Box 6, Folder 2, Document 24

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' A comprehensive approach to a study of the financing of the public
_, i:·
schools in Atlanta and Fulton Cqunty would involve an appraisal of the
future policies of the State of Georgia and the federal government
foi · school financing a
we ll as a study
or local
school financing.
i .


Since such an appraisal is beyond the scope of this study, this section
of the report will deal primarily wi~h problems of local school financing in the two districts.
However, most authorities on school financing
anticipate that in the future there will be further increases in school
financial support from the federal government and state governments as
well as from local school districts.
Although the public schools will
no doubt receive increased funds in the future from both state and
federal sources, strong local financial support of the public schools
will have to be maintained by all districts that desire something better
than a mediocre quality level of education for their children.
The following matters are treated in this section of the report:
revenue receipts, current expenditures, taxpaying ability and local effort
to support education, indebtedness, equalization that would result from
consolidation, non-property local taxes and financial arrangements that
would need to be made if the two districts were conso lidated.
I •
Revenue Receipts
Table I shows the budgeted reven ue receipts of the Atlanta and Fulton
County school systems.
It will be noted from this Table that 55.4 per
cent of the revenue of the Atlanta City schools is derived from the
district property tax as compared with 29.6 per cent in Fulton County.
However, both of these percentage figures are deceiving.
Just what per cent of the revenue receipts of each school system i s
provided by property taxes levied on property located in each district?
It will be noted that the A~lanta City Council paid $2,835,045 in 1966
for the debt service on bonds the City iss~ed to construct school buildings.
This amounts to 5.3 per cent of the revenue receipts of the Atlanta City
board of education.
Th i s added to the 55.4 per cent derived from the
district property tax makes a total of 60.7 per cent of the revenue
receipts of the Atl ant a Cit y schools derived from property
taxes in 1966-67.
It will be no t e d th a t Fu lton County receivis $1,762,892 from the
county- wide tax ( 1½ mi ll s ) a nd $780;000 from a direct appropriation from
the County Commission.
This makes a total of $2,542,892 from these two
If it is a ssumed that t he appropriation from the County Commis-
sion is also de ri ve d f rom prope r t y taxes , what part of this total is
paid on prope r t y located i n Fu l t on County but outside of the City of
Atla nta?
Since only about 19 per cent of the digest of Ful t on County
lies outside of the City of At l an ta, only app roxima t ely 19 per cent of
t his amount, or $483,149, is pa id on t he prope rty in Fulton County l y ing
outside the city of Atlanta, and $2 , 059,743 on the propert y in t he City
of Atlanta.
This represents only ap proximatel y 3.2 per cent of the
revenue receipts of the Fulton County board.
It wil l a l so be noted that
8.1 per cent of the revenue receipts of the Fulton County district is
derived from th e 5½ mill levy for debt service.
These two amounts, that
is, 3.2 per cent plus 8. 1 per cent a dded to 29.6 per cent make a total
of 40.9 per cent of the revenue receipts o f the Fulton County board
of education obtained from property taxes pa i d on property located In
Fulton County outside of the City of Atlanta.
The Fulton Coun ty board of education receives 42.6 per cent of its
· revenue from t he state Mi n imum Foundation Program appropriations as compared with 32.3 per cent for t he City of Atlanta.
The Minimum Foundation
Program law was des i gned to equalize educational opportunities among
school districts that vary g rea tl y in wealth.
The 1-½ mill countyw.ide
tax levied in all of Fulton County but allocated exclusively to the Fulton
County board also provides f o r considerable financial equalization at the
local level.
The equalization of educationa l opportunity is sound public
Later in this report , it is shown tha t the adjusted gross digest
is 32 per cent greater per pupil in t he City of Atlanta than in Fulton
Table I shows the revenue receipts of the Atlanta
Schools totaled
$530.01 per pup il in 1966-67 as compared with $547.35 in Fulton County.
This means tha t the State Minimum Foundation Program Law tQgether w_ith
the 1-½ mi l l county-w ide levy and the direct appropriation from t he County
Commission have gone a long way toward equalizing the financi a l su pport
of the two systems.
It should not be inferred from this comment, however,
that educational opportunities are equal in the two school systems.
Atlanta City school sys tem provides kindergartens which are not provided
in the Fulton County system.
If Fulton County provided kindergartens,
the revenue receipts per pupil in that school system wou ld probably be
l ess t han the reven ue receipts per pupil in the Atlanta system.
Both systems will benefit substantially in 1967-68 from increases
from the Minimum Foundation Program Appropriation provided by t_he 1967
Legislatu re .
It is estimated t hat the City of Atl anta wil l receive an
increa se of approximately $1,863,000 from this source and Fulton County
approximately $1,075,000.
Dis t ric t Proper t y
tax for · ope ra t ion
Per cent
Amo unt
$29 ,686 ,-415
Per cent
$ 4 , 922,451
1,762 , 892
County Commi s s ion
Intangibl e Taxes
230 , 000
County Wide
Proper t y Tax
State Min imum
Foundat ion Prog ram
Othe r State Funds
Vocat ional Funds
Na t iona l Defence
Education Act
17,322, 038
32 .3
7, 074 ,76 1
425 , 013
628 ,449
1. 2
58 , 000
1. 0
65 ,400
Ful t on County Schoo l
Dis t r ic t 5½ mi 11 lev,
for debt service
Fede ral Impacted
Area Funds
802,3 66
Ci ty Co unc il Payments f or Debt
Service on Sch. Bond•
Other Income
1, 358,747
Total Revenue
Re ceipts
Beginning Cash
Fede ral Funds El em. & Sec. Act. 1961
1,3 50 , 000#
8. l
210, 000
$ 16 , 613 I 004
818 , 609
54, 111 , 104
17, 431,6 13
$ 17,892,996
100 . 0

Not Incl uded in the operating budget .
