Report 2016-130 All Recommendation 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 for Legislative Action

To ensure that the Office of the President's actions align with the university's primary mission, the Legislature should appropriate an amount directly to the Office of the President through the annual state budget process that eliminates the need for a campus assessment. Based on the Office of the President's actions as it implements its three-year plan, evaluate the amount of the direct appropriation annually. Once the Office of the President has completed the three-year plan, evaluate the necessity of a continued direct appropriation after assessing the strength of the Office of the President's new budget, accounting, and staffing policies, as well as its demonstrated commitment to ongoing transparency.

Description of Legislative Action

Assembly Bill 97, the Budget Act of 2017, appropriates $296 million to the Office of the President and provides that the funds may only be encumbered if the President certifies in writing to the California Department of Finance that there will be no campus assessment for support of that office for the 2017-18 fiscal year and overall campus revenues will be greater in the 2017-18 fiscal year than in the previous fiscal year.

  • Legislative Action Current As-of: November 2017

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

Legislation Enacted


Recommendation for Legislative Action

To ensure that the Office of the President's actions align with the university's primary mission, the Legislature should do the following:

From the funds appropriated, require the regents to contract with an independent third party that can assist the regents in monitoring the three-year corrective action plan for the Office of the President. The Legislature should hold annual hearings that include a status report by the independent third party regarding the Office of the President's progress, challenges, and barriers to success in implementing the three-year corrective action plan.

Description of Legislative Action

Legislation was not introduced to address this recommendation; however the Office of the President entered into a contract with an independent third party to assist in monitoring the three-year corrective action plan.

  • Legislative Action Current As-of: November 2017

California State Auditor's Assessment of 6-Month Status: No Longer Necessary

No Longer Necessary


Recommendation #3 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2018 the Office of the President should document and review the restrictions on its funds and fund commitments to determine whether it can reallocate any of these funds to its discretionary budget for eventual reallocation to campuses.

6-Month Agency Response

The workgroup formulated a project scope and workgroup charter . The group has identified a list of funds used within the UCOP budget (500+) and created a file to track them , along with their respective key attributes.

Next steps in the review include identifying funds with external restrictions and subsequently validating this information with departments and divisions across UCOP.

The workgroup will then review the restrictions and evaluate any opportunities to relieve restrictions to support unrestricted budget categories, with the input of key subject-matter experts and the Executive Budget Committee.

  • Estimated Completion Date: April 2018
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's review of fund restrictions. The Office of the President plans to report on its fund restrictions, commitments, and balances by April 2018. According to the Office of the President's working list of restricted funds, there are 521 active restricted funds. The Office of the President asserts that only 136 of those funds are restricted for Office of the President budget purposes, but not restricted per the university's financial audit or generally accepted accounting principles. Therefore, the Office of the President has discretion to make the policy decision to remove the restrictions on these funds.


60-Day Agency Response

A fund restrictions work group has been formed and is meeting twice monthly. The work group consists of staff members from UCOP and systemwide finance, and will draw on subject matter experts as required (e.g. Office of General Counsel). The work group has identified the scope which includes: (1) Review all restricted funds, (2) Evaluate use of fund categories to separate based on least / most restrictive definitions, (3) Apply a materiality methodology to focus on the largest opportunity areas, (4) Develop comprehensive documentation for future use and regular reviews, and (5) Establish where fund restrictions can be removed or modified.

The work group has finalizing a work plan and is launching the analysis and documentation phase. This involves identifying all funds and any existing documentation. It includes understanding the restrictions as well as identifying how or who made the initial restriction (e.g. Federal Research grant vs. UCOP restriction). In addition, the work plan includes assessment of existing best practices and benchmarks.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's review of fund restrictions. The Office of the President plans to report on its fund restrictions, commitments, and balances by April 2018.


Recommendation #4 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2018 the Office of the President should develop a reserve policy that governs how large its reserves should be and the purposes for which they can be used.

6-Month Agency Response

An analysis and summary of existing UCOP reserve practices and balances and a stakeholder analysis have been completed and reviewed by UCOP leadership. This process included benchmarking and research of reserve practices and policies of other universities and organizations in the non-profit/government sector.

A forecasting model for reserve-requirements scenarios with related assumptions for a central operating reserve is being developed. The workgroup will use it to model various reserve-requirements scenarios. A review of historical practices for strategic-priorities reserves is in progress to support projections and scenarios for future reserves requirements.

  • Estimated Completion Date: April 2018
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's development of a reserve policy. The Office of the President plans to present its recommended reserve policy to the regents in late January 2018.


60-Day Agency Response

The reserve policy work group, which includes both UCOP and campus representatives, has been formed and is currently meeting weekly to define our scope, determine our research and benchmarking methodologies, and develop a more detailed workplan. Current objectives have been defined as: 1) complete a review of current UCOP reserve practices and existing reserves ("set the baseline"); 2) conduct research / benchmarking to document best-practices; 3) develop a formal UCOP Reserves policy and obtain stakeholder agreement and Regental approval; and 4) develop and approve how the reserves will be funded.

Research and benchmarking efforts are already underway and will include: higher education institutions (e.g., CSU, Big 10, SUNY, etc.), industry associations (e.g., NACUBO, EAB, GFAO, etc.), as well as other industry and government entities.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's development of a reserve policy. The Office of the President plans to present its recommended reserve policy to the regents in late January 2018.


Recommendation #5 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2018 the Office of the President should implement our recommended budget presentation shown in Figure 11 on page 40. Specifically, the Office of the President's budget presentation to the regents should include a comparison of its proposed budget to its actual expenditures for the previous year. It should also include all its expenditures and identify changes to the discretionary and restricted reserves. The Office of the President should combine both the disclosed and undisclosed budgets into one budget presentation.

6-Month Agency Response

The budget presentation work group has met regularly to address the California State Auditor's budget format as detailed in figure 11, page 40, of CSA's audit report. The final FY2017-18 budget presentation in July 2017 incorporated CSA audit format and the team is focused on additional improvements to further enhance the nuances and clarity of the UCOP budget.

The work group completed its charter and stakeholder analysis review with COO Nava. The Executive Budget Committee (EBC) has reconvened and meets monthly. The October-through-December EBC meetings will include reviews of UCOP FY2017-18 budgets, including activities and associated costs.

The work group reviewed financial system functionality with partner UC campuses. UCOP awaits additional information from partner campuses before making a recommendation. New system solutions are expected to mitigate existing gaps between current capabilities and best practices, and include specific requirements to further adhere to the format presented in figure 11 of the CSA's report.

  • Estimated Completion Date: April 2018
  • Response Date: October 2017

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

We have concerns regarding the Office of the President's 2017-18 budget. On the Office of the President's website, it states that it has partially implemented this recommendation. However, we disagree based on a review of the Office of the President's data and its supporting documentation. Our concerns are regarding the budget's accuracy and the fact that the Office of the President did not seek the regents' approval for $12 million in additional budget expenditures. Overall, although the Office of the President used our recommended budget format, we found that it could not adequately substantiate the amounts it used in the presentation.

Because the Office of the President expedited its budget process by two months, it developed its budget "offline" using questionable methods. For example, for expenditures from what we called the undisclosed budget— which the Office of the President presented to the regents as the strategic priority reserve in May of 2017—it used estimates from staff as opposed to financial data. Moreover, even though its 2016-17 vacancy rate was 15 percent, the Office of the President also built $25.4 million in one-time salary savings back into the 2017-18 budget. In response to our audit, the Office of the President stated that its reserves stem from vacancies and other unexpected events that create one-time savings and that these are not permanent savings and cannot be used to support permanent expenditures. The Office of the President has consistently budgeted many more positions than it has actually filled. Since fiscal year 2013-14 the Office of the President's vacancy rate has been between 10 and 15 percent. While a small vacancy rate is reasonable, we have concerns because the Office of the President's high vacancy rates translate into recurring one-time savings that help to build its reserve. Our workforce planning recommendation should help the Office of the President better align its staff and lower its vacancy rate. The budget director stated that although the budget office made its best projections in the time available, it would not use the 2017-18 budget methods for future budgets.

