I know that the title of this blog isn’t likely to make your heart race, but it’s a big issue in public policy, albeit one that is tackled only in generalized pronouncements. No one wants too much of any program (private or especially public) spent on administrative costs. The assumption is that they are wasted dollars. They don’t directly serve people.

One of the treats of working at PSC is that a small group of us working on a project gets to sit around and hash out how we’ll address a certain policy issue. The spirited exchange among smart people is exhilarating. Early this week, we were discussing a project in which we’ve been asked to look at administrative costs of public programs. I posed the question: “Is providing technical assistance to teachers who are serving young children administrative cost?” From two thoughtful people I got a “yes” and a “no.” The one who said “yes” said it did not directly benefit children. The other said, of course it does; it gives the teacher essential knowledge to guide the child’s learning. The children will definitely be better off because of that technical assistance.

They are both right. And this gets to the imprecision of “administrative costs.” We shouldn’t shy away from acknowledging that some “indirect” costs directly benefit, in this case, children. Nor should we be so cavalier as to give all administrative costs a free pass. There are good and bad administrative costs, and it’s often (but not always) difficult to distinguish between the two.

The bottom line is that the administrative cost discussion will someday soon become irrelevant. When we can better measure how programs affect children’s outcomes (i.e., not numbers served, but numbers served well), when we can determine to a reasonable degree whether a program makes a difference in the lives of children, then direct vs. indirect spending will be replaced by wise vs. unwise spending. If wise technical assistance enables teachers to improve children’s well being, then that will be reflected in children’s reading and math proficiency.

By Peter Pratt