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UW System President Kevin P. Reilly

Tuesday, September 13, 2005

Thank you. Good morning. I want to thank the Committee Co-Chairs, Senator Roessler and Representative Jeskewitz, and all members of the Joint Legislative Audit Committee, for the opportunity to continue the dialogue on the important issues before us. 

When I took office a year ago, I pledged that the University of Wisconsin System would be transparent in all that it does, and be diligent and accountable to our stakeholders.  I remain committed to those goals and take our role and responsibilities very seriously. That’s why I asked you to approve an audit of our compliance with state and university employment policies and practices. We will work with you and the Legislative Audit Bureau and will provide access and as much assistance as we can. I will say more about this audit request later.

During my testimony, I will be addressing the following:

• The report we submitted to the co-Chairs on September 2 concerning so-called "back-up" appointments in the university;
• An update on our internal reviews of issues that have received attention this summer;
• Actions taken by the UW System Board of Regents just this past Friday that are intended to jump start reforms and clarifications of our employment policies and practices;
• Responses to your questions about these and other issues, including our request for an audit.

Let me point out that I am joined today by my colleagues, associate vice president for human resources, Al Crist; director of operations review and audit, Ron Yates; and general counsel, Patricia Brady.  They’ll be available to help in the question and answer period as needed.

As I know you recognize, the vast majority of our 33,000 university employees are dedicated, hard-working professionals. We value and respect them. I am proud of them and all that they do for the Wisconsin residents you represent.

The personnel system in which they work is a complex one that involves state employment policies and protections, shared governance with elected faculty and staff bodies, and other accepted state government and academic policies and practices. Much of what we do in our personnel system is set down in state statutes.

September 2, 2005 Report

On September 2, we submitted a report in response to three questions the co-chairs posed in a letter dated July 25.

• In response to the first question, we pointed out that 1,092 individuals, representing 3.3 percent of the total 33,063 UW System employees, serve in limited ("at will") appointments in which they have statutory rights to a "back-up" position as required under Chapter 36 of the Wisconsin Statutes, or in which they have received such a position contractually. Of this group, 64 percent, or 698 individuals, have statutory rights to a "back-up" position.
• In response to the second question, we indicated that 79 UW System employees returned to "back-up" positions during the period July 1, 2002 through June 30, 2005. Of this group, 39 returned to a tenured faculty appointment; 39 returned to either a previous academic staff position or were assigned new duties by the appointing authority, and one individual returned to a classified appointment. Individuals may return to their positions for a variety of reasons, including budgetary reasons, new leadership in a unit, performance issues, or at the employee’s own request. Such actions are intended to deploy and engage the best leadership talent and expertise university leaders have available at the particular time. 
• The third question from the co-chairs asked us to identify employees who "were granted paid leave after resigning" between July 1, 2002 and June 30, 2005. Technically, there are no such individuals, since after the effective date of a resignation one is no longer employed, and thus could not be on leave. It is not our practice to pay people after they resign from the university, or are removed from any position, except where contractual obligations require it, or other unique circumstances suggest that it is the most cost effective way to resolve disputes and avoid more costly litigation. 
  
  Regarding this point, the Board adopted on Friday a requirement that any employees returning to the faculty and receiving transition time to prepare to teach must provide a documented work product for the period of the transition. In addition, the Board supported my directive that all UW institutions must seek my prior approval for any settlement involving the termination of a limited appointee. I will report these arrangements to the Board of Regents.

Internal Reviews

You also asked me to provide information on any internal reviews we are conducting of the university’s employment practices.

• One review underway involves former UW-Madison vice chancellor Paul Barrows. Judge Susan Steingass has completed an investigation of all alleged violations of applicable rules, policies, and procedures on the part of Dr. Barrows related to his employment at UW-Madison, as well as the university’s application of leave policies. UW-Madison Provost Peter Spear and I are reviewing her report and will make a decision on an appropriate course of action.  Once the review is completed and all required notifications have been made, the report will be publicly available.  I expect this process to be completed by September 23.
• We also learned of personnel settlements decisions made at UW-Milwaukee and UW-Green Bay regarding limited appointees at those campuses. I am legally bound to honor confidentiality and non-disparagement provisions in these agreements. I will say, however, that those matters did not come to me and my approval was not sought or required. In the future, as I noted earlier, I will require the institutions to submit these requests to me for my approval.
• Others have questioned the appointment of the housekeeper at Brittingham House, the official required residence of the system president. This position will be appraised in light of the Regents’ overall review of employment policies and practices which I will describe in a moment. I fully expect as a result to make changes in the nature of that position.
• The Board of Regents and I share the deep concerns of Wisconsin citizens and legislators over the criminal activity of any state or university employees. I believe that we need to act more expeditiously than we sometimes have in these cases. As you’ll hear as I now review with you the recent actions on employment issues taken by the Regents and the UW System, we will be doing just that. 