In November 2017, the Office of the President also failed to receive the regents' approval for a $12 million increase in multi-year commitments paid for from its reserves and did not adequately describe its planned use of these funds. When asked by the regents, the budget director confirmed that the $12 million increase in multi-year commitments was the result of increased costs for a number of projects that were originally added as placeholders in the Office of the President's May budget proposal. This was despite the Office of the President's claim in its May budget proposal that projects from the reserve undergo a rigorous review prior to consideration for final approval and funding by the President. Moreover, based on our review of the Office of the President's documents, a significant amount of these increased costs relate to information technology projects including updating its financial and budgeting systems. The director of budget and finance stated this increase was presented as an informational item—meaning the regents did not vote on the increase—because of time constraints related to other high priority items for the regents to consider at the November meeting. The chief operations officer stated the Office of the President did not seek approval for this spending because the numbers were still very preliminary. However, we believe the regents should approve the $12 million increase and that the Office of the President should transparently present changes in funding for review by the Legislature, the regents, and the public.

Because of our concerns with the accuracy and budget process that the Office of the President used, we have rated this recommendation as pending. For its 2018-19 budget, we expect the Office of the President to be able to better justify the numbers in its budget and the process it used to develop its budget. We also recommend that the Office of the President seek the regents' approval on the $12 million increase in planned spending for multi-year commitments at the January 2018 regents meeting.


60-Day Agency Response

The budget presentation work group has been formed and meets regularly to incorporate the State Auditor budget format as detailed in Figure 11, page 40 of the State Auditor's audit report. Included in the FY17-18 Regents budget presentation were the following elements: (1) Incorporation of the FY16-17 forecasted actual expenditures compared with budget, (2) Detail of all expenditures including projections of fund balances, and (3) A combined comprehensive view of Permanent and One-Time spend including systemwide programs and initiatives. All of the above elements are included in the work plan.

The work group has already begun development of improved reporting, and will provide budget to actuals on a quarterly basis to the regents. Reporting improvements are also expected to provide visibility to all expenditures and reserves. The work group has initiated a project to evaluate current financial systems including the Budget Development System to identify gaps and evaluate improved systems with robust functionality, including reporting.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The status of this recommendation is pending.The Office of the President presented the regents with more robust budgets during the last two regents' meetings that included forecasted actual expenditures and fund balances. However, as discussed during the regents' meetings, further improvements to the budget presentation are necessary to ensure transparency and clarity of the Office of the President's expenditures. The Office of the President plans to present its new budget presentation to the regents in May of 2018. In addition, we will conduct an analysis of the Office of the President's budget system to verify the amounts presented to the regents.


Recommendation #6 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2018 the Office of the President should increase opportunities for campus stakeholder involvement in the budget development process by reconvening the campus budget committee and establishing an agreed-upon charter that describes the committee's scope, role, and protocol for reviewing and providing comments on the Office of the President's annual budget.

6-Month Agency Response

President Napolitano has reconvened and expanded the scope of the UCOP budget Executive Budget Committee (EBC). The EBC has completed its charter describing the committee's role and protocol for reviewing and providing input on the Office of the President's annual budget. In its critical advisory capacity to the President, the EBC consists of leaders from every campus, Academic Senate representatives, and UCOP leadership . The EBC met in August and September and plans to continue meeting regularly, with meetings occurring monthly for the remainder of 2017.

  • Completion Date: October 2017
  • Response Date: October 2017

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

The Executive Budget Committee Charter (charter) establishes a process in which the Office of the President and campus representatives are engaged in the Office of the President budget process. Specifically, the charter requires the Executive Budget Committee (committee) to review, advise, and make recommendations to the President on the development of the Office of the President's budget including the budget process and presentation. The charter requires monthly meetings during the budget development process and the committee must report on its activities at least annually.


60-Day Agency Response

A budget process work group has been formed and meets regularly. In connection with this recommendation, UCOP did conduct a review of the FY17-18 budget with campus stakeholders (VCPBs) on May 5th, prior to the May Regents presentation. Moving forward, the work group is focused on (1) expanding the involvement of key stakeholders, (2) documenting processes, and (2) formalizing governance for UCOP budget development.

The President has reconvened and expanded the scope of the UCOP budget Executive Budget Committee (EBC), and a charter is being developed to include governance of the UCOP budget. The EBC consists of campus leaders from every campus, Academic Senate representatives, and UCOP leaders, and will serve in an advisory capacity to the President. Its first meeting is being scheduled for August 2017.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's development of a charter for the Executive Budget Committee. The current Executive Budget Committee charter provided by the Office of the President does not adequately define the committee's scope, role, and protocol for reviewing and providing comments on the Office of the President's annual budget.


Recommendation #7 To: University of California Board of Regents

To ensure the ongoing accountability of the Office of the President, the regents should require it to implement our recommendations and report periodically on its progress.

6-Month Agency Response

The Office of the President has confirmed to the Regents that it will implement all of the State Auditors recommendations from this audit. The Regents have identified the following reporting schedule and structure for updating the Board on the status of implementing the recommendations from this audit:

-Reports on status of implementation of recommendations at 60 days, 6 months, one year, and annually thereafter to the Compliance and Audit Committee. Work Plan oversight will be governed by a working group of the board composed of the Chair and Vice Chair of the Board and the Chairs of the Finance, Compliance and Audit, and Governance and Compensation Committees. The Chair of the Compliance and Audit Committee will report overall progress to the Board of Regents no less than every 6 months.

-To the Finance Committee: Reports of budget to actuals at the November, March and July meetings and biannual reports on Presidential Initiatives budgets.

-To the Governance and Compensation Committee: Reports on recommendations regarding staffing at the November, March and July meetings.

At the July 2017 Regents meeting, the Regents received an update on the status of implementation of recommendations at 60 days.

At the November 2017 meeting, the following reports will be provided to the Regents:

-To the Compliance And Audit Committee: Update on the status of implementation of recommendations at 6 months

-To the Full Board: Report on overall progress by the Chair of the Compliance and Audit Committee

-To the Finance and Capital Strategies Committee: Report of budget to actuals for the Office of the President

-To the Governance and Compensation Committee: Update on recommendations regarding staffing

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the regents' ongoing oversight of the Office of the President's implementation of our recommendations. During the November meeting, the regents received multiple reports on the Office of the President's progress towards implementing our recommendations. The regents also requested additional information and action from the Office of the President. For example, Regent Perez was concerned regarding the board's oversight involvement in determining if funds are truly restricted. The chief operating officer responded to this concern by committing to bring the results of the Office of the President's analysis to the regents to ensure it aligns with their expectations.


60-Day Agency Response

The Office of the President has confirmed to the Regents that it will implement all of the State Auditors recommendations from this audit. The Regents have identified the following reporting schedule and structure for updating the Board on the status of implementing the recommendations from this audit:

- Reports on status of implementation of recommendations at 60 days, 6 months, one year, and annually thereafter to the Compliance and Audit Committee. Work Plan oversight will be governed by a working group of the board composed of the Chair and Vice Chair of the Board and the Chairs of the Finance, Compliance and Audit, and Governance and Compensation Committees. The Chair of the Compliance and Audit Committee will report overall progress to the Board of Regents no less than every 6 months.

- To the Finance Committee: Quarterly reports of budget to actuals and biannual reports on Presidential Initiatives budgets.

- To the Governance and Compensation Committee: Quarterly reports on recommendations regarding staffing.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the regent's ongoing oversight of the Office of the President's implementation of our recommendations.


Recommendation #8 To: University of California Board of Regents

To ensure that the Office of the President's spending aligns with the needs of campuses and students, the regents should hold a public meeting to discuss the results of the Office of the President's review of its fund restrictions and funding commitments, as well as its proposal to reallocate funds to campuses.

6-Month Agency Response

The Regents will review the results of the Office of the President's review of its fund restrictions and commitments in a public meeting by July 2018.

