Case Study

Des Moines Public Schools, Iowa

PFM was retained in 1998 by Des Moines Public Schools ("DMPS") to provide interim financial management oversight and to undertake productivity initiatives directed at improving the cost efficiency of non-instructional services. DMPS serves 32,000 students' in Iowa's largest urban center with 65 facilities and a general fund budget of $240 million. While student enrollment had stabilized after declines in the 1980's the student mix is increasingly comprised of children with special education and English language needs. Under investment in aging facilities had resulted in $425 million in building improvement needs.

In 1998, DMPS had experienced three successive years of general fund deficits, resulting in a severe depletion of the fund balance. Public confidence in district financial management had eroded and two public referendum for $350 million in much needed facilities improvements had failed. The leadership of a new Superintendent and the recent retirement of a long serving Chief Financial Officer provided the impetus to undertake a comprehensive review of financial management and accounting practices. PFM's contract included a two part scope of services. On an interim basis, PFM would provide certain management oversight tasks normally performed by a Chief Financial Officer. Secondly, PFM would review accounting and cost control systems, banking and cash management services, purchasing and procurement practices and internal systems for printing, copying and food service delivery. All service functions were to be analyzed for cost efficiency with consideration given to privatization opportunities.

In the first eighteen months, PFM has assisted the Board of Education develop financial performance targets, and instituted multi-year forecasting of resources and expenditures. The district's accounting system has been revised to better track expenditures by building and by educational initiatives. Chronic operating deficits in the special education program have been eliminated.

With the fiscal year ending June 30, 2000 the District anticipates a second budget year with an operating surplus. Changes in banking services and implementation of a PFM recommended cash management plan is expected to increase revenues by $350,000 for FY 2000-01. Public confidence in DMPS management has improved dramatically, evidenced by the approval in late 1999 of a local option sales tax to fund an estimated $350 million in facilities improvements.

PFM will completed productivity initiatives in the areas of purchasing, printing and copying, food service and study the costs of alternative high school programming. PFM alsol worked with the facilities department to establish a tracking system to monitor the costs of facilities improvement projects and develop a plan to optimize investment return of sales tax proceeds.