Report 2015-107 Recommendation 18 Responses
Report 2015-107: The University of California: Its Admissions and Financial Decisions Have Disadvantaged California Resident Students (Release Date: March 2016)
Recommendation #18 To: University of California
To ensure that it spends state funds prudently for programs that do not directly relate to educating students, the university should reevaluate these programs each year to determine whether they continue to be necessary to fulfill the university's mission.
Annual Follow-Up Agency Response From October 2021
As noted in the University's response to recommendation 17, a full accounting of how State General Funds are allocated annually across campuses—including a breakdown of State funds that are allocated on the basis of student enrollment and funds that are allocated for specific programs (including programs that relate to all three elements of the University's mission: instruction, research, and public service)—is available on the University's website for each of the past three fiscal years at the following URL: https://www.ucop.edu/operating-budget//budgets-and-reports/other-resources/
These allocations are not immutable and are subject to change from one year to the next. The fact that the University intentionally allocates funding to these programs each year reflects a determination that the programs continue to be aligned with the University's mission of instruction, research, and public service. In cases where funding for these programs was originally specified in a State Budget Act, the Governor and the Legislature themselves determined that the program was consistent with the University's mission and a legitimate recipient of State support.
- Completion Date: January 2019
California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement
The university's position is unchanged from its previous response. The university's response indicates it does not believe the recommendation to annually reevaluate the necessity of programs that do not directly relate to educating students is needed.
- Auditee did not substantiate its claim of full implementation
Annual Follow-Up Agency Response From November 2020
As noted in the University's response to recommendation 17, a full accounting of how State General Funds are allocated annually across campuses—including a breakdown of State funds that are allocated on the basis of student enrollment and funds that are allocated for specific programs (including programs that relate to all three elements of the University's mission: instruction, research, and public service)—is available on the University's website for each of the past three fiscal years at the following URL: https://www.ucop.edu/operating-budget//budgets-and-reports/other-resources/
The fact that the University intentionally allocates funding to these programs each year reflects a determination that the programs are aligned with the University's mission of instruction, research, and public service. In cases where funding for these programs was originally specified in a State Budget Act, the Governor and the Legislature themselves determined that the program was consistent with the University's mission and a legitimate recipient of State support. Absent a change to the University's mission, the University does not believe at a wholesale annual review of these programs is needed.
- Completion Date: December 2018
California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement
The university's response indicates it does not believe the recommendation to annually reevaluate the necessity of programs that do not directly relate to educating students is needed.
- Auditee did not substantiate its claim of full implementation
- Auditee did not address all aspects of the recommendation
Annual Follow-Up Agency Response From November 2019
As noted in the University's response to recommendation 17, a full accounting of how State General Funds are allocated annually across campuses—including a breakdown of State funds that are allocated on the basis of student enrollment and funds that are allocated for specific programs (including programs that relate to all three elements of the University's mission: instruction, research, and public service)—is available on the University's website for each of the past three fiscal years at the following URL: https://www.ucop.edu/operating-budget//budgets-and-reports/other-resources/
The fact that the University intentionally allocates funding to these programs each year reflects a determination that the programs are aligned with the University's mission of instruction, research, and public service. In cases where funding for these programs was originally specified in a State Budget Act, the Governor and the Legislature themselves determined that the program was consistent with the University's mission and a legitimate recipient of State support. Absent a change to the University's mission, the University does not believe at a wholesale annual review of these programs is needed.
- Completion Date: December 2017
California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement
The university's response indicates it does not believe the recommendation to annually reevaluate the necessity of programs that do not directly relate to educating students is needed.
- Auditee did not substantiate its claim of full implementation
Annual Follow-Up Agency Response From October 2018
The new methodology for reviewing expenditures described in the University's response to recommendation 16 includes all State General Funds as well as other core funds, which are collectively used to cover direct and indirect costs associated with the University's teaching and research mission.