  • Estimated Completion Date: July 2018
  • Response Date: October 2017

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

The status of this recommendation is pending the regents' July 2018 meeting regarding Office of the President's fund restrictions and commitments.


60-Day Agency Response

The Regents will review the results of the Office of the President's review of its fund restrictions and commitments in a public meeting by July 2018.

  • Estimated Completion Date: July 2018
  • Response Date: June 2017

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

The status of this recommendation is pending the regents' meeting regarding Office of the President's fund restrictions and commitments.


Recommendation #9 To: University of California Board of Regents

To ensure that the Office of the President's financial safeguards are adequate, the regents should require the Office of the President to engage in a financial audit of only the Office of the President's operations.

6-Month Agency Response

The financial audit of the Office of the President is in process. The audit is being conducted by the University's external auditor, PricewaterhouseCoopers (PwC) with support from Internal Audit. PwC will issue an opinion on a report showing Office of the President expenditures and the sources of funds used to pay those expenditures, including the campus assessment. PwC will present this additional report at the November 2017 Regents meeting along with the other external audit reports.

  • Estimated Completion Date: November 2017
  • Response Date: October 2017

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

Although the Office of the President presented the regents with a financial audit in November 2017 titled "Financial Statement, June 30, 2017" (audit), this audit does not implement our recommendation. Specifically, the audit was limited to only the Office of the President's revenues and expenditures for fiscal year 2015-16. Because of the audit's limited scope, it omits the Office of the President's reserve balances. We expected the audit to include an assessment of reserve balances because in our report we found that the Office of the President had failed to disclose the amount and nature of these reserves to the regents and to the public. In addition, the audit did not evaluate the Office of the President's internal controls. We expected an assessment of the Office of the President's reserve and budgeting internal controls because in our report we determined there were significant deficiencies in these areas. While a financial audit of the Office of the President that was similar in nature to university's systemwide audit would have addressed these areas, this November 2017 audit is too limited in nature to satisfy our recommendation.

Finally, another shortcoming of the November 2017 audit is that it includes several large entities under the Office of the President's control, such as the Division of Agriculture and Natural Resources and the Education Abroad Program. Although it is acceptable to include these entities in the audit, the Office of the President should place their financial activities in separate columns to allow for full transparency of the Office of the President's financial activities. Because the report does not show these entities' operations separately from the Office of the President, it does not fully address this recommendation.

We shared our concerns with the Office of the President and Regent Zettel and committed to future coordination to ensure this recommendation is fully implemented.


60-Day Agency Response

The audit scope for 2016-17 for the University's external auditor, PricewaterhouseCoopers, has expanded to include a separate report on the results of operations for the Office of the President. UCOP's Internal Audit department will support this audit by conducting its own review of Office of the President expenditures. PwC will issue an opinion on a report showing Office of the President expenditures and the sources of funds used to pay those expenditures, including the campus assessment. PwC will present this additional report at the November 2017 Regents meeting along with the other external audit reports. In the future, when the Office of the President presents its budget for approval, the Regents will have confidence that the actual expenditures presented are correct since those amounts and underlying transactions will have been audited by Internal Audit and PwC.

  • Estimated Completion Date: November 2017
  • Response Date: June 2017

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

The regents' response implies that it has already expanded the scope of these audits. However, according to the systemwide deputy audit officer, the Office of the President is still in the process of developing these documents and therefore it did not provide any additional information.The status of this recommendation is pending completion of the financial audit and the Office of the President's planned internal audit.


Recommendation #10 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2018 the Office of the President should develop a method for weighing comparable public and private sector pay data when establishing salaries for all positions.

6-Month Agency Response

Additional surveys are being reviewed to assess their underlying data management methodology, data viability, and survey participants.

The work group is reviewing practices at other public and private AAU institutions to determine how each define their competitive labor markets; the methodologies they use for including public, private and other data; and, the surveys they use for analyzing markets, among other considerations.

Systemwide data is being reviewed to identify the organizations that comprises UC's recruiting and retention activity.

Survey sources are being reviewed for analyzing and updating Market Reference Zones for Senior Management Group positions.

Analysis of UCOP salary ranges is being conducted.

  • Estimated Completion Date: April 2018
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's development of a method for weighing comparable public and private sector pay data. As of November 13, 2017, the Office of the President has not yet established survey sources, data sources, survey protocols, and survey methodologies. Moreover, it has made no changes to its current process for establishing salaries for executive staff. It claims that it will identify these items by the April due date.

However, we are concerned that the Office of the President does not intend to take genuine steps to implement this recommendation because it continues to contend that university employees are not comparable to state employees. Specifically, an Office of the President document analyzing its labor market concludes, "State positions are not comparable to UC positions, the State is not a competitor with the University, nor are their compensation practices and programs aligned with market practices..." It goes on to state, "CSU, often cited by CSA as a comparator to UC, is not comparable to UC." As we describe in our audit report, in the Budget Act of 2016, the Legislature required the regents to consider compensation for comparable state positions when evaluating the salaries of executives. The Legislature reissued this requirement in the Budget Act of 2017. In our report, we also acknowledge that while the Office of the President's assertion that the higher education environment necessitates higher pay for its staff for certain positions, this argument has less merit for administrative staff who perform similar duties no matter where they work.

The Legislature required the Office of the President to demonstrate a good faith effort to implement all of our recommendations; however, we do not believe that the Office of the President's response to this recommendation meets that requirement. The conclusions of the analysis above is in conflict with these directives and disregards our audit findings that the Office of the President—even when factoring in a cost-of-living adjustment—pays its staff significantly more than public employees as demonstrated in Figure 13 and Table 8 of our report. Furthermore, the Office of the President did not share adequate details with the regents Governance and Compensation committee regarding the work it has performed and its preliminary conclusions. When we shared this recommendation with the chief operating officer, she stated that this analysis was a preliminary look at the marketplace and that the regents and the president still need to weigh in on these conclusions. She also stated that the Office of the President is not necessarily going to align its salaries with the market and that it is taking this analysis very seriously. However, we recommend that the regents and their independent consultant invest additional efforts into holding the Office of the President accountable for implementing this recommendation.


60-Day Agency Response

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 campuses/medical centers. Meetings occur weekly. A project plan has been finalized. A call with CalHR Compensation is scheduled for information collection regarding the State's approach to market pricing/data management processes and salary ranges. Possible additional survey sources focusing on public employers have been identified for the staff positions and the survey protocols and methodologies are being reviewed and data is being tested to determine integrity, adequate number of benchmark matches, etc. Once data sources are selected, a method for weighing comparable public/private pay data can be established.

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. A project plan has been finalized. Additional survey sources or alternate methods of data collection are being identified/reviewed that would support proper benchmark matching and data collection. A call with CalHR is scheduled for information collection regarding the State's approach to market pricing/data management processes and salary ranges. An advisory group comprised of Chief Human Resource Officers from campuses/medical centers has been created to review and provide input throughout the process. Once data sources are selected, a method for weighing comparable public/private pay data can be established.

Revised guidelines have been developed for the semi-annual equity/promotion process. At this time the semi-annual equity/promotion process scheduled for July 2017 has been suspended to continue to look at ranges and the weighting of market data.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's development of a method for weighing comparable public and private sector pay data. Because the Office of the President's response implies it has identified additional survey sources, data sources, survey protocols, and survey methodologies, we requested the Office of the President provide additional documentation to support these statements for its 6-month response.


Recommendation #11 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2018 the Office of the President should determine how to restructure salary ranges to make certain the ranges encourage employee development and ensure pay equity.

6-Month Agency Response

Options and recommendations for including public data and for assigning a weight have been presented to UCOP leadership for review and feedback.

Survey sources are being reviewed for analyzing and updating Market Reference Zones for Senior Management Group positions.

Analysis of UCOP salary ranges is being conducted.

  • Estimated Completion Date: April 2018
  • Response Date: October 2017

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. To date the Office of the President has not provided us with sufficient documentation to allow us to understand the status of this recommendation. However, the concerns we discuss in recommendation 10 also apply to this recommendation.


