LOOKING INTO THE UC BUDGET -- Report #22 (email version)
by Charles Schwartz, Department of Physics, University of California
Berkeley, CA 94720. 510-642-4427 January 8, 1998
CONTENTS
I. Update on excesses in UC spending for top level administration.
II. Update on some issues of Regents' misconduct.
A FAREWELL NOTE
This should be the last issue in this series of Reports. After five
years of working on this project, learning about the University's
finances and finding many challenging questions to raise, I think
it is time to quit. There are still many mysteries, such as: How is
the annual budget actually made? However, my style of research
relies on public documents and data along with an occasional quote
from public meetings of the Regents, while the inner politics of the
University remain hidden from public view.
Many people have let me know that they appreciate these Reports and
I consider this to have been a worthwhile undertaking in terms of
research and education. As far as having an impact upon the
University's top officials, I certainly have not accomplished much.
The Regents and the administrators they hire seem to be as
impervious to outside criticism as any self-perpetuating oligarchy.
Much of the data and analysis in this series of Reports should
remain useful for some time and I hope that it may serve as a
resource for others, perhaps active on individual campuses, who can
engage more effectively in the debates that will shape the future of
public higher education. (An article by William Honan in The New
York Times "Education Life" 1/4/98 describes a movement burgeoning
across the country against the excessive costs of a university
education, in which faculty are seen as the culprits.)
Back issues of these Reports are available most readily via email from:
schwartz@physics.berkeley.edu
I. UC EXPENDITURES FOR ADMINISTRATION
As published in the latest UC Annual Financial Report, Total
Expenditures for Institutional Support (top level administration
throughout the University) amounted to $442,233,000 in the fiscal
year 1996-97, a 7% drop from the previous year's figure of
$473,602,000. This decrease is only a mirage, however, produced by
recent fluctuations in the accounting procedures used for the
University's insurance program.
In Table 1, below, I have listed the total annual expenditures
for Institutional Support, with the Insurance Items taken out and
listed separately, using data from UC Campus Financial Schedules
over the last 10 fiscal years. These two Insurance Items are listed
in Schedules 10-B and 10-C, covering Systemwide Programs and
Administration (SP&A), as "Liability Insurance" and "Insurance
Expense Accrual" under the Institutional Support (IS) category of
Current Funds Expenditures. With this adjustment, we see that the
figures for All Other IS Expenditures, in Table 1, show year-to-year
changes that are much more stable, i.e., free of sharp fluctuations,
in recent years.
The data in the 4th column of Table 1, showing Year-to-Year
Changes in Total Expenditures for Institutional Support, Less
Insurance Items, show the effects of UC's severe budget problems
during the years 1991-94. The change in IS spending over those
three years (0, -12, +4) amounts to a net decrease of $8 Million or
about a 2% cut in the annual expenditure. During the three most
recent years, 1994-97, increases in state appropriations have
allowed for budget increases of 3-4% per year for the University
overall; and we see from the data in Table 1 that Institutional
Support has increased by rather larger amounts: 6-7% per year. Also
shown in Table 1 are figures for additional expenditures under IS
which are paid for by Transfers, or Recharges to other budget
categories within the University.
Table 1. Institutional Support - UC Total Expenditures
(Less Insurance Items) ($ Millions)
Fiscal Insurance All Other IS Yr-to-Yr Transfers Yr-to-Yr
Year Items Expenditures Change (Recharges) Change
1987-88 7.2 300.0 324.3
1988-89 7.2 337.3 +37 347.9 +24
1989-90 6.7 363.0 +26 388.5 +41
1990-91 9.1 384.8 +22 399.2 +11
1991-92 9.3 385.0 + 0 416.5 +17
1992-93 12.0 372.7 -12 424.9 + 8
1993-94 11.0 376.7 + 4 429.2 + 4
1994-95 9.6 397.7 +21 433.0 + 4
1995-96 47.3 426.3 +29 435.4 + 2
1996-97 (12.7) 454.9 +29 448.2 +13
Source: UC Campus Financial Schedules, Schedules 10-C and 11-E
Controversy has surrounded the question of how UC's
administrative budgets shared in the pain of budget cuts during
those difficult years in the early 1990s. The repeated claim made
by the UC President and his staff was that academic programs would
be protected most of all and that administrative budgets would
receive disproportionately larger cuts. In an official report to the
Regents in February 1994, each of the campuses stated that
administrative services were being cut most severely: an average of
27% below their 1990-91 levels of spending. In subsequent
statements, UC officials have insisted that those cuts were real
and were permanent.
