DETROIT—In August, Detroit schools chief David Adamany said the payroll situation was so bad he was considering following the lead of some private companies and replacing the internal payroll department with a private firm. It appears that privatization may still be an option.

Since school started, despite the installation of a new computer system and the opening of a payroll service center, little has changed. Teachers and other staffers chronically receive paychecks for wrong amounts, receive them late, or not at all. Some employees cannot get paid for overtime; others cannot get answers when they have questions about mistakes.

The main problems: 1) Staffers in the payroll division lack the skills necessary to do their jobs; 2) The personnel and payroll divisions are not set up to communicate well with each other; and 3) Much of the payroll work is still done manually because staffers have not been trained yet how to operate the new computers.

"Given the continued inability of the payroll department to do the job, outsourcing the work, or at least part of it, has become an imperative, even if it means job losses," writes The Detroit News in an October 13 editorial. "The district has a responsibility to pay its employees in a timely and correct way—not to exist for the benefit of payroll workers."

"Tinkering around the edges of the problem is counter productive," the paper continued. "Contracting out the payroll would be a powerful incentive for change, and a working model for overcoming bureaucratic inertia in other areas that have become unmanageable."