Report 2010-105 Recommendations and Responses in 2013-041

Report 2010-105: University of California: Although the University Maintains Extensive Financial Records, It Should Provide Additional Information to Improve Public Understanding of Its Operations

Department Number of Years Reported As Not Fully Implemented Total Recommendations to Department Not Implemented After One Year Not Implemented as of 2012-041 Response Not Implemented as of Most Recent Response
University of California 2 8 7 6 4

Recommendation To: University of California

To increase the transparency of university funds, the Office of the President should make available annually financial information regarding its funds, including beginning and ending balances; revenues, expenses, and transfers; and the impact of these transactions on the balances from year to year.

Response

The status of implementation of this recommendation is "pending." The campus financial schedules for the year ending June 30, 2013 will contain this data. The June 30, 2013 reports will be published by January 2014.

Recommendation To: University of California

To address the variations in per student funding of its campuses, the university should complete its reexamination of the base budgets to the campuses and implement appropriate changes to its budget process. As part of its reexamination of the base budget, it should:
• Identify the amount of general funds and tuition budget revenues that each campus receives for specific types of students (such as undergraduate, graduate, and health sciences) and explain any differences in the amount provided per student among the campuses.
• Consider factors such as specific research and public service programs at each campus, the higher level of funding provided to health sciences students, historical funding methods that favored graduate students, historical and anticipated future variations in enrollment growth funding, and any other factors applied consistently across campuses.
• After accounting for the factors mentioned above, address any remaining variations in campus funding over a specified period of time.
• Make the results of its reexamination and any related implementation plan available to stakeholders, including the general public.

Response

As the University's July 26, 2012 response states, a systemwide work group consisting of Chancellors and other campus and Office of the President leadership, and faculty met for nearly a year to review the distribution of State funds across the system. It issued a set of recommendations that has been shared publicly; the basics of these recommendations were described in UC's response to BSA. These recommendations will be implemented over a multi-year period, the first phase of which was initiated in allocations associated with the 2012-13 fiscal year. It was the preference of the systemwide taskforce to use new and incremental State funding to achieve the rebenching of State funds. The length of time to complete this process depends entirely on the future of funding increases from the State.

Recommendation To: University of California

To help improve accountability in the university's budget process, and to help minimize the risk of unfair damage to its reputation, the university should take additional steps to increase the transparency of its budget process. Specifically, the Office of the President should update its budget manual to reflect current practices and make its revised budget manual, including relevant formulas and other methodologies for determining budget amounts, available on its Web site.

Response

See prior update plus the addition below:

We have been working to update the Budget Manual in a way that accurately reflects the major changes that have been made in the way money flows through the university and gets distributed. While we completed a first draft of the manual last spring, we realized it did not cover enough of the issues campuses would find useful. Therefore, we have found it necessary to solicit input from the campuses to help us craft a document that has pertinence and utility at this time when the relationship between campuses and OP has continued to evolve. To do this in a meaningful way, we found it necessary to form a workgroup with campus budget folks to help us work out what sort of manual would be suitable and useful given recent changes in university budgeting. We estimate this will take the full academic year to complete and hope to have a more useful manual in time for the 2014-15 academic year.

Recommendation To: University of California

To ensure that the campus financial information published by the Office of the President can be better evaluated by interested stakeholders, the university should disclose instances in which campuses subsidize auxiliary enterprises with revenues from other funding sources and should disclose the sources of that funding.

Response

This information is posted on the following website: http://www.ucop.edu/financial-accounting/financial-reports/university-auxiliary-support/index.html

Recommendation To: University of California

To improve the transparency of its expenses, the university should identify more specific categories for expenses that are recorded under the Miscellaneous Services accounting code and should implement object codes that account for these expenses in more detail.

Response

Please see attached letter to the Honorable Adam C. Gray, Member of the Assembly. (emailed to dalec@auditor.ca.gov on 10/15/13)

Recommendation To: University of California

To ensure that campuses do not inappropriately use revenues generated from student fees imposed by referenda, the university should ensure that it, the regents, and the campuses do not expand the uses for such revenues beyond those stated in the referenda.

Response

See prior response (over character limit for this form)

Current Status of Recommendations

All Recommendations in 2013-041