Molly Corbett Broad, president of the American Council on Education (ACE)

MADISON – American higher education is at a crossroads, a national expert told the University of Wisconsin System Board of Regents on Friday, and that presents not only profound challenges but also significant opportunities for innovative and creative approaches.

“We are experiencing tremendous financial pressures, and they’re coming from all directions … These financial issues are troubling and difficult to manage,” said Molly Corbett Broad, president of the American Council on Education (ACE).

At the same time, she said, these challenges — along with major changes in higher education’s enrollment demographics — are “precipitating some interesting innovation and advances in the teaching and learning process.”

“All of this coming together is persuasive that business as usual is not in the future cards and we must innovate,” said Broad, whose varied experience in higher education includes leadership roles at University of North Carolina, the California State University System, University of Arizona System, and Syracuse University.

She re-emphasized to Regents what is now a common refrain in university worlds: As state support of higher education has declined, dependence on tuition revenue has increased. What makes this dynamic even more challenging, Broad said, is that it also intersects with a time of decreased average family income as well as increasing political and public pressure to keep tuition hikes low.

Broad told Board members that the prevailing practice since the 2008 recession of raising tuition by ever larger amounts is “not a sustainable strategy.” While over the previous five years, the average increase in tuition nationally was approaching 7% per year, Broad said this year’s average rate of increase is 2.7%.

She said the changing demographics in higher education are also putting pressure on existing academic models. Despite popular perception, the so-called traditional student, the 18-year-old who enters college right out of high school, is no longer the norm. Rather, she said, “the overwhelming number of students are what we’re now calling ‘post-traditional.'”

According to 2009 ACE figures, of the 17.6 million undergraduates in the U.S., 15% attend four-year colleges and live on campus; 43% attend two-year colleges; 37% are enrolled part-time; and 38% of those enrolled are older than 25, and one-quarter are older than 30. What many of these students are looking for, Broad said, are credentials that have labor market recognition.

She also noted that about half of all college students today are Pell Grant-recipients.

Several promising models have arisen out of the current environment of challenges, Broad said, including MOOCs (massive open online classes) and the use of “big data” to identify student patterns and then help students complete their degrees more efficiently.

“The third really promising use of technology is right here at UW with the Flex Option,” Broad said, “because it incorporates many of the emerging innovations that are enabled by technology — competency-based education, self-paced learning, modular coursework, customizing the learning. These tools are enabling the delivery of the highest quality educational experience and doing so at a more affordable price.”

“The challenge for higher education is that we need bold and responsible leaders, and we need bold and responsible management of our processes and our models of business,” Broad said. “Innovation is really the imperative, and it is possible, given the breakthroughs that our universities are experiencing in areas like cognitive science, information technology, artificial intelligence. It’s an exciting time to be in American higher education, it’s a fulfilling time to be in higher education … but it’s also a challenging time.”

Full Board is briefed on HRS challenges

Following up on Thursday’s discussions as part of the Business, Finance and Audit Committee, the full Board was briefed Friday on plans for addressing the challenges associated with UW System’s implementation of the new Human Resource System (HRS).

“We are going to be as forthright and transparent as we possibly can in this situation,” said UW System President Kevin P. Reilly. “We will continue to apprise all of you on future developments. We recognize that this will require some uncomfortable public conversations.”

Reilly explained how UW System is employing a three-pronged strategy. Two prongs related to external review — engaging an outside expert to conduct an immediate risk assessment and cooperating fully with the Legislative Audit Bureau (LAB). The third prong, already under way, involves the UW System’s internal audit function.

“Our auditor has already begun a vigorous review of issues related to HRS, with an emphasis on shining a bright light on any new issues that have not yet been aired,” said Reilly. “I can tell you that she and her staff will be dedicating a vast amount of time and effort to this project, in close cooperation with others.”

Elizabeth Dionne, UW System’s Director of Operations Review and Audit, explained that her office is looking at “known issues” related to HRS while also working to identify other issues that have not been explored yet. She went on to describe new issues, not covered in the LAB’s audit report, that have a “net fiscal impact” of approximately $1.1 million, dating back to the HRS launch in April 2011.

