Sunday 18 April 2010

The education department that can't add up

I have been putting my toe in the water over at the Tele's education blog, which is usually a fun experience. In order to provide a reasoned comment on one thread this week, I did some research on the DET website. Bloody hell, it's hard to get a straight and simple answer out of the education dept.

What I was looking for was an average cost to put a kid through a state school. I then wanted to compare that to a fair/average sample of independent schools - not the elite schools, just the run of the mill ones.

Well, I can give you a range of numbers, and you can pick whichever one you like.

The DET has a flyer that claims the cost of running a high school kid is $13,551 and a primary school kid is $10,772. However, it classes these costs as "in the classroom costs" - and it provides no background as to how it calculated these costs.

The same flyer puts the cost of NSW bureaucracy at $426 per head - again, with no methodology as to how it came up with that cost, or the comparative costs of other states.

I decided to use Rosebank College as one point of comparison, mainly because it is not too far from my place. I drive past it occasionally. Their last annual report gives a figure for bureaucracy of $145,000 - but averaged over 527 kids, that comes to $276 per head - which means the cost of the state bureaucracy is only 54% higher (if you believe the numbers - which I don't).

I then tried the Fast Facts section of the DET website. According to this section of the website, there were 735,779 kids in state schools last year, and running the state school system cost $11.67 billion - or $15,860 per kid.

Hmm, small mismatch there.

There were 420,801 primary school kids last year. That leaves 314,978 in secondary or other schools.

If we crunch the numbers, we get:

420,801 primary kids x $10,772 = $4,532,868,372
314,978 secondary kids x $13,551 = $4,268,266,878

That adds up to $8,801,135,250.

However, Fast Facts tells us that it costs $11.67 billion to run the school system. Where has the other $2.8 billion gone?

For starters, they wouldn't have included the $426 per kid in bureaucracy in those numbers. That comes to $313,441,854.

$300 million. That's a pretty big head office. However, we are still missing $2.5 billion. Apparently, that is spent on capital works and maintenance.

Interestingly enough, they list capital works as $660 per kid, regardless of whether they are in primary school or high school. But when you multiply $660 by 735,779 kids, you only get $485,614,140.

We are still $2 billion short. Why the difference? Where has it gone?

I tried to get an answer from the financial statements, but they are indecipherable. I'd have to spend all weekend going through them with a highlighter and a spreadsheet to make any sense of them.

Here is my take on this.

With a private school like Rosebank, when you read the financial statements, what you see is what you get.

Salaries & Related costs: $5,652,582 = 68%
Non Salary Expenses: $1,982,651 = 24%
Departmental Expenses: $145,318 = 1%
Capital Expenditure: $566,608 = 7%
Total = $8,347,159

Although they don't provide a further breakdown, you can see where all the money is going. You can also read their report and see where it all came from.

With 527 students, and a total running cost of $8,347,159, we can see that the average cost to educate a kid here is $15,839. That's not the fees. Here is where the money came from:

School fees & charges: $2,292,074 = 32%
Commonwealth Govt:. $3,183,475 = 45%
State Govt.: $1,290,142 = 18%
Other income: $378,392 = 5%
Total income: $7,144,083

With fees set at $2,292,074 and 527 kids, we can calculate the fees as being about $4349.

Now, let's go back to the DET numbers.

They think that it costs them $13,551 to educate a high school kid. Using that number, Rosebank looks bad with a cost of $15,839. Bad private school, bad, bad, bad. Expensive and elitist to boot.

However, you have to remember that if you use the DET number of $13,551, you end up with a "missing" $2.8 billion in the state education budget. I reckon the more accurate number for the state system is $15,860. Suddenly, Rosebank is $21 a year cheaper.

But wait, there's more.

In the state system, secondary school kids get 56% of the funds and primary kids get 44%. The figure of $15,860 is an average across the board. If I re-weight it the same way that the DET does it, the cost of educating a high school kid in the state system is suddenly $17,446 per year.

Fees at St Joseph's, an "elite" private school are only $21,555.

What cracks me up is this line from the DET flyer:

The Department of Education and Training continues to pursue lower costs for 'out of school' support services to allow more money to be directed to students in the classroom. Economies of scale and efficiencies achieved by virtue of being the largest public school system in Australia assist this process.
I have to laugh at the line about economies of scale and efficiencies. Instead, what we have is a massive and intrusive bureaucracy that can't erect a tin shed without stuffing it up.

The DET of course will say that they provide all sorts of administrative and managerial backup to the schools - which is just horse poo at its worst. How is it that the Principal of Rosebank can manage to run a school without requiring a massive bureaucratic back office, but the Principal of a state school is seemingly unable to function without input, advice, guidance, assistance and direction from 3,000 mouth breathers in head office?

(I use the term "mouth breathers" with confidence, as I used to work in a building that also housed part of the DET head office. I saw a lot of their staff over the years whilst going up and down in the lifts. I have never seen such a collection of freaks, wierd-beards and muppets in my life. I wouldn't trust most of them to clean my toilet properly, but we happily entrust the education of our kids to them. They really are a freak show).

This is why I like the idea of vouchers so much. Just stop stuffing around with all the programs, systems, initiatives and so on that head office comes up with, and just divide the annual budget by the number of kids and give each parent a voucher for that amount. Let them figure it out from that point on. (And yes, you might hold 10% aside for kids with special needs and so on - but the principle is the same - get the money away from the oxygen thieves who currently run the system, and put control back in the hands of parents).


1735099 said...

Your breakdown for Rosebank is fascinating -
School fees & charges: $2,292,074 = 32%
Commonwealth Govt:. $3,183,475 = 45%
State Govt.: $1,290,142 = 18%
Other income: $378,392 = 5%
Total income: $7,144,083
Correct me if I'm wrong, but it shows that 63% of their income is derived from the public purse. Are their enrolment policies similar to most private schools of my acquaintance in that they refuse to enrol students with disabilities such as Autism or Intellectual Impairment?
If so, it simply highlights one of the major abuses these schools get away with on a daily basis in that they accept public money but don't respect the anti-discrimination legislation that our democracy has in place.
Their hypocrisy is breathtaking.
Even if the parents can afford to pay the fees (and many can), they are refused enrolment on the basis that they don't have the resources or the expertise to support students with special needs. Through my work, I'm aware of some very angry bush parents of kids with special needs who have had their enrolment knocked back by elite private schools in Toowoomba. Whilst these parents have enough money to pay the fees, they can't raise the necessary dollars to take a civil action which they'd probably win.
It's tempting to collate a list of such people and help them get a class action together.

kae said...

Sounds like a good match for the copper talking on the fly-on-the-wall cop show the other night.

He said that there were 1,500 plants and they were valued at $2,000 per plant, so the street value was $2.2M.

My maths isn't good, but I don't think that 1500 x 2000 equals 2,200,000.

Anonymous said...

In fact, I personally know that Rosebank has a whole department dedicated to special needs children. They do, in fact, not ONLY accept them but provide them with support as well.