Stay tuned: More Q & A with AVC Erin Gore
In February, Graduate Student John Stehlin and I met with Associate Vice Chancellor for Budget Erin Gore to ask some questions and discuss the 2008-09 UC financial reports. (Read the post about that meeting here.) Gore wasn’t able to answer all of our questions in the hour-long meeting, but has responded to some of them by e-mail. I’ll post the Q & A after she clarifies parts of answers I didn’t understand. She said she would send an additional e-mail with more answers Monday.
Some additional links related to the UC Regents meeting
A blog titled Student Activism has posted a link to a briefing on the meeting put together by UC Student Regent Designate Jesse Cheng. Cheng will be liveblogging the meeting all three days of it.
An SF Chronicle article about the possibility of the UC Regents changing a policy so they will have the ability to raise fees at professional schools more drastically. According to the Student Activism blog, Cheng has said that this proposal is not reflected in the meeting materials.
March 2011 UC Regents Meeting
The UC Regents will meet Tuesday, Wednesday and Thursday of this week at the Community Center, UC San Francisco Mission Bay. For directions to the meeting and a link to the meeting’s live Webcast of the meeting, go to the UC Regents Web site (or click here).
The meeting falls during the spring break of UC Berkeley, the UC campus closest to the location of the meeting other than UCSF itself. (Most other UC campuses are in session right now.) As a result, a large number of students and other members of the UC community who would otherwise attend the meeting will be out of the area. At the last meeting of the Faculty Seminar on UC’s Financial Future, Professor Emeritus Charles Schwartz questioned whether this week was the most ideal time to have a meeting. UC Student Association board member Ricardo Gomez raised the same concern in the March 18 Daily Californian article previewing the meeting.
The Daily Cal article states that the meeting will focus on promoting diversity in the UC system in light of recent controversial incidents at UC Davis and UC San Diego:
Last month, the UCSD administration faced backlash following an off-campus “Compton Cookout” party and the discovery of a noose in a campus library. At UC Davis, derogatory graffiti was sprayed on the campus Lesbian, Gay, Bisexual, Transgender Resource Center and cotton was placed in front of the campus’s Black Culture Center.
The meeting agenda also mentions an incident at UC Irvine, in which a speech by the Israeli ambassador to the U.S. was interrupted by students.
The Wednesday and Thursday portions of the UC Regents Meeting both start with a public comment period at 8:30 a.m. On Tuesday and Thursday, all committee meetings are open sessions, meaning the public may attend those sessions. On Wednesday, all the morning sessions are open, then about three hours worth of sessions are closed in the afternoon, and the last session of that day– a meeting of the Committee on Investments– will be open.
The topic of UC investments is very controversial, especially concerning UC pensions and the UC’s bond-selling practices. UC Santa Cruz Professor Bob Meister (political science) wrote a paper claiming that the UC uses student fees as collateral for bonds, meaning that fee increases, which are increases in collateral, improve the bond rating of the UC. The placement of the last open session on Wednesday raises similar concerns about scheduling as having the meetings during Berkeley’s spring break does. The fact that a single open session– especially one that may be very controversial– is placed after hours of closed and Regents-only sessions makes me wonder by what method each day of the UC Regents Meeting is planned. I would think that hours of closed session would cause a lot of people to leave UCSF, at least while the closed sessions are going on. Also, since a session can start as soon as the one before it ends, this last session could start at a wide range of times. I want to emphasize though that I really don’t know how UC Regents meetings are planned and the UC Regents may well have to discuss certain content before the Committee on Investments can meet Wednesday. Still, I think the question about method of scheduling is worth posing.
I plan to go to the Wednesday portion of the meetings and will try to blog live, provided I can get onto the internet. The agenda for the meeting can be found here. Click on each committee meeting to see its action items, which can each be clicked on as well to find out more about each one.
Transparency 101
Context: The Transparency 101 presentation was hosted by the Faculty Seminar on UC’s Financial Future, an open seminar organized by UC Berkeley Professors Stanley Klein (Optometry), Alan Schoenfeld (Education) and Charles Schwartz (Physics), devoted to research into topics such as the construction finance and how the University of California contributes to the state’s economy. The seminar meets Tuesdays from 5-7 p.m. in 489 Minor Hall on the UC Berkeley campus.