Of the approximate $1.1 million net impact, approximately $700,000 relates to errors in withholding FICA or income taxes from certain employees. The largest category of such errors relate to FICA payments not withheld from student employees. IRS rules dictate whether or not students are exempt from FICA, based on the number of credit hours they take. If a student changes their course load to less than half-time, such as during summer months, but remains a UW employee, the university is required to withhold FICA payments.  During the summer of 2011, an under-withholding error occurred because the multiple systems tracking student enrollment were not properly integrated with the newly launched HR system.

In addition to the items with a net fiscal impact, Dionne noted other circumstances in which deductions were not properly withheld from employees, but were later identified and corrected. She also reported to the Regents that $450,000 of overpayments to life insurance plan was identified, but the full amount was recovered.
“We will need considerable amounts of both patience and tenacity,” said President Reilly. “We are fixing issues as we go, to the extent we can when we find them, and will continue to fix the rest of the problems going forward.”

In addition to the work being done in Madison, Regent Regina Millner asked about the role of individual UW System campuses.

Larry Henderson, who directs the Service Center where HRS data is collected and managed, assured the Regents that every institution will be part of the solution. He described how UW employee data must align with benefit data maintained by Employee Trust Funds – a separate state agency that manages retirement and health plans. When HRS records don’t match ETF’s data, the individual UW institutions must take timely action to update and correct the information.

Regent Vice President Mike Falbo asked if UW officials have given up trying to collect excess health insurance premiums that were paid.

“No, we have not,” President Reilly responded. “We are still talking with our friends at ETF, and we will persist in those efforts.”

UW-Stout Chancellor Chuck Sorensen explained how a team from the Service Center spent three weeks on his campus helping to improve HRS. “They did a very fine job correcting errors that were made and educating people on how the system is designed to work.”

UW-Parkside Chancellor Debbie Ford described a similar experience. “We had a group from the Service Center come in and do an assessment. We then identified 14 individual tasks we needed to accomplish. This led to improved training, improved integration, and improved understanding of how best to deploy this robust HRS system.”

Chancellor Bernie Patterson from UW-Stevens Point shared some of the difficulties experienced by his faculty and staff as the new system was activated in 2011, when some employees missed paychecks. For some employees who “live from paycheck to paycheck,” this created serious problems. “People pulled out all the stops to get it fixed, but it’s a very difficult problem to deal with.”

“All of us are very embarrassed,” said Regent Jeff Bartell. “The first task should be to find out what happened, but we also need to focus on how we can prevent something like this from happening again. What could we have done? We should learn from this.”

Regent President Brent Smith emphasized his expectation that Regents receive regular updates on information uncovered by the internal and external reviews. “We expect and want information. Not just about the technology, but about what we’ve learned going forward.”

Regent Jerry Whitburn, a former insurance company CEO, compared the situation to other major IT projects. “This is the most complicated, sophisticated HR system ever implemented in Wisconsin, in the private or public sector. No question about it. Is this catastrophic? No. It is something we should we be going through? Absolutely not.”

“Nobody is going to walk out of here with a happy feeling about this,” said Regent Falbo. “Hopefully, we can walk out of here with the confidence that we are doing everything we can.”

Regents present 5th annual Diversity Awards

The Board honored the fifth annual winners of its Regents’ Diversity Awards, established by the Board to recognize and support individuals and programs in the UW System that foster access and success in university life for historically underrepresented populations.

This year’s winners are:

