Report 2016-130 Recommendation 18 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 #18 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2018 the Office of the President should develop and use a clear definition of systemwide initiatives and administration to ensure consistency in future budgets.

1-Year Agency Response

UCOP has completed its development of clear, mutually exclusive definitions to distinguish between the primary functional areas of the Office of the President: Central & Administrative Services and UCOP-affiliated Programs and Initiatives. Further, UCOP-affiliated Programs and Initiatives have been separated into five distinct categories including State/Federal Programs, Campus Programs, Systemwide Programs, Systemwide and Presidential Initiatives. All definitions were reviewed by the Executive Budget Council and the President prior to presentation to the Regents. These definitions will be applied to budgets moving forward.

The definitions were reviewed by the Regents at the March 2018 Regents meeting in Item F9.

http://regents.universityofcalifornia.edu/regmeet/mar18/f9.pdf

An updated document with the same definitions plus additional context, including an expanded explanation of UC budget processes is being submitted to the CSA as part of this one year update.

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

The Office of the President's systemwide initiatives workgroup presented the following definitions to the Regents as a discussion item at the March 14, 2018 meeting. The development and publication of these definitions fulfills our recommendation.

Central and Administrative Services are the Office of the President's administrative support functions or centralized operational services for which there is a clear benefit to having one entity perform on behalf of the entire system, capturing economies of scale.

The Office of the President Affiliated Programs and Initiatives are funded wholly or in part through the Office of the President budget and/or receive state general funds through an annual set-aside allocation that flows directly to the campus and not through the Office of the President budget.

6-Month Agency Response

The UCOP systemwide initiatives workgroup, supported by a team of subject-matter experts from the Academic Affairs division, has compiled a preliminary data set of UCOP systemwide programs and initiatives and formalized the categories for these items with clearly articulated definitions. The terms and definitions will be used to develop future budgets.

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

The Office of the President's working documents shows that it has developed five definitions to establish and track statewide, systemwide, and campus initiatives and programs. According to the Office of the President's website, the President will review and approve these definitions in January 2018. Moreover, our recommendation indicates that the Office of the President should develop a definition of administration, but it has yet to do so. Thus, this recommendation is pending approval by the President of statewide, systemwide, and campus initiatives and programs in addition to the development and approval of a definition for administration.

60-Day Agency Response

A UCOP systemwide initiatives work group has been formed. This group includes representation from key stakeholders across a variety of functional areas within the Office of the President. The work group has met and a workplan has been developed. It has begun formulating a project scope and a work group charter. The work group will: (1) develop a baseline understanding of current initiatives and how they are defined, (2) undertake a research phase as required to understand best practices and leverage existing methodologies, (3) establish and apply clear definitions, and (4) document and develop processes to differentiate types of initiatives and use them consistently in future budgets.

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

The status of this recommendation is pending the Office of the President's development of a clear definition for systemwide initiatives and administration. Additional documentation provided by the Office of the President shows that by August 2017 it intends to develop a framework for reviewing systemwide initiatives. Additionally, by December 2017, it plans to complete its assessment of the programs it identified for review.

All Recommendations in 2016-130

Agency responses received are posted verbatim.