When I first started complaining that those claimed cuts in
administrative spending could not be found in early accounting
documents (see my Reports #7 and #15 in 1993,1995) the response was
that it takes time for the cuts to be phased in and one should wait
for later data. My Report #19, one year ago, pointed out that the
promised cuts had still not materialized and, on the contrary,
administrative spending seemed to be increasing at an inordinate
rate. In response, President Richard Atkinson designated Vice
President Larry Hershman, UC's Director of the Budget, to meet with
me and explain the discrepancies I had complained about.
Report #19a (1/28/97) detailed what transpired at that meeting
and presented further data which showed the falsity of the official
UC position on administrative spending at the University. Several
weeks later I wrote to President Atkinson (2/21&22/97) as follows.
--------------------
This letter is a followup on our previous communications
regarding spending for administration within UC.
The meeting you arranged for me to have with Larry Hershman,
while sometimes contentious, served some useful functions. My
Report #19a brings to a logical conclusion the long-standing debate
over the issue of purported budget cuts. It remains for you and/or
the Regents to take action on what I have called a major fraud; and
I would be happy to discuss with you my ideas about appropriate
remedies.
In addition, at that meeting with Hershman I made specific
requests for information and documentation regarding several issues
which he raised in defense of UC's administrative budget. Those
items were written down and I was assured that the requested data
and documentation would be collected. The items were:
1. Overall accounting for UC expenditures on insurance.
2. Details of plans for "investment in technology" for administration.
3. Review of operations of the General Counsel's Office, including
expenditures for outside counsel, litigation, settlements, etc.
4. Details of Hershman's calculation of the ratio of administration
cost to all UC expenditures.
5. Hershman's study of the effects of external regulations on
administrative costs.
6. Hershman's reports from the campuses detailing the cuts they have
made in administration.
7. Details of the origins of the $102 million from "Other Sources"
which was spent last year on Institutional Support.
(See Campus Financial Schedules, Schedule 11-D.)
It is now over five weeks later and I have heard nothing. May
I have a progress report?
--------------------
I have never gotten any further response from the President's office
on this matter.
If the UC systemwide administration, backed up by the Regents,
is unable to defend its spending record and unwilling to engage in
rational dialogue about this scandal, then perhaps this situation
can be more productively addressed on each individual campus.
Toward that end I present, below, further detailed data.
Table 2 shows a seven year record of each UC campus' spending
for all upper level administration. This covers the accounting
categories "Institutional Support" (managed from the Chancellor's
office) as well as "Academic Administration" (managed from the
Deans' offices) and includes the expenditures from Transfers
(recharges). Readers should understand that many other domains of
administrative expenditures remain outside of these two categories:
those at the level of individual academic departments and research
units, those classified under Student Services, as well as
administrative components of Hospitals, Operation and Maintenance of
Plant, housing services, etc.
The data in Table 2 updates that presented in my Report #16
of 1/10/95.
Table 2. Institutional Support + Academic Administration
Total + Transfers ($ Millions)
6 Years'
Campus 90-91 91-92 92-93 93-94 94-95 95-96 96-97 % Change
Berkeley 113 114 112 117 127* 134* 138* +22%
Davis 103 102 102 98 100 113 124 +20%
Irvine 71 73 69 73 75 77 83 +17%
Los Angeles 203 203 190 194 215 227 234 +15%
Riverside 31 32 31 31 32 35 38 +23%
San Diego 85 89 88 89 98 111 104 +22%
San Francisco 115 129 131 130 139 138 163 +42%
Santa Barbara 43 43 42 43 45 48 49 +14%
Santa Cruz 25 28 28 29 33 37 39 +56%
SP&A** 133 129 142 151 136* 138* 134* + 1%
Total** 922 942 935 955 1000 1058 1106 +20%
Source: Campus Financial Schedules, Schedules B.
