Report 2016-130 Recommendation 16 Responses

Report 2016-130: The University of California Office of the President: It Failed to Disclose Tens of Millions in Surplus Funds, and Its Budget Practices Are Misleading (Release Date: April 2017)

Recommendation #16 To: University of California Board of Regents

To ensure that the Office of the President is engaging in a thorough review of its systemwide and administrative costs and implementing our recommendations, the regents should hold a public meeting that includes university stakeholders, including campuses and students, to discuss the purpose, intent, and prioritization of each systemwide and presidential initiative in light of campus funding levels for students. Require the Office of the President to publish the results of this meeting, including any systemwide or presidential initiatives that are eliminated or scaled down and the amount of money that will be reallocated to campuses for students.

Annual Follow-Up Agency Response From October 2018

The Office of the President redirected $15M to the campuses to fund additional undergraduate enrollment in FY18-19, as detailed in the published AB97 proposal. This included $2M in funding from presidential initiatives and $0.5M from other UCOP-budgeted programs.

A comprehensive review of all UCOP program and initiative budgets was conducted as part of the FY2018-19 budget process. The May 2018 budget presentation to the Regents and subsequent open discussion referenced comprehensive documentation of the purpose, intent and funding levels of each systemwide and presidential initiative. As detailed in the FY2018-19 UCOP budget document, reductions were made to several program and initiative budgets, resulting in an additional net decrease of $10.5M from the previous year (FY2018-19 Budget pg. 11 and Schedule C).

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

The Office of the President presented its review of systemwide programs and presidential initiatives to the regents in March 2018. As part of this review, the Office of the President developed a comprehensive list of systemwide programs and presidential initiatives. The review identified 31 UCOP affiliated systemwide programs, one systemwide initiative, and nine presidential initiatives. According to UCOP, it plans to review systemwide programs and presidential initiatives as part of its annual budget process to identify any funds that it anticipates reallocating to campuses.

1-Year Agency Response

In March 2018, UCOP provided a presentation to the Regents Finance and Capital Strategies Committee on systemwide programs and presidential initiatives in a meeting open to the public. This presentation included a comprehensive list of programs and initiatives, including purpose and cost, and formalized categories for classifying programs and initiatives, along with their definitions. These programs and initiatives will be presented again as part of the FY2018-19 UCOP Budget presentation at the May Regents meeting.

Additionally, in response to AB97, UCOP submitted a report to the Department of Finance and the Joint Legislative Budget Committee in December 2017 redirecting $15 million in savings from systemwide initiatives and programs and UCOP administrative costs to fund 1,500 additional students beginning in the 2018-19 academic year.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

This recommendation is partially implemented pending the public meeting in which the Regents will review with their stakeholders the prioritization of systemwide and presidential initiatives through the budget process in May 2018. In March 2018, the Office of the President presented the Regents with the list and cost of systemwide and presidential initiatives and in December 2017, the Office of the President redirected $15 million from systemwide initiatives and programs as stated in the Regents' response.

We confirmed with the systemwide deputy audit officer that the Regents believe prior meetings satisfy the commitments for a July 2018 meeting made in the 6-month status report. Specifically, for its March 2018 meeting it highlighted on its website the item discussing systemwide programs and presidential initiatives and invited students and the public to comment specifically on the item during the public comment period that occurred on each day of the three-day meeting.

6-Month Agency Response

The Regents will review systemwide and presidential initiatives in a public meeting by July 2018. In this meeting, we will discuss the purpose, intent, and prioritization of each systemwide and presidential initiative. The results of the meeting will be published.

California State Auditor's Assessment of 6-Month Status: Pending

This recommendation is pending the July 2018 public meeting in which the regents will review systemwide and presidential initiatives.

60-Day Agency Response

The Regents will review systemwide and presidential initiatives in a public meeting by July 2018. In this meeting, we will discuss the purpose, intent, and prioritization of each systemwide and presidential initiative. The results of the meeting will be published.

California State Auditor's Assessment of 60-Day Status: Pending

This recommendation is pending the July 2018 public meeting in which the regents will review systemwide and presidential initiatives.

All Recommendations in 2016-130

Agency responses received are posted verbatim.