2004 audit of the University of Wisconsin System by the Legislative Audit Bureau

October 6, 2004

Testimony

Joint Legislative Audit Committee

Toby E. Marcovich, President

UW System Board of Regents

Thank you, President Reilly. Good morning. On behalf of my Board of Regents colleagues, I want to extend our appreciation for your time and consideration. And a special thanks to Jan Mueller and her hard-working staff for all their efforts.

I should point out that Jan will be journeying all the way up to Superior to discuss the audit with me and my fellow Regents at our monthly meeting tomorrow. Now, that’s what I call public service!

I’m sure you’re eager to ask your questions – and you’ll want to hear from those in the audience – so I will be brief.

My Regent colleagues and I spent almost a year on the Charting study, a strategic planning report of public university education in Wisconsin. Of the study’s 27 recommendations, one-third deal with administrative efficiency. For example, Recommendation 16 points out:

 “The State of Wisconsin should create flexibility in its procurement process to permit more efficient purchasing of goods and services directly in the marketplace, and permit the UW System to take advantage of discounts available through higher education consortium contracts.”

It is estimated that more than $1 million of savings could accrue to the state from the Big 10 Consortium contract for office supplies alone, with the UW System realizing more than $600,000 in savings.  I mention this to demonstrate that the Regents support and share President Reilly’s commitment to efficiency. And we need you to partner with us in this effort.

Together, we can find ways to streamline the burdensome and time-consuming bureaucratic processes that waste taxpayers’ dollars and divert our staff from the important work of educating our students and helping advance knowledge and strengthen our state’s economy.

As Regent President, I must tell you that not a day goes by that I don’t expect a call, telling me that we have lost another star chancellor, another top teacher or another world renowned scientist to a competing university. That is the reality of the business of higher education. It is a highly competitive business and we are being raided all the time. I realize it is sometimes hard to fathom, but we are competing in a national market and, I’m sorry to report, that lately, we are losing more than we are winning in our fight to retain and recruit faculty and staff.

Going into the 2004-05 budget, UW System faculty were already being paid, on average, six percent less than their peers, while the gap for UW academic staff is even larger. We are in serous danger of losing more and more of our bright and talented faculty because our salaries simply are not competitive.

 We have the same situation with our top academic leaders. On page 50, the LAB report points out that “data available through the Colleges and University Professional Association for Human Resources…indicate that the salaries of 20 UW System senior executives are below the national median for universities with comparable budgets.”

So, who are these people and why are they receiving these higher salaries? You’ve noticed, I’m sure, that some 1200 UW System employees make more than $100,000, which is a really high wage in Wisconsin. Who are these people? Well, a bunch of them are coaches. But beyond that, let me tell you about them:

  • More than 75 percent of those employees are on the UW-Madison campus, our flagship research campus where deans, directors and faculty not only raise millions in private dollars but also collectively generate more than $700 million in extramural research support annually.
  • More than 70 percent of those employees are faculty, individuals who on average bring in many times their salary in gifts and grants, some of which is used to underwrite their own salaries. My good friend and old college roommate, Dr. Hector DeLuca is with us here today. He is one of UW-Madison’s most distinguished and accomplished faculty members. Though he serves as chair of UW-Madison Department of Biochemistry, he takes no pay for that post and half of his salary is paid for with nonstate dollars.  I’ve asked Dr. DeLuca to tell you a little bit about his work and his role as a so-called “administrator.”

[DeLuca remarks]

  • Finally, I’d like to point out that the individuals making more than $100,000 annually represent less than four percent of our total employees.

As President Reilly noted, we have grown positions recently on nonstate dollars.

So who are these “new” employees and what kinds of work are they doing?

  • Some are staff hired with $3.2 million in federal funding at UW-Milwaukee’s Water Institute, working in the Institute’s Center for Water Security on research designed to protect us against bioterrorism and ensure the security, quality, and quantity of freshwater supplies serving our citizens.
  • Some are scientists and engineers hired through a $13.6 million National Science Foundation grant in nanoscale science and engineering at UW-Madison to conduct research in various areas of semiconductor physics, optics, mechanics and chemistry, including developing a technique to cheaply and simply manufacture customized gene chips capable of deconstructing long segments of DNA.
  • And they’re some of the cutting-edge researchers and graduate students who are working to map the human genome with Dr. David Schwartz, UW-Madison professor of genetics and chemistry, who has brought $11 million to the campus since he came aboard six years ago as part of a state investment in what was then called the Madison Initiative, for which the funding has been cut in recent years.

As President Reilly mentioned, we are proud of the growth in entrepreneurial activity of our faculty and staff. These are the kinds of good paying, “knowledge economy” jobs Wisconsin needs. The university’s academic research and development is one of the best ways to do this, and, hopefully, will produce jobs like these in numbers that far exceed 89 – or 890!

Thank you again for your time and attention. My fellow Regents and I pledge to continue our commitment to serve students and Wisconsin citizens, to be responsible in spending state dollars, and to be forward-thinking and innovative – as a world-class university system should be. We are eager to hear more suggestions on how we can improve all that we do, and, in this regard, I invite everyone to attend two public listening sessions that the Board of Regents will hold this month.

I am personally going to go up to hold these sessions on Monday, October 18, at UW-Eau Claire and Monday, October 25, at UW-Oshkosh. We want to give the public and our campus constituents a chance to share their ideas on college affordability, our progress in recruiting and retaining high quality faculty and staff and our role in the economic development of their regions and the state. We hope to have a good turnout and a lively discussion about university issues, including how we can function more efficiently.

Thank you for the opportunity to speak before you today. I’d be more than happy to answer questions if you have any.

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