1

PROPERTY RISK MANAGEMENT INSURANCE

The ‘’insurance crisis” when government bodies were deserted by the

conventional insurance market should usually be viewed as the ‘’age of self-insurance

enlightenment’’. This new age has led government bodies to adapt more intelligent,

economic and efficient, means to protect against catastrophic liability exposures.

Robert K. Bush, 1993

Instructional and administrative personnel would be severely handicapped and their

contributions to the educational program greatly minimized in the absence or short

supply of appropriate materials and equipment. This is particularly true in modern

school, with its emphasis on instructional media and educational technology.

DELEGATING RESPONSIBILTY

In today’s complex school community, regardless of its size, the superintendent’s chef

responsibility is to provide educational leadership. No chief officer can possibly

perform all of the generally accepted functions of the superintendency alone; some of

the duties of the office must be delegated to others. Since the business aspects of the

school are clearly secondary to the educational aspects, the superintendent should be

delegate some of the former duties to capable employees but retain direct leadership

responsibility for the academic program. Knezevich and Fowlkes emphasized the

point in the following

But delegation of authority does not in any way justify ignorance of the principles of

the functions duties delegated. The chief administrator does not get rid of his

responsibility by this action for the chief executive is held accountable for the acts of

assistants. Top management has the further responsibility to consult with and review

the progress and efforts of assistants. It can be concluded that the principles of sound
 2

business management must be known by the large system superintendent upon whom

falls the burden of performing many of the details of business management.

THE BUSINESS MANAGER

Authority in school business affairs was one of the last responsibilities to be entrusted

to professional school administrator. The vestigial remains of board execution of

business affairs and the reluctant delegation of authority in this area are still apparent

in many school systems. One vestige of such board executive activity is the secretary

or treasurer to the board of education. The functions performed by such individuals

include such activities as operation of business affairs preparation of board agendas,

and recording and keeping the minutes of board meetings.

FUNCTIONS OF THE BUSINESS OFFICE

School business administration is not an end in itself. It exist for the sole purpose of

facilitating the educational program of a school district. It should operate to support

the teacher in the classroom, the principal in the school, the school board and the

central administration as each strives to fulfil its responsibilities toward the

accomplishment of the educational mission. The best school business official is one

who understands the primary goals of education and who works closely with others in

promoting the best education the community can afford.

SUPPLIES AND EQUIPMENT

Supply item is any article or material that meets any one or more of the following

conditions:

1. It is consumed in use.

2. It loses its original shape or appearance with use.

 3

3. It is expendable; that is, if the article is damaged or some of its parts are lost or worn

out, it is usually more feasible to replace with an entirely new unit than to repair it.

4. It is an inexpensive item, even if it has characteristics of equipment, its small cost

makes it inadvisable to capitalized the item.

5. It loses its identity through incorporation into a different or more complex unit or

substance.

Equipment item is a movable or fixed unit of furniture or furnishings, an instrument, a

machine, an apparatus, or a set of articles that meets all the following conditions:

1. It retains its original shape and appearance with use.

2. It is nonexpendable, that is, if the article is damaged or some of its pars are lost or

worn out, it usually more feasible to repair it than to replace it with an entirely new

unit.

3. It represents an investment of money that makes it feasible an advisable to capitalize

the item.

4. It does not lose its identity through incorporation into a different or more complex

unit or substance.

The differentiation between supplies and equipment is sometimes very difficult to

make. In the interest of consistency, schools and many other institutions sometimes

use a fixed standard cost as the arbitrary determinant of the classification of the

materials used in the operation. Thus, a material costing S 250 per single unit might

be classified as a SUPPLY, while one costing more than that would be called

EQUIPMENT. Standardization and consistency in whatever distinction is made is

 4

important if cost comparisons are to be made from year to year or from one district to

another.

PURCHASING

Practice in school district.

1. Accomplish a definite objective in the shortest possible time and in the easiest manner

consistent with accuracy and efficiency.

2. Provide simplicity to speed operations and reduce possibilities of error.

3. Establish procedures that are definite and understandable to obviate friction,

duplication and confusion.

4. Fix responsibility for each of performance.

5. Establish procedures that are sufficiently elastic to allow for expansion as the district

grows.

6. Provide an system of procurement that is inexpensive and consistent with the job to be

done.

7. Ensure the system is adequate to perform the task for which it was created.

Ferguson requested if four aspects of purchasing are handled properly, the overall

school progress will improved.

