Its Partnership Agreement Could Be Improved to Increase Its Accountability for State Funding

California State Auditor/Bureau of State Audits
Summary of Report Number 2001-130 - JULY 2002

University of California : Its Partnership Agreement Could Be Improved to Increase Its Accountability for State Funding

RESULTS IN BRIEF

In May 2000, the University of California (university) and the governor entered into a four-year partnership agreement encompassing fiscal years 1999-2000 through 2002-03. The overall intent of the agreement was for the State to provide the university with funding stability in exchange for the university making progress toward 22 objectives. These objectives, which the agreement outlines, range from maintaining the increase in its faculty teaching loads to maintaining the university's commitment to accept all eligible California high school graduates who wish to attend.

One of the governor's stated goals in entering the partnership agreement was to increase the university's accountability. However, although the partnership agreement contains measurable targets for some of the objectives, it does not contain such targets for many others. Without these targets, the university's ability to demonstrate its success in using state funds to achieve the partnership agreement's objectives is limited. Specifically, our review of the partnership agreement found that of the 22 objectives, 9 contain outcomes that identified quantifiable and clear targets to measure improved performance, and 13 do not.

For example, 1 objective states that beginning in 2001, the university should increase the percentage of students from low-participating high schools who enroll in the university. A target for this objective might identify a specific percentage and establish a deadline for the university to reach it, while stating that the university could revise these goals as circumstances warranted. However, the agreement contains no such target. Of the 9 objectives that do have measurable targets, the university asserts it has met 3 and could not meet 2 due to factors outside its control. It is too early to determine whether or not the university has successfully met the remaining 4 objectives. Although in many cases the university did not have clear and measurable targets to achieve, that is not to say the university did not spend funding for the intended purpose, people did not work hard, programs were not implemented, reports were not written, or progress was not made toward unquantified targets.

However, none of those events allow for a quantifiable assessment of whether the desired extent of intended benefit was achieved for the funding provided. An appendix to this report displays an analysis of the university's assertions on its performance in relation to each of the 22 partnership objectives.

Although the Legislature is not a party to the partnership agreement, the Legislature and the governor appropriated additional state funds during the first two years of the partnership agreement that they expected the university to use, in combination with existing resources provided by the State, to accomplish objectives identified in the partnership agreement. For example, during one year of the partnership agreement, the State allocated to the university approximately $175 million for enrollment growth, for a 4 percent annual increase in the university's base budget, and for a one-time salary increase for lower-paid staff.

According to the university, the campuses allocate these funds to hire additional faculty to meet increases in enrollment, to provide salary increases to existing faculty and staff, and to finance high-priority projects at the discretion of vice chancellors and deans. The allocation of the funds to hire faculty and provide salary increases addressed several objectives of the partnership agreement, including maintaining the university's commitment to accept all eligible California high school graduates who wish to attend, continuing to provide competitive faculty salaries, and emphasizing its merit-based pay system.

Additionally, although the university's primary mission is to teach and conduct research in a wide range of disciplines and to provide public services, it increased its expenditures for support staff salaries made out of its general operating funds at a greater rate than it increased its expenditures for academic staff salaries within instruction, research, and public service between 1997 and 2001. Only 44 percent of its increase in salary expenditures during this time related to these academic salaries, while 56 percent related to support staff salaries. Moreover, the proportion of employees that the university hired in certain support classifications using general operating funds over the five-year period was much greater than those it hired in certain academic positions, despite its nearly 13 percent growth in enrollment. The majority of the increases in the university's expenditures occurred in five job classifications, four of which were support classifications. The number of full-time equivalent (FTE)[1] professorial-tenure employees[2] at the university grew by 504, or 10 percent, while the number of its FTEs within advising services increased by 532, or 59 percent, and the number of its FTEs within fiscal, management, and staff services increased by 2,075, or 43 percent.

The hiring of both academic and support staff may have contributed to achieving the partnership agreement objectives, and the university's hiring decisions may have appropriately reflected its needs. However, because the partnership agreement does not contain objectives or measurable targets that identify the areas in which the university believes growth in positions is necessary, the Legislature and the governor may not be able to evaluate whether the university's decisions reflect the intent of the agreement. The addition of such targets to the partnership agreement would increase the university's accountability for its use of state funds and would enable both the State and the university to better monitor the proportion of increased funding spent on academic and support salaries.