�TABLE I - (Con t.)
Ave rage Dai 1y
Attendance Jan . 1,
Revenue Receipt s
Per Pup i 1 in ADA~\-

Amoun t
Per cent
Per cent
101 , 068
30 , 352
$ 530-. 0 1
$ 547.35
Excludes federal funds received under the Elementary and Secondary
Act of 1965 which cannot be used for the regular school program.
. ,,:·
�-4The federal revenue s rece ived f rom t he Eleme ntary an d Secon da r y
Educa tion Ac t of 1965 are a l so shown in Tab l e 1.
These reve nues are
shown s epa rately because they are al l earmarked f o r s pecia l purpos e s
by the feder a l gover nme nt a nd can not be exp ende d for t he re gular sc hool
p rog ram .
Prac t icall y a l l of t hese reven ues mus t b~ expen ded for compen-
sa tory ed uca t ion for the chi l dren of the disadvantaged .
Cur rent Expe nditu res
In Tab le 2 a n a nal ysi s of the budgeted curr en t expendi t ures of
t he two s chool systems f or 1966- 67 is presen ted.
Bo t h s ystems expe nd
75 pe r cent or mo re of total curren t ex pen d itu res for in s t ruc tion .
Th i s
i s ty pi ca l p ra ctice in large schoo l systems.
Ca ut ion s hou l d be exercised in comparing t he different percenta ge
all ocation s given to the same ex pendit ure functions in t he t wo systems.
The se systems differ cons i derably i n t heir bases of fin anc ia l sup port ,
t he spread of popu l ation a nd ot her facto r s .
al locates 3.0 per cent of its
Fo r exampl e , Fu lton County
current expenditu res to tra ns po r t at ion but
At l an ta spends no funds for pup i l transpo rtat ion .
The difference between the two systems i n curren t expen di t ure s per
pupil is negligible.
Fulton County $493.34.
Atlanta budgeted $486.07 per pupil for 1966- 67 and
The Research Division of the National Education
Ass ociation estimated that the average current expe nditure per pupil in
average daily attendance for the 50 states and t he District of Columbia
was $564 In 1966-67.
Therefo re,
the current expenditures per pupil in
both the Atlanta and Fulton County School systems are very low when
compared with the national average.
1. Adm in istration
2. Instruc t ion
3. _Ope r at ion of
Pl ant
Amoun t
$1, 796,920
Per ce nt
Per cent
$ 309,784
2. l
36,977 ,443
81. 1
4. Maintenance
of Plan t
5. Health Servi ces
6. Food Services
4 l, 209
9. Other
9,3 00
444, 160
1. 1
7. Transportation
8. Fixed Charges
Average Daily
Jan. 1967
49, 119,602
Current Expenditur ~s
Per Pupi 1 in ADA
14 ,973,695
100. 0

Data furnished by county and cit y schoo l off icial s. Expenditure accounts

do not include expenditures from federal funds received from the Elemen- .
tary and Secondary Act of 1965.

This account consists principally of undistributed expenditures made

from federal funds received under the National Defence Education Act.
Financi~l Abil i1:_y
. r·;·
The best measure of the relative local taxpaying ability of the
Atlanta and Fulton Co unty s chool systems is the: gross property digest
per pupil in average daily attendance computed on the basis of 100
per cent valuation .
This is due to the fact ihat most local school
revenue is derived from property taxes.
Following is t he adjus t ed 100 percent gross digest for 1966 of the
Atlanta City School district estimated by the State Revenue Department:
Atlanta City in Fulton County
$. 4, 141,663,000
· Atlanta City in DeKa lb County
173 , 149,000
Tota 1·
$ 4,314,812,000
The average dally a t t e ndance ~f the At1~nta City schools was 101,068
in Janua ry, 1967.
Therefo re, t he gross digest of the At l anta Ci t y ~chool
~i strict adju s ted on a 100 pe r cent basis was $42,692 . per pupil.
The 1966 . gross digest of t he Fu l ton Count y school d istrict adjusted
·on a 100 per cent basis was $982, 348 , 000 according t o da ta f urn,i shed by
t he State Revenue Department.
The gros s dige st .include s t he va l uat ion
of homesteads even though homesteads up .to a valuat ion of $2, 000 are
exempted from County operating levies for schools.
It is necessary to
include the valuation of homesteads in order to compute an accurate mea sure of the relative wealth of the two districts.
· County schools in January was 30,352.
was $32,365.
The ADA of the Fulton ·
The gross digest per pupil In ADA
Therefore, the Atlanta City schoo·1 system has a gross
digest approximately 32 per cent greater than the Fulton·County school
However, each of these school systems has considerably more
wealth per pupil than the average school district In the United States.
�-6.Local Financial Effort to Support Education
A valid measure of local tax effort to suppor t sch6ols can be
obtained by dividing the taxes paid on the property . located in each school
district by tbe adjusted 100 per cent gross digest of that district.
It is difficult to compute exactly the local tax effort ~f the
Atlanta City District because a part of that district is in DeKalb
However, the following is a fairly close approximation for 1966-67 .
District property tax
Payments of City Council for debt ~
service on school bonds
The portion of the 1½ mill countywide tax and the portion of the
approximation made by the County
Commission which was paid on property located in the City
$ 34,581,203
The 100 per cent gross digest of the Atlanta school district for 1966
was $4~314,812,000 • . The total local taxes for schools .divided by the gross
digest equals .008 o r 8 mills on the adjusted 100 per cent gross digest
or true value of property.
