Risk Management

There are a number of potentially crippling natural and man-made disasters that can threaten your ISD’s vital records: fire, flooding, tornados, etc. On Memorial Day of this year, Shoal Creek in Austin flooded; it shattered the federal 500-year flood plain mark. The flood happened quickly and without warning leaving the impacted area in disarray and businesses ruined.

All it takes is one disaster to destroy paper-based student records – one spark in a dry warehouse where records are housed, high humidity to deteriorate paper files, or a flash flood to wash it all away.

Are your districts records safe? Is there a plan in place to protect student, financial, and HR records?

The Risk Management Plan is a standard document for most project implementations. However, these Plans are also extremely useful as standalone tools. Generally speaking there are three primary steps in Risk Management:


Asses and Evaluate

Control and Monitor

The first step in the creation of the Risk Management Plan is to identify potential risks. Are there vital records stored on paper or other physical media (CDs, DVDs, flash drives)? What security protocols are in place to restrict file access? What state-mandated file retention schedule is your ISD required to follow? Is your district in a floodplain? Variables like these may increase your districts risk rating.

Secondly, once the risks have been identified they then can be assed. This is done by the creation of a “Risk Matrix”. The Matrix allows for the easy identification and classification of risks by identifying how likely an event is to happen, compared to the impact sustained if that event were to happen. An example of this likelihood/impact measurement is if your district is in a 500 year floodplain but you store physical records. In this example it’s not likely your area will flood, but the impact of a severe flood is huge.

The third step is understanding how a specific risk can be controlled. In the project world there are four ways to approach this – risks can be accepted, controlled, avoided, or transferred. The following paths should be taken for each scenario:

Mitigation: A risk should be mitigated if there is a high probability of the event happening, but low impact. A lost or misplaced invoice is one example. High volumes of physically held paper have a high probability of being lost; however, losing one does not result in massive impact, and is easily controllable through an Electronic Content Management system.

Acceptance: Should only happen if there is a low probability of an event happening with a low impact if the event happens.

Avoidance: Any event that can happen to your records that has a low probability and high impact should be avoided. A lost or misplaced student record is one such case.

Transferred: High probability and high impact. Is your district in a 100 year floodplain? Are vital paper records stored in an unsecure and unregulated area? If so there is high probability with a high impact if something happens to those documents.


When it comes to the controlling of risks to your school districts records, an Electronic Content Management system addresses most, if not all, of the associated risks to your districts financial, student, and HR records. Automated digital repositories offer a safe and cost effective option in addition to massively improving current inefficient processes.





Growing Pains

Texas schools are in a pickle. Flat lined budgets, growing enrollment, and reliance on inefficient processes are pushing more ISDs to financial strain than ever before.

The population of Texas grew 5.2% in 2014, likewise school enrollment in the state has seen constant year over year growth. Texas schools have 39.9% more students than they had in 1995, and with this growth comes increased administrative costs. More filing cabinets are needed to store student records, along with more administration time to process registration forms and other documents. Wrap this up with an average document loss rate of 5% and you have some real unnecessary costs piling up; and let’s not forget records retention. These costly practices will only grow as student population grows.

Most academic documents require permanent retention. Physical storage can be extremely expensive to not only house but also maintain – it costs an average of $880 annually to keep and maintain one 5-drawer filing cabinet.

Options like microfiche and digital media can reduce physical space, but as discussed in our last SMARTtips article “Digital Decay”, they also present the same issues as paper documents. All this considered, there’s no denying that physical files on a permanent retention schedule create “retention debt”.

Unlike a bond issuance, or a car payment, retention debt builds over time in a linear relationship. As time passes, more students graduate, records pile up, and so do storage costs. This is one operating cost that can easily be mitigated with the implementation of an Electronic Content Management (ECM) system.

ECM implementations if not done correctly can be painful and ineffective, so it’s important to do some research first. Some things to consider are:

  1. What are the goals?
  2. What is the commitment from administration/leadership?
  3. What are the impacts to daily process?

Understanding your district’s pain points is a great place to start. Lean budget? Running out of storage space? Missing student records? Or just looking to migrate to a digital environment? A properly planned and implemented ECM is the answer to all of these questions.

Once there is a clear understanding of what the problem is, it is vital to have buy-in from senior leadership. A properly implemented ECM system will do wonders, but not without some process change first, and that change will need to be enforced at the ground level.

Daily routine processes will shorten exponentially — no more shuffling through files to find a student record, no more manual organization of stacks of documents to be filed, no more missing expense records. These processes become fully digitized and much faster.

