While it pays to be a school administrator in North Carolina — in many cases, very well, the employment deals offered to school system bureaucrats are woven into an intricate and multilayered state compensation system that can be difficult to decipher for those who fund it: North Carolina taxpayers.

According to the N.C. Employment and Security Commission, the average school administrator in North Carolina earns nearly $63,000 a year in salary alone, almost double the $34,000 in wages paid to the average North Carolina wage earner. For a school system’s top administrators, the amount is much higher and often padded with additional forms of compensation such as signing bonuses, enhanced retirement benefits, health club memberships, conversion of unused vacation days into cash compensation, and more.

In Wake County, the state’s second-largest school district, new superintendent Del Burns negotiated a four-year contract that nets him an annual salary of $250,000 plus about $36,000 in additional benefits. Burns is a 30-year veteran of Wake County schools whom the school board selected after it decided to conduct an internal search.

Board members said the compensation package was justified because it was comparable to other superintendents’ salaries in large North Carolina school districts. “This is an organization with 16,000 employees and a billion dollar budget,” Burns said when asked about his compensation package. “I feel like the compensation is certainly fair.”

Not everyone sees it that way.
“If the competition for the position was truly an open competition, I would say it’s a true statement,” said Americans for Prosperity State Director Francis DeLuca, “but what exactly is the need for a huge pay package for someone who has been in the system for years?”

“Providing guaranteed compensation packages is dangerous and actually provides a disincentive,” said Robert Luddy, a member of the Blue Ribbon Committee for the Future of Wake County. “Compensation structures should be based on a salary and bonus for proven performance. Mr. Burns could well be worth more money… but only based on proven performance.”

The 239 Central Office administrators who work for Burns earn an average salary of $68,000. Burns said the administrators are college-degreed individuals who oversee many people and programs; they are worth the money.

Is such compensation excessive? Critics of the system say taxpayers should consider how their tax dollars underwrite school administrators’ salaries and fringe benefits when they are asked to vote for tax increases such as the $1.05 billion school bond Wake County voters will decide in November.

When the Charlotte-Mecklenburg school system’s new superintendent takes office this month, he will be the county’s highest-paid public official. Dr. Peter Gorman’s compensation deal includes a $250,000 base salary plus a performance bonus of up to $25,000 per year and deferred retirement pay of $35,000. His compensation will be higher than the chancellor of the University of North Carolina system, and nearly double that of state agency heads and members of the Council of State.

At a recent press conference Gorman said of his $310,000 package, “I’m going to work hard for that money…I don’t apologize for negotiating that.” Gorman will head the state’s largest school system, and his supporters say his salary matches the responsibility he is taking on and is comparable to what a senior executive in the private sector would earn.

However, critics argue that some of the money could be better put to instructional uses or, in systems like Charlotte-Mecklenburg, to new-school construction. Actually, Charlotte voters rejected a $427 million school construction bond last November.

School Board member Larry Gavreau said that vote was a partial reflection of voter dissatisfaction with the way funds were being spent. Gavreau was the sole board member to vote against Gorman’s compensation package, which he called “excessive and unwarranted.” He cites it as evidence that North Carolina’s public school systems are bureaucratic and bloated.

“Ninety percent of that $310,000 is guaranteed,” Gavreau said, “All Dr. Gorman has to do is show up. If half of that was performance only…if we put the superintendent on a commission plan, I might be able to support that.”

The pay controversy does not stop with the superintendent’s salary package. One of Gorman’s first personnel decisions, Gavreau said, was to create a chief operating officer position in his administration.

“So now we have a $310,000 superintendent, who’s going to add a $200,000 COO,” Gavreau said. “We’ll have two new positions costing an additional half-million dollars…We’re acting like if something costs a lot of money, that means it must be good. The school board is being overly generous with the taxpayers’ money.”

In the Charlotte-Mecklenburg school system’s Central Office, Gorman’s regional superintendents also receive six-figure salaries. The salaries range from $110,000 to $124,000, plus benefits. Even administrators much further down the chain of command receive pay well above the state average. The executive director for professional development, who is charged with overseeing programs such as teacher training and after-school enrichment, receives a salary approaching $100,000. The system’s diversity specialist, who plans and promotes the school system’s multiculturalism programs, receives more than $50,000.

Each of these administrators also receives a benefits package provided by the state and the school district. The package offers health, dental, optional vision, vacation, and retirement benefits, which in some cases exceed those typically found in the private sector. For example, after five years of employment, state employees are guaranteed full health coverage after retirement until they qualify for Medicare. The same employee with five years of service to the state receives nearly three weeks of paid vacation.

According to the State Office of Personnel, these benefits are valued at about 41 percent of the employee’s base salary.

For some positions, there may be other benefits, such signing bonuses, woven into the hire. Because they are not part of the basic salary schedules published by the state or local school districts, they are often difficult to track. “The school board approves the budget and then it’s all moved around and kept undercover. There’s no accountability,” Gavreau said.

However, many thoughtful observers of the system said the salary issue is not really the central concern. Salaries do tend to be higher in high-growth districts, as one might expect. But with growing school districts come growing bureaucracies, ones that are difficult for anyone outside the system to untangle and examine how money is spent.

The Department of Public Instruction is North Carolina’s central authority for the state’s 2,338 public elementary and secondary schools. It publishes hundreds of pages of salary schedules, job codes, and statistics for public school systems across the state.

