Questioning UF Administration’s Allocation of Funds
During the May 29, 2012 “Open Faculty Forum about Budget Cut” called by the central administration, President Machen and Provost Glover were asked, among others, several questions from this list, based on an independent report on UF’s reserves, including those held by the University “proper” and those held by the University’s various “discrete component units” including Shands; including approximately half a billion dollars categorized as “restricted expendable;” and over 100 million dollars held by the University “proper,” and characterized as “unrestricted net assets.” Candid answers were not forthcoming.
One question specifically concerned the “Strategic Fund Pot” into which all of the recent and ongoing yearly tuition hikes go.
Based on a recent document (RCM “three scenarios”) prepared by Provost Glover or by CFO Fajack, $41.5 million of this recurring Strategic Fund Pot was available from the FY2012 tuition hike.
We were told during the forum that at least 75% of this Strategic Fund Pot has already been distributed to the Deans according to their College’s current RCM proportions. (Read about RCM or Responsibility Center Management, and its stress on decentralization and transparency). I.e, we were told that the control of the remaining reserves rests with the colleges.
We were also told that, specifically, Dean Abernathy of the College of Engineering has made public, on her website and elsewhere, all the necessary information, to the extent that further information would be impossible for the administration to produce. This statement is inconsistent with the philosophy of RCM as substantiated below.
According to the philosophy of RCM, administrators at all levels should ensure sufficient transparency about allocation of funds to Academic, Research Units, Support Units and Initiatives, so that faculty and other members of the university community are not required to become “lawyers and accountants” in order to understand the allocation or its rationale. The allocation of state, tution and indirect revenue from grants and contracts (unrestricted use for academic/research and related purposes) is to be primarily based on a pre-published RCM formula(*) that encourages units and initiatives with high costs to also generate high revenues.
Currently, the Central Administration’s Costs and Revenue Allocation to the Colleges is detailed in the University of Florida Budget Book(*) and the Office of Instructional Resources website(*) (look under analytical tools, SCH cube and Enrollment Revenue Cube).
Note: Faculty in the college of engineering have located errors in the document underlying the SCH cube (not publicly visible, that was obtained as part of a request for information from the college of engineering – see below). The central administration was notified, but the error has not been acknowledged. Specifically students majoring in Computer Science and Engineering (CSE) were wrongly attributed to the Department of Electrical and Computer Engineering (ECE) instead of CISE. The group of faculty that scrutinized the document do not have comprehensive data to determine whether there are other such errors. While this particular error does not change the RCM distribution among colleges, it would change the RCM distribution among departments within the College of Engineering. Errors such as these are unavoidable, but easily corrected if the document is made available for public scrutiny, and if errors are promptly acknowledged and corrected.
Understanding Colleges’ Allocation of Costs and Revenues to Academic, Research Units, Support Units and Initiatives.
Provost Glover made a statement at the April 12 senate meeting RCM analysis should be encouraged down to the department, institute and center level. This is consistent with RCM philosophy. After all, if weighted SCH’s represent a primary source of the College’s revenue, it makes sense that one should at least know the weighted SCH distribution for the various deparments within the college; and rationalize subventions that deviate from this distribution. And one would expect that such subvention decisions are motivated by academic and research missions of the college, which in turn are arrived at via formal consultations with the faculty.
Motivated by these principles, several faculty members, especially the College of Engineering, have recently invested a great deal of effort in trying to understand the following points.
(a) The amounts in recurrent revenue streams – state, tuition, direct and indirect revenue from grants and contracts - as well as non-recurrent, one time, revenues generated by each of the Academic, Research and their Support Units and Initiatives in the College. By “Units and Initiatives” we refer not only departments and standard support units, but also centers, institutes, and non-standard administrative offices.
(b) The complete description of each revenue stream (recurring or non-recurring, stipulation on type of use, time limits etc)
(c) The recurring and non-recurring costs – in various categories – incurred by each of the Units and Initiatives.
(d) Allocation of revenue streams to cost categories for each Unit or Initiative so that the stipulations of (b) are met
(e) Rationale for allocation of revenues governed by RCM to each of the Units and Initiatives in the College - especially if the allocation is a subvention that deviates significantly from the RCM formula
(f) The current balances in each revenue stream
(g) The future commitments in each cost category, with a clear description of the nature and time-limit of the commitment
(h) Other additional sources of revenue such as Foundation (donations or entrepreneurial income): stipulations on type of use, allocation to various Units and Initiatives in the College, and the rationale for the allocation.
For example, for the most complicated revenue stream namely Direct Revenues from Contracts and Grants, all of the relevant items above are directly available to any principal investigator from the Myufl/PeopleSoft system, broken down by Unit or Principal Investigator or Project within any College. If the College were to follow similar, standard accounting practices, all the above items (a)-(h), except (e) should be immediately available directly for all revenue streams and cost categories, for each Unit and Initiative within the College. The Item (e) can then be computed rather accurately from the RCM resources (*) mentioned above.