Like anything else in life worth doing an ECM implementation requires work, but the payoffs are immense. Such an undertaking should never be done without careful consideration and the help of an experienced professional.


Email has revolutionized how business is transacted. With the average business user sending and receiving 121 emails a day in 2014, that number is projected to grow to 140 by 2018 (Radicati 2014). It’s both a blessing and a curse. While the speed at which daily business is conducted has greatly increased, it becomes difficult to manage as we’re bombarded with perpetual waves of electronic data. Emails by their nature are addressed to, and handled by individual workers. While this allows for quick response and turnaround, transparency as to what critical business documents they contain is rarely available. As a result, it’s easy for important records to get lost or deleted.

Does your school district use emails to conduct business? If so, those emails are subject to retention and litigation schedules just as if they were paper documents. Housing and retrieving emails can be a cumbersome and disjointed process if your district doesn’t have centralized retention and classification plan, and the necessary tools to enforce it.

How does your district handle important documents sent via email?

There are no definitive retention schedule for emails. Unlike text book, maintenance, or attendance records, email is a conduit for information and not a record type.  If an email contains an invoice for text book delivery, it’s subjected to a 2 year retention schedule; details for school bus maintenance? Better hold onto that email for 5 years. Record type classification of emails are fluid based on the subject matter they contain, and as a result can be difficult to manage.

While the need for proper email maintenance may not be immediate, it becomes apparent if and when a critical document storied in an email is needed for litigation or audit purposes.

These issue is easily preventable. As a standalone process or part of a larger implementation, the identification and classification processes of an ECM can easily sort, identify, and store emails for retention and retrieval. Visit us today at SMARTfiles.us to learn more.




We’ve talked to some extent of the value of moving your ISD’s student, financial, and HR records to a digital solution; going digital is one of the most positively impactful things you can do to save your district money and improve the overall operations of your school. That being said, we’ve also discussed the value of capture within an existing Electronic Content Management (ECM) system.

Capture is the most time-intensive process when converting to digital. Removal of staples, straightening dog-eared pages, and taping ripped pages are all elements that increase processing time. Having a good capture process in place is vital for transferring legacy back file documents to the ECM, and bringing new documents from third parties into the ECM (e.g., invoices).  However, the pain of capture can be greatly mitigated with the implementation and use of e-forms.

e-forms drastically cut down cost of capture by allowing for direct input into the back-end repository. In order to better understand this it helps if we look at the lifecycle of a document. A document’s lifecycle can be broken down into eight distinct, sequential segments: Capture, Creation, Classification, Index, Storage, Access, Retention, and Destruction.

There are three ways in which a document can be captured: Network Scanning, Scan to PC, and Electronic Document Capture (CompTia 2014). Network Scanning and Scan to PC deal with physical document capture and require a much longer lead time. Think about the number of constraints involved with scanning a document. An average file cabinet drawer holds 3,000 sheets of paper, and that means a standard 5-drawer file cabinet holds 15,000 sheets of paper.

On average, a full-time employee can prep between 500-1,000 documents an hour (CompTia 2014). So if we take the median of that (750), and assume there are zero issues with your district’s 50 page-per-minute scanner, we’re looking at 25 hours (15,000/750 = 20 hours + 5 hours to scan) to prep and scan one 5-drawer file cabinet! That doesn’t include image enhancements that may be needed for the documents to be properly be captured (deskew or straightening the image, despeckling the image – removing background noise such as hole punches, and other enhancements).

Now let’s look at the power of e-forms. All of that time and room for potential error in the example above is diminished. e-forms are custom built to capture specific data fields (referred to as metadata) directly. That means there is no need for prep work, scanning, or image enhancements. The amount of work time required to capture data is significantly marginalized by e-forms.

At SMARTfiles we’ve seen drastic improvements by our ECM clients when e-forms are implemented. If your district has an ECM but doesn’t utilize e-forms, the full value of your system is not being recognized. Contact us today to learn about services we offer to help you maximize the value of your ECM investment.


Death of Digital

Storing your school district’s important records on CDs and DVDs may prove to be a risky proposition. Temperature, humidity, and sun exposure can reduce the life of the  CD, and permanently destroy important archival data. There is no official amount of time data from storage CDs can be retrieved before the data is damaged and unattainable. Estimates range from 4 – 30 years. It really comes down to the CDs build quality, storage, and treatment.  Although physical media (i.e. CDs) may be a marginally better option for storing data than traditional paper, they still share many of the same limitations, such as:

1. Deterioration risk
2. Data access
3. Physical storage

CDs are comprised of three distinct layers, tenuously held together by light adhesive.