Note: Additional specific questions asked during the Transparency 101 presentation and their answers, if available, will be available in a later post.
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“Money not formally restricted to its use is fungible,” UC Berkeley Professor Emeritus Charles Schwartz (physics) said. “Fungibility is the antithesis to transparency.”
Schwartz was speaking at a presentation hosted by the Faculty Seminar on UC’s Financial Future Tuesday night (March 9th) called Transparency 101. The presentation consisted primarily of a lecture given by Schwartz about parts of the UC budget and UC financial documents that he considered unclear. His lecture was followed by a response period for UC Berkeley Associate Vice Chancellor (AVC) for budget Erin Gore and AVC for Finance and Controller John Ellis, as well as a question-and-comment period for the audience, which consisted of around 30 to 40 students, faculty and staff.
Disagreements shaped the presentation, but overall it was characterized by a shared interest in inquiry. Everyone seemed to agree that UC finances could be more transparent.
Berkeley Professor Stanley Klein (optometry) emphasized the nuances of views expressed in the seminar, explaining as an example that he disagrees with Schwartz on a number of topics.
“That’s what makes this seminar interesting– different points of view,” he said.
The presence of Ellis and Gore made the presentation particularly unique. UC administrators and non-administrative members of the UC tend to be seen as polarized and uncooperative, but here they were engaging in thoughtful dialogue.
However, there may be a limit to the impact this dialogue can have. While Gore and Ellis can share information about UC finances and may even be able to revise UC financial records to make them more understandable, they have specific responsibilities that are mostly restricted to the Berkeley campus. Their positions have little to no influence over the UC Regents.**
Schwartz, who was clear to direct his criticism of the UC to higher officers such as UC President Mark Yudof, explained that Gore’s responsibilities include Berkeley’s budget planning at the beginning of the fiscal year and Ellis’s include the accounting for the campus at the end.
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Controversies that figured prominently in the presentation were accounting for unrestricted funding, the classification of funding that goes toward university hospitals and the effect of pay cuts on faculty.
Unrestricted funding
In the quote about fungibility and transparency, Schwartz was referring to the University of California’s unrestricted fund, which is comprised of money pooled together from various sources such as state aid and student fees. Because the funding sources that flow into the unrestricted fund are fungible or not bound to specific uses, no one can pull a dollar out of a student’s fees and say, “This dollar went toward this professor’s salary,” or “This dollar went toward construction.” The uses of unrestricted funds, therefore, are not transparent.
Gore disagreed with Schwartz that fungibility and transparency are irreconcilable, though she admitted that information about how the UC uses its fungible funds is currently not as clear as it could be.
“Just because money is fungible doesn’t mean you can’t see where it’s spent—not to say we’re there yet,” she said.
Classification of funding for hospitals
On the topic of funding for university hospitals, Schwartz said the category “Total Expenditure for Instruction” in UC financial schedules 1D (Berkeley) and 4D (UCLA) is deluding because it does not refer specifically to money spent on teaching activities but also includes money that goes toward things like the salaries of doctors at university hospitals.
A professor in the audience countered that UCLA doctors’ salaries can be considered instruction expenses because the doctors may be educating medical students who are watching their procedures.
Pay cuts
In relation to the controversy over pay cuts, a graduate student asked if UC Office of the President officials could quantify at what level of pay cut faculty would leave their jobs. He recited a “mantra” used by UCOP officials:
“If we don’t pay them enough, then they’ll walk,” he said, and asked at what point the faculty would walk–will a doctor or professor leave after receiving a one percent pay decrease?
A professor responded that Berkeley lost 48 retention cases last year.*
Gore suggested that it’s not just the money that keeps people at the UC and that that various factors create a delicate balance, including a desire to contribute to public education.
“It’s more art than science,” she said. “The fear is always that we don’t want to break Berkeley, we don’t want to break (the) UC.”
The next step
Many topics, such as where the overhead on grants goes, were only touched upon on Tuesday. In order to follow-up on topics that were not thoroughly explored, seminar facilitators and audience members decided to continue the discussion next week, at the March 16 session of the seminar.
