Auditor: Use review in future discussions with state

SUPERIOR – Members of the University of Wisconsin System Board of Regents sought to clarify the findings of a state audit of university staffing levels during Thursday’s opening session of the board’s October meeting, held on the UW-Superior campus. The report was the subject of a Joint Audit Committee public hearing held yesterday (Wednesday) in Madison.

State Auditor Janice Mueller explained to the board that unlike other audits, the Legislative Audit Bureau’s way of measuring the university’s administrative costs was not intended to provide proscriptive recommendations, but rather to serve as a “springboard” for further discussion on UW System operations.

“It’s meant to illuminate staffing in a way you’ve not seen before,” Mueller said.

Mueller said the audit bureau reviewed university staff levels, with a focus on administration. According to the audit, the UW System is the state’s largest employer, with 32,000 employees.

Mueller said the review offered “two views of the same picture.” The audit found that according to nationally accepted standards, which measure costs known as “institutional support,” the UW System spends 5 percent of its budget on administration. This measure is used by the federal government, as well as colleges and universities around the nation.

“It works for you because you are able to benchmark against your peers,” Mueller told the board.

Mueller noted that there are limitations to that approach, however, as some employees are primarily counted as research or instructional staff, but may have administrative duties.

The audit also found that when adding other types of employees, like program assistants, to that traditional “institutional support” measure, the university spends 15 percent of its budget on administration.

“[The first] is a very low administrative cost figure for a multibillion dollar enterprise,” she said. “I would submit that [the second] is a far more credible administrative figure for a large, complex organization like the University of Wisconsin System.”

Mueller also said the audit recognized the substantial growth in positions funded by federal or private dollars, while faculty positions funded by state support, declined in the last fiscal year.

Regent President Toby E. Marcovich of Superior reiterated the university’s intent to embrace the audit and implement each of the four recommendations it includes. Marcovich suggested that confusion about the audit findings may have resulted because “the devil’s in the definitions.”

“I don’t want anyone to think that the UW System is trying to conceal any of the positions we have,” Marcovich said.

Regent Danae Davis of Milwaukee said she appreciated the audit bureau’s understanding of why the UW System measures its administrative costs in the same way as other universities, but valued the state’s review as well.

“We need to be able to tell if 15 percent is good, bad, or otherwise,” Davis said. “In this collaborative partnership, it seems there’s a way we can work together to do both.”

Regent Jose Olivieri of Milwaukee wondered if the recommendation to report back to the Legislature about possible areas in which administrative costs could be reduced was due to a significant concern about UW System practices. Mueller said the audit bureau is always concerned about economy and efficiency, and that similar recommendations are made to all state agencies.

Regent Jesus Salas of Milwaukee said the audit was very timely and supported the Regents decision to forward a 2005-07 budget request to the state that included a modest tuition increase.

“It’s important to reevaluate the values from which we set those modest tuition increases,” Salas said.

Among other items, the audit bureau recommended that the UW System and the state streamline current position reporting requirements to the Legislature, which Mueller said seem to be ineffective.

“The system’s not working for you, and it’s not working for the public,” she said.

Dr. Maria Wyant Cuzzo, associate professor of Legal Studies at UW-Superior, opens her lunchtime presentation about "The Liberal Arts Mission of UW-Superior." With her are, at left, Shirley Lee and, at right, Amy Tripp. Lee and Tripp are UW-Superior students majoring in Legal Studies. They each spoke about their experiences at UW-Superior.

Dr. Maria Wyant Cuzzo, associate professor of Legal Studies at UW-Superior, opens her lunchtime presentation about “The Liberal Arts Mission of UW-Superior.” With her are, at left, Shirley Lee and, at right, Amy Tripp. Lee and Tripp are UW-Superior students majoring in Legal Studies. They each spoke about their experiences at UW-Superior.

In thanking Mueller and her staff for their professional report and cooperation, UW System President Kevin P. Reilly said he appreciated the additional time and energy they have spent in explaining the report to various audiences.

Highlights and the UW System’s response to the report from the state’s nonpartisan Legislative Audit Bureau, released last month, are available on the UW System website. The report was requested by the Legislature’s Joint Committee on Audit.

Thursday’s presentation was part of a Business and Finance Committee meeting, to which all regents were invited to better understand the methodology and purpose of the audit bureau’s review. The university will present a report following up on the LAB recommendations to the Legislature’s Audit Committee in February 2005.

Education Committee 

The Education Committee opened Thursday’s session with continued discussion of the morning’s presentation by the Legislative Audit Bureau.

Regent Roger Axtell of Janesville said, after talking with State Auditor Jan Mueller, he understood that the measure of the university’s administrative costs – 15 percent as measured by the LAB – compared favorably to the costs of other state agencies. For example, Mueller reports that the state Department of Natural Resources spends 16 percent of its budget on administration, Axtell said. Additionally, he said Muelller reinforced that “clearly, there was no attempt at misleading – no attempt at deception” regarding the UW System reporting of administrative positions.