60-Day Agency Response

A work group of compensation and Human Resource experts from OP and campuses/medical centers has been formed and will be working to address salary range structure as it relates to employee development and assurance of pay equity. A project plan has been finalized. A call with CalHR compensation is scheduled for information collection regarding the State's approach to employee development.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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.


Recommendation #12 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2018 the Office of the President should evaluate and identify needed changes in employee benefit policies to ensure that they include reasonable safeguards to control costs.

6-Month Agency Response

Changes to systemwide policies were made for car allowances, meal limits during business travel, hotel rates, relocation allowances, moving reimbursements and senior manager supplemental retirement contributions, effective October 2017. Changes to policies at the Office of the President were made in October 2017 for issuance of cell phones and other electronic devices and for stipends.

  • Completion Date: October 2017
  • Response Date: October 2017

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

The Office of the President has taken action on most of the benefit policies we outline in Table 9 of our report. Although the Office of the President asserts it made changes to systemwide policies, we determined that this recommendation remains partially implemented due to actions the Office of the President and the regents need to take to change its policies for car allowances, business meetings and entertainment, employer contributions toward a retirement savings plan for SMGs, and stipends. Moreover, many of the policy changes only effect new hires or appointees and do not apply to current staff.

Incomplete

Car Allowances: In October, the Office of the President added an administrative note to the car allowance policy stating that the President is no longer recommending or approving automobile allowances for new hires or new appointees. The note further states that current recipients may continue to receive automobile allowances until they step down from their current positions or change positions. Although we recognize this action as a positive step that meets the spirit of our recommendation, until the regents take action to approve the policy changes the Office of the President's approach creates the risk that in the future a president may choose to remove the administrative note and restart the practice of issuing car allowances. To implement this recommendation fully, the Office of the President needs to take policy revisions to the regents for approval who would vote to change the policy.

Business Meetings and Entertainment: We expressed a concern in our audit that the amount the Office of the President reimburses for business and entertainment costs is too high. The Office of the President has taken some actions to change its costs for business meetings and entertainment, but has not revised the university policy that allows for the reimbursement of these costs. In May 2017, the Office of the President implemented new restrictions disallowing expenditures on retirement events and limiting the cost of morale building events to $19 per person or $500 in total, whichever is less. The policy also states that Office of the President funds cannot be used for any form of entertainment such as tickets to a fine arts or sporting events. However, because the Office of the President has not taken steps to update the university's policy, we still have concerns. For example, based on our reading of the May 2017 memo and the university's policy, Office of the President employees could still charge between $19 and $81 for business meetings provided to its employees. To implement this recommendation fully, the Office of the President needs to update the university's business meeting and entertainment policy to lower these reimbursable costs.

Employer Contributions Toward a Retirement Savings Plan for SMGs: In October, the Office of the President added an administrative note to the senior management supplemental benefit policy stating that the President is no longer recommending or approving participation in this program for new hires or new appointees. The note further states that current recipients may continue to participate in the program until they step down from their current positions or change positions. We recognize this action as a positive step that meets the spirit of our recommendation. However, until the regents take action to approve policy changes that affect the compensation of SMG employees, the Office of the President's approach creates the risk that in the future a president may choose to remove the administrative note and allow new SMG employees to participate in the program. The Legislature made $50 million of funding contingent upon the university demonstrating a good faith effort at adopting a policy that does not provide supplemental retirement payments to any new SMG employees no later than May 1, 2018. To implement this recommendation fully, the Office of the President needs to take policy revisions to the regents for approval so they can vote to change the policy.

Stipends: In October 2017, the Executive Director of UCOP Human Resources sent an e-mail to all Office of the President managers and supervisors reissuing the Office of the President's procedures for approving stipends. In this e-mail, she establishes additional controls for Office of the President employees that exceed the requirements of the university's compensation policy. Specifically, according to this e-mail, the Office of the President's human resources recommends that stipends do not exceed 20 percent of an employee's base salary; whereas, the policy allows stipends to reach 25 percent of an employee's base salary. Although we recognize that this action is a positive step that meets the spirit of our recommendation, to implement this recommendation fully, the Office of the President needs to establish formal policies and procedures for the approval of stipends that reconcile the difference between the recommendation from its human resources and its formal policy.

Complete

Cell Phones: In October, the Office of the President issued a mobile device policy that includes many safeguards to control costs and ensure the proper distribution and tracking of cell phones and other electronics. This policy is sufficient to address our recommendation.

Meals: In October, the Office of the President updated its travel policy to limit the allowable per-person reimbursement for meals and incidentals to $62 per day. The policy also states that meal reimbursements must not be treated as a per diem and must be for the actual and reasonable costs incurred. This policy aligns with that of the California State University and is therefore more reasonable and justified. This policy is sufficient to address our recommendation.

Lodging: In October, the Office of the President updated its travel policy to limit in-state and out-of-state lodging reimbursements to a traveler's actual costs not to exceed $275 per night. The policy also states that lodging reimbursements must be reasonable for the locality of travel. This lodging policy aligns with that of the California State University and is therefore more reasonable and justified. This policy is sufficient to address our recommendation.

Relocation Allowance: In October 2017, the Office of the President removed its policy on relocation allowances and replaced it with a more specific policy on reimbursable relocation expenses. The new policy allows the university to reimburse an appointee for the cost to sell his/her former primary residence or for the settlement of an unexpired lease. This policy is sufficient to address our recommendation.

Moving Reimbursement: In October 2017, the Office of the President updated its moving reimbursement policy. The new policy clearly outlines which costs the university will reimburse for and places limits on those costs. It also made some costs that were previously reimbursable—such as the assembly and disassembly of unusual items like swing sets and swimming pools—unallowable. This policy is sufficient to address our recommendation.

Performance Bonuses: In May 2017, the Office of the President implemented new restrictions regarding employee bonuses. Specifically, it limited STAR Awards to $500 per person. Moreover, the policy only allows one award per person or team per fiscal year and the awards must recognize a specific project or event that is above and beyond the normal scope of an employee's regular job. These changes address our recommendation.


60-Day Agency Response

A memo restricting the use of funds for retirement parties and gifts, morale-building activities, STAR awards and spot awards at the Office of the President was issued on May 31, 2017 and the changes were effective immediately. Benchmarking of UC policies to other universities, CSU, the state of California and federal rates is underway.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The May 31, 2017 memo included reductions in employee benefits such as bonuses and additional safeguards to control costs. Full implementation of this recommendation is pending the review of other employee benefit policies.


Recommendation #13 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2018 the Office of the President should complete phase one of CalHR's best-practice workforce planning model by developing a strategic direction for its workforce plan.

6-Month Agency Response

The workgroup has reviewed the CalHR workforce planning model and is is reviewing practices at other public and private AAU institutions to determine how each define the approach to workforce planning.

The group has completed the stakeholder analysis and is focused on the early development of the UCOP workforce planning model.

There was a conference call with CalHR in early October to discuss the current state of the CalHR workforce planning activity. Members of the workforce planning workgroup participated in the CalHR Quarter Workforce Planning forum on in early October.

  • Estimated Completion Date: April 2018
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's completion of CalHR's best-practice workforce planning model.


60-Day Agency Response

A work group has been formed and has begun identifying and reviewing different workforce planning models currently in place at state and like university systems to better understand the best practices. The work group consists of staff members from compensation, talent acquisition, HR Generalists, the program management office, departments from OP and campuses/medical centers. Meetings are being scheduled bi-weekly.

An initial call with CalHR's Director of Human Resources took place the week of May 15, 2017 to discuss CalHR's workforce planning model. A follow up call with the Division Chief in charge of workforce planning for CalHR took place the week of June 12, 2017.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's completion of CalHR's best-practice workforce planning model.


Recommendation #14 To: University of California Board of Regents

To ensure that the Office of the President's staffing levels are justified and that costs are reasonable and align with the needs of campuses and other stakeholders, the regents should require the Office of the President to implement our recommendations and report periodically on its progress.