*I have moved "Printing Services" from Berkeley back to SP&A, where
it was counted prior to 1994-95. ** Less Insurance Items
Table 3, below, presents a more restricted set of data on
administrative spending by each campus: leaving out the Transfer
amounts. Most of this (Transfers/Recharges for Institutional
Support) covers services such as telephone, mail, material
management, duplication, computer centers, personnel, etc., which
are centrally managed on the campus but paid for by the individual
(or departmental) users of the service. What remains, then, in
Table 3 is the portion of administrative spending more directly
attributable to the priorities of top administration officials on
each campus.
Table 3. Institutional Support + Academic Administration
Total w/o Transfers ($ Millions)
6 Years'
Campus 90-91 91-92 92-93 93-94 94-95 95-96 96-97 % Change
Berkeley 73.2 74.1 73.2 71.7 80.2 90.4 90.6 +24%
Davis 50.4 50.2 49.4 45.2 51.6 61.5 72.0 +43%
Irvine 44.7 44.2 41.6 45.5 45.6 47.1 53.9 +21%
Los Angeles 92.9 98.1 88.7 96.1 110.9 117.1 120.7 +30%
Riverside 19.2 20.1 18.6 18.3 19.8 23.3 25.9 +35%
San Diego 49.1 52.3 50.8 51.8 59.8 73.2 61.8 +26%
San Francisco 51.9 56.0 52.2 53.8 58.1 56.0 73.3 +41%
Santa Barbara 28.5 29.4 28.8 29.2 31.1 33.0 33.2 +16%
Santa Cruz 16.3 19.5 19.2 19.9 24.6 28.4 29.1 +79%
SP&A* 82.9 70.2 78.2 83.1 72.1 73.6 76.4 - 8%
Total* 509 514 501 514 554 604 637 +25%
Source: Campus Financial Schedules, Schedules B.
* Less Insurance Items
The figures in Table 3 are smaller than those in Table 2 but
they show larger percentage increases over this period on almost
every campus. I would encourage interested parties on each campus
to sit down with their Chancellor and ask for an in depth
justification for the large increases in administrative expenditures
shown by this data. Remember that the appropriate comparison to
make is with the promised cuts of 25-30% in administration, which
were supposed to be implemented during this period.
__________________________________________________________________
II. REGENTS' MISCONDUCT - THREE CASES
CASE 1. Reports #21, 21a and 21b concerned an attempt by one regent
(Charles Soderquist, Vice-President of the Alumni Association) to
squelch this author. Here is a report from an Academic Senate
committee that looked into this matter.
-------------------------
June 18, 1997
Report by the UC Berkeley Committee on Academic Freedom
Re: Professor Emeritus Charles Schwartz
UC Berkeley Physics Department
The Committee on Academic Freedom of the Berkeley Senate convened on
May 5, 1997 to study an issue brought forth by Prof. Emeritus
Schwartz of UC Berkeley Physics. This memo concerns a letter
received by Prof. Schwartz dated 9 March 1997. A copy of the
original letter is enclosed. The letter was written by a UC Regent
in regards to Prof. Schwartz' reports, which mostly concern the
University's financial affairs. Prof. Schwartz distributes these
reports to a mailing list of members of the university community and
others, mostly via campus mail and email.
While the Committee felt that the letter was an isolated
communication, it nevertheless is quite damaging to Prof. Schwartz'
academic freedom by itself. The Committee unanimously felt that it
should make a statement on the matter. There were other
communications arising from this matter that were brought to the
Committee's attention. However, at the heart is the original letter,
and that is where the academic freedom issues lie. That is the
subject of this memo.
There were questions about the "official" status of the letter,
which was sent by an individual regent directly to Prof. Schwartz.
There would be no need for discussion if the letter were a private
communication between the regent and Prof. Schwartz. The letter was
issued on the regent's company letterhead but all other factors
point to it being an official communication and the Committee was
forced to take that view. It was signed by the regent as "regent-
designate," copied to the Chairman of the Regents and to the
University President. The events that have followed have forced
retention of the letter in the files of those who received it,
making it part of the California public record.