The local taxes for schools in the Fulton County school district In
1966-67 were as follows:
$. 4,922,451
Dis tric t property tax
The portioh of the l½ mill countywide tax and the appropriation made
by the County Commission which was
paid on property located in the
county district
Fulton County district levy of
mills for debt service
483; 149

$ 6,755,600
i .
The 1966 gross dig~st of the County school system on lOO per cent
basis was $982,348,000.
The total local taxes fo~ schools divided by
the gross digest equals .006877 or approximately 6. 9 mills on the gross
digest on true valuation of property.
It is evident that the Atlanta City school district made a greater
local tax effort in proportion to its ability to support schools than
Fulton County.
If the Fulton County schopl district had made as great
a tax effort In proportion to its ability as the Atlanta school district
in 1966-67, it would have raised .001123 times $982,348,000 or $1,103,176
in additional local revenue in 1966-67.
Special attention is directed to the fact that Fulton County could
not legally have made this extra local effort in 1966-67.
The District
levied 25 mills of operating taxes which was the legal limit it could
Furthermore~ property was assessed at less than 25 percent of true
However, the limitations on the taxing power of the Fulton County
board of educa tion wi l l be eased somewhat in the future because of the
ruling of the cour t in the Mclennon vs State Revenue Commission case.
The cour t ru l ed tha t all proper ty must be assessed at a uniform percent
of t rue va l ue regar dless of the c l ass of prope r ty o r whe re it was locat ed.
Upon t he r ul •ing, the Revenue Commi s sioner o rde red that a l l count y d i ge sts
be based on assessing all property a t 40 pe r ~ent of t r ue value.
Th is wi l l
~ake it possible to increase consi dera bly th e loca l reven ue s of the Fulton
County school district beginning with t he 1967-68 f isca l year.
There are no legal limits on the amount of mills which the Atlanta
City board of education may levy for the operation of the public schools
of the ~Jty.
Therefore, there ar~ no legal barriers to Increasing local
school support for schools in Atlanta.

�-8Actually the loca·J taxes for schools are extremely ·low both in
Atlanta and in Fulton County when compared with - the school taxes levied
in other sections of the nation.
Recently one of the members of the staff
making this survey participated in a study of school financing in all
school districts of 20,000 population or more in Illinois.
It was found
that the average school district in Illinois levied local property taxes
for schools equivalent to 12 mills on the 100 per cent true valuation
of property.
This is a fifty per cent greater local effort than the
City of Atlanta.
The local tax effort for schools in the Fulton County
school district is only 58 per cent
of the average effort in Illinois.
The bonded indebtedness of the Atlanta City Council for schools
totaled $52,905,000 in 1967.
This was less than 3.8 per cent of the
unadjusted gross digest.
The . bonded indebtedness of the Fulton County school district was
$22,661,000 in 1967.
This was 9. 1 per cent of the unadjusted gross digest
of the county school distri ct .
This Is close to the 10 per cent consti-
tutional limit on school indebtedness for the Fulton County district.
However, the bonded indeb ted ness margin of Fulton County will be greatly
increased when the property digest i s raised from an estimated 25 per cent
of t rue value to 40 per cent.
The unadjusted 1966 gross digest for the
Fulton County district was approximatel y $248,000,000.
Assuming that the
1966 digest was at 25 per cent of true value,the 1967 digest at ~O per cent
of true value should be approximately $400,000,000 allowing for a reasonable
amount of growth.
The present county school Indebtedness wouid be less
5.7 per cent of the gross digest at a 40 per cent valuation.
�-9Another way of looking at the indebtedness of the two districts is
to compute the pe~ cent that the school ind~btidness of each district
is of the _a djusted gross dig·est of each district at 100 per cent of
true value.
In 1966 this figure for the Atlanta city district was 1.23
per cent and for Fulton County 2.31 per cen t.
If . the ·two districts
were consolidated, it is assumed. that the territory that originally issued
the bonds would continue to be responsibJe for the debt service on the
- bonds that it had Issued.
It does not appear that this would work any
great hardship on either district because the indebtedness of neither
district is excessive.
Non-Property Local Taxes
Some school districts in the United States have obtained . legal authority to levy non-property local taxes for schools.
both for and against this practice.
There are arguments
Following are some arguments against
the levy· of local non-property taxes for schools:
Usually only urban or metropolitan school districts are able
to derive substantial funds from this source.
The state can collect most types of local non- property taxes
more efficiently than local untts of government.
Local non-property taxes for schools place cities in competition
with each other for industries.
If the larger urban districts are able to .levy local non-property
taxes for schools, they may not support a state f i nancing program which
helps the less · fottunate school districts.
Some type!,; of local non- property taxes make it possible for
wealthy districts to shift a part of the incidence of their taxes on the
residentj of less wealthy dlstricts • .
.. d·
�-10Some arguments fo r the levy of local non-propert~ taxes for schools
are as follows:
The property tax is a regressive tax and public resistance to it
is growing.
If we main ta in the vigor of local school support, many believe
that a source of loca l revenue more nearly related to ability to pay than
the property tax must be found.
The more progressive areas of . a state desire a better quality
program tha n the legi slature is usually willing to provide from nonproperty state taxes.
Those areas should be given the authority to
provide this higher quality program from some local source other than the
property tax.
It is possible to select types of local non-property taxes the
burden of which can not be shifted to the taxpayers of less wealthy areas.