1. The staffing of the purchasing department.

2. Professional objectivity in vendor relationships.

3. Patron’s interest in education.

4. User input and feedback.

STANDARDIZATION

Benefits:
 5

1. Allows lower cost from bids or large quantities of one item.

2. Reduces and facilitates repair and replacements.

3. Reduces inventories, thereby reducing storage cost, and the same time increases the

amount of school funds available for other purposes.

4. Speed delivery of materials or equipment’s.

5. Reduces the number of materials and materials for which specifications must be

written

6. .reduces the work of the purchasing department, including that of the business office

record keeping.

In determining the standard of quality, the purchaser should consider:

1. Length of term for which the product is to be used.

2. The comparative service that each potential choice is known to have given.

3. Prestige factors involved, if any.

4. The extent of safety hazards involved, if any.

5. The availability of products under consideration.

6. Initial cost and upkeep cost.

7. Disposal problems and cost.

BIDING

If the amount is to low, little savings is possible advertising for and receiving bids is

expensive to the district and also to the vendor. Low maximums also tie the hands of

the purchasing agent who may otherwise have the opportunity of making frequent

small purchases at a saving. Bidding requires advertising, establishing specifications,

 6

obtaining sealed bids to supply the materials at a certain price, and determination of

the successful bidder.

SUPPLY STORAGE

Six requirements for an effective storage system:

1. All supplies must be stored in spaces that are free of destructive factors such as

excessive heat or cold, moisture vermin, and insects, and fire hazards.

2. All storage areas must be accessible for both incoming and outgoing supplies.

3. All supplies must be stored as to be readily available when needed.

4. All storage materials bust be administered under the rule that old stock is used first.

5. A current inventory should b kept for each storage area.

6. Responsibility for proper operation of storage areas must be specifically assigned and

clearly understood by all involved.

RISK MANAGEMENT

Risk control is the art of anticipation and action and is an inherent management

responsibility. It is embedded In the risk management process and has to do with

identifying risk of loss and then eliminating, reducing or avoiding risk in the most

appropriate way in each circumstances. It encompasses safety programs, inspections

and training, but goes beyond traditional concepts of safety to include management

issues such as policies and procedures, programming and contracts. It should be as

broad and pervasive as risk of loss is. Among the main objectives of our risk control

program are these;

1. To save lives.

2. To eliminate human suffering.

3. To avoid disruption of the services you provide and

 7

4. To reduce the cost of losses and thereby meet the public trust you have for the

resources you control.

INSURANCE

Insurance is a method of providing for cooperative sharing of the risk of financial or

other loss in the event of some unfortunate incident. It has been called necessary

expenditure to provide for benefits in case of an incident or emergency that the

purchaser hopes will never occur. The risk taker purchases insurance from a

professional risk bearer as financial security in the event that some undesirable event

occurs.

Main types of insurance:

1. Fire insurance on the buildings and its contents against loss damage by fire; common

to all school districts, may use coinsurance, blanket insurance, specific or specific

schedule insurance.

2. Extended coverage it is added to fire insurance policies to cover miscellaneous risk,

usually windstorm or tornado, smoke, loss by vehicular or aircraft damage to

buildings.

3. Glass insurance against windows or door glasses.

4. Boiler insurance for protection against property damage, injury and death due to

boiler or pressure tank explosions.

5. Floater insurance to protect all valuables and equipment’s used by the school.

6. Crime protection against loss by burglary, robbery or theft.

7. Automobile; bus protection against damage or destruction and liability for damaged

and injury.

8. Liability protect against bodily injury or damage accidents due to negligence.

 8

9. Workers compensation state protection from loss to the employee because of injury or

death resulting from employment.

10. Safety bonds protection for the school district against loss or damage through

dishonesty.

11. Accident protection for pupils for injury sustained in the activities of the school

FIRE INSURANCE

Financial protection of the large investment that every school district has in buildings,

equipment’s and other property is an absolute necessity. The serious predicament of

the small school with inadequate insurance that loses its only buildings to fire is not

pleasant to contemplate. If such an event should occur, no amount of explanation

based on the boards opinion that insurance costs were beyond its budgetary provisions

would satisfy the local citizenry, replace the school building, or in any way provide

for the future school program. Thus, fire insurance is a necessity in order to protect

the assets of a school district.