Report 2016-130 Recommendation 24 Responses

Report 2016-130: The University of California Office of the President: It Failed to Disclose Tens of Millions in Surplus Funds, and Its Budget Practices Are Misleading (Release Date: April 2017)

Recommendation #24 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2019 the Office of the President should narrow its salary ranges.

Annual Follow-Up Agency Response From April 2019

In October 2018, UCOP provided a plan for narrowing UCOP and Office of General Counsel (OGC) salary ranges. The CSA agreed this recommendation had been met. The plan has been implemented as proposed as of April 1, 2019.

Prior to implementation of the UCOP and OGC salary ranges, the finalized plan was reviewed with the Regents' Working Group on UC Office of the President Salary Ranges on January 12, 2019, and the Regents Governance Committee on March 13, 2019. At that meeting, independent consultant Sullivan Cotter discussed the finalized plan for narrowing the Office of the President salary ranges as described in the documents found at the link below. The plan included an adjustment of the UCOP and OGC salary midpoints by 8% based on overall labor market salary movement using the approved method for weighing comparable public and private sector pay data for non-executive staff. UCOP has not moved their salary ranges during the last two years, leaving them behind the labor market in salary range movement. The approved methodology incorporated salary data from the State and California State University System for operational staff and academic administrative positions at UC.

The link below provides the Regents' item that was presented for discussion:

https://regents.universityofcalifornia.edu/regmeet/mar19/g5.pdf

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

We rated this recommendation as fully implemented because the Office of the President narrowed its salary ranges. The narrower ranges are more in line with best practices ensuring pay equity among positions with similar responsibilities and provide an incentive for employee development by limiting the number of pay increases that an employee can earn before they reach the range maximum. Although we are rating this recommendation as fully implemented, we note that the 8 percent market increase discussed in recommendation 23 negates any cost savings the Office of the President may have realized from implementing this recommendation.

1-Year Agency Response

The Office of the President has initiated efforts to implement this recommendation and will provide a status update on its progress at the next reporting milestone.

California State Auditor's Assessment of 1-Year Status: Pending

The status of this recommendation is pending the Office of the President's actions related to our previous recommendation--restructuring its salary ranges--that was due April 2018. Additionally, the Office of the President will need to narrow its salary ranges by April 2019 to fulfill this recommendation.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 recommendations.

California State Auditor's Assessment of 6-Month Status: Pending

The status of this recommendation is pending the Office of the President's actions related to restructuring its salary ranges due April 2018.

60-Day Agency Response

Implementation of this recommendation is dependent on actions taken in response to the April 2018 recommendations.

A work group has been formed for the two projects related to staff salary ranges (OP and system). The work group members are compensation experts from OP and four campuses/medical centers. Meetings occur weekly. An additional work group has been formed to address the project related to the review of leadership salary ranges (Market Reference Zones), systemwide. The work group members are compensation and Human Resource experts from OP and campuses/medical centers. Meetings occur twice monthly. The information gathered through the in depth analysis that is currently in progress will be used to determine the appropriate salary ranges.

California State Auditor's Assessment of 60-Day Status: Pending

The status of this recommendation is pending the Office of the President's actions related to restructuring its salary ranges due April 2018.

All Recommendations in 2016-130

Agency responses received are posted verbatim.