The cost of administering local non-property taxes can be held
to a reasonable level by using the state's tax collection machinery or
by levying local non-property taxes by metropolitan areas rather than by
ind ividual school districts.
The taxpayer should be given the choice of what type or types
of local taxes he will kvy for schools in order to broaden the base of
local taxation.
As has been pointed out above, local property taxes for schools are
very l ow both in Atlanta and in Fulton County.
There is considerable
leeway in both districts for increasing local property taxes for schools
without those taxes becoming burdensome. · Therefore, there is no immediate
urgency for the consideration of obtaining the authority to levy local
non-property taxes for schools.
If the Atl a nta and Fulton County school authorities - decide to study
the possibility of levying local non-property taxes, it is recommended
that consideration be given to t he following:
That any local non-property taxes that are levied for schools
in the AtlaAta area be lev ied over the entire metropolitan area of Atlanta
including all school districts in the following counties:
Fulton, DeKalb,
Clayton, Cobb, and Gwinnett .
That a metropol itan s chool taxing authority be established with
the sole responsi bil ity for collecting any local non-property taxes for
schools authorized by law and for apportioning such t axes among the several
school dis tricts in the f i ve counties named above in proportion to the
average daily attendance of pupils.
3. That only t hos e types of non-property local taxes be levied, the
burden of which cannot be shifted to tax payers residing outside of the
Atl anta metropolitan area .
Financing Education in a Reorganized District
A number of reports have been presented to the people of the Fulton
County and Atlanta School distric ts in which arguments for and against
the consol itation of the two districts have been set forth.
the purpose of this report to review those arguments.
It is not
Therefore, the
di scuss ions of schoo l finance presented in this study have been focu sed
primarily on the financing of schools in each district rather than on the
financing of schools in a consolidated district.
Certain suggestions
particularly concerning the level of school financ ing have already been
Those suggestions are as app li cab l e to the financing of
education in Atlanta and Fulton County as separate school districts as
they wou 1d be app li cab 1e to the financing of education in a conso 1 i dated
It wou ld no dou~t be possi ble to provide reasonably adequate sch~ol
financing in each of t he t wo districts operating as separate districts.
However, if the two districts were consolidated, it would be possible to
establish a more equitable and more efficient financing plan.
It has
already been pointed ou t t ha t the 1966 gross digest adjusted at 100 per
cent in t he ci ty of Atla nta ~ as $42,692 · per pupil In ADA and in the Fulton
County district $32 ,365.
If the two d1stricts were consolidated, the
gross diges t at 100 per cent valuation· for the consolidated district would
be $40,307 per pupil.
It has also been pointed out that the taxpayers in
the Fulton Coun ty schoo l district are making a lower tax effort to support
schools in propo rtion to ability than the taxpayers•in the Atlanta City
district .
Therefore, consolidation of the two districts would equalize
the weal t h. back of each child and it would also equalize the tax effort
to suppor t schools in the Atl anta-Fulton County consolidated district.
Consolidati on would a l so simplify local financing because there would no
longer be a need for t he special l½ mill couhty equalizing levy or direct
appropr iations from the County Commi ss ion.
It has been s uggested in other st udies presented to the Local Education
Commission of At l ant a a nd Fulton Cou nty that the consolidation of the two
districts migh t resu l t i n t he l oss of some state school funds under present
me t hods of s tate apportionment .
If there is anything in present state laws
that would place a penalty on des i r able reorganization of school districts,
the Jaws shou l d be amended and the penalties eliminated.
This should not
be a difficu l t undertaking.
As has already been po i nted out , improvements in s chool f inancing
should be made In the Atlanta and Fulton County school distr i cts regard l ess
.. r·i·
�-13of whether they are consolidated.
If . the two districts are consolidated,
consideration should be given to the following financial recommendations:
The board of the consolidated district should be given the same
power for levying taxes for school operation as that now possessed by the
Atlanta City Board of Education and it should be fiscally independent of
any other local body. ·
The board should be given th e power to issue bonds for capital
outlay purposes up to a reasonable per cent of the gross digest.
board should also be given the power to obtain tax anticipation loans to
be repaid within the fiscal year.
Homestead exemption from school taxes should be abolished in the
reorganized dtstrict.
Present outstanding bonds should be retired in accordance with
the convnitments made at the time of issuance but all new bonds should be
issued on a district-wide basis and retired from taxes levied thro~ghout
the consolidated district.
The primary purpose of business administration is to provide the
services netessary for obtaining the maximum return per dollar invested
In public education.
It is not the pu r pose of business administration to
minimize educational expenditures.
Business and industry have long been
aware of the fact :that t he investment .of additional fu nds In an enterprls-e
wi 11 freque ntly return more profi t s per dolla r -invested than a smaller Investment.
Thi s same pril'lcip le applies to the educational enterp ri se.
wasteful or ineffici ent ex pend i ture of fu nds ~anno~ be Justified by the returns
rece i ved In either business or education.
A limited survey was made of the bus iness administration service s and
policies of the Atlanta an d Fulton County school systems.
Th i s survey was
made f irst to dete rm t he adequacy of t he bus iness adminis tration services
of each school system and second to dete rmine whet her major economies in
business adminis tra tion could be obtained by the conso l_idation of the two
The f i ndi ng s of that su rvey are set forth be low.
Atlanta Ci ty School Sys tem
The At lan ta City schoo l system has a we l l developed program of busines s
a dm i n is t ration serv ices typical of cities the size of Atl anta.
Except fo r
s ta ff organization, business admin istrati on policies are generally consistent
woth the policies recommended by authorit ies on school bus iness mana gement.
The organization for school business management does no t
follow the.pattern generally recommended by authorities in this fiel d.
