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March 22, 2010


B. Questions to the President.

From the Faculty Council Executive Committee.
1. Because we are in a flat budget situation, how will the faculty be able to provide our views in a timely way (e.g., not after the fact) about the University’s priorities? For instance, many budget cutting plans have been driven by a strategic decision to maintain a raise pool. If future strategic planning requires cuts to various programs, how will the faculty be able to provide our views concerning the positive and negative impacts of such decisions before any budget decisions are made?

President Powers said the provost had met with the Faculty Advisory Committee on Budgets (FACB). The president indicated he would also be meeting with the committee on a monthly basis and more frequently if situations developed that required quick decisions. He said he thought the FACB could “over time be used by the administration more effectively,” and then he added, “We will certainly be consulting with that group.” He explained that he and a small group of other administrators meet monthly with the Faculty Council Executive Committee and more frequent meetings of this group could be held if needed. President Powers assured the Council that faculty concerns and ideas would be considered when he said, “I will certainly be getting input before the decisions are made priorities.”

In response to the question about the raise policy, President Powers said that the colleges/schools and administrative units have all been asked to preserve two percent of their budgets for raises. He said the critical question regarding this priority is that it will need to be carefully compared to other alternative needs, and he expects there will be differences of opinion on the priorities. Staff and faculty, for the most part, have had no raises this year and UT Austin lags behind its competitors on salaries even after the budget cuts that are occurring throughout the United States. President Powers said he thought salary increases are important, and that is why he has insisted that the two percent amount be built into the planning of the University. He then went on to say that if providing salary increases could only occur at the expense of being unable to offer needed classes or perhaps cutting out some non-essential administrative functions, the choices would be easy and the courses would be offered. However, he indicated that the choices would not be that easy and there would be disagreements as to what the priorities should be. Because what the trade-offs might be is unknown, information gathering through the incorporation of projected cuts and reallocations is underway in the budgetary processes across the campus. These tentative plans will allow the administration to understand these trade-offs and the concerns involved in each choice. He explained that he thought it was important to adopt “some type of salary raise policy across the board, not the kind of structural one we had both for faculty and staff,” but one that had been arrived at after there was information that answered the question “compared to what.” He said before this issue can be decided that he would be consulting with the FACB, FCEC, vice presidents, and deans. He said the major share of discussions regarding these priorities would occur within the colleges/schools,” and “there ought to be similar processes that set the priorities.”

2. We understand that some trimming will be occurring in the upper administration budget (the offices of the vice presidents). For our information in terms of thinking about University priorities, what was the structure (number of vice presidents and number of staff members in the VPs’ offices) 10 years ago, 5 years ago, and this year? What was the budget for these offices 10 years ago, 5 years ago, and this year not in dollars necessarily but in terms of a relation to the general academic budget (e.g., 10% of the amount in the general academic budget)?

President Powers said he did not yet have a complete answer to these questions because of the complexity involved in collecting and analyzing the information, especially given the changes that have occurred during the last ten years in the administrative structure of the University. He said many functions in the past were run out of the chief financial officer’s budget before President Faulkner decided to establish portfolios for the physical plant and human resources and to transfer a good deal of the budget to the provost’s office. Because of these changes, the president said comparisons would be somewhat difficult to make and assess.

In addition, he pointed out there has been a substantial increase in regulation of University activities with the requisite measurement and monitoring responsibilities that assure compliance and timely reporting. However, President Powers said that the information gathering to answer the questions was underway and would be useful to have. He added that the provost’s office now is using account-driven budgeting processes, which according to the president, “is great for accountants and is not good for planning of these purposes. “ He reported that for about a year there has been a major effort to gather information and report and store it such that key indicators can be monitored and used in management decisions. For examples, he mentioned the following broad questions: “How have things grown? How have things shrunk? How have priorities shifted?” More specifically, he said these records would allow matters regarding the usage of assistant instructors, lecturers, and various types of staff members as well as management positions over time to be accurately understood.

He cautioned that some of the information would not be easy to find and assemble, but the plan was to “come forward with whatever we have.” He added that the split between the aggregated funds allocated to the portfolios of the vice presidents is about equal to that of the aggregated funds allocated to the colleges/schools. This categorization, according to President Powers should not be seen simply as a comparison of administrative costs vs. programmatic costs. He said there is administrative funding in the college/school budgets, and the portfolios of the vice presidents pay for utilities, police services, student health center services, parking, residence halls, etc. He said he was always trying to look at what he calls “the administrative budget,” and was pleased that the Legislative Budget Board had found two years ago that the University’s share of the core budget that goes toward administrative functions is only about half that of the average of state agencies—five percent vs. ten percent respectively. According to President Powers, the findings provided both good and bad news: the good news is that the University operates with relatively low administrative costs whereas the bad news is “it’s harder to find easy low-hanging fruit” for budget cuts.

3. Will the present level of PI discretion on spending external grant monies change? If so, how? In your answer, can you include any policies about hiring of personnel (students, staff, fellows) off of such funds?

President Powers responded that there were certain funds that the University cannot tap into to meet institutional needs during a period of budget cuts and reallocations because of contractual agreements. For example, he said the funds a principal investigator has been granted for a research project and those the University receives from some of its endowments are dedicated to specific purposes. He said the use of 26 accounts for these specific projects has not been restricted by the administration, and hiring of staff, such as graduate students and lab technicians, has been occurring at least to the best of his knowledge. He said he was reasonably certain that this policy would not change. He indicated that last summer there had been discussion that everyone ought to share in the pain of the budgetary constraints when the issue about pending raises for the existing personnel on such projects arose, and his own viewpoint was that horizontal equity was an important factor for the morale of workers throughout the University. However, he also understood that it was necessary to use the resources to meet the goals of the intended projects, and he thought in retrospect, there might have been a need for improved communication indicating the policy had not been changed. He said this would be an important issue in the new salary policy that is currently being discussed. Although he still feels horizontal equity is important, he would want to see the funds expended for their intended purposes to assure the work is completed as promised and the personnel and their units move ahead in terms of recognition and increased stature. He added that it is difficult to determine when a budget is isolated from the University’s budget because often the University is subsidizing the lab and project with money that could be used to help meet the institution’s expenses.

4. Are there any plans to change the distribution of indirect cost returns to the colleges? If so, when will they be implemented and what will be the specific changes in distribution?

President Powers responded that there was no plan to change the distribution of indirect costs. He explained that it was “important that indirect costs funds chase the value that created the indirect cost funds.” He added that successful completion of the projects that provide indirect costs help to generate additional indirect cost funds, in which some is returned to the colleges and some to the departments. Executive Vice Provost Steve Monti clarified that some of the indirect costs from a grant is returned to the dean of the unit that generated the funding, but none is automatically returned directly to the department. President Powers then said the existing policy would remain in force, and there were no plans for any changes. Chair Staiger thanked President Powers for providing answers to the questions and apologized that the administrative one had been late in being sent in due to a communication mix-up.

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