The truth of this argument is borne out by the LAUSD’s ongoing payroll debacle. It seems that the unwieldy size of the district has had a debilitating effect, producing what can only be called an “economy of waste.” The school district’s new payroll system, which is part of a $95 million accounting package, is full of glitches. Teachers haven’t been properly paid for months and are justifiably fed up. These are not the six-figure salaried executives who can absorb a skipped paycheck or two. Some have lost good credit scores, cars and even homes, according to union representatives. Now the district is preparing to spend another $10 million to hire a consulting firm to fix the mess that the first contractor made. This is savings? This is efficiency? Not even close. This payroll fiasco is sure to become one of the LAUSD’s most expensive bungles, right up there with the Belmont Learning Center, the nation’s most expensive school. And the public will surely pick up the bill. Clearly, as in the LAUSD case, when organizations get too big, they start to become grossly inefficient. The primary goal changes from doing the function it was created to do to simply maintaining the bureaucracy. For the sake of the teachers, the LAUSD must solve the payroll problem, even it it takes another $10 million to hire the nation’s experts on the system. But never again should the LAUSD boosters use the economies-of-scale argument to fight back legitimate debate about breaking up the district. It just doesn’t fly.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Every time the issue of breakup arises in regard to the massive Los Angeles Unified School District, the same arguments about economies of scale surface. As the reasoning goes, a centralized bureaucracy such as the LAUSD’s can save money on standardized functions such as buying supplies, repairs and maintenance and processing payroll. But if the LAUSD were split into several smaller districts, the bigger-is-better crowd argues, there would be waste and redundancy. But such a blanket bigger-is-better pronouncement is really too broad to reflect how things work in the real world. According to studies of the public sector we’ve seen, cost-effectiveness in service delivery reaches optimum levels in service areas of 100,000 to 200,000. Beyond that, citizens often lose touch with the public agency, which is then free to add layers of bureaucracy and is often unwilling to jettison antiquated work rules. And huge bureaucracies often lack businesslike value systems that give us the most bang for the buck.
Payroll flap shows bigger is not better