The Search for Transparency and Rationale within the College of Engineering
Dean Abernathy provided 2 documents, soon after the unveiling of the Abernathy Plan on April 11, 2012. one of which was the RCM “three scenarios” document mentioned above that was prepared by the central administration detailing allocations among colleges, but which does not detail allocations within any given college. The other was a Power Point, showing “performance” of various departments in the college with respect to a selected and somewhat skewed set of performance metrics. Indirect revenues from grants and contracts was listed, but cost sharing on grants by the college was not; specifically, Space, Facility and Equipment costs were unlisted; number of students in each major were listed, but weighted SCH’s were not (RCM revenues are based on tuition generated by different categories of students). Teaching Assistantship costs were listed, but Technical, administrative and other support staff and auxiliaries were not.
In response, faculty members pieced together summary documents that the college of engineering provided to various comittees since 2009, to give a well-rounded set of metrics and performance ranking of the various Engineering departments according to those metrics.
The above documents provided by the College were however inadequate for Items (a)-(h) above, especially concerning research support centers; college of engineering administration and related offices such as fiscal and development; strategic and other discretionary institutes; the fiscal relationships between all of these and each department; and foundation accounts controlled directly by the Engineering administration.
Further questions posed by the faculty (since April 16th, in an effort to understand Item (a)-(h)) have been treated by the Administration (by their choice) as a FOIA Public Records Request. The University’s PR officer Janine Sikes has been the go-between for all communication between the Faculty and the Administration, specifically, Bill Heitman, the boss of Engineering’s centralized fiscal office.
We repeat: If the College were to follow standard accounting practices, all the above items (a)-(h), except (e), should be immediately available directly for all revenues and costs, for each Unit and Initiative within the College. The Item (e) can then be computed rather accurately from the RCM resources (*) mentioned above.
Instead, Bill Heitman provided 33 documents, in response to at least 4 rounds of requests. While these documents contain many numbers, no doubt of independent interest, they do not contain sufficient information for the group of 6 faculty members asking the questions to even approximately piece together Items (a)-(h) above. Further questioning has yielded no response for the past month.
Best Effort Conclusions for Engineering
Of the various conclusions we were able to draw for the College of Engineering (to the best of our knowledge, given that we are not “lawyers or accountants”):
(1) The Dean Abernathy has said explicitly that she “does not run the college according to RCM.” That statement could be construed as refering to a small percentage of subventions that adjust the RCM. However, this new performance document, however, makes it clear that the College of Engineering does not allocate revenues and costs even remotely according to RCM. The allocation model is better termed as: “Dean’s discretion.” To the best of our knowledge, no formal faculty consultation, meetings with minutes or votes have informed the Dean’s discretion.
(2) Atleast $3.9 million (recurring), probably from the strategic funding pot, has been spent during this year, probably even this Spring.According to the College, five strategic plan faculty were hired this past year (including one returning faculty member who had left around the time that the nuclear and radiological engineering department was dismantled). In addition, at least a couple of highly paid PR and other staff were hired to advise the Dean on all public communications (some might call this process spin doctoring). Two more strategic plan faculty offers are pending. 7 new discretionary institutes, with recurring costs have been set up under the college of engineering administration, including institutes for leadership and innovation. Most of these institutes currently do not generate their own revenues. To the best of our knowledge, no formal faculty consultation, meetings with minutes or votes have informed these decisions (until the point where the faculty hire has to choose and be accepted to a tenure home), Again, there were ample opportunities to seek formal consultation. “Consultation” instead takes the form of townhall meetings and parallel SWOT exercises, run by ad hoc dean-appointed committees, with no minutes taken..
(3) Atleast 6 strategic plan positions have been advertised in March or April 2012 (each call indicated several positions), that amount to a (recurring) salary amount of $660,000; and atleast the same amount in annual faculty start up costs that will recur for several years.
(4) Several apparently one-time commitments are listed without adequate detail, so it is not clear that they really are commitments, including $1million for a reactor upgrade that probably could be deferred, and $700K for “budget cut transition costs,” presumably for recovering from the original the Abernathy Plan — we hope this will not be needed.
(4) A few million dollars of spendable (not principal/capital) amounts are sitting in unnamed foundation accounts labeled “College of Engineering Administration,” and “Dean’s office,” including at least $800,000 for “Engineering Development.” For most of these unnamed accounts, it is not clear how much they accrue each year, making it difficult to cast them as recurring revenues. The stipulations for each amount to 2-3 words – they certainly do not restrict spending to any special institutes or centers or specify any university matches. More specifically the stipulations do not prevent the amounts from being spent on core departmental functions.
Recommended Budget Plan for Engineering
Our recommendation based on the above conclusions is the following. (i) A hiring freeze for strategic plan positions; (ii) some austerity on the part of the bloated Engineering administration, fiscal and development offices; (iii) holding back new spending on Dean-favored, untested, questionable, discretionary institutes; (iv) improving efficiency, downsizing or deferring spending on inefficient research support centers and facilities would comfortably cover the recurring cut that the college of engineering has been asked to make. This would render the Dean’s latest plan – of cutting core, extremely lean, high performing units – unnecessary. We believe that following our suggestion instead, will minimize adverse impact on the health of the College.