6-Month Agency Response

The Office of the President has confirmed to the Regents that it will implement all of the State Auditors recommendations from this audit. The Regents have identified the following reporting schedule and structure for updating the Board on the status of implementing the recommendations from this audit:

-Reports on status of implementation of recommendations at 60 days, 6 months, one year, and annually thereafter to the Compliance and Audit Committee. Work Plan oversight will be governed by a working group of the board composed of the Chair and Vice Chair of the Board and the Chairs of the Finance, Compliance and Audit, and Governance and Compensation Committees. The Chair of the Compliance and Audit Committee will report overall progress to the Board of Regents no less than every 6 months.

-To the Finance Committee: Reports of budget to actuals at the November, March and July meetings and biannual reports on Presidential Initiatives budgets.

-To the Governance and Compensation Committee: Reports on recommendations regarding staffing at the November, March and July meetings.

At the July 2017 Regents meeting, the Regents received an update on the status of implementation of recommendations at 60 days.

At the November 2017 meeting, the following reports will be provided to the Regents:

-To the Compliance And Audit Committee: Update on the status of implementation of recommendations at 6 months

-To the Full Board: Report on overall progress by the Chair of the Compliance and Audit Committee

-To the Finance and Capital Strategies Committee: Report of budget to actuals for the Office of the President

-To the Governance and Compensation Committee: Update on recommendations regarding staffing

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the regents' ongoing oversight of the Office of the President's implementation of our recommendations. During the November meeting, the regents received multiple reports on the Office of the President's progress towards implementing our recommendations. The regents also requested additional information and action from the Office of the President. For example, Regent Perez was concerned regarding the board's oversight involvement in determining if funds are truly restricted. The chief operating officer responded to this concern by committing to bring the results of the Office of the President's analysis to the regents to ensure it aligns with their expectations.


60-Day Agency Response

The Office of the President has confirmed to the Regents that it will implement all of the State Auditors recommendations from this audit. The Regents have identified the following reporting schedule and structure for updating the Board on the status of implementing the recommendations from this audit:

- Reports on status of implementation of recommendations at 60 days, 6 months, one year, and annually thereafter to the Compliance and Audit Committee. Work Plan oversight will be governed by a working group of the board composed of the Chair and Vice Chair of the Board and the Chairs of the Finance, Compliance and Audit, and Governance and Compensation Committees. The Chair of the Compliance and Audit Committee will report overall progress to the Board of Regents no less than every 6 months.

- To the Finance Committee: Quarterly reports of budget to actuals and biannual reports on Presidential Initiatives budgets.

- To the Governance and Compensation Committee: Quarterly reports on recommendations regarding staffing.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the regent's ongoing oversight of the Office of the President's implementation of our recommendations.


Recommendation #15 To: University of California Board of Regents

To ensure that the Office of the President is engaging in a thorough review of its systemwide and administrative costs and implementing our recommendations, the regents should develop a contract for an independent third party that can assist the regents in monitoring implementation of the three-year corrective action plan for the Office of the President. The independent third party should have expertise in higher education, public administration, and public finance. Moreover, the independent third party should have complete access to the Office of the President's documentation and its staff so that it has sufficient and appropriate information to verify the Office of the President's actions. The independent third party should report to the regents on the Office of the President's progress, challenges, and barriers to success at least quarterly.

6-Month Agency Response

Sjoberg Evashenk Consulting, Inc. (SE) has been selected to serve as the independent third party to assist the Regents in monitoring the Office of the President's progress in implementing the recommendations from this audit. The contract with SE was executed on July 7, 2017. SE issued its initial report on its independent assessment of implementation plans in July 2017. Its second quarterly report was issued in October 2017.

  • Completion Date: July 2017
  • Response Date: October 2017

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

At the July meeting, the regents announced that it hired Sjoberg Evashenk Consulting, Inc. (Sjoberg Evashenk) in response to this recommendation. The scope of work outlines requirements that align with our recommendation. Although the regents claim this recommendation is fully implemented, full implementation is pending the quarterly reporting from Sjoberg Evashenk to the regents.

Moreover, we are concerned because we found minimal evidence that Sjoberg Evashenk is independently verifying the Office of the President's implementation of our recommendations. In its formal reports and presentations to the regents, it has stated there are no potential issues at this time. However, we believe there were issues that Sjoberg Evashenk should have brought to the regents' attention such as the $12 million increase in multi-year commitment spending discussed in recommendation 5 and concerns with the employee benefit policies discussed in recommendation 12. Moving forward we hope that the regents clarify their expectations of its independent consultant to ensure the consultant is reviewing, verifying, and reporting on at-risk areas in the implementation of our recommendations.


60-Day Agency Response

The Regents conducted a request for proposal (RFP) process to identify an independent third party consultant that can assist in the planning and implementation of the recommendations from this audit. The RFP required that the consultant must have expertise in higher education, public administration, and public finance. A consultant has been selected and the contract is expected to be finalized shortly. The consultant will be supervised by and report directly to the Regents Compliance and Audit Committee. The consultant will report to the Compliance and Audit Committee on the Office of the President's progress, challenges, and barriers to success at least quarterly.

  • Estimated Completion Date: July 2017
  • Response Date: June 2017

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

At the July meeting, the regents announced that it hired Sjoberg Evashenk Consulting, Inc. in response to this recommendation.The scope of work outlines requirements that align with our recommendation. Full implementation of this recommendation is pending the quarterly reporting from Sjoberg Evashenk Consulting, Inc. to the regents.


Recommendation #16 To: University of California Board of Regents

To ensure that the Office of the President is engaging in a thorough review of its systemwide and administrative costs and implementing our recommendations, the regents should hold a public meeting that includes university stakeholders, including campuses and students, to discuss the purpose, intent, and prioritization of each systemwide and presidential initiative in light of campus funding levels for students. Require the Office of the President to publish the results of this meeting, including any systemwide or presidential initiatives that are eliminated or scaled down and the amount of money that will be reallocated to campuses for students.

6-Month Agency Response

The Regents will review systemwide and presidential initiatives in a public meeting by July 2018. In this meeting, we will discuss the purpose, intent, and prioritization of each systemwide and presidential initiative. The results of the meeting will be published.

  • Estimated Completion Date: March 2018
  • Response Date: October 2017

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

This recommendation is pending the July 2018 public meeting in which the regents will review systemwide and presidential initiatives.


60-Day Agency Response

The Regents will review systemwide and presidential initiatives in a public meeting by July 2018. In this meeting, we will discuss the purpose, intent, and prioritization of each systemwide and presidential initiative. The results of the meeting will be published.

  • Estimated Completion Date: March 2018
  • Response Date: June 2017

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

This recommendation is pending the July 2018 public meeting in which the regents will review systemwide and presidential initiatives.


Recommendation #17 To: University of California Board of Regents

To ensure that the Office of the President is engaging in a thorough review of its systemwide and administrative costs and implementing our recommendations, the regents should require the Office of the President to implement our recommendations and report periodically on its progress in doing so.

6-Month Agency Response

The Office of the President has confirmed to the Regents that it will implement all of the State Auditors recommendations from this audit. The Regents have identified the following reporting schedule and structure for updating the Board on the status of implementing the recommendations from this audit:

-Reports on status of implementation of recommendations at 60 days, 6 months, one year, and annually thereafter to the Compliance and Audit Committee. Work Plan oversight will be governed by a working group of the board composed of the Chair and Vice Chair of the Board and the Chairs of the Finance, Compliance and Audit, and Governance and Compensation Committees. The Chair of the Compliance and Audit Committee will report overall progress to the Board of Regents no less than every 6 months.

-To the Finance Committee: Reports of budget to actuals at the November, March and July meetings and biannual reports on Presidential Initiatives budgets.

-To the Governance and Compensation Committee: Reports on recommendations regarding staffing at the November, March and July meetings.

At the July 2017 Regents meeting, the Regents received an update on the status of implementation of recommendations at 60 days.

