Senate communications

February 28, 2018

Report of the chair of the Senate Committee on Planning and Budgeting

Zoe Barsness, Associate Professor, Milgard School of Business, UW Tacoma

The Senate Committee on Planning and Budgeting meets weekly with the Provost, the Vice-Provost for Planning and Budget, and the head of the Board of Deans. SCPB is charged with consulting on all matters relating to the University budget and on a wide range of program and policy decisions.

The Senate Committee on Planning and Budgeting (SCPB) has met three times since the last Senate meeting. With the exception of a review of the law school unit adjustment proposal which is forthcoming, the SCPB has wrapped up its review of the school, college and campus unit adjustment proposals. All UW Seattle schools and colleges with the exception of Dentistry elected to submit a unit adjustment proposal and secure a portion of the $2 million allocated by Provost Baldasty from central funds to address unit level compensation priorities. UWT also submitted a self-funded unit adjustment proposal that was reviewed by SCPB as part of this cycle.

As I indicated in my last report, the SCPB’s role in the unit adjustment process is to review each proposal and make a recommendation to the Provost as to whether or not the proposed unit adjustments should be approved. It is important to emphasize that these SCPB discussions are intended to be supportive of the academic units’ compensation planning efforts. Thus, when reviewing each proposal, the SCPB focused on assessing: (1) the alignment of the proposed unit adjustments to the unit’s stated strategic compensation goals and priorities, (2) the sustainability of the proposed increases to the unit’s overall compensation pool, and (3) the implications of the proposed unit adjustments for the proposing school, college or campus in regards to opportunities enabled and costs incurred. SCPB members found the unit adjustment proposals reviewed reflective of the unit compensation goals and priorities and was positively impressed by the level of collaboration between the Deans/Chancellors and their respective EFCs evident in each of the units’ compensation planning processes. In all cases the SCPB recommended approval of the unit adjustment proposal. Ultimately, the approval decision is the Provost’s to make.

Earlier this fall, the SCPB tasked a small working group to develop a framework of values and principles that could serve the committee effectively as a guide in its review of proposals and provision of advice to the Provost. At our February 5th meeting, the full SCPB membership reviewed and endorsed the SCPB Values to Frame Decision Making as a framework that will be used to inform its review of proposals brought before the committee and which can be shared with proposing parties to assist them in their preparations for an SCPB review. It is the intent of the SCPB that this be a living framework which will be reviewed each fall and updated as needed to align with the evolution of our institution more broadly.

Other topics addressed at the February 5th meeting included reviews of various proposals from the Office of Ceremonies for achieving cost reductions and a request from the College of Arts and Sciences to shift the Audiology Clinical Training Program from its current “hybrid” state/fee-based funding model to an entirely fee-based funding model.

As Senate Chair, Thaisa Way mentioned in her report, our budget situation continues to be challenging and questions about how we can sustainably fund our compensation needs to assure fairness and excellence for our faculty continue to be a strong focus for the SCPB. At our February 12th meeting, we received an update from JoAnn Taricani, our Faculty Legislative Representative on our efforts in Olympia to redress the problematic fund split and more generally increase support for higher education, including more robust funding for the State Need Grant fund. We also began discussions with the Provost about the outlook for FY19 compensation and identified areas to explore where important institutional priorities may come into conflict depending on what happens with the fund split, funding more generally for higher education, and new constraints on our ability to set tuition.

In light of these challenges, the SCPB has turned its attention to exploring other aspects of our operations that significantly impact the UW operating budget. On February 12th, the SCPB met jointly with the Senate Executive Committee to continue its exploration of strategic enrollment management. Philip Ballinger, Associate Vice Provost for Enrollment Management, reported on emerging trends in UW enrollment at the Seattle campus in particular. The report looked closely at student admissions and enrollments over the past ten years highlighting those areas that have seen significant changes, whether increases or decreases in numbers of students. A lively discussion of the implications of these enrollment trends for ABB allocations to the various schools and colleges and cost of degree production ensued. Also discussed were the fiscal and demographic implications for future freshman cohorts of focusing any additional enrollment growth on international students, domestic non-resident, resident students, or some combination of students from these three different groups.

Later this month, the SCPB will turn its attention to financial aid, exploring the impact of our current policies on student access and the implications of current legislative proposals in Olympia for more fully funding the State Need Grant for the cost of our various programs such as the Husky Promise.