1. Coating Layer – Outermost layer consisting of a thin lacquer used for protection
2. Reflective Layer – Aluminum layer which reflects the laser back to the CD reader
3. Data Layer – “Polycarbonate Substrate” this is where your data resides

Any minor scratch of the coating layer can expose the thin, aluminum reflective layer, causing oxidation or ‘disc rot’. Once the reflective layer is compromised, it’s only a matter of time before the data will likewise be destroyed.  Additionally, overtime the layer-bonding adhesive will wear away causing the attached layers to decouple, rendering the stored data obsolete.

Data access and physical storage are also important considerations. Retrieving important records like human resources, financial or student records can be a daunting task using CDs. If the disks aren’t labeled correctly, or if the disk is missing, you could end up wasting time searching for the ‘right’ CD that has “that tax return from 5 years ago.”

Wouldn’t it be easier to access those records from the comfort of your computer? A properly implemented Enterprise Content Management system can allow for this…

reducing risk, saving money, and securing your district’s important information.

Code-less Integration

Most of today’s companies have good reason to integrate their disparate systems. Benefits of system integration range from scalability to ease of use. However, integrations have long been associated with complex tasks leading to extended deadlines. Even with major paradigm shifts in implementation methodologies from waterfall to agile, integrations may take anywhere from weeks to years for larger organizations.

The demand for rapid integration is spurred by customer driven development. We’ve traded in our pencils for digital styluses, paper for Microsoft Word, even the classic calendar is now being managed by Outlook. In today’s digital world, how companies utilize and leverage data is often the difference between a stellar year and a Chapter 7 filing.

Having digitized data often isn’t enough, especially when business-critical information is stored on separate systems. Integration allows for one cohesive, and centralized system, where data can be easily and effectively retrieved and utilized. Historically, this would require custom code which opens the doors to many risks such as documentation, support, and complexity.

Coding is highly nuanced and capturing the business context is often overlooked. Many times developers build a new product or integration that is highly technical, then move on to another role or organization, leaving the operational code without any documentation. New developers step in and think they can build a better solution, and perhaps they can, but is it worth the risk?

The good news is that technology is starting to catch up with business. Products like Laserfiche Connector allow for streamlined, and easy integration, with most major platforms. This allows end-users all of the major benefits of integration with minimal amounts of risk. Major complex and technical operations are handled and supported in the backend by the developing company, leaving the important business functionality to the end-user.

Learn more about how SMARTfiles can help sync your existing Laserfiche repositories to other critical systems.

Handy Handwritten Capture

Electronic Content Management (ECM) systems are spectacular animals. They consume data, cut it up, label it, and store it so it can be retrieved and used later. When correctly implemented they can vastly transform the operations landscape of a school district from a chaotic and unorganized paper mess, to an optimized and efficient digital web.


Data capture is the start of the pipeline and is how the ECM animal is fed. Most ECM solutions leverage and utilize electronic forms (e-forms) to capture data. Operationally, e-forms are the optimal approach for a complete ECM solution, but they are not always realistic. There are many legal considerations for the continued use of “wet” or handwritten signatures, in addition to the pain felt by changing capture processes that prevent many ISDs from moving to e-forms.


At SMARTfiles, we understand this concern, and have worked extensively to provide a solution that allows for easy handwritten form capture with back-end ECM integration. We’ve partnered with Parascript an industry leader in Intelligent Word Recognition (IWR) to provide our customers with a single, seamless solution that allows for handwritten form capture. Using this approach, your district will gain all of the benefits of an ECM system while still using physical forms. No need to retrain employees on how to use e-forms, for items like HR, Student Records, and Accounts Payable. The paper forms that are being used by your district today can be captured and automatically inputted into an ECM system just like any standard e-form.


For example, Coach Jimmy Smith needs to collect a physical form from each of his 35 students before they can participate in physical education classes for the year. Coach Smith is able to have his students provide him the completed forms (each form is 4 pages), and he could simply scan in the handwritten form. The process of scanning in 140 pages (35 students’ times 4 pages each) would take less than 10 minutes. The back-end ECM solution would be able to extract important data from the handwritten and digital text. When each 4 page form is scanned, Coach Smith will then be able to query the students name, grade, emergency contact name, and emergency contact phone number within the ECM application. Without the ECM solution in place, he would have spent possibly 20 minutes or more per student manually typing in the data. This would average out to almost 12 work hours just for manual data entry.


As with all systems adaptation is key for success. Check out this short video to get a glimpse of IWR, and contact us to discuss how we can help your ISD improve data capture storage.