At the November 2017 meeting, the following reports will be provided to the Regents:

-To the Compliance And Audit Committee: Update on the status of implementation of recommendations at 6 months

-To the Full Board: Report on overall progress by the Chair of the Compliance and Audit Committee

-To the Finance and Capital Strategies Committee: Report of budget to actuals for the Office of the President

-To the Governance and Compensation Committee: Update on recommendations regarding staffing

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the regents' ongoing oversight of the Office of the President's implementation of our recommendations. During the November meeting, the regents received multiple reports on the Office of the President's progress towards implementing our recommendations. The regents also requested additional information and action from the Office of the President. For example, Regent Perez was concerned regarding the board's oversight involvement in determining if funds are truly restricted. The chief operating officer responded to this concern by committing to bring the results of the Office of the President's analysis to the regents to ensure it aligns with their expectations.


60-Day Agency Response

The Office of the President has confirmed to the Regents that it will implement all of the State Auditors recommendations from this audit. The Regents have identified the following reporting schedule and structure for updating the Board on the status of implementing the recommendations from this audit:

- Reports on status of implementation of recommendations at 60 days, 6 months, one year, and annually thereafter to the Compliance and Audit Committee. Work Plan oversight will be governed by a working group of the board composed of the Chair and Vice Chair of the Board and the Chairs of the Finance, Compliance and Audit, and Governance and Compensation Committees. The Chair of the Compliance and Audit Committee will report overall progress to the Board of Regents no less than every 6 months.

- To the Finance Committee: Quarterly reports of budget to actuals and biannual reports on Presidential Initiatives budgets.

- To the Governance and Compensation Committee: Quarterly reports on recommendations regarding staffing.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the regent's ongoing oversight of the Office of the President's implementation of our recommendations.


Recommendation #18 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2018 the Office of the President should develop and use a clear definition of systemwide initiatives and administration to ensure consistency in future budgets.

6-Month Agency Response

The UCOP systemwide initiatives workgroup, supported by a team of subject-matter experts from the Academic Affairs division, has compiled a preliminary data set of UCOP systemwide programs and initiatives and formalized the categories for these items with clearly articulated definitions. The terms and definitions will be used to develop future budgets.

  • Estimated Completion Date: April 2018
  • Response Date: October 2017

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

The Office of the President's working documents shows that it has developed five definitions to establish and track statewide, systemwide, and campus initiatives and programs. According to the Office of the President's website, the President will review and approve these definitions in January 2018. Moreover, our recommendation indicates that the Office of the President should develop a definition of administration, but it has yet to do so. Thus, this recommendation is pending approval by the President of statewide, systemwide, and campus initiatives and programs in addition to the development and approval of a definition for administration.


60-Day Agency Response

A UCOP systemwide initiatives work group has been formed. This group includes representation from key stakeholders across a variety of functional areas within the Office of the President. The work group has met and a workplan has been developed. It has begun formulating a project scope and a work group charter. The work group will: (1) develop a baseline understanding of current initiatives and how they are defined, (2) undertake a research phase as required to understand best practices and leverage existing methodologies, (3) establish and apply clear definitions, and (4) document and develop processes to differentiate types of initiatives and use them consistently in future budgets.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's development of a clear definition for systemwide initiatives and administration. Additional documentation provided by the Office of the President shows that by August 2017 it intends to develop a framework for reviewing systemwide initiatives. Additionally, by December 2017, it plans to complete its assessment of the programs it identified for review.


Recommendation #19 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2018 the Office of the President should develop a comprehensive list of systemwide initiatives and presidential initiatives, including their purpose and actual cost that will be used in the regents' meeting previously recommended.

6-Month Agency Response

The UCOP systemwide initiatives workgroup, supported by a team of subject-matter experts from the Academic Affairs division, has: (1) compiled a comprehensive data set of UCOP systemwide programs and initiatives, including individual purposes and costs, (2) formalized categories for these items along with their definitions, and (3) developed key attributes to assist with reporting . This documentation will be incorporated in future budgets.

To respond to the timing of AB97, UCOP's effort to identify savings to be put towards its share of $15M in funds for enrollment increases beginning in the 2018-19 academic year, the team used the data set of programs and initiatives. This documentation has been provided to key stakeholders (Executive Budget Committee, Council of Chancellors, Department of Finance and others) for consultation and evaluation to ensure UC will meet December 2017 deadlines for development of the State of California budget.

  • Estimated Completion Date: April 2018
  • Response Date: October 2017

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

The Office of the President provided us with a working list of 90 statewide, systemwide, and campus programs. The list includes a summary of each program, its stakeholders, and the funds used to support it. According to this document—which the Office of the President highlighted as a work in progress—the total 2017-18 Office of the President budget for initiatives and programs equals $440 million. This total is $32 million more than the amount approved by the regents. Since this list is a work in progress, it is possible that this discrepancy represents data entry errors; the Office of the President stated it is still validating data internally and with its campuses. By April, we expect these amounts to tie back to the budget approved by the regents or to be otherwise explained.

Moreover, we also expect clarification on the status of presidential initiatives. The budget director informed us that through its review of statewide, systemwide, and campus programs UCOP has preliminarily determined that presidential initiatives generally fit into one of these categories. He stated that management had not determined how the Office of the President would define presidential initiatives or the status of the $10 million allocated each year to the presidential initiative fund.


60-Day Agency Response

A UCOP systemwide initiatives work group has been formed. This group includes representation from key stakeholders across a variety of functional areas within the Office of the President. The work group will complete a baseline review including development of a comprehensive list of systemwide and Presidential initiatives. The documentation will explain: purpose, commitment levels, and costs. This baseline will be used in the subsequent research phases to implement further recommendations. Consistent with recommendations related to budget process and presentation, these initiatives will be presented in the annual budget process.

  • Estimated Completion Date: April 2018
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's development of a comprehensive list of systemwide initiatives and presidential initiatives.


Recommendation #20 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2019 the Office of the President should publish the results of its review of fund restrictions and fund commitments and identify any funds it anticipates reallocating to campuses.

6-Month Agency Response

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

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's review of fund restrictions due by April 2018.


60-Day Agency Response

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

The fund restrictions work group, consisting of staff from UCOP and systemwide finance, will develop a white-paper and proposed recommendation to be reviewed by key stakeholders and presented for required approvals. This document will serve as a guideline to govern the use and re-allocation of restricted funds, potentially supporting portions of the budget currently funded by unrestricted sources. The information will be published and made accessible in the appropriate format as determined by the Regents.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's review of fund restrictions due by April 2018.


Recommendation #21 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2019 the Office of the President should implement the best practices for budgeting identified by the GFOA and NACUBO, including developing budget policies and procedures and formally documenting, approving, and justifying all one-time and unexpected expenditure requests.

6-Month Agency Response

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

Review of best practices has commenced. Some best practices were identified using NACUBO and will be incorporated with improvements in budget process and presentation.

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's adoption of our recommended budget format due by April 2018.


60-Day Agency Response

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

A budget process work group has been formed and will conduct a research phase that will identify and document budgeting best-practices. This review will include leveraging sources of common best-practices like NACUBO, GFOA, and other sources. UCOP will develop a white paper to document best-practices and recommend an annual budget process from kick-off through Regents approval.

This process will leverage all established review committees (Executive Budget Committee) and key stakeholders consistent with the recommendation to reconvene the Executive Budget Committee. Implementation of this recommendation will require that we improve process, reporting and controls for one-time spending items.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's adoption of our recommended budget format due by April 2018.


Recommendation #22 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2019 the Office of the President should continue to present a comprehensive budget based on the presentation in Figure 11 to the regents, the Legislature, and the public.

6-Month Agency Response

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

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's adoption of our recommended budget format due April 2018.


60-Day Agency Response

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

The budget presentation work group plans to implement improved financial systems to better support on-going development and transparency of the budget presentation, and this requires replacement of the existing budget development system (BDS). Figure 11 will be used, among other best practices guidelines, to establish user requirements for a BDS system.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's adoption of our recommended budget format due April 2018.


Recommendation #23 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 set targets for any needed reductions to salary amounts using the results from its public and private sector comparison and adjust its salaries accordingly.

6-Month Agency Response

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

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's development of a method for weighing comparable public and private sector pay data 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 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.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's development of a method for weighing comparable public and private sector pay data due April 2018.