Further, the university compiles certain ratios involving the teaching activities of regular-rank faculty in its annual Undergraduate Instruction and Faculty Teaching Activities report (instructional report), which responds to inquiries made by the Legislature and also addresses one of the objectives included in the partnership agreement[3]. According to that objective, the university in effect agrees to maintain an average workload of 4.8 primary courses per faculty FTE per year. The university defines primary course as a regularly scheduled, unit-bearing course usually labeled as a lecture or seminar. The university's instructional report states that for academic year 1999-2000, the university's primary course-to-faculty ratio was 4.9, exceeding the agreement's requirement.

However, certain factors have an impact on the primary course-to-faculty ratio. For example, we found that 13 percent of the primary courses taught by regular-rank faculty had enrollments of two students or fewer, and an additional 15 percent had enrollment of only three to five students. In fact, the university spent an estimated $80 million in fiscal year 1999-2000 on the faculty salaries for primary courses with five students or fewer as well as for a proportionate share of their additional duties related to instruction. These additional duties, for which there is no quantifiable expectation of faculty, include such duties as planning courses, mentoring and advising students, developing curriculum, and teaching independent study courses. The university believes these additional duties can be significant and thus believes our calculation seriously overstates the costs that we attribute to these small enrollment courses and that other methods of calculation would produce a different result. The one-to two-person courses comprised 0.7 of the 4.9 primary course-to-faculty ratio. Although no requirement exists regarding the minimum number of students in a primary course, having a significant number of small-enrollment primary courses could affect a student's ability to graduate in four years. Additionally, we found in our analysis of a sample of the one- to two-person courses that the campuses were unable to demonstrate that they had correctly classified 33 percent as primary courses rather than independent study. To the extent that the university has misclassified these courses as well as others, it could significantly influence the primary course-to-faculty ratio.

Finally, although the instructional report addresses the workload of regular-rank faculty, it does not address the workload of non-regular-rank faculty and miscellaneous instructors, such as adjunct professors, lecturers, teaching assistants, retired faculty, and others. These individuals teach a combined total of 46 percent of the university's primary courses. In light of the partnership agreement's objective of graduating students in four years or less, it would seem appropriate for the university to also provide the Legislature and the governor with information regarding the workload ratio for all of its instructors, not just its regular-rank faculty. In fact, the partnership agreement could be expanded to include objectives and measurable targets that specifically address the workload of these staff. The Legislature and the governor would then have a more complete picture of the workload of all instructors and could more appropriately evaluate that workload to determine whether fluctuations occur that may affect the ability of students to enroll in the classes they need to graduate.

RECOMMENDATIONS

When preparing future partnership agreements, the university should do the following to accomplish the governor's goal of increased accountability:

· Propose establishing clear and measurable targets that allow it to better assess its success in meeting the objectives of the partnership agreement. If the university is concerned that it will be expected to meet a measurable target even if it does not receive sufficient funds or if factors outside its control intervene, it should propose that, as circumstances change, it can revise its targets.

· Confer with the governor and the Legislature to determine whether it would be beneficial to establish targets to evaluate how the growth in academic and support positions and spending are consistent with the priorities of the partnership agreement.

The university should also confer with the governor and the Legislature to determine whether having the Legislature provide input on objectives and measurable targets for future partnership agreements might be beneficial.

To ensure that the Legislature and the governor have a more accurate picture of the actual primary course-to-faculty ratios so they are able to evaluate and address issues of concern, such as whether the university is providing sufficient courses to allow students to graduate in four years or less, the university should propose expanding future partnership agreements to include objectives and measurable targets that address workload ratios and course enrollment levels for all regular- and non-regular-rank faculty, as well as miscellaneous instructors. Additionally, the university should disclose in its instructional report the primary course-to-faculty ratio for non-regular-rank faculty and the workload ratio for miscellaneous instructors. It should also disclose all faculty and miscellaneous instructor workloads by the number of students enrolled in courses.

To ensure the accuracy of the tables it includes in the instructional report, the university should clarify its definitions of primary and independent study courses. It should also periodically review the data it receives from the campuses for accuracy and consistency.

The university concurs with the general intent of the recommendations and plans to take specific actions to address areas of concern identified in the report. The university also states that the recommendations relating to future partnership agreements will be a matter of negotiation with the governor.

[1] To determine the number of FTE employees, the university converts the actual number of full- and part-time employees to a number representing only full-time employees.

[2] Professorial-tenure employees are associate and full professors.

[3] The university's definition of regular-rank faculty is specific to the instructional report and includes positions in the professorial series: professors, associate professors, assistant professors, and acting titles in these positions. In addition, it includes other positions such as supervisors of physical education and professors in residence. This data relates only to the general campus, which consists of all schools and departments except for those focused on the health sciences, such as the medical, dentistry, nursing, pharmacy, and veterinary schools.