Cross-Cutting Issues
ADMINISTRATIVE EFFICIENCIES: WORKING
SMARTER
On July 14, 2010, the Regents adopted a resolution regarding systemwide administrative efficiencies1. The
resolution directs the President, in consultation with a small committee of campus representatives, to, where
1See http://www.universityofcalifornia.edu/regents/regmeet/
jul10/f2.pdf
appropriate, design and implement common best-practice administrative systems, including but not limited to student information systems, financial systems, human resources systems, payroll systems, and their underlying technology support systems. This resolution was further bolstered by the recommendation of the Commission on the Future to accelerate this initiative2.
The initiative evolved into Working Smarter, a five-year program that is focused on promoting and accelerating projects that bring all UC locations the benefits and efficiencies of one common administrative framework. With a portfolio of more than 30 projects, the majority of
Working Smarter projects have specific “streamline and
improve” objectives with significant cost savings relative to the initial investment. Other projects are focused on producing new sources of revenue. Whether through direct cost savings or new revenue, the overarching objective of
Working Smarter is to redirect $500 million in five years
from administration to the academic and research mission of the University.
Many Working Smarter projects are still in development or early implementation, and positive fiscal impact, net of any targeted investment, is not expected for another year or more. Each project differs in its complexity, implementation timeline, and expected fiscal impact. Some projects incur one-time savings or revenue numbers. They are measured and accrue to the University’s fiscal goals, and are
instrumental in building momentum and coveted “quick wins.”
But the far greater focus of the initiative is on permanent savings or revenue. These tend to be more difficult to achieve and usually result from substantial and
transformative changes. For these projects, a more robust project team and governance structure are generally in place. All Working Smarter projects have identified specific executive sponsorship, project owners, teams, and
stakeholders.
At the close of the third year in the five-year program, nine projects reported incremental savings or new revenue in
2Commission on the Future Final Report, November 2010,
Recommendation #14, “Expedite Implementation of UC’s Initiative on Systemwide Administrative Reforms, with the Goal of $500 Million in Annual Savings,” page 20.
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Display III-5: 2012-13 Working Smarter Projects: Cost Savings and New Revenue (Dollars in Millions)
Benefits Redesign (Family Member Eligibility) $35.00 UC Equipment Maintenance Insurance
Program (UCEMIP) $0.63
Enterprise Risk Management (ERM) $32.03
Purchase Card Program $5.74
Liquidity Management (STIP/TRIP) $33.23
Parent Giving $15.00
Strategic Procurement $23.24
Connexxus Travel $7.93
Statewide Energy Partnership $18.53
Total $171.