotely input their hours during the day. The School Corporation might consider a computer terminal at the VMF which drivers could visit at the end of their work day to input their time.

There are certain remote time-entry systems available, which would allow a unit on each bus where drivers can clock in and out as they complete routes, which the Corporation may also consider. We understand that the familiarity with computer systems varies among the employees of the School Corporation, so we would suggest a system with a user-friendly interface that would make inputting time intuitive and provides adequate training material.

The review of payroll records is an important control and implementation of an electronic timekeeping system will not only reduce human error, but will also allow the Clerk more time to focus on reviewing hours instead of entering them herself. In addition, we recommend that someone independent of the Clerk review her records on a weekly basis.

One potential payroll systems provider (Kronos) provided information to the Transportation Director, which included estimated savings of approximately $250,000 per year based on prior implementations. This estimated savings results from reduction of human error and increased deterrence of fraudulent time entry.



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24. Process for Tracking Trips and Trip Cost Recovery

Observation: The process for tracking and billing trips is manual and is time consuming due to numerous limitations of the AS/400 system. Schools enter requests for trips into the AS/400 system, and the system estimates the cost for the school based on standard rates that are included within the system. However, the radio dispatch department prepares billing information for trips manually because the rates in AS/400 are not accurate. We were informed that not all personnel at the schools are aware that the cost estimates in the AS/400 system are not accurate. Therefore, many schools expect the trips to cost less than they truly do, and, therefore, are surprised when the invoiced costs are greater than the estimate in the system. The process of computing and billing invoices is manual in nature. The Radio Dispatcher/Trip Coordinator keeps a log book for each school year and prints out lists of all of the trips. She computes the cost for each trip based on the information (mileage and hours) reported in the AS/400 system, but uses the actual rates for the driver who actually completed the trip. The calculations are handwritten on print outs of the trip activity, and summarized on pages of a note book, making both the calculations and the invoice entry prone to human error. The handwritten papers are routed to the Executive Secretary, who types the invoices to be sent to the schools. Finally, the AS/400 system requires a “budgeted” trip cost figure to be input for each school for the year in order for each school to be able to request trips. The Radio Dispatcher/Trip Coordinator inputs rough estimates into the budget fields for each school so that they can request trips. It appears that the budget field is not used by the school or transportation for planning. During 2010, the transportation department billed $274,000 to schools for trips. A total of $1,248,000 in actual costs for trips flowed through the transportation department, which we have suggested in an earlier observation that the transportation department should bill in full to the schools to properly allocate costs. Recommendation: We recommend that the School Corporation considers either upgrading the capabilities of the AS/400 system or considers implementing a new trip scheduling system that will eliminate manual processes and billings. The computation of the cost of the trips should be automated, in order to provide the schools with accurate estimates of the trip costs at the time the school is arranging the trip request and in order to eliminate the risk of human error in calculation when the billing for trips. We also suggest that the creation of invoices for these trips is integrated into the system. Furthermore, if the School Corporation retains the AS/400 system for trip scheduling, we recommend that the budgetary control is either properly used to enforce limitations, or, if the control is not practical, that the School Corporation considers removing the control.



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25.

Automated Calling System or Use of E-Link

Observation: The School Corporation has the capability for 12 lines of automated calls, but is not currently utilizing this feature of the telephone system. The radio dispatchers place a high volume of calls on a daily basis to communicate route changes, late buses, and other routine communications. While many of these communications benefit from a live person being able to offer clarifications and to lend a human touch to any correspondence with student’s parents, the automation of some selected routine communications would help increase productivity of the radio dispatchers. In addition, Versatrans offers a capability called “E-Link”, which works directly with the Versatrans routing software to provide updates on pick up locations and routes, which may be especially helpful at the beginning of the school year. Since this function would help post routine information on the Corporation’s website for parents and schools to use, it would potentially reduce incoming calls with inquiries for routine information. Making live phone calls for routine, mass-communications is time consuming and could be streamlined by use of an automated calling system in appropriate situations. Recommendation: We recommend that the School Corporation looks into utilizing an automated calling system for certain routine calls. It is important to have a live person available to answer questions, so the Corporation should ensure that the system includes an option for the recipient of the call to be connected with a dispatcher if they do need clarifications. In addition, we suggest that the Corporation evaluates adding E-Link to its Versatrans software in order to communicate real-time information on routine routes and pick-ups by school, in order to address certain information needs without the need for a parent to make a call. Reducing some of the time spent on routine, repetitive calls will help reduce call volume and allow personnel in the transportation department to have more time to devote to handling incoming calls on specific issues and addressing parent and driver concerns over other matters. Even if this saved only two hours per day for each day of the school year, the radio dispatch department would save as many as 360 hours per year, allowing additional time to devote to addressing incoming calls (overflow of which is handled by the Routers, Transportation Director, and Safety and Training Supervisor during busy times) and assisting with other initiatives such as documenting policies and procedures.

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