“We knew this (presentation) would just be dipping our toes into the issues of fiscal complexity,” Schwartz said.
*I don’t know if “last year” means 2009 or the 2008-09 school year, but it is the phrase the professor used.
Pre-meeting with AVC Erin Gore
About two weeks ago, UC Berkeley graduate student John Stehlin and I had a “pre-meeting” with Associate Vice Chancellor Erin Gore, who is in charge of budget planning for the Berkeley campus. We spoke to Gore about how we would like to go about our research and asked her to recommend UC Office of the President employees to talk to about different topics related to UC finances, ranging from the meaning of the phrase “common good” as it is used in the 2008-09 financial reports to the role of bonds in the UC’s finances and in university finances in general. We also had an opportunity to ask Gore a few of the specific questions compiled by the Education Crisis Research Group*, of which John and I are both members. We e-mailed Gore the questions we didn’t get to or that she could not immediately answer during the meeting.
*The Education Crisis Research Group is referred to as the nameless research group in earlier posts on this blog.
What is the actual cost of instruction?
Erin Gore said this is something she and her colleagues are working on figuring out and that she will get back to us with what data is currently available. The graphs and other visuals from her February 2nd presentation have some relevant information. One needs to keep in mind whether the total or per-student cost of instruction would include both graduate and undergraduate students or just undergraduates, Gore cautioned, explaining that different types of funding and resources go to each type of student. As an example, funding for research can be said to partly go toward graduate students.
What exactly do student fees pay for?
Gore could not give us a break down of exactly how student fees are spent. She said student fees are combined with state aid and are just treated as one of the revenues that come in. The one definite number she could give is that a third of student fee revenue goes toward financial aid. She also said that student fees and state aid largely pay for faculty salaries, which are mainly paid out of the unrestricted fund. (Some faculty salaries are paid out of federal grants.) However, faculty salaries are not tagged or tracked when they are taken out of the unrestricted fund, so there’s no paper trail.
I am unclear about whether all student fees and state aid go into the unrestricted fund. I will have to ask Gore for clarification.
There are also smaller, more specific student fees, such as campus and registration fees, that have somewhat more specific purposes. Campus fees, for example, only go toward a student’s campus and not the UC system as a whole.
The allocation of funds, in general:
Gore recommended the site Cal Profiles to learn more about how funds are allocated. One of the site’s applications is “Allocated Student FTE by Term,” which shows the number of full time equivalent students taking classes in each department, which in turn determines the total amount of money paid out to faculty of each department. (Two part-time students make one full-time student, FYI.)
Questions we did not get to or that Gore could not answer that I e-mailed to her:
Many of the questions below pertain specifically to the 2008-09 financial statements.
From the 2008-09 financial reports: “FTE employees increased by approximately 3,300 in 2009 and nearly 50 percent were for academic and health sciences staff.” What qualifies as academic and health sciences staff, esp. health sciences? What was the number increase for each type? What should we make of lump sums? How do we disaggregate them? What does “supplies and materials” refer to?
What does it mean that the financial schedules feed into the financial report? What are the relationships between different financial documents? What does it mean when one feeds into the other? How might one map the documents and their connections?
Does the entire UC system budget for increased state funding every year? How does the budgeting process itself impact the actual finances of the UC?
Where can one find the specific revenues from medical centers, educational activities, student housing, food service operations, parking? How much do housing/food services cost school, compared to at other schools? (I realize the second part may be something I need to find out by talking to administrators at other schools.)
How does support from federal agencies work? Why does that money come in, how, and where does it go?
National laboratories operate on federally financed budgets. Does that mean they are completely financed by the federal gov.?
What do STIP, TRIP and GEP stand for?
What are ”acceptable levels of risk” (p. 9, 2008-09 financial reports)?
What does revenue from UC medical centers go toward?
March 4th in Berkeley, pre-march-to-Oakland/San Francisco
The March 4th Day of Action and Strike in Support of Public Education was quieter in Berkeley than I expected today, at least the portion of the events I witnessed. I left work around noon to see the protests and was surprised by the calmness of the campus; I might even say I was startled by how un-startling the scene was. Rounding the corner of California Hall, I anticipated cops, signs, slogans, yelling and hollering, but I saw and heard nothing until I’d made my way to the edge of Sproul Plaza, on the corner of Bancroft and Telegraph.