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.

6-Month Agency Response

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

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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.


Recommendation #25 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 set targets for appropriate employee benefits and implement new processes that ensure that employees adhere to the revised policies regarding employee benefits.

6-Month Agency Response

Procedures are in place at each campus, medical center and the Office of the President to ensure compliance with the systemwide policy and administrative changes made in October 2017. Procedures at the Office of the President are in place to implement the policy changes made in April 2017 and October 2017.

  • Completion Date: October 2017
  • Response Date: November 2017

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

Although the Office of the President asserted to us that this recommendation is fully implemented, we disagree. As we discuss in recommendation 12, the Office of the President and the regents still need to take additional actions related to its policies for car allowances, business meetings and entertainment, employer contributions toward a retirement savings plan for SMGs, and stipends. Moreover, when we asked the Office of the President to provide targets for appropriate employee benefits, it referred us to one line in the 2017-18 budget that stated it aims to reduce employee travel expenditures by 10 percent. We find this single target insufficient to address this recommendation as we intended the recommendation to encompass all employee benefits.


60-Day Agency Response

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

Updates to policies based on benchmarking with federal, state and other universities will be published online.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's review of its employee benefit policies due April 2018.


Recommendation #26 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 create a plan for reallocating funds that it saves to campuses as it reduces its staffing costs.

6-Month Agency Response

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

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our staffing recommendations due by April 2019.


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.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our staffing recommendations due by April 2019.


Recommendation #27 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 implement phase two of CalHR's best-practice workforce planning model by determining its current and future staffing and competency gaps. As part of this phase, the Office of the President should consider the input of stakeholders, including campuses and students, regarding which elements of its organization are of critical importance and which elements it could eliminate or downsize.

6-Month Agency Response

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

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's completion of CalHR's best-practice workforce planning model due April 2019.


60-Day Agency Response

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

From the beginning of implementation, UCOP is proactively seeking and considering the input of stakeholders. The work group for this recommendation includes staff members from compensation, talent acquisition, HR Generalists, the program management office, key units within OP and representatives from campuses/medical centers. Meetings are being scheduled bi-weekly. The analysis that is currently in progress will create the structure and process that OP will use moving forward.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's completion of CalHR's best-practice workforce planning model due April 2019.


Recommendation #28 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2019 the Office of the President should establish spending targets for systemwide initiatives and administrative costs.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 recommendations and establishment of spending targets due April 2019.

The Executive Budget Committee has been consulted on AB97 and is expected to continue to review the list of systemwide initiatives and programs, including establishment of targets by 2019.

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's development of a clear definition for systemwide initiatives and administration due April 2018 and its establishment of spending targets for systemwide initiatives and administrative costs due April 2019.


60-Day Agency Response

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

The systemwide initiatives work group will work with the budget process work group to develop work flow, approvals and review of initiatives in the context of annual budgets. The budget process documentation will include methodology for establishment and communication of annual budget targets expected to include targets for systemwide and Presidential initiatives. The establishment of targets and the prioritization of alternatives will include key stakeholders such as the Executive Budget Committee who will serve in an advisory capacity to the President.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's development of a clear definition for systemwide initiatives and administration due April 2018 and its establishment of spending targets for systemwide initiatives and administrative costs due April 2019.


Recommendation #29 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2019 the Office of the President should publish the results of the review of systemwide and presidential initiatives, including any funds the Office of the President anticipates reallocating to the campuses.

6-Month Agency Response

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

The systemwide and presidential initiatives workgroup will develop reports to enhance transparency. The workgroup will continue to engage the Executive Budget Committee. The workgroup will determine review criteria and a frequency to periodically review items. Governance will be established to enable review and to facilitate prioritization and trade-off decisions, as needed. The workgroup will publish its results.

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's development of a comprehensive list of systemwide initiatives and presidential initiatives due April 2018.


60-Day Agency Response

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

The systemwide and Presidential initiatives work group will develop reporting to enable transparency. The work group will engage the Executive Budget Committee and develop an approach to evaluate the review of the portfolio of projects and initiatives. Governance will be installed to ensure review so that less impactful items may be discontinued. The work group will publish their results.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's development of a comprehensive list of systemwide initiatives and presidential initiatives due April 2018.


Recommendation #30 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2019 the Office of the President should restructure budget and accounting systems to ensure that the costs of the Office of the President can be clearly tracked and reported annually. Specifically, the budget and accounting systems should be able to distinguish between systemwide initiatives, presidential initiatives, and administrative costs.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 recommendations as well as dependencies that will be identified in the budget process workgroup.

UCOP has begun exploring system improvements. UCOP is working with UCLA as the campus identifies a new financial system that includes general ledger and planning tools. We continue to explore the use of systems to effectively capture systemwide and presidential initiatives. Key requirements will also include improved budgeting, tracking and reporting on these projects.

A key dependency for the timing of this item will include the UCLA or alternative campus system implementation, which has a 2- to 3-year timeline, independent of UCOP's control. Actual costs, dependent on commensurate accounting and financial system upgrades, are subject to the UCLA project timeline. UCOP has restructured its budget development system (BDS) to track and report budgeted costs to distinguish between those that are systemwide, presidential and administrative.

  • Estimated Completion Date: April 2019
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our budget, systemwide initiative, presidential initiative, and administrative cost recommendations due April 2018. The Office of the President's response implies that it will not be able to fully implement this recommendation on time because of difficulties in transferring to new systems. Upgrading the Office of the President's budget and accounting systems is very important because these systems affect its ability to present accurate and transparent data to the regents and the public. Because of the importance of this recommendation, the Office of the President needs to fully disclose the challenges it is facing and the impact that delays to system timelines will have on implementing this recommendation.


60-Day Agency Response

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

UCOP will review budget development tools in use at select campuses as part of the financial systems replacement project (driven by UCLA) with a goal of identifying and implementing a new budget tool. In establishing the UCOP requirements, we will explore greater use of systems to categorize Systemwide and Presidential initiatives. The requirements will also include improved budgeting, tracking and reporting on these projects to capture inception-to-date, annual and multi-year spending.

  • Estimated Completion Date: April 2019
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our budget, systemwide initiative, presidential initiative, and administrative cost recommendations due April 2018.


Recommendation #31 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2020 the Office of the President should reallocate to the campuses funds that it identified during its review of fund restrictions and fund commitments.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 recommendations and potentially on UCOP's ongoing funding sources. Impact of this recommendation varies under the established campus assessment model versus direct state appropriations.

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our fund restriction and fund commitment recommendations due April 2018.


60-Day Agency Response

Implementation of this recommendation is dependent on actions taken in response to the April 2018 recommendations and may be dependent on UCOP's on-going funding sources. Impact of this recommendation varies under the established campus assessment model versus direct state appropriations.

Upon completing the initial analysis of current fund restrictions, the fund restrictions work group, consisting of OP and systemwide staff, will develop and document a process for an annual review of fund restrictions and balances. Where fund restrictions or changes in restrictions will allow for broader uses, UCOP will recommend using these funds for programs and areas that further support and benefit the campuses.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our fund restriction and fund commitment recommendations due April 2018. Although we agree that the impact of this recommendation will vary based on the Office of the President's funding situation in April 2020, we are concerned that the Office of the President indicates in its response that it does not plan to directly reallocate these funds to campuses. We look forward to the Office of the President's 6-month response to evaluate the level of campus input in these funding decisions.


Recommendation #32 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2020 the Office of the President should evaluate its budget process to ensure that it is efficient and has adequate safeguards that ensure that staff approve and justify all budget expenditures. If the Office of the President determines that its safeguards are sufficient, it should begin developing a multiyear budget plan.

6-Month Agency Response

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

High-level financial system requirements analysis has included evaluation of new technology and the handling of process flows, financial controls and required resources. UCOP will require the functionality to complete multi-year budgets.

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our budget recommendations due in April 2018 and April 2019.