Updates on Requests for Information Regarding the University Budget and Finances

In this section of my report, I have compiled the requests for information that have been directed to me as chair of the SCPB via email. Responses have been informed by relevant staff at the Office of Planning and Budgeting with input from other administrative groups where relevant. If the topic was also addressed at SCPB, the responses below are reflective of what was learned during our SCPB discussion. I would like to thank Associate Vice Provost for Planning and Budgeting Sarah Hall and her staff for their timely and instructive responses to these questions.

Q:  If positions are eliminated right and left and academic units are under scrutiny for elimination, why is there nothing about possibly huge cost-savings to be had from slimming/eliminating redundancies in administration? If anything, this is the area that has grown exponentially in the past decades and represents permanent commitments in salary and pension pay.

Many administrative units have reorganized recently and these reorganizations have involved the elimination of positions and reclassification of positions.  $2 million in central funding provided by the Provost to support unit adjustment proposals in FY18 was secured through central administrative cost savings. The share of pure administrative budget relative to our total overall operating budget at the institutional level has shrunk. Yet, increased regulatory and reporting requirements means the complexity and costs of compliance have increased. The UW’s large research portfolio and size of UW Medicine mean, that even with slimming, significant administrative overhead is required. This said, the SCPB is being attentive to such concerns in its review of proposals brought before the committee and in its consultation and advice to the Provost regarding different aspects of the university’s operating budget.

Q:  The payroll “modernization” has been disastrous in cost overruns. Why is no one held responsible for these failures? What went wrong in the decision making process that hired the company involved? Is there anything done to hold those who made the decisions accountable?.

The individuals responsible for many of these initial process decisions regarding the HR/Payroll modernization process are no longer at UW. It is also critical to understand that the age of our former HR/Payroll and our current finance systems coupled with years of deferred action in regards to migrating critical aspects of our infrastructure to newer technologies have led to more challenging and ultimately costly transition efforts. Our aging systems must be replaced, as they rely on outdated technologies that cannot be adapted to serve our current needs and employees with the knowledge base to maintain our old systems have largely retired from the workplace. In regards to avoiding the kinds of cost overruns experienced in the HR/Payroll modernization effort, significant efforts have been made to identify lessons learned—both in regards to what did not and what did work effectively. These lessons are being documented and shared so that better processes and outcomes can be assured as we migrate our finance systems to new technology platforms. The Senate Chair sits on the Finance Transformation Steering Committee to assure faculty input into the oversight process in regards to this next large scale system migration. In addition, the SCPB Chair sits on the IT Service Investment Board, one of three IT Governance Boards. It plays an important role in guiding UW Information Technology’s service investments, including priorities for major IT projects and the annual review of the Technology Recharge Fee. The SCPB will also continue to receive regular reports on the progress of system migrations, such as the ongoing implementation of Workday and the upcoming Finance Transformation effort.

Q:  If truly faculty compensation is a priority, why are the cost increases for utilities, property expenses and compliance deemed “mandatory” but not those for “labor”, in particular faculty? It seems that frankly “priority” does not mean what it sounds like, it is rather of the “wish list” type, not the “serious concerns”. What would it take to put our salaries under the “mandatory” category?

Faculty compensation has been a top priority in all university budget decisions. When the legislature was not able to provide incremental funding for compensation, the University used what reserves it had and cost savings achieved centrally (through administrative slimming and increased efficiencies) to provide merit pools of 4% in FY14 and 4% in FY15 for UW faculty and professional staff when the state authorized 0% and funded 0% in both of those years. In FY 16 the UW implemented a 3% merit pool, which the state authorized at 3%, but state funds only covered 38% of the incremental compensation. In FY17 the UW implemented a 4% compensation increase, although the state authorized only a 1.8% increase and state funds covered only 34% of the incremental compensation. In FY 18, the Provost authorized a 2% merit pool for eligible and meritorious faculty, librarians, and professional staff, even though state funds again covered only 34% of the incremental compensation.   And, as a part of the FY18 Compensation and Merit cycle, the Provost allocated an additional $2 million from central funds (secured through central administrative cost savings) to match UW Seattle academic units’ self-funded unit adjustments in FY18.