The crowd was much smaller than the 5000 who rallied on campus as part of the walkout on September 24, when students across UC campuses walked out of their classes to demonstrate dissidence with state funding cuts to education and the then proposed, now implemented student fee hikes. According to the Daily Californian’s live blog of today’s protests, the on-campus crowd peaked at 800 around 12:15 p.m. The crowd was also much tamer than the riots spurred by the Wheeler Hall occupation on November 20th.
So tame and quiet was the pre-march-to-Oakland portion of today’s events, many didn’t even notice when the crowd shoved off for Oakland City Hall. A friend of mine who was gathering signatures for the California Democracy Act, which would amend the state constitution so the state legislature can pass the budget with a simple majority vote as opposed to a two-thirds majority, said he’d wanted to go to Oakland with the protestors but they slipped away before he got a chance to join them.
I may have just missed some of the action on campus. The New York Times reported that this morning, about 100 students blocked Sather Gate, the main entrance to campus. However, it sounds like other campuses taking part in the state-wide protests (world-wide according to the March 4th blog) were a bit more rowdy than Berkeley. The Times reported that at UC Santa Cruz, someone’s windshield was bashed in and protests were disruptive enough this morning that police had to turn cars away from the school’s entrances. As quiet as the day’s protests began at Berkeley, though, the Daily Cal’s live blog indicates that energy has started to pick up as protestors—now about 1500 of them—move through Oakland and toward San Francisco. We’ll see how the day turns out.
Pre-March 4th Protest Thoughts
Today, I considered posting about a meeting some students and I recently held with Associate Vice Chancellor Erin Gore, but I realized that would be pretty dry and seem out of place considering the events that will commence at day break. While this site is anything but focused on protests or activism related to the University of California budget crisis, I’d feel like a sham if I didn’t at least acknowledge the March 4th Day of Action. This will probably be the biggest protest I have ever witnessed. I’ve been hearing buzz about the event since November 20th when students occupied buildings across the UC and California State University campuses, including Wheeler Hall at UC Berkeley.
The building occupations that took place in November showed me that students in California are not only critical of the current state of public education finances, but they’re passionate enough about their criticism to do something about it. I don’t agree with all their criticisms; I’ve found some of the stands taken by activists to be a bit radical. For example, I don’t see how the fee hikes could be repealed when this semester’s 15 percent fee hike has already been implemented and next semester’s additional 15 percent increase in fees has probably already be factored into the next budget. Still, witnessing the drama of Wheeler Hall inspired me to get serious about the UC budget crisis and approach the situation in my own way, which consists of simply trying to understand it.
I’m not an activist. I don’t walk in picket lines. I don’t wear clothes that indicate my political leanings. I’m hesitant to yell slogans with a crowd or raise my fist in solidarity, and I can’t imagine myself occupying a building. But I respect the people who engage in these activities and I’m glad they do. They provide a necessary reminder for the education community and the citizens of California to question the mechanisms behind the overall decrease in funding for education and the way educational institutions handle their current situations.
Audio recording of Gore’s presentation
Click here to listen to an audio recording of the presentation.
Please note, there is a period of silence at the beginning. A new audio recording without the awkward silence should be posted on the Academic Senate Web site soon.
Click here to download the materials from the presentation (tables, graphs, etc.)
Erin Gore’s Presentation
What the talk was about:
Associate Vice Chancellor Erin Gore gave a 30-minute power point presentation about UC Berkeley’s financial model, where the university gets its money and how it spends it. She spoke at length about how the financial situation of the university has changed since the 2001-02 fiscal year. Here is a Daily Cal article about the presentation.
According to the data Gore presented, UC Berkeley received $390 million from the state during the 2008-09 school year, compared to $497 million in 2001-02, the year UC Berkeley received the most it has ever received from the state. When you adjust for inflation, that amounts to about a $100 million decrease in state funding. While state funding for the university decreased, the student population increased by about 3,600 full time equivalent students. (Two part-time students count as one of the 3,600 full time equivalent students.)
Gore said the combination of decreased state funding and increased student population has led to students receiving 33% less resources per capita than they did in 2001-2, though students now pay 150% more in student fees than they did then.