Fi nance,
Inc luding administration of t he budget, Is under the supervision of a comptroller appointed by the Atlanta Ci ty boa rd of education and he Is directly
responsible to the boai d.
Legally the comptroller is not required to report
to the _superintenden t noi is he under the supervis1on of the superintendent.
In practice however he works closely with the superintendent.
An assistant
superi~tendent for school plant planning and construction reports directly
to the :superintend~ nt .
All ot her busine~s administr~tion services are under
the direction of an assistant-superintendent for administrative services who
-~ W:.!.E _<!Lrectly to the superintendent.
Th e services under the supervi
of the assis t ant superintendent for administrative services include the following :
~urchasing, school plant operation and maintenance, food ~ervices, records
center, warehousi ng, .inventory, print shop, statistical services and school
detective services.
Autho r ities on school business management usually recommend that all
business administration s e rvi ce s should be coordinated by one assistant
superintendent directly responsible to the superintendent.
Howeve r, if
thos e services are divided among two or more assistant superintenden ts, each
of these superintendents should report directly to the superintendent.
disa dvantage of this latter system as compared with· the system usually recommended is that the superintendent of schools is required to coord .i nate the
different administrative services rat her t ha n the assistant superintendent for
business a ffa irs .
rhe system of orga n ization now use d by ·At lanta viola te s the princ ipal of
coo rdination of the ac t ivities of an o r ganization through a single executive.
Potentially this system could cause friction and lack of coordination in t he
administration of the Atlanta public schools.
That it has not done so is a
credit to the educational and business executives of the A~lanta school s ys tem.
,r' '
�-3Facilities and Equi pment.
Office f acilit ies for t he business admini- ·
stration staff are provided for in a central admin istrative bu il ding for the
Atlanta City board of education.
Another bu ilding , located approximately-
one. block from the adminis trative office building, is being renovated to house
re~ords and data process ing eq uipment.
When t his i~ done fairly adequate
office space will be ava ilable for t he business administration staff at present.
However, the central off i ce building is located on a limited site with inadequate
parking facilitie s.
It would be diffi cu lt a ~d expens iv~ to expand the present
central office fac ili ti es of the Atlanta City board of education.
Sophis ticated data proces sing equ ipme nt i s in proces s of be i ng installed.
That equipmen t includes an IBM 360 computer, tape and dis~ sys tem and related
equipment includ ing a 1428 document reade r.
When th is system is in full ope r -
ation, the fina ncial accounting system, the central record system for warehouses and othe r record systems involving da t a processing can be greatly improved.
All other business administration services are housed in a newly constructed
educational se r vices building.
This is an excellent building located near an
expressway and it is served by a railroad siding.
The site is fairl y adequate.
The building houses the school plant maintenance shop ; warehousing for school
supplies and school plant maintenance and custodial supplies, storage for schoo l
food service, the print shop and other t ypes of educational services.
The warehousing and storage facilities of the educational services building
are efficiently arranged for accessions to and withdrawals from stock.
At the
time this building was constructed it was thought to be adequate for all the
storage and warehousing needs of the Atlanta system.
However, it was soon
found necessary to utilize the ~Id abandoned city jail building to store old
·· •' :
- 4-
school furniture and ce rtain other ty pes of non-rapidly moving stock.
not ideal, t his buildi ng is s til l usefu l for th~s type of storage.
School Plant Maintenance .
The At lanta Ci ty board of education operates
a city owned school plan t ma in tenance shop.
It is adequately staffed with
employees of the Ci ty board of educati on and we ll equipped.
Experience has
shown t hat. a proper ly operate~ school plant maintenance shop can not only save
money on school plan t maintenance but that Jt usually provides better service
tpan when school_ plan t maintenance is pr6vlded for by job contract.
The board
has developed a program for the repair and maintenance of school buildings and
this policy not only exte nds the life of a bui l ding but it also reduces the
Some di fficulty has been .
number of hazards to pupil s and s chool employees.
experienced In obtainin g employees with t he desired skit .t s.
School transpo r tation Is not provided for at public expense by the
Atlan ta City board of educati on .
Budgetary Procedures.
Work on the budget starts approximately six months
before the beginning of the fiscal year.
prior to the beginning of the fiscal year.
The budget is not always ap proved
Best practice dictates that the
budget be approved prior to the beginn ing of the fiscal year.
However, it is
reported that delays In receiving tax di gests and estimates of revenue sometimes make it difficult to approve t he budget in final form prior to the beginning of the fiscal year.
The comptroller has primary responsibility for preparing the budget document.
However, the comptroller consults with the superintendent, the assistant
superintendents and the area superintendents before he prepares the budget.
area superintendents consult with the principals.
There seems to be no fo rma l
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arrangemen t s fo r providing opportuni ties for classroom teachers or their
representat ives to partic ipa te in t he formulation of the budget.
Certain items, including ins tructional supplies, library expenditures,
. band equipment and janitorial su pplies, are budgeted by individual schools.
The budget for 1966-67 is a formi dable document consisting of more than 160
tin it
It contains detailed financial schedules of re143.215.248.55ues and expenditures,
cos ts, and comparisons of the proposed_ budget with receipts and expend i •
t_ures for previ ous years.
understood by laymen.
This Is a technical document and is not readily
The board holds public hearings but they are not well
The board is fiscally independent and adopts its budget without
being subject to review by · any other local body.
to make the board fiscal ly independent.
It .fs sound pub I i c pol Icy
Under t his policy the public is able
to fix responsib ility fo r t he school budget because the board of education is
the sole responsible body.