Regent Danae Davis of Milwaukee said the presentation confirmed that “it is not either inappropriate or inconsistent” to use nationally accepted accounting standards to compare the UW System with peer institutions.

“If you read the [Audit Bureau] report without hearing that, it would not be readily apparent,” Davis said.

Committee Chair Jose Olivieri of Milwaukee asked that the committee be made aware of any educational issues that arise with further analysis of the report, and added that he was “very happy with the way President Reilly has responded constructively to the report.”

“Measures, Benchmarks and Accountability”

Frank Goldberg, UW System associate vice president for policy analysis and review, looked back Thursday at his six years of analyzing data as indicators of UW System quality.

Goldberg, who will leave the UW System at the end of the month for a position at the University of Illinois-Chicago, noted the importance of knowing the difference between external measures used to determine accountability and internal measures used for continuous improvements within the UW System and individual institutions.

He said while benchmarks for quality are important, especially as a tool to help Regents offer good stewardship, it is equally important not to make unfair comparisons of individual institutions based on aggregate data from across the System. Goldberg noted that missions, student populations and other factors vary widely campus-to-campus.

“As we evaluate performance, you can’t avoid standard benchmarks — but it requires more in-depth analysis,” Goldberg said. “If we want continuous improvement, factors such as student population and institutional mission should be used over a period of time and should be campus-based, not just System-based.”

Regent Elizabeth Burmaster of Madison echoed the importance of not just relying on accountability measures as a way to measure quality. She noted the K-12 system has made that mistake, is now trying to swing the pendulum back toward some continuous improvement criteria.

Davis asked if accountability data could help the UW System identify and “more nimbly duplicate” what works at individual institutions.

Goldberg said campus interaction at the operational level can be very valuable. He said there is a need to continue to focus on continuing those kinds of dialogues and that, perhaps, UW System administration has a responsibility to “leverage” idea.

However, Goldberg also cautioned: “There aren’t simple solutions to complex problems – complex problems require complex solutions.”

UW-Superior Accreditation

UW-Superior Provost David Prior informed the committee that UW-Superior received its 10-year accreditation from the Higher Education Commission of the North Central Association of Schools and Colleges and is now engaged in a select review pertaining to its liberal arts mission.

Prior said a report is due in December 2006 on a review centered on three areas: Central features of the liberal arts program; academic offerings within the curriculum; and assessment procedures to determine effectiveness.

“We’re trying to build an emphasis on the “public” in liberal arts education, including teaching students the importance of citizenship and service to their community,” Prior said.

Prior said the special-emphasis review now underway has been enormously helpful, providing a reaffirmation of general education offerings at UW-Superior. Breadth of knowledge, citizenship, critical thinking and communication across the curriculum is central to the educational mission of the university, he said, emphasizing that these kinds of skills instill personal and social responsibility and build the foundation for lifelong learning.

Olivieri asked what role the Board of Regents should have in supporting these goals. Prior responded by saying it the Board could help by reaffirming that general education is a priority and that courses should be taught not only by teaching assistants or younger faculty members, but also by veteran professors. This would help convince students of the enormous value of the 45 required general education credits, and not just coursework in their major area of study, Prior said.

Olivieri suggested the committee revisit the topic in a year to learn what progress is being made and how the faculty is being engaged to achieve the goals.

Prior said the review is helping UW-Superior move beyond structure to action items that will enable it to review its entire program array with an alignment to its liberal arts mission.

In other business, the committee unanimously approved resolutions for consideration by the full board that would:

  • Authorize the creation of a B.A./B.S. program in Multimedia Digital Arts at UW-Whitewater;
  • Authorize the creation of an M.S. program in Occupational Therapy at UW-La Crosse; and
  • Authorize the recruitment of a Provost and Vice Chancellor at UW-Milwaukee.

Business and Finance Committee

The Business and Finance Committee met jointly with the Physical Planning and Funding Committee to hear a report from UW-Superior’s Jan Hanson, vice chancellor for administration and finance, and Jill Schoer, assistant chancellor for university advancement, on the campus’s physical development plan and fund raising campaign.

Hanson pointed out UW-Superior’s facility needs, which include remodeling the Rothwell Student Center and the Jim Dan Hill Library, developing several new athletic fields, and building a new academic building. Some of this will require GPR support from the state, while other elements of the funding will come from student fees and private donations, Hanson said.

Schoer reported on the success of UW-Superior’s “private fund raising through its current capital campaign, Campaign Superior.” Planning for the campaign began seven years ago.

Schoer said the campus already has raised more than $7 million toward its goal of $17.5 million, including a major gift for the new academic building the campus is hoping to build in 2007-09. She noted the dramatic increase in fund raising and alumni involvement – from 6 percent of alumni giving annually to the campus, to 11 percent, today. In dollar terms, Chancellor Julius Erlenbach, Schoer and UW-Superior staff have increased fund raising from $138,000 annually in 1997 to $5.6 million this past year.