60-Day Agency Response

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

A budget process work group has been formed and has begun early stages of scoping a robust budget system to replace the existing limited functionality of the current Budget Development System (BDS). In connection with the UCLA financial systems replacement project (UCOP leverages UCLA general ledger and procurement modules), the work group is reviewing budget systems at some of the campuses to evaluate process and technology. In connection with a BDS replacement, the work group will (1) evaluate current process, flows and budget controls and (2) evaluate technology and implement updated systems with new policies, procedures and controls documented in our requirements. Any UCOP investment in an updated budgeting tool will be functionality to complete multi-year budgets.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our budget recommendations due in April 2018 and April 2019.


Recommendation #33 To: University of California

To determine the amount of money that it can reallocate to campuses and to ensure that it publicly presents comprehensive and accurate budget information, by April 2020 the Office of the President should report to the regents on the amount of funds it reallocated to campuses as a result of implementing our recommendations.

6-Month Agency Response

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

The EBC charter includes the following specific language: "The Executive Budget Committee is accountable for ensuring that recommendations are consistent and aligned with the timely incorporation of the CSA audit budget requirements dated April 2017, as part of a transparent planning, resource allocation, and assessment process." As such, UCOP requires that the EBC provide campus-level input on future funding decisions.

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our budget recommendations due in April 2018 and April 2019.


60-Day Agency Response

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

Included in research and evaluation of Best-Practices, the budget process and presentation work groups will develop a comprehensive budget check-list to be submitted annually with budgets. The work groups will include the requirement to report amounts reallocated to campuses or used to offset subsequent year assessments or other purposes as determined by the President.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our budget recommendations due in April 2018 and April 2019. The impact of this recommendation will vary based on the Office of the President's funding situation in April 2020; however, we are still concerned that the Office of the President implies in its response that it may not directly reallocate these funds to campuses. We look forward to the Office of the President's 6-month response to determine the level of campus input on these funding decisions.


Recommendation #34 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2020 the Office of the President should adjust its salary levels and ranges to meet its established targets.

6-Month Agency Response

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

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our salary restructuring recommendations due in April 2018 and April 2019.


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 and targets.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our salary restructuring recommendations due in April 2018 and April 2019.


Recommendation #35 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2020 the Office of the President should adjust its employee benefits to meet its established targets.

6-Month Agency Response

Systemwide policy changes were implemented in October 2017 based on benchmarking data from federal and state sources as well as CSU and other public universities .

  • Completion Date: October 2017
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our employee benefit recommendations due in April 2018 and April 2019. As we discuss in recommendation 12, the Office of the President and the regents still need to take additional actions related to its policies for car allowances, business meetings and entertainment, employer contributions toward a retirement savings plan for SMGs, and stipends.


60-Day Agency Response

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

Policies will be revised based on benchmarking with federal, state, and other university policies.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our employee benefit recommendations due in April 2018 and April 2019.


Recommendation #36 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2020 the Office of the President should reallocate funds to campuses when adjustments to its salaries and benefits result in savings.

6-Month Agency Response

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

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our staffing related recommendations due April 2018 and April 2019.


60-Day Agency Response

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

Any potential savings from this process will either be reallocated to campuses or used for programs and areas that further support and benefit the campuses.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our staffing related recommendations due April 2018 and April 2019. The impact of this recommendation will vary based on the Office of the President's funding situation in April 2020; however, we are still concerned that the Office of the President indicates in its response that it does not plan to directly reallocate these funds to campuses. We look forward to the Office of the President's 6-month response to determine the level of campus input on these spending decisions.


Recommendation #37 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2020 the Office of the President should implement phase three of CalHR's best-practice workforce planning model by presenting the final workforce plan to its staff and beginning its implementation by carrying out workforce planning strategies covering a three-to five-year period. The Office of the President should make its final workforce plan publicly available.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 and April 2019 recommendations.

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our workforce planning recommendations due April 2018 and April 2019.


60-Day Agency Response

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

UCOP will carry out workforce planning strategies covering a three to five year period and will make its final workforce plan publicly available.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our workforce planning recommendations due April 2018 and April 2019.


Recommendation #38 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2020 the Office of the President should implement phases four and five of CalHR's best practice workforce planning model by implementing its workforce plan strategies and annually evaluating the completed workforce plan strategies against defined performance indicators and revising the plan where necessary.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 and April 2019 recommendations.

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our workforce planning recommendations due April 2018 and April 2019.


60-Day Agency Response

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

UCOP will annually evaluate its completed workforce plan strategies against defined performance indicators and revise the plan where necessary.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our workforce planning recommendations due April 2018 and April 2019.


Recommendation #39 To: University of California

To ensure that its staffing costs align with the needs of campuses and other stakeholders, by April 2020 the Office of the President should report to the regents on the amount of funds it reallocates to campuses as a result of implementing our recommendations.

6-Month Agency Response

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

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our staffing-related recommendations due April 2018 and April 2019.


60-Day Agency Response

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

The Regents have established regular reporting schedules related to audit implementation progress and the recommendations made in the report. UCOP will report to the Regents at those times throughout the year and on items recommended by the State Auditor in its report.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our staffing-related recommendations due April 2018 and April 2019.


Recommendation #40 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2020 the Office of the President should publicly publish its progress in meeting systemwide initiative and administrative cost targets.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 and 2019 recommendations.

Upon completion of this requirement, UCOP will identify the best, most appropriate way(s) to publish reports regarding systemwide and presidential initiatives, to further transparency of these efforts.

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our systemwide initiative and administrative cost recommendations due April 2018 and April 2019.


60-Day Agency Response

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

Upon completion of this requirement, UCOP will identify the appropriate and best way to publish reports regarding systemwide and Presidential initiatives to ensure transparency of these efforts.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our systemwide initiative and administrative cost recommendations due April 2018 and April 2019.


Recommendation #41 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2020 the Office of the President should reallocate funds from the review of systemwide and presidential initiatives, as well as any administrative cost savings, to campuses.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 and 2019 recommendations.

The Executive Budget Committee, consistent with its charter, will continue to serve in its campus-input role of making recommendations on resource allocations.

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our systemwide initiative and presidential initiative recommendations due April 2018 and April 2019.


60-Day Agency Response

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

The systemwide and Presidential initiatives work group will develop reporting to enable transparency. The work group will publish reports their results. Potential reallocations to the campuses will be included as applicable.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our systemwide initiative and presidential initiative recommendations due April 2018 and April 2019.


Recommendation #42 To: University of California

To ensure that its spending aligns with the needs of its stakeholders, including campuses and students, by April 2020 the Office of the President should report to the regents on the amount of funds reallocated to campuses.

6-Month Agency Response

Implementation of this recommendation will be dependent on actions taken in response to the April 2018 and 2019 recommendations. Furthermore, the UCOP resources available to fund these activities may depend on the outcome of other recommendations, including those relating to fund restrictions, budget process and reserves.

The Executive Budget Committee, consistent with its charter, will continue to serve in its campus-input role of making recommendations on resource allocations.

  • Estimated Completion Date: April 2020
  • Response Date: October 2017

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

The status of this recommendation is pending the Office of the President's implementation of our systemwide initiative, administrative cost, and presidential initiative recommendations due April 2018 and April 2019. The impact of this recommendation will vary based on whether the Office of the President is funded via a direct appropriation from the state or the campus assessment in April 2020.


60-Day Agency Response

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

Included in our research and evaluation of Best-Practices, UCOP will develop a comprehensive budget check-list to be submitted annually with budgets. We will include the requirement to report amounts reallocated to campuses or used for programs and areas that further support and benefit the campuses.

  • Estimated Completion Date: April 2020
  • Response Date: June 2017

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

The status of this recommendation is pending the Office of the President's implementation of our systemwide initiative, administrative cost, and presidential initiative recommendations due April 2018 and April 2019. The impact of this recommendation will vary based on the Office of the President's funding situation in April 2020; however, we are still concerned that the Office of the President indicates in its response that it does not plan to directly reallocate these funds to campuses. We look forward to the Office of the President's 6-month response to determine the level of campus input on these spending decisions.


All Recommendations in 2016-130

Agency responses received are posted verbatim.