  • Individual category: Angela Bauer, Professor of Human Biology and Special Assistant to the Provost, UW-Green Bay.  Bauer said in accepting the award, “I know that many of us pour our hearts and souls into projects that we’re passionate about because we believe it will help our students. I know that not all of those efforts pan out — I’ve been there — but some of them do … and some of our efforts have truly made a significant impact on the experiences of the students on our campus.”She particularly noted the importance of faculty and staff being intentional about creating community within classrooms and the campus as a whole. “I used to think that achievement gaps were about differences in academic preparation or in content knowledge. But while those things are important for students, they’re really not key to closing the achieving gap. Creating community really is the key….and sending positive, affirmative messages about what students’ potential can be.”
  • Individual category: Douglass Henderson, Professor of Engineering Physics, College of Engineering, UW-Madison. Henderson told Regents he was very, very honored to receive the award, which recognizes much work over the last 13 years. From his early days at UW-Madison, Henderson said, “When there were discussions about diversifying the faculty ranks, you always heard there were not enough minorities in the field to recruit for faculty positions. So my comeback always was, well, we should really be producing them. Why not do something about it? That was my motivation.”
  • Team category: McNair Scholars Program, UW-Whitewater. Along with acknowledging the important support of fellow UW-Whitewater faculty, staff, and administration in making the program successful, Director Samantha Samreth said she was particularly grateful for the McNair program scholars themselves. “Their motivation and dedication to the pursuit of their
  • career and educational goals has been inspiring to all of us,” she said. “Overall, this recognition demonstrates that students from low-income, first-generation, and under-represented, multicultural backgrounds can be successfully prepared for careers where graduate training is required by a regional comprehensive campus with an access mission.”

Members of the selection committee included Regents John Drew, Tracy Hribar, Edmund Manydeeds, and José Vásquez.


Regent President’s Report

Regent President Brent Smith updated Board members on ongoing communications between UW System leaders and new and returning lawmakers. This includes visits by President Reilly, members of the Board, Chancellors, and other UW staff with members of the Governor’s staff, DOA Secretary Mike Huebsch, legislative leaders, members of the respective Higher Education committees, and the Joint Committees on Finance and Audit.

Smith noted that Governor Scott Walker’s office recently announced that it is seeking applicants for a new student representative to serve on the Board of Regents. Student Regent Katie Pointer’s two-year term is due to expire on May 1.

Smith also updated Regents on the Chancellor searches currently in progress at UW-Madison and UW-Eau Claire. Both searches are “on track,” he said, and the Board is expected to vote on their respective recommended new chancellors at the April board meeting.


UW System President’s report

UW System President Reilly called the Board’s attention to the significant attention generated by UW’s Flexible Option, including a Jan. 25 story in the Wall Street Journal. He noted that UW Flex has also been featured on Southern California Public Radio, and in news outlets including the Milwaukee Journal Sentinel, the National Review Online, and the American Enterprise Institute. It also was the subject of considerable attention at the recent annual meeting of the Association of American Colleges & Universities in Atlanta.

“More importantly, it is clear from the nearly 650 people to date who have requested more information from UW-Extension about the Flex Option that this new approach has struck a chord,” Reilly said.


In other business, the Board:

  • Extended condolences to the family, friends, and colleagues of former UW-Stout Chancellor Robert S. Swanson, who died on Jan. 27 at his home in Rochester, Minn., at the age of 88;
  • Approved the proposed 2013 Operations Review and Audit Plan, including audits of benefit eligibility and compliance with continuation of health coverage (COBRA) requirements);
  • Approved a Regent Policy Document which requires a managed travel program covering all university employees while traveling on university business;
  • Approved the proposed Doctor of Education (Ed.D.) in Career and Technical Education at UW-Stout;
  • Approved the B.S. in Accounting at UW-Parkside;
  • Approved the Bachelor of Science in Nursing (BSN) at UW-Stevens Point;
  • Approved the Bachelor of Science in Nursing@Home (BSN@Home) at UW-Stevens Point;
  • Approved a request by UW-Milwaukee Office of Charter Schools for contract renewals at two charter schools, the Bruce Guadalupe Community School and Woodlands School, and the authorization of a new charter school, Woodlands East Charter School, a replication of the Woodlands School;
  • Approved UW-Madison’s request for authority to expand a parking lot onto a site where two vacant houses will be demolished for the development of additional temporary surface parking;
  • Approved UW System’s request for approval to seek the release of $89,000 Building Trust Funds for the purpose of hiring consultants to prepare a farms master plan for UW-River Falls and a space plan study for UW-Waukesha;
  • Approved UW System’s request for approval of 10 All Agency Maintenance and Repair projects on seven campuses totaling about $14.5 million; and
  • Approved UW Colleges’ request for authority to construct a $3.7 million Multiple Building Energy Conservation Project at UW-Waukesha County.



The UW System Board of Regents will hold its next meeting March 7, 2013, in Van Hise Hall, Madison

Photo Credit: Jim Gill

Related: Read February 7 (day 1) news summary