Although North Carolina has established compensation ranges for positions within the public school system, individual school districts often supplement the salaries and benefits according to their own set of criteria, and assign their own job titles and hierarchy to their bureaucracy. The net effect is a statewide web of school systems that are opaque to the taxpayers who fund them. For some, it is the opacity of the system that is the most concerning: How is an outsider to monitor the way a system spends tax dollars — whether on salaries or other operational functions?

“There are no transparencies in government accounting on any level,” Luddy said. “These reporting systems are designed to conceal information from the average reader. An annual report that simplified the data would be most useful to the decision-makers and might cause dramatic change in the operation of the school system.”

In Wake County, for example, school board members said they set objectives for the superintendent and get a detailed report on what has been done to meet the objectives. However, since this is a part of his performance appraisal, it is protected as a part of his personnel file. The school system’s Certified Annual Financial Report lists department salary budgets as line items, but follows these with a general “other costs” category, which some critics say is too vague.

The superintendents themselves concede the system is complex. “Everything we do has to follow the chart of accounts that DPI has set for us,” Burns said. “There are 125,000 active accounts in Wake County. It is a complex structure that DPI requires.” Because this information is available to the public, Burns said he thinks the system is transparent to taxpayers.

But if something is published in a language no one outside the system can speak, is this really true? Forsyth County Superintendent Dr. Donald Martin said the answer is no.

“We are very closely budget-code-controlled,” he said. “To the average person on the street, if you don’t have a chart of accounts and someone to explain it to you…it’s almost impossible to figure out.”

Also, the debate over how much money school systems spend on salary and benefits is underscored by the sheer number of administrators the systems pay. “That’s one of the problems across the state — the proliferation of administrators,” DeLuca said.

The DPI recently began tracking the number of Central Office administrators per 1,000 students as one means of gauging a system’s efficiency. Of the top five urban school districts in North Carolina, Forsyth has the lowest ratio, 1.33 administrators per 1,000 students.

Wake County has the highest ratio, 2.34:1,000.“We do some things others do not,” Burns said. “We have a very large building program,” and an internal technology services division “to make sure the infrastructure is as it should be.”

In Charlotte-Mecklenburg’s case, the ratio is 1.68 administrators per 1,000 students. Gavreau expressed frustration at the number of staff: “No one gets fired in Charlotte-Mecklenburg, no one gets released,” he said. “They just get shuffled around.”

Forsyth County provides an example of what one school system is doing to trim Central Office payroll costs by trimming the administrative positions themselves. When Forsyth County Superintendent Donald Martin took office in 1994, he tracked reductions in Central Office staff through attrition, retirement, and regular turnover.

“We discovered that many times a nonlicensed person could do the job that an administrator was doing,” he said. Sometimes a position’s duties were transferred to an administrative assistant. With time and vigilance came tangible cost savings, Martin said. “We ended up with a million dollars in annual salary cut out.”

He said the approach continues to be a valid one: “Every time you’ve got a vacancy you’ve got to look at whether there’s a way to parcel out those duties…and sometimes technology can do the job, which means you can eliminate benefit costs.”

Forsyth County also contracts out services for which other school systems maintain an in-house staff. For example, the school system contracts out the planning of construction projects to two private-sector specialists, rather than maintaining those positions in-house. Forsyth County also had its operations scrutinized by the private sector. Representatives from industries such as food services, warehousing, computer services, and financial accounting looked at these functions of the public school system and made recommendations for running them like a business, rather than a bureaucracy, Martin said.

Forsyth County School Board member A.L. Collins said decision-makers cannot focus only on administrator pay levels, if meaningful savings are to be realized. Like Martin, he advocated looking for ways to cull unnecessary administrative positions.

“I’m not naïve enough to believe you can run a system with 6,000 employees and not have some inefficiencies,” Collins said. In Forsyth County, “you can find positions where you scratch your head and say ‘What do they do?’ But when budget time comes along you should have to justify every position.”

Collins also said that ultimately, taxpayers must face the reality that a school system’s top officers don’t come cheap. “From a superintendent standpoint, it is a question of competition,” he said about Martin’s $197,000 annual salary. “Our superintendent presides over the fifth-largest school district, a $350 million budget, and has 50,000 kids to take care of. For any of these top level people it is, candidly, a competition with private industry.”

But where is the line between being a competitive employer and a burgeoning bureaucracy? The average salary for all North Carolina superintendents is $130,374, and the number of school administrators overall is growing. According to policy analysts with the John Locke Foundation, more than $8 billion of local, state, and federal money was earmarked for the salary and benefits of nearly 175,000 public school employees in 2005. This was an increase of nearly $1 billion and 9,000 employees from 2004.

Is this a sign of a hiring and spending spree? Over the next 10 years the costs of new-school construction in North Carolina will be $10 billion. According to an April 2006 Civitas Institute poll, only 18 percent of respondents think those costs should be paid for in some degree by state bonds.

Yet the state’s largest and fastest-growing school districts have or plan to have bond referenda to help fund school construction costs. It is particularly in these districts, where Central Office administrators are paid the highest, that many observers think both pay and hiring trends should be scaled back dramatically.

Finding a way to do this systematically and with clarity may be difficult in a statewide public school landscape that is cluttered with thousands of budget accounting codes and intricate personnel policies. Yet experts both within and outside the system say North Carolina’s school systems have no choice: They must be vigilant.

“I don’t know of any school district in the state that has the luxury to waste money on inefficient jobs in Central Office,” Collins said. “Ultimately, we have to look at every administrative expense and ask if it supports children learning in the classroom.” That, in the final analysis, is the one test the North Carolina school system must pass.

Susanne Robinson is a contributing editor of Carolina Journal.