Schoer emphasized, however, that greater fund raising success requires building campus infrastructure. This means adding administrative positions, she said, referring to the morning LAB presentation, which shows growth in UW positions with administrative duties over a five-year period.

Faculty Retention and Recruitment

The Business and Finance Committee then reconvened to hear a presentation from a panel of faculty leaders on faculty retention and recruitment. This has been especially challenging in recent years, when university employees got 0 and 1 percent pay increases.

UW-Whitewater Provost Richard Tefler recounted the difficulty the campus is having recruiting and retaining faculty. He cited nine factors that are hampering the campus:

  • salaries that are lower than comparable institutions;
  • start-up costs that new faculty require;
  • access to resources for scholarly work;
  • research support in the form of graduate assistants and clerical support;
  • jobs for spouses;
  • the lack of domestic partner benefits;
  • the lack of tuition remissions for the spouses and children of UW faculty and staff;
  • teaching loads that are higher on UW campuses than at comparable universities; and
  • the scarce opportunity for faculty sabbaticals.

UW-Madison Chancellor John Wiley echoed Tefler’s concerns, noting that UW-Madison is under increasing pressure to retain star faculty. He noted that the 2,000 faculty at UW-Madison bring in, on average, $700,000 per year.

Wiley told the Regents that it is much cheaper and more efficient for the state to invest in retaining its current star faculty and staff than to recruit new ones. Mid-career faculty in the scientific fields bring in millions of dollars in outside grants annually, he noted, and when they leave, the campus can often only afford to replace them with junior faculty, who require major campus investments to get their labs set up and give them research support. Wiley said it can take years to recoup those investments as new faculty get established and begin to generate outside gifts and grants.

He also noted that there are no special funds set aside to retain faculty and staff and that many departments have cannibalized their vacant faculty positions and S&E budgets to retain valued colleagues – strategies that are unsustainable in the long run.

Faculty leaders from UW-Superior and UW-Stevens Point echoed many of the same issues, noting specific faculty they had lost in recent years and the impact of those losses on the campuses. One particular problem is that the new faculty being recruited in at the Assistant Professor level sometimes command starting salaries that are close to or exceed those of senior faculty, creating a penalty for those who have had loyalty and longevity at their respective UW campuses.

Ray Spoto, head of The Association of University of Wisconsin Professionals, or TAUWP, which represents faculty and staff members at UW System comprehensive campuses, UW-Milwaukee the UW Colleges, also addressed the problem of salary compression for senior faculty. He said there are salary problems across the board, noting that “there are approximately 18,000 faculty and academic staff employed across the system, yet the compensation for the 15 chancellors receives disproportionate amounts of time, attention and headlines.”

Regent Peggy Rosenzweig of Wauwatosa suggested that the UW System pay attention to the recent audit, especially looking at those in the university who are making more than $100,000 annually to see who they are and what they’re doing. She noted the UW System has to be able to explain those positions to the public, students and the Legislature, especially the nonfaculty positions.

The presentations are part of the committee’s ongoing look at competitive salary issues. The committee will come back to the issue at its November meeting to consider compensation recommendations for 2004-05.

Sharon Wilhelm, director of the UW System Office of Policy Analysis and Research, presented a report on the university’s continuing appropriation authority for continuing education program revenue funds. This tuition flexibility, she noted, enabled the university system to serve 14,000 adult nontraditional students in 2003-04, an increase of 11 percent over the year before.

Committee members also discussed raising the current threshold of $50,000 at which a private gift to a UW campus becomes an endowment, a practice the Regents endorsed in 1990. Chancellors and UW System officials are asking the Regents to review this practice, given inflationary measures and that the expenditure of the principal of such gifts can sometimes pay more dividends to the campus in the long-run than an endowment, such as investing in an expensive piece of research equipment or upgrading needed facilities.

Committee members decided to revisit the issue of an “endowment” threshold at the November meeting.

Physical Planning and Funding Committee

Following the joint meeting with the Business and Finance Committee, the Physical Planning and Funding committee briefly reconvened to hear a report on upcoming projects.

Assistant Vice President David Miller reported that the Building Commission approved about $22 million for various projects at its September meeting.

In other business, the committee passed resolutions for consideration by the full board that would:

  • Authorize construction of a residence hall at the UW-Madison Kemp Natural Resources Station using gift and grant funds;
  • Approve a Middleton Library Renovation on the UW-Madison campus;
  • Grant authority to increase the scope and budget of the UW-Madison Biotechnology Building Addition project; and
  • Approve a budget increase for the UW-River Falls New Student Union project and granting authority to seek a waiver of the DSF project management fee.


The Board of Regents will resume its October meeting at 9 a.m. Friday (Oct. 8) in the Rothwell Student Center on the UW-Superior campus.