Yes, it is true that other costs—for utilities, deferred maintenance, and compliance—are increasing and must be met. At the same time, the state has constrained our tuition setting authority for undergraduate tuition, which is now capped due to a particular formula at approximately 2% per year. Many of our graduate programs are already priced at the top of market, so our flexibility to increase tuition on the graduate front is increasingly constrained as well. In short, many levers that we have relied on in the past to secure our compensation goals are no longer available to us. It is for this reason that the SCPB has begun exploring the fiscal implications of different enrollment strategies (as I discussed above in my report) and our current strong commitment to assuring access for all students eligible for a State Need grant regardless of whether the state has fully funded those students. These are other institutional priorities, in addition to compensation, to which we have been historically and rightly committed. Unfortunately, we may be at the point that a broader discussion and reassessment of our strategic priorities is required. The SCPB is currently making an effort, in collaboration with the Provost, to explore what those tradeoffs might be and where we might discover remaining degrees of freedom that will allow us to sustain our commitments in all those areas core to our values as a faculty and a public institution of higher education.

Q:  ABB has had disastrous consequences for intellectual cross-fertilization. We are now being discouraged from teaching outside of our departments. Very sad for interdisciplinary work. One may want to rethink how to allocate funds.

A mechanism does exist for cross-listing courses and attributing ownership of that course to multiple departments so that ABB funds are allocated accordingly. Some schools and colleges have also effectively supported interdisciplinary teaching through the use of Memoranda of Understanding (MOUs).

Q:   Where can we find out more about the exact nature and history of the deficits in programs such as Dentistry, Law, UW Press, etc. I also think that the faculty are owed an accounting of what caused these deficits, how long they have lasted, their current size, what steps are being taken to deal with these deficits, and their effects on other units. How are administrators in the Provost’s office as well as leaders of other units running deficits responding to these apparently chronic deficits?

This is exactly SCPB’s job. The SCPB receives a report from the Provost on a quarterly basis regarding units in deficit. In reviewing each of these units, the SCPB focuses its questions on: (1) why and how the deficits developed, (2) whether the deficit is sustaining, increasing or decreasing, and (3) whether the unit’s deficit mitigation efforts should be increased, sustained, or shut down. We then advise the Provost accordingly. The SCPB is also interested in determining the degree to which there is faculty involvement at the unit level in identifying the underlying problems causing the deficit, whether there is faculty involvement in resolving the deficit through the elected faculty council in the unit or more broadly, and if there is transparency of the unit’s deficit reduction efforts for faculty in the school, college or campus. Finally, every unit in deficit has a deficit reduction plan developed which is monitored by the Office of Planning and Budget as well as the unit’s elected faculty council, Dean/Chancellor, and the SCPB.

While a single dashboard or set of metrics for assessing unit performance and progress on deficit mitigation is everyone’s long term aspiration. The reality on the ground is frustratingly complex given our hodgepodge of outdated financial systems. Review of deficits clearly indicates the fact that each deficit is unique in its own idiosyncratic way. It is difficult to discern a recurring pattern of contributing factors that would lend themselves to revelation by a systematic/common dashboard. In short, our best protection is: (1) transparency and accountability of the unit heads, Deans and Chancellors, and (2) active engagement and collaboration of the elected faculty councils in each of the units, which requires the education and development of budget knowledge and expertise among faculty. Over the last two years, the SCPB and Senate leadership has been engaged in collaboration with the Provost, the Board of Deans and Chancellors and unit elected faculty councils to assure support for the those faculty councils on this very front. Under Paul Hopkins leadership of the SCPB last year, we provided compensation planning tools to each of the unit elected faculty councils. This year, we have encouraged elected faculty council chairs to share best practices for budgeting and planning. And, as a part of the annual planning process, the Provost has required Deans/Chancellors, in consultation with their elected faculty councils, to provide a Fiscal Vitality Report that includes 4 years of projection as part of their unit’s annual planning report to the Provost. This report is shared with the SCPB for review and consultation to the Provost each spring.

In closing, I encourage any SEC member, Senator or faculty who has questions about the budget or finances to submit his or her questions to me as Chair of SCPB at: The SCPB is currently collecting data in response to a number of questions that were forwarded to the committee at the close of the fall quarter and over the break. As soon as we finish collecting data and reviewing relevant analyses, we will be sure to include answers to your queries and a summary of any related SCPB discussions and materials in my upcoming regular reports.