THOUGHT LEADERSHIP: School Bonds Part 3
Internal oversight vs. external expertise
Weighing the best approach to bond program management
This is part 3 of our 3-part series on school bonds. Part 1 can be found here; part 2 can be found here.
Bond programs play a crucial role in funding facility improvements across California’s PK-14 schools. However, managing these programs effectively and expediently is a complex undertaking, requiring strategic planning, financial oversight, and regulatory compliance. For school district leaders, one of the most critical decisions is whether to manage a bond program internally or hire an external advisory firm. Each approach has its advantages and challenges, and finding the right fit for your district can make all the difference in delivering projects on time, within budget, and with maximum impact.
APPROACH 1: Managing a bond program internally
Many school districts consider managing their bond programs in-house, leveraging existing staff and resources. This approach offers several advantages:
Advantages:
- Institutional knowledge and direct oversight: District staff have an intimate understanding of their schools’ needs, priorities, and history. Managing the bond program internally ensures that decision-making aligns with district values and long-term goals. Additionally, your team knows the community, and has earned the trust of your teachers, staff and the public.
- Cost savings (at least on the surface): Without the need for external consultants, districts may perceive cost savings. Existing staff can oversee bond funds and manage projects without additional budget allocations.
- Long-term capacity building: By handling bond programs internally, districts can develop internal expertise and strengthen project management capabilities for future initiatives.
However, this approach also comes with notable challenges:
Challenges:
- Limited expertise and specialized skills: Most district staff lack deep experience in executing large-scale bond programs. Compliance, procurement, and financial management require specialized knowledge that may be beyond the capacity of an internal team. Plus, they are likely to have limited experience in doing the types of projects required, so they are essentially learning on the job.
- Capacity constraints: District administrators and staff already juggle multiple responsibilities, from academic programs to daily facility and maintenance operations. Adding bond program management can lead to inefficiencies, project delays, or costly errors. Most of your staff already have full-time responsibilities, and this could mean slower delivery of projects, which could then cause cost inflation and reduced project scopes.
- Navigating political and community pressures: Internal teams often face pressure from school boards, community stakeholders, and local entities. Balancing transparency with efficiency can be challenging when internal decision-making is influenced by competing interests.
APPROACH 2: Hiring an external advisory firm
Many school districts opt to hire external advisory firms that specialize in bond program management. This option offers several strategic advantages:
Advantages:
- Specialized expertise and proven best practices: Advisory firms bring extensive experience managing bond programs across multiple districts. They are well-versed in regulatory requirements, reporting obligations, and compliance strategies.
- Efficiency and risk mitigation: External teams implement structured processes, project management tools, and best practices to keep projects on schedule and within budget. Their expertise reduces the risk of mismanagement, legal non-compliance, and project underperformance. Consultants can more easily staff up during critical program and projects activities, and reduce staff during slower times, such as DSA reviews. Additionally, you only need staff during your construction program, so when the construction ends, so does their cost.
- Objective decision-making and community trust: Independent advisors provide unbiased recommendations, helping districts navigate political dynamics. Their oversight can enhance community trust, ensuring bond funds are allocated transparently and effectively. Another advantage is that consultants can accelerate your projects to reduce the impacts of cost inflation, which is particularly important when external events, such as natural disasters, such as the fires in So Cal impact labor, material and temporary housing availability.
However, hiring an external firm is not without drawbacks:
Challenges:
- Additional cost: Consulting fees require budget allocation, which some districts may view as an unnecessary expense rather than a strategic investment.
- Need for strong district-firm collaboration: External consultants, while highly skilled, may lack the deep institutional knowledge that internal teams possess. Effective collaboration and ongoing communication are essential to align external expertise with district priorities.
- Potential for perceived outsourcing: Some community stakeholders may feel that hiring an external firm relinquishes local control over taxpayer dollars. Clear messaging and transparency are needed to demonstrate the value of external expertise.
Finding the right balance: a hybrid approach
Many successful districts employ a hybrid model—leveraging both internal staff and external experts to achieve optimal results. This approach allows districts to retain oversight and stakeholder engagement while outsourcing specialized tasks such as construction management, financial oversight, or compliance monitoring.
For example, some districts manage community outreach and stakeholder engagement internally while partnering with an advisory firm for technical aspects of bond execution. This balance allows districts to benefit from both institutional knowledge and industry expertise.
Making the best decision for your district
Every school district has unique needs, constraints, and priorities. When deciding how to manage a bond program, district leaders should ask themselves:
- Do we have the internal expertise and bandwidth to manage this effectively?
- Can we afford the risk of non-compliance or inefficiency?
- Would external expertise ultimately save time and money while improving outcomes?
The ultimate goal isn’t just to manage bond funds—it’s to maximize their impact for students, teachers, and the broader community. By carefully evaluating internal capabilities and external options, districts can develop a management strategy that ensures successful project delivery while maintaining public trust.
How we can help
B&D has helped districts across California navigate the complexities of bond management. Whether you’re considering internal management, external expertise, or a hybrid approach, we can provide guidance tailored to your district’s unique needs. Let’s discuss how we can support your district’s bond program success.
Mark Newton is a senior vice president at Brailsford & Dunlavey, with almost 30 years of experience in managing PK-14 development projects and bond programs in California. He can be reached at mnewton@bdconnect.com. Brailsford & Dunlavey is a leading development advisory and program management firm with expertise in the planning and delivery of school projects and district-wide programs across the United States. For more information, visit california.bdconnect.com.
