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

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

Recommendations and UW Response

Legislative Audit Bureau's Evaluation of
University of Wisconsin System Staffing

September, 2004

Background

The Legislative Audit Bureau undertook an evaluation of UW System staffing at the request of the legislature's Joint Audit Committee. The study was begun in February of 2003 and initially covered staffing level changes between 1998 and 2003. However, because of large GPR cuts to the UW System in the 2003-05 biennium, LAB extended the time frame of the study to capture payroll data from March, 2004, as well. The findings of the study were released on September 17, 2004. Following is a summary of the recommendations, the study findings and the university's response.

Report Recommendations

  1. Provide the legislature with complete periodic reports on executive salaries, fringe benefits, and cash and noncash compensation from outside sources.
  2. Provide all University of Wisconsin institutions with guidance on coding contractual expenditures in their accounting records to ensure accuracy and consistency.
  3. Seek statutory changes to streamline and improve its (UW) position reporting to ensure accuracy, transparency, and timeliness in reporting the number and type of UW positions.
  4. Report to the Joint Legislative Audit Committee by February 1, 2005, on its administrative staffing and service delivery costs by institution, and provide specific proposals to reduce administrative expenditures and increase operating efficiencies in the 2005-07 biennium.

UW System Response

  • The UW System has made efficiency and accountability high priorities and as such, embraces the report's recommendations and will implement each of them. The LAB report confirms that using the standard measures applied to universities across the country, the UW System has the lowest administrative overhead of its peer group and the UW is proud of that achievement.
  • The LAB report confirms that the university is one of the state's leading and most important employers. There has been no net increase in the number of state-funded positions at the UW System during the past fifteen years. In fact, more than one-third of UW's workforce is now paid with non-state funds.
  • The LAB report highlights the university's growth in enrollment during the five years studied. The university has accommodated this growth by replacing more expensive faculty positions with less expensive professional, non-faculty positions - hence the growth in that category. This has led to approximately 40 percent of the UW's credit hours being taught by non-faculty -- up from 30 percent a decade ago. This is not a trend that will sustain quality or enrollment growth in the long-term.
  • The LAB report devised a means of measuring our administrative staffing that makes it difficult for the university to judge these costs against its peers by including student services, academic departments and research supervision. The UW is offering to work with LAB staff to apply their coding to a sampling of peer universities so that UW can benchmark its overall administrative costs to peers. Administrative expenditures that LAB added are vital to maintaining enrollments, enhancing student success and conducting research and public service work.
  • The LAB report makes more imperative the implementation of several recommendations from the Board of Regents' recent study, "Charting a New Course for the University." This report identifies a variety of additional administrative expenses and bureaucratic processes that could be streamlined for cost savings (see attached).
  • The LAB noted that 1208 UW employees earn more than $100,000 annually. Many of them, including prominent researchers, coaches and chancellors, raise millions of dollars for their programs and campuses and provide a multifold return on that salary investment. These salaries comprise 3.86% of the UW budget.
  • The LAB report raises important policy questions -- to what degree should the Legislature control the number and type of UW positions; how will the relationship between the UW System and the state be defined in the future; and how will student access be maintained? The Regents, President and Chancellors pledge to work closely with the Governor and Legislature to examine these important policy questions for the citizens of the state.

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