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SCREENSHOT: PPS.NET - Portland Public Schools board member Pam Knowles says the district was 'crippled' by a salary freeze during an audit of compensation practices. Portland Public Schools has a bloated, overpaid and expensive administration, right?

Not according to a final audit report the school board released recently.

While the board-funded $97,615 audit identified some problems with how administrators are compensated, it largely agreed with district officials’ previous statements that many of their salaries are less than what their peers make at other districts.

Reports of double-digit percentage salary increases for district administrators was a major issue in the May 2015 election that installed four new school board members.

“There were no smoking guns in this audit,” two-term board member Pam Knowles said at the Aug. 4 meeting. Knowles blamed a salary freeze during the yearlong wait for the audit to have “crippled” the district and resulted in the loss of several longtime employees.

“I thought it was too slow, too, but there were darn good reasons that we took a look at this compensation and had a compensation audit,” board member Steve Buel countered. “It’s brought about a more sensible approach and a more accountable approach for how we’re going to compensate people.”

Board member Julie Esparza Brown said she had urged the committee to complete its recommendations much sooner.

“And in the meantime, we have many, many, many vacancies,” Brown said.

With the release of the report, the board passed minor adjustments to the salary freeze put in place July 28, 2015.

“We’re finding ... quite a number of scenarios where we can’t meet market and we’re losing candidates for that,” said Yousef Awwad, the district’s chief executive officer, who is leading the district in the absence of a superintendent.

The district is reorganizing after the early retirement of Superintendent Carole Smith and is looking to fill many administrative vacancies.

Mike Rosen, chair of the board Audit Committee, said even though administrators may have made the right guess that salaries were under market, the audit showed they didn’t follow a clear and transparent process to arrive at that decision.

“It was hard to produce credible paperwork and guidelines that were followed,” Rosen said, blaming that for some of the delay in completing the report. “I think it was about accountability. And if the accountability’s lacking — whether you’re paying somebody over, under or the right amount — people are going to be concerned because you have no way of justifying the fiscal decisions that they are making.”

The audit found what many in the administrative building already knew: that before 2013, during the Great Recession, compensation procedure slipped.

“Prior to 2013, the District’s process for setting compensation did not mirror industry best practices. No comprehensive job analysis was known to have occurred for nonrepresented employees,” the report reads. “Job descriptions did exist but were typically created for specific positions as vacancies occurred. This resulted in multiple individual job titles and responsibilities focusing on an individual’s skills and not on a specific position.”

But all this started to be addressed when the district made changes in its Human Resources department, including the creation of a Classification & Compensation Division. That led to the unreported raises that became such an issue last year.

The vast majority — 95 percent — of PPS employees are unionized. Their compensation packages are determined by contract negotiations.

For nonrepresented employees, the auditors recommended that the board and administration publicly discuss and agree on a compensation philosophy and review it every three to five years.

Another significant issue a year ago was the question of which districts PPS was comparing itself to. The district furnished a list of districts mostly in the Northwest after a request from the Portland Tribune. The auditors, by comparison, used many districts from outside the Portland area, but they say the districts are actually more comparable because of size and similar demographics.

“The District did not use an objective means of identifying comparable organizations from which to benchmark its compensation structure,” the report reads.

That is to say, the district wasn’t comparing apples to apples.

Kim Sordyl, a PPS parent advocate who originally gave the salary information to the media, says she was never against paying administrators more. But she felt the manner the district went about the raises was secretive, haphazard and smelled of cronyism.

“I don’t think you should automatically get a pay increase because Joe Schmoe down at the city makes $10,000 more,” Sordyl says. “If what they did was above board, why did they keep it secret? Sometimes the cover-up is worse than the crime.”

The board’s Business and Operations Committee will continue to work on recommendations for how to authorize salary range increases.

Director Brown said the board now needs to decide if it will offer administrative salary ranges that lag the market, meet the market or lead the market.

“My own personal philosophy is that we should lead the market if we’re going to be the best,” said board chair Tom Koehler.

More audit findings:

48.3%: The amount of the district’s budget that is spent on instruction (teacher-student interaction). This is about average in the districts the audit used to compare.

10.7%: The amount PPS spends on administration. Higher than average.

11.8%: What PPS spends on school and student support. Slightly higher than average.

5.3%: What PPS spends on construction. Slightly lower than average.

4.5%: Interest for loans. Higher than average.

12.6%: Operations, such as utilities, security, food service and maintenance. Lower than average.

Shasta Kearns Moore
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