Bond Risk and Your District


The costs associated with not having an Electronic Content Management (ECM) system is more than just workflow efficiency saves and paper reduction. Costs for not implementing and operating an ECM also affect a school district’s credit rating, impacting its ability to obtain necessary capital to finance large projects.

When financing a new capital project, districts have limited options in how they generate the funds needed. There are usually two approaches for a district to obtain financing capital:

1. Use cash on hand generated from tax revenues, or

2. Issue bonds.

Given that large capital projects can represent a huge expenditure for a non-profit entity like a school district, cash on hand is rarely an option. The issuance of municipal bonds is a common practice for most districts when a large amount of capital is needed, e.g., building a new school, improving an existing athletic field, or purchasing school buses.

Municipal bonds come in two flavors: General Obligation and Revenue. The differences between the two are in the form of how they are repaid. A General Obligation bond does not specify a specific source of repayment, while a revenue bond repayment is promised through a specific revenue-generating function. Most, if not all, Municipal Bonds issued by school districts are of the General Obligation variety.

Bonds are debts which are issued by the district in exchange for the needed capital. Like all other investments, there has to be an incentive to get investors to purchase. This incentive takes the form of a coupon rate which the issuing district will pay to the investor for taking on the debt. The rate is directly proportional to the amount of risk the investor is willing to assume. Higher interest is a result of higher risk, so more reward is needed to get investors to bite. Conversely, lower rates mean less risk so less reward is required to get investors to purchase the bond from the district.

Given the interest rate is a cost to the school district, it is advantageous for a district to secure a good credit rating. Credit rating is the number one factor for influencing bond coupon rate. Ratings are issued by one of three, third-party entities: Moody’s, Standard and Poor’s, and Fitch. The rating designation from low to high differ based on agency, but the valuation impacts are the same. Below is an example of Moody’s ratings:

High Ratings: AAA, Aa, A, Baa

Low Ratings: Ba, B, Caa, Ca, C


Potential investors, or what is referred to as “the market”, will view good ratings as being less risky, and bad ratings as being more risky, and the interest rate they are willing to accept will reflect that risk. Think of it as a credit score for your school district.

That leads us to the question: What goes into a credit rating?

It varies depending on the credit rating agency, but generally there is a focus on issuers’ long-term consistency and cash flow predictability. A rating agency will review a district’s financial records and ask questions to help assess their credit rating. Some of these questions may be: Is there consistency among the repayments of debt? Are records available to even review?

Transparency of records is critical for credit rating assessment, as they are for any auditing purposes.

To this end the security and retention of records must be considered. The ability to reconcile all expenses is crucial. It shows that the entity is trustworthy and financially stable as the necessary control and tracking systems are in place.

With thousands of PO’s in a given year this can be a daunting task if done through physical means. Having the appropriate capture, workflow, and retention systems in place makes extracting this data a piece of cake. The difference between an AAA and Aa rating (both considered good ratings) can be as much as 2%. For a $1,000,000, tax-free, 10 year repayment issuance, that can be the difference of a little over $100,000 of additional cost the district will have to pay.




Accounts Payable

There aren’t many subjects as boring as Accounts Payable (AP). After all it’s just dollars that your ISD owes vendors for goods or services. Pretty straight forward. No need for a large, in-depth treatise of the ins and outs of cash flow and operating capital.  Just pay the bill within the agreed upon time frame, be it net 30 or 90 as long as the account is kept in good standing, and your district keeps getting the goods and services. Everything is good. Right?

Dry as it maybe AP operations constitutes a very large cash outflow for most school districts. In addition to input accuracy errors, lost or misplaced invoices, and storage costs, manually processing an invoice costs an average of $12.00 per invoice. School districts are high cost operations with many vendors providing services.

How many invoices does your district process on a daily basis?

Additionally, there are unseen costs tied to manual AP processing as well. Often, high value knowledge geared AP employees are relegated to do operational process work when manually processing invoices. The reassignment of knowledge workers to “busy” work can be a real moral killer leading to higher turnover and more costly mistakes. Couple this with the inherent audit risks all paper-based documents are susceptible to and the costs continue to mount. Lost or misplaced documents can lead to very costly fines, and potential municipal bond devaluations when Uncle Sam calls.

Let us help your district out with your AP process. Our automated SMARTSolution reduces the costs of invoice processing by 50-75%. If your district processes an average of 30 invoices daily, that’s a $50,000/year savings! No more lost purchase orders, no more input errors, no more costly high risk physical storage. Check out the below video – Tom Bienski, VP of Strategic Solutions demonstrates how simple, fast, and efficient our automated solution is.