That brings us to the academic freedom issues. The letter begins:
Dear Professor Schwartz:
Unless you can explain to me how the "public service" mission of
the University is met by your "reports," I request that you stop
using University envelopes (and paper, postage, computers, desks,
electricity &c.) in their preparation and dissemination.
In other words, the regent has requested that Prof. Schwartz must
justify his reports to this regent, or stop using all University
resources in writing them. This is a very direct breach of Prof.
Schwartz' academic freedom. Without laboring the point, here is
short summary from the Faculty Handbook:
The Academic Senate has affirmed the right of faculty members to
make public the findings of their research, orally or in writing,
free from censorship or restraint by any representative of the
University.
The letter restrains Prof. Schwartz by (i) requiring justification
(ii) applying or proposing to apply restraints on resources if the
justification is absent or not adequate. The restraint has some
teeth because the board as a whole is certainly empowered to
restrict campus resources, and apply further sanctions as well. This
particular letter does not describe an action by the Regents, but at
least hints that such an action may be in progress. A priori, such
action by the Regents is very unlikely. But the original letter is
no less extraordinary, and it casts doubt on the claim that no such
action would normally occur.
The Committee noted that Prof. Schwartz' reports are funded by a
Campus Committee on Research (COR) grant, and that his research
proposal mentioned reports on the financial affairs of the
University. The regent was probably not aware that the reports are
part of Prof. Schwartz' sponsored research, and so did not feel that
the letter would affect his academic freedom. However, academic
freedom means that Prof. Schwartz alone should determine the best
course of his inquiry. Whether the regent or anyone else agrees with
his findings or considers his a valid research direction should not
be cause to restrict his research. The COR grant demonstrates peer
support for his research, but such support should not be a
prerequisite for his right to pursue it.
The letter continues:
As to the value of your efforts, my brief time with the regents
indicates that no one is listening. Perhaps your time could be
better spent on research and/or teaching. You do teach and
perform research, I assume.
which indicates that the regent did not judge Prof. Schwartz'
reports to be a legitimate form of research. This is in one sense
understandable because Prof. Schwartz' home department is Physics,
and financial/administrative reports would not normally be
considered research within that department. But on the other hand,
the reports were based on considerable information gathering and
organization by Prof. Schwartz. They represented his considered
analysis, and were not pure opinion or fiction. Whether one agrees
at all with his methods or conclusions he deserves, prima facie, the
protection of academic freedom to prepare and disseminate them.
Finally, the Committee noted that the letter had impact on Prof.
Schwartz' academic freedom beyond the points enumerated above. We
believe the regent did not intend to infringe Prof. Schwartz'
academic freedom and was unaware of the COR grant or the prima facie
argument above for scholarly reports. Objectively, one must remark
that the letter is harshly worded. While this is of no import in a
personal letter, in an official letter the situation is very
different. It mentions Prof. Schwartz' teaching and other research
as well as his reports. There is a summary conclusion that the
Regents are not interested and that Prof. Schwartz' time could be
better spent. This document has become public and serves as an
informal evaluation of Prof. Schwartz by this regent. There are
well-accepted mechanisms in the University for review of employees,
and with good reason, much of this process is confidential. From
the Faculty Handbook under "Part I Professional Rights of Faculty":
5. The right to be judged by one's colleagues, in accordance with
fair procedures, in matters of promotion, tenure, and discipline,
solely on the basis of the faculty member's professional
qualifications and professional conduct.
Expressing opinions about the research of an individual faculty
member (and its effect on his teaching and other research) in the
format of the letter, now on record, can be quite destructive. It
affects Prof. Schwartz' credibility among his peers and may cause
biases in the traditional evaluation process.
As to a resolution of the matter, the Committee hopes that the
regent is now satisfied that Prof.Schwartz' reports are a legitimate
research activity. Some communication to that effect would put the
matter to rest, and relieve Prof. Schwartz from any implied or
actual obligation to provide further justification of his research
to the Regents.