Gore also explained the differences between certain types of funding, such as restricted and unrestricted, and she talked about the relationships between some UC financial documents, like how data from UC Berkeley’s financial schedule 1A feeds into its financial statements. I’m not completely clear on all the definitions of types of funding or relationships between documents; those are things I’ll need to ask someone from the Campus Budget Office about.
Who was at the presentation, what they said:
A question and comment period followed Gore’s presentation.
Stanley Klein, a UC Berkeley optometry professor, announced a faculty seminar in which members would outline what parts of the UC’s finances they don’t understand as well as they would like and work on fully understanding the UC financial records. (It’s sort of a similar idea to this site.)
Charles Schwartz, who writes University Probe and is a UC Berkeley professor emeritus, had a lot to say. During the presentation, he commented that people should always be asking what numbers mean, where they come from, and whether there is any controversy about them. He was responding to a line in the table, “Berkeley’s Current Funds Revenues, 2008-09.” I think it was the line titled, “Sales and Services of Educational Activities.” He said he didn’t know what the line specifically referred to.
Schwartz made the following claims during the question-and-answer period:
- UC President Mark Yudof lied about some data or made a false statement. (I didn’t catch what.) Either Yudof or someone from UCOP acknowledged that Yudof had lied, but the incorrect data or statement remains on the UCOP Web site.
- There is no way to find out how education fees are spent.
- The number of management positions in the UC has grown disproportionately more than the total number of positions.
Points of confusion:
I have some lingering questions about content from both the Budget Primer and the presentation. You may be wondering why I would list questions I have instead of just finding the answers and posting them when I get them. Well, (1) I think the process of finding out is a valuable thing to show and (2) I think questions can be informative themselves, in a way. One question might make someone think of another question or another type of information to look for.
First, I’ll list the questions I had after reading the Budget Primer:
- Why is UC Berkeley’s spending reported as static? “The University of California, Berkeley spends approximately $1.8 billion per year to fulfill its teaching, research, and public-service missions.”
- “Though unrestricted funds may be spent for any mission-related purpose, all funds, including unrestricted funds, must be spent in ways consistent with regular University accounting and purchasing policies.” (1) What funds are unrestricted? (2) Where can one find the accounting and purchasing policies?
- Does UC Berkeley always budget for an increase in funding? Why or why not?
- One of the “budget principles” is: “Ensure sufficient ongoing funding is available to support ‘common good’ priorities.” How is “common good” defined?
- Another budget principle is: “Increase financial flexibility that promotes fungibility [replaceability] of funding sources.” I’d be interested to see an example of that to illustrate exactly what it means.
- What sort of activities does “activity” refer to, as in activity-based budgeting? (Activity-based budgeting is mentioned on the Berkeley Campus Budget Office Web site.)
Questions I had after the presentation:
- Why is the Hepi Index controversial? What other indexes for calculating inflation are there?
- How can I find numbers related to bonds in financial records such as the UC’s financial statements?
- What is the definition of a financial statement and what part of the budget setting process does it represent? (See “Posted public records” for the financial statements.)
- What is the definition of a financial schedule? (See “Posted public records” for the financial schedules.)
- What are the differences between financial schedules, i.e. “Schedule A” vs. “Schedule B?”
- What are administrative units? How do they work?
- Why are there both general and designated unrestricted funds? Are all unrestricted funds designated in some sense, or only the “designated” ones?
In general, the financial organization of the UC reminds me of this really complicated tape dispenser I use at work: whoever came up with it must be really proud of himself for being an inventor, but everyone who tries to work with it is super peeved. Anyway, that was some food for thought.
Today: “Presentation and Discussion of Berkeley’s Finances” by AVC Erin Gore
At 3:30 p.m. Tuesday, February 2, UC Berkeley Associate Vice Chancellor for Budget & Resource Planning Erin Gore will talk about UC Berkeley’s financial model, the university’s sources of revenue and its expenses. The talk will take place in Sibley Auditorium (Bechtel building), by the Hearst Mining Building.
Read the Budget Primer to prepare for the presentation.
Visit Budget Central for more information from UCOP and the UC Berkeley administration about UC Berkeley financial issues.
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