Howeve r , as taxes inc rease in the fu t ure and the
public becomes more tax conscious, t he board may need to develop better methods
than it is now using to commun icate the educational needs of the pupi ls to the
Financial Accounting and Audit ing.
The financial accounting system
utilized in the Atlanta City schools conforms with the principal accounting
standards and account classifications reconvnended by t he United States Office
of Education.
This is important in order that t he financial data for the
Atl anta City school system may be comparab le not only with other school systems
In Georgia but also comparable with the financi al data from other school systems
throughout the nation.
The accounting system is completely mechanized by the
use of the data processing equipment already described.
Accrual or encumbrance
accounting is used.
Thjs is essential for close budget control.
Under accrual
accounting, a budget account is encumbered as soon as an obligation is incurred
against that account.
The accounts of the Atlanta City schools are audited annually by a firm
of certified public accountan t s.
The board requires the principal of each school to keep a uniform system
of account records of internal accounts.
co11ec~ed at individual schools .
Internal accounts consist of funds
These accounts are also audited annuallyo
The accounti ng and auditing procedures of the Atlanta City school system
are in accord with standard practice.
Purchasing Procedures.
All items of any importance used by the Atlanta
City schools are cent r ally purchased in quantities on competitive bids.
policy undoubtedly saves large sums of money annually.
The construction of
central warehousing facilities and the establishment of an efficient distribution system made it practicable for t he board to establish its broad policy
· of central purchasing.
Business Administration, School Lunch Rooms.
provided for school lunch rooms.
Central supervision is
All school lunch rooms receive federal aid
in the form of cash and commodities.
From 60 to 70 percent of the pupils
participate in the school lunch p rogram.
This compares very favorably with
a national part icipation average of only 35 percent.
The board provides for central purchasing and central accounting for all
school lunch rooms.
The business administration policies of the board for
the operation of school lunch rooms are in line with best practice.
Insurance and Bonding.
School buildings are insured for 100 percent
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-7of appraised wor t h on blanke t f ire and extended coverage policies.
board deals with one agen t who re prese nts the Association of Independent
Insurance Agents.
Build ing s and equ ipment are insured at an appraised
value of $77,736,493 a t an ann ua l cost of $53,000.
find it advisab le to be self insurers.
Large school systems
However, since the amount
of money expended for f ire insurance in the Atlanta City school system is
relatively small , very little money cou ld be saved by a self-insurance program.
All officia ls and employees who handle ~funds in the Atlanta City school
system are bonded .
The board pays t he cost of the bonds.
Workman's Compensation insurance is provided for all the employees of
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the board.
The boa r d is sel f-insurer for t his type of insurance.
Income Management and Depository Security.
The board has been able during
the past few years t o keep a sufficient working ba]ance on hand to pay all current obligations when due.
tax anticipation loans.
Therefore t he board has not been requi red t o obtain
The board does not have the authority to bo rrow money.
All borrowing, eithe r on short term loan·s or bonds, mus t be done by the Atlan ta
City Council for t he board of educa ti on.
The board fo ll ows the soun d policy of
operating on a balance d budget and it carries over a reasonable working balance
from one fiscal year into the next year.
The board wisely follows the policy of investing i'ts idle funds in
appropriate United States Government obligations.
in In t erest earnings from this ~ouri.:e
It obtained $302,301.24
in 1965-66.
The board requires its depository bank to escrow collateral in another
bank in the amount of $500,000 in order to protect the funds it has on deposi t.
The balances in the depository sometimes exceed this amount .
Howeve r, the board
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follows the pol icy of promp t l y inves ti ng its idle funds and this provides
some protection .
Fringe Benefi ts for Em ployeeso
The following fringe benefits are
provided for all employee s of t he board , both certificated and uncertificated:
r'e tirement, sick leave , me dical and hospitalization insurance and a limited
amoun t of li fe insur ance .
Both the board and the empl oyee participate in
financing mos t of these be ne fit s.
Boards of educati on must participate in
making provis ions for thes e benefits if they compete on equal terms with the
private sector of the economy i n obtai ning needed personnel.
The Fulton Co unty Schoo l System
The Ful t on Coun t y boa rd of e duca tion has provided fairly adequate
business adminis t ration se rv ices for the public schools of the County.
The busine ss adminis tra t ion pol ic ies a re basically sound.
As indicated
below , improvements t hat need to be made involve increasing the s ize of
staff and provid i ng for a ddi t iona l space and equipme nt rat he r than any
change in ope ratin g policies.
Organ izat ion.
The pr incipal busines s admi nistration services are
unde r the di r ec t ion of an assi s tant supe r i nten dent for maintenance and
operation and a di rec t o r of fi na nce.
di rect ly to the super i ntende nt .
Ea ch of thes e of fi cial s
report s
The assistant supe r intende nt f o r mai n-
tenance and opera tions supe r vis e s school pl ant opera ti on and ma intena nce,
warehous i ng and s t ora ge and dis t ri bution serv ices , school plant planning
and purchas i ng .
Th e director of finance and h i s staf f kee p all accounts,
administer t he budge t and audit Inte rnal accounts.
In addition , schoo l
transpor ta ti on is supervised by t he director of attendance and transpo rtation
and the d i rector of the s chool l unch program is under the supe r visi on of the
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assistant supe rinte nden t for curri c ulum.
This latter arrangement is a
1 ittle unus ual beca use the central servi ces provided for the school lunch
program at the county l evel have more rela t ionship t o finance , accounting,
purchasing and s torage and distribut ion which are business adminis t ration
services, than to cu rr icu lum.
