Alvarez & Marsal top recommendations include education-related proposals

The top recommendations of a group studying state efficiencies include several major changes for K-12 education.

The consulting group of Alvarez & Marsal on Tuesday presented to legislators its final report and implementation schedule. Here is a link to the report and here is a link the update.

A&M was hired for $2.6 million to analyze state government, including school districts, to try to find cost-savings.

Its top 21 recommendations include using school districts’ cash carryover balances to offset future education funding; consolidating K-12 health insurance plans; and strategic sourcing of procurement activities.

John “J.W.” Rust, a senior director at A&M, said both the issues of changing districts’ carryover balances and consolidating health plans will need more study, but that there are significant savings to find in both areas.

A&M has proposed a “deep dive” to asses current plans held by school districts and historical claims and gain key stakeholder consensus.

A&M says it believes a consolidated plan can be implemented by Jan. 1, 2017 and save $40 million during that fiscal year and $80 million per year after that.

In the area of cash balances, A&M says districts should carryover 10 percent to 15 percent of its annual operating expenses. A&M said 64 districts are below 10 percent; 77 are within 10 percent to 15 percent; 92 within 15 percent to 25 percent; and 49 more than 25 percent.

KASB has cautioned careful consideration on this recommendation, saying local districts know best how much to keep in reserve and state funding for schools has experienced disruptions in recent years.

A&M also said it would like the Legislature to establish a Program Management Office, headed by State Budget Director Shawn Sullivan, that would oversee implementation of the recommendations.

The recommendations will be aired out before several legislative committees all week.

February 16, 2016