Since the letter seems to be an isolated communication, there are no
more general issues to be addressed. The Committee hopes that in
future, more suitable channels will be used should questions be
raised about a faculty member's activities. We hope it is evident
that a letter like this harms more than the reputation of an
individual faculty member. The public exposure of the affair harms
also the reputation of the University as a whole, its unity, the
mutual respect of its principals, and their support of its formal
review mechanism
-------------------------
I wrote a letter to Regent Soderquist (7/29/97), enclosing a
copy of this report, explaining the function of the Committee on
Academic Freedom, and offering this regent the following invitation:
"Can we two get together and discuss how this affair may be turned
into something constructive and beneficial for the University?"
I have received no reply.
As far as I can tell, no responsible official of the Academic
Senate or of the UC administration intends to do anything further
about this matter; and so the Committee's report will simply gather
dust in the files. Thus I must conclude, unhappily, that academic
freedom continues to be at risk for all faculty at the University of
California.
_________________________________________________________________
CASE 2. In an earlier document of the case discussed above, I wrote
that this story "carries the implication that any regent may take a
poke at any UC faculty member with impunity." A subsequent example
of just such regental misconduct (whether inspired by the Soderquist
affair or not I do not know) occurred last summer. As reported in
the San Francisco Chronicle (7/12/97):
University of California Regent Ward Connerly accused the dean
of the Boalt Hall School of Law on the Berkeley campus of
intentionally trying to keep minorities from being admitted to
the school in order to pressure regents to overturn their ban on
affirmative action.
"I think the dean has consciously been throwing cold water on
the prospect of black students enrolling to foster the notion
that the passage of SP-1 (the regents' resolution) has been a
mistake," Connerly said in an interview yesterday. "I don't have
any proof of it, but I believe deep in my soul that this has been
a conscious effort on the dean's part."
Herma Hill Kay, the Boalt Hall dean, vigorously rejected
Connerly's assertion. Colleagues said that if anything, Kay -
first hired as a Boalt Hall law professor in 1967 - has dedicated
years of her life to increasing minority and female enrollments
at the school.
...
Last month, Boalt disclosed that not one of the 14 black
students offered admission for this fall's class decided to
attend.
...
Connerly, who has led the fight to end affirmative action in
California, first made his charges against Kay in an National
Public Radio interview earlier this week.
"I believe the dean has consciously been involved in trying to
keep the numbers down, to sacrifice this class, if you will, in
order to perhaps get the regents to change their mind, and to
rescind the action." he said.
...
Several of Kay's colleagues at the law school expressed
outrage at Connerly's remarks. ...
_________________________________________________________________
CASE 3. Governor Pete Wilson used the UC Regents as a springboard
for his own political ambitions in 1995 with the contentious issue
of affirmative action. This fall, he tried once again to abuse his
power over the University's governing body, this time trying to
score political points over the issue of domestic partner benefits.
As reported in the San Francisco Chronicle (11/22/97):
The governor had mounted a full-court press to defeat domestic-
partner benefits beginning in September, when he insisted on a
regents' vote before [UC President] Atkinson could go ahead with
his plan.
He then appointed three new regents - all "no" votes on
domestic partners - to vacant seats on the board during the past
three days. Besides Wednesday's appointment of ..., Wilson swore
in ... and ... yesterday at 8:30 a.m. - two hours before the
regents were scheduled to begin debating the issue.
A later story (San Francisco Chronicle 12/31/97) discussed the
situation of some of Wilson's friends on the Board, especially
regent Ward Connerly, who did not vote with the governor on this
issue:
Sean Walsh, a Wilson spokesman, said ... "Clearly, the
governor and his staff would have preferred to have seen Ward and
other regents vote to deny domestic partner benefits, and clearly
some of the staff were not happy with the outcome, but that was
simply a matter of frustration about not being able to deliver on
your boss' political agenda."
Some may take solace in the fact that Wilson lost this time, by
a one-vote margin. However, anyone who values the principle of
political independence for maintaining a high-quality university
should worry about the continuing vulnerability of the University of
California in the hands of its highly politicized Board of Regents.