It is generally considered good organization
policy to organize simi iar t yees of operations in the same organizational
All the top off ic ia l s re~ponsible fbr bus-iness administration services
report to the s upe r in tendent r a ther t han directly to the board.
This is
sound policy because it prov ides for central coordination of all educational
serv ices at t he coun ty l evel.
It appea rs t hat the staff employed by the board for accounting, purchasi ng , budget a dmi n i stratron , etc., is inadequate in size to provide for
these serv ices .
The staff provided for these services is as fo ll ows:
d irector of fi nance and a ss i sta nt , a purchasing agent, an a dm ini s t r ative
assistant, f our bookkeepe rs, and t hree secre ta ries.
This is a ve ry small
staff f o r these services in a schoo l s ys tem with a budget exceeding sixteen
mi l li on dollars annually.
Fac i litie s a nd Equi pment .
The ce ntra l s t a ff f or bus iness ma na gement
i s hous ed in offi ce s pace provide d in t he Ful t on County Court House.
Thi s
space is ina deq uate .
Data process i ng equ i pment is not avai l ab l e.
used fo r payro ll purpos~s and account records.
Accounting machines are
If Fulton County remains a
separate school sys tem , the board should investigate the poss ibility of
Ins ta lli ng or renting certa i n t ypes of data processing equi pment.
The board has cons t ruc t ed an excellent educational services bui l ding
on a site some d ista nce from the cour t house.
centrally adjacent to an expre ssway .
Th_is bui-1:ding is located
However, it was constructed on a very
limited site with but littl e room for parking or expansion.
,that another story can be added to the present structure.
It is understood
However, this too
would become inadequate in a few years and parking space is already inadequate.
There fore the present site should be expanded if possible.
The educational services building houses the school plant maintenance shop,
warehousing for school supplies , school plant maintenance and custodial supplies
and storage for school furnit ure , instructional materials and supplies.
a very useful building.
This is
It makes it possible for the board to do quantity pur-
chasing on competitive bids.
Thi s policy is not possible without adequate ware-
housing and a distribution system.
The board has ' established a centrally located
S·chool Plant Maintenance .
school plant maintenance s hop located in the educational services building .
It is well equpped and staffed with personnel possessing the necessary sk il ls .
Reports from t he State Depa rtmen t of Education indicate that the board has an
excellent school plant maintenance program.
However, it is reported that some
additional employees are needed.
School Bus Maintenance.
The board operates 78 county-owned buses and
contracts for eight other buses.
The policy
district ownership and operation
of school buses almost al ways results in better service at a lower unit cost
than contract transportation.
The provision of school transportation is not
a simple matter in the Fulton County school district because of its geography.
The district is divided into two separate parts by the Atlanta City School
It is approximately 70 miles between a schoo1 in the northern part
of Fulton County and a ichool located in the southern part ~f the County school
Road and traffic conditions vary from the conditions typically
found in rural Georgia to conditions usually found in a densely settled metropol itan area.
The board contracts for bus maintenance and inspection with a private
garage at a cost of $1,300 per month.
Parts used in repairing buses are
"bil led to the board at list price less 10 .percent .
Buses appear to be well
· maintained and very few road failures are experienced.
The operator of the
garage with whom the board contracts for its bus maintenance takes a genuine
pride in maintaining school buses.
He appears to h~v~ the interest ~nd
enthusiasm of a board empl oyee.
The board has explored the possibility of constructing its own school
bus repair shop and operating it.
Available evidence does not indicate that
the board could save money by establishing its own shop as long as it is able
to contract for its bus maintenance at so favorable a rate.
The contractor
operates a branch shop in the nort he rn part of the County which does light
repairs a nd inspections.
This reduces the amount of empty mileage traveled
by buses .
The board puys its gasoline for school buses from filling sta tions.
Discounts are received at only a few stations.
The board has considered
purchasing its own tank truck and serving its own buses.
However, schools
· are so widely separated that this method would probably not save very much
The board could probably save some money on its gasoline 'purchases
if filling stations were required to bid for the board's business.
Financial Accounting and Auditing . The financial accounting system
follows in general the account classification for receipts and expenditures
recommended by the United Sta tes Office of Education.
state requirements .
It also conforms to
The accounts of the Fulton County schools can readily
' be compared with the accounts of school systems not only in Georgia but also
throughout the Nation.
As poin te d out above , data processing equipment is not available for
keeping financial accoun ts.
Furthermore,· the s taff provided for accounting,
purchasing and budget administration is insufficient in number to provide
all of the se rvices needed .
on an accrual basis .
For example, expenditure accounts are not kept
This should be done in order to provide a more efficient
method of budget control.
If Fu lton County is continued as a separate school
system, accrual accounting s hou l d be installed along with data processing
The accounts of the board have been audited eight times during the past f our
years, four ti mes by state auditors and four times by independent certified
public accountants.
The board requires school principals to maintain a uniform system of
accounts for al I of the internal funds handled at school cente=rs. .
accounts are audited annually.
Budgetary Procedures.
The director of finance is assigned the res-
ponsibility of preparing the budget document.
As pointed out above, he is
directly responsible to the superintendent and works under his supervision
in preparing the budget.
He also works with the assistant superintendentSp
director of Instruction, principals and others In preparing the budget.
Work is started on the budget from 6 to 12 months prior to the beginning
of the fiscal year but it is not always approved in final form by the beginning of the fiscal year.
The budget is a technical budget not readily understood by the lay
Detailed schedules of anticipated receipts _and proposed expenditures
by function and object are presented.
In addition certain unit costs and data
for the previous year are i ncluded in the budget.
Program accounting is not
used In interpretihg the budget.