Actions Taken by Board of Regents and UW System

Just last week, the Board of Regents engaged in an intense and extensive discussion of the employment policies and practices within the University of Wisconsin System. I’d like to walk you through the substance of the resolution they passed, which comprises eight specific actions. 

First, the Board of Regents supported my suspension of the practice of granting administrative back-up appointments for new employees, and the granting of further indefinite academic staff back-up appointments, unless I otherwise approve. This suspension will remain in effect until lifted by the Board. With input from appropriate governance groups, we will review position titles designated as limited appointments and consider the practice of negotiating fixed-term contracts for administrators in lieu of limited-term appointments. We will report on that assessment to the Board of Regents no later than November 2005.

Second, as I mentioned earlier, the Board of Regents and I share the deep concerns of citizens of the state and legislators over the criminal activity of any of our employees. The Board has directed that the System Administration establish policies and procedures to assure the public and the Legislature that any employee charged with a felony will be immediately investigated and that disciplinary action, if warranted, will be determined in a timely manner.  If such policies and procedures are precluded by state law, the Board of Regents and I will work with the Legislature to enact appropriate changes.

Third, all UW institutions shall be required to seek my approval for any settlement involving the termination of a limited appointee. I will report such settlements to the Board of Regents.

Fourth, UW System Administration shall revise its policy to ensure that when administrators return to their faculty position, they will be compensated at a salary rate consistent with other faculty members of the same rank in the department, considering factors normally used when setting faculty salaries. The UW System Office of Human Resources shall approve all such salaries and justifications before they are finalized.

Fifth, all UW institutions shall require that employees who return to the faculty from an administrative position, and are offered transition time to prepare to teach, provide the equivalent of a sabbatical proposal and subsequent report of work accomplished during the transition.  The transition period should be no longer than one academic semester. If the individual has served in a limited position for five or more years, we may allow up to two academic semesters.

Sixth, UW System Administration will consult with UW institutions to develop a revised sick-leave policy by October 1. This policy will specify the time period after which we will require a health professional’s certification for use of sick leave.

Seventh, the Board of Regents will review and approve as appropriate the total compensation package for the President and each Chancellor.

Lastly, following Sarbanes-Oxley regulations, I will review and prepare for the Board a recommendation on whether the internal audit function is sufficient. I will also consider whether the System Auditor shall report directly to the President and the Board.

Some of the actions approved by the Board will result in immediate, permanent changes in our current employment policies and practices.  Others will require additional work before we implement permanent changes.  Still others, such as the policy on reviewing the conduct of any of our employees charged with criminal activity, may require appropriate changes to current law. 

Yet as I told the Regents at the beginning of their conversation on this subject last week, I believe we need to take actions that will restore the public’s confidence that their university system is open, accountable, and a wise steward of public resources.

We need to 'fix' those aspects of our policies and practices that we determine need fixing.

We need to employ "best practices" that safeguard the interests of our citizens, students, employees, and stakeholders.

And we need to do everything we can to ensure that our great university system remains competitive with its peers throughout the nation, and the world.

The Board of Regents and I are making substantial progress in tightening up our employment practices. These reforms will strengthen how we attract top-quality employees, address personnel problems, and respect the rights of those who work in public university service.  We believe the public and legislature will benefit from an independent verification that we are complying with statutory requirements, and state and university employment rules and regulations.

Therefore, we look forward to the Legislative Audit Bureau audit I requested to help us provide the public with this assurance.

I want us to have a thorough, open, and honest assessment of these issues. And to emphasize what’s at stake in  these deliberations, I want you to know that we are addressing all of the above while we welcome more than 160,000 students to our campuses, conduct internationally-recognized research, boost the Wisconsin economy, and step up to do as much as we can to assist the victims of Hurricane Katrina.

In closing, I am optimistic that we will get this done, and done right. Thank you for your time and attention. I welcome your questions and advice.

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