The University publishes a full accounting of how State General Funds are allocated annually across campuses and major programs. See, for example, https://www.ucop.edu/operating-budget/_files/bap/2016-17_summary_of_state_general_fund_allocations.pdf
A more detailed listing of State funding by program is available at
https://www.ucop.edu/operating-budget/_files/legreports/17-18/AB97RedirectionofFundsforEnrollmentGrowthLegRpt.pdf
- Completion Date: December 2017
California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented
The university's response does not indicate how it plans to reevaluate programs that do not directly relate to educating students each year to determine whether they continue to be necessary to fulfill the university's mission.
- Auditee did not substantiate its claim of full implementation
Annual Follow-Up Agency Response From November 2017
The Financial Planning & Analysis ("FP&A") unit has developed a prototype analytical tool and report for use in analyzing core funds expenditures at each UC campus during the past three years. The tool and report have the potential to provide useful information about trends in spending by function and by expense type to identify any significant year-to-year variances and to ensure that core funds are used in a manner consistent with the University's core mission. Upon final testing and review of the tool, UCOP staff will use it to conduct annual analyses to better understand spending patterns at each campus and to identify issues or trends for discussion with campus budget staff as necessary. For material variances, staff will consult with campuses to better understand the reasons for the variance, and recommend any action for future changes, if applicable. Staff will begin using this tool and reporting template beginning in early 2018 to review expenditures through FY2017.
- Estimated Completion Date: April 2018
California State Auditor's Assessment of Annual Follow-Up Status: Pending
The university's response does not address how its new tool and report will reevaluate the need to spend state funds for programs that do not directly relate to educating students. Therefore, we look forward to its 2018 response to understand how the university will use the new tool and report to implement our recommendation.
1-Year Agency Response
UC disagrees with the premise that programs related to research and public service that rely in part on State funds should be subject to special scrutiny, as they too help the University to fulfill its three-part mission. Moreover, the administrative burden that would be required to annually reevaluate every program that receives State funds and that is not directly related to instruction would be extraordinary. The University will, however, include expenditures on these programs in the framework for monitoring core fund expenditures described above.
- Estimated Completion Date: September 2017
- Response Date: March 2017
California State Auditor's Assessment of 1-Year Status: No Action Taken
We have clearly reiterated that our recommendation relates to a certain subset of programs indicated on page 71 of our report. We question why the university continues to respond based on an erroneous reading of our report.
6-Month Agency Response
The University does not agree that all programs should be reevaluated each year to determine if they continue to be consistent with the University's mission. The administrative burden of this kind of review of each and every program that does not relate specifically to instruction of students would be onerous and cost prohibitive.
However, consistent with the response to recommendation 16, the University will implement a system for monitoring the use of all core funds to ensure they are being spent prudently and consistent with the University's missions.
- Estimated Completion Date: September 2017
- Response Date: August 2016
California State Auditor's Assessment of 6-Month Status: No Action Taken
The university misconstrues our recommendation as we do not suggest that "all programs should be reevaluated each year to determine if they continue to be consistent with the University's mission." Rather, we recommended that the university should annually reevaluate the spending of state funds for programs that do not relate to educating students, which are the 18 programs listed on Table 17 on page 75 of our report. As noted on page 71 of our report, the university does not actively track the allocation of state funds to these programs, and essentially, was continuing to fund these programs without putting any thought into whether that funding was necessary or justified, or considering whether alternate funding sources exist.
60-Day Agency Response
The University does not agree that all programs should be reevaluated each year to determine if they continue to be consistent with the University's mission. The administrative burden of this kind of review of each and every program that does not relate specifically to instruction of students would be onerous and cost prohibitive.
However, consistent with the response to recommendation 16, the University will implement a system for monitoring the use of all core funds to ensure they are being spent prudently and consistent with the University's missions.
- Estimated Completion Date: September 2017
- Response Date: May 2016
California State Auditor's Assessment of 60-Day Status: No Action Taken
We asked the university whether it has begun this system and why it believed the system would take until September 2017 to implement. The university subsequently stated that its initial 60-day response provided sufficient information. Because the university did not provide any specifics as to what steps it intends to take or when it will begin to develop the system, we consider the university to have taken no action on this recommendation.
All Recommendations in 2015-107
Agency responses received are posted verbatim.