Budget hearings are held but they are not well att~nded.
The budget is
advertised in the newspaper and a dopted by the board at a later date as
prescribed by law.
The boar d is fi scally independent' and its budget is not
subject to review by any ot her local body.
However, as school costs continue
to increase and the public becomes more tax conscious, the board will undoubtedly find it advisable to deve lop more adequate means than are now used to communicate school needs to t he public.
Purchasing Procedures.
The boar d purchases all important items in
quantity and requires competitive bids for all items costing in excess of
This policy undoubtedly resu lts in the saving of considerable
Quantity buying requires storage and a distribution system.
educational services building and t he distribution system established in
connection with it greatly facilitates quantity purchasing.
Business Administration of the School Lunch Program.
The board provides
some central supervision for the school lunch program but it does not provide
for central accounting and purchasing for school lunch rooms.
Central account-
ing and central purchasing usually resu lt in considerable savings for the
school lunch program • . Howeve r as pointed out above, distribution is a
problem in Fulton County beca use of the remoteness of many schools from
a central warehouse.
The educational se rvi ces building is not equipped for food storage
but this deficiency could be remedied.
It is believed that considerable
money could be saved by centr?l accounting and purchasing for school lunch
However, these services could not be provided without expanding the
b~siness management s taff.
Approxima te ly 61 percent of the pupils enrolled participate in the
school lunch program .
All school s either receive federal aid in the form
of cash and commod it ies or conmodities only.
Insurance a nd Bonding.
fidelity bond .
Al l employees· are under a blanket position
Principa l s are also under a name bond.
The board pays the
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cost of all bonds .
The board carri e& fire and extended coverage insurance under the Public
and Institutional Property Plan.
Under this form of insurance (avai lable only
to publi c institutions) t he board insures a buiiding and its contents for
replacement cost rather than appra ised cost.
This g ives the board rather
compl ete coverage but it is a fair ly .expensive type of insurance.
The board
pays $50,755.66 annually for carrying fire and extended coverage Insurance on
buil dings and equipment ins ured at a replacement value of $32,773 ,199.92.
This may appear rather expe nsive when compared with the insurance costs of
the Atlanta City system.
However, insurance rates a re greatly affected by
the fire protection ava ilable and the City of Atlanta has far better fire
protection than Is ava ilable in most sections of Fulton County.
Income Manageme nt and Depos ito ry Security.
The board has been able
to carry a su fficient workin g bala nce t o be abl _e to pay Its current
obi igations on ti me without having to resort to tax anticipation loans .
This is good po licy.
The board has operated on a balanced budget and has
carried over a reasonable working bal ance from on~ f!scal year to another.
The board wise l y fol lows._ the pol icy of investing idle funds in United
States Government securiti es.
It realized $199,640.39 in interest from
this source dur ing the 1965-66 fis cal year.
The boa rd does not follow standard procedures for protecting its
funds in depositories.
The standard procedure is to require the board's
depository bank to protect the board's deposits by escrowing in another
bank, government securiti es in an amount equal to the maximum balance
carried by the board.
In 1 ieu of t h i s pol icy the Fulton County board of
education keeps its f unds in 10 bank accounts and attempts to invest funds
not needed during a given mon th as quickly as possible.
During the period
of heavy tax collections, the board may receive as much as $2,000,000 in a
single remittance.
While these fun ds are invested in United States Government
obliga tions promptly, nevertheless the board should have some protection for
its funds in depositories in the form of escrowed collateral.
Fringe Benefits for Employees.
The board provides the following fringe
benefits for all of its employees both cert ifica ted and non-certificated:
retirement, sic~ leave, medi cal and hospita lization insurance and a limited
amount of life insurance.
the costs of most of these benefits.
The employer and the employee share in financing
These are the same types of benefits
provided by the Atlanta City board of education for its employees.
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The business administration policies of the Atlanta City school
sy,s tem and the Fulton County school system ·a re both basically sound.
The available evidence indicates that no great amount of money could be
saved by consolidating the business administration operations of the two
Few if any business administration personnel could be eliminated
by the consolidation of the two systems.
It might be necessary and desirable
to change a few titles and to do some reorganization but the services of all
of the present employees would be needed.
Both ~ducattona l services buildings would still be needed because of
the shortage of warehousing and storage space.
The consolidation of the
two systems would not elimina t e the great distances between schools which
cause distribution problems .
If the two systems were consolidated and public transportation provided
for qualifying pupils who now live in the city of Atlanta , different arrangements for the mai nt~nance and ope ration of ~chool buses would have to be ma de.
Those arrangements would probably involve the construction of two school bus
repa i r s hops , one l ocated in t he nor t hern half of the reorganized dis t r i ct
and the ot he r in t he sout·he r n ha 1f .
From t he standpoint of bus ine s s a dm i nistration, t he c h ief sa ving i n
consoli dat ing t he two school distr ic t s would be the elimi nati on of t he cost
o f one da ta processing system.
The newl y i nstal le d da ta proce ssing sys t em
for the Atlanta City schools has sufficient capacity to serve both school
All other business administration savings would have to be obtained
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from increases in efficiency derived from economy of scale.
for example,
consolidation of the two systems would result in increasing the volume 9f
specific items submit t ed for bid.
The increased volume might result in
lower unit costs for some items.
Some financial savings could probably be obtained by eliminating
certain duplicating educatio~al programs or the provision for better
coordination of existing educational progra~s if the two districts were
consolidated .
Since this section of this report is concerned only with
business administration policies, no attempt is made to estimate the
amount of savi ngs on t he opera t ion of educational programs that could be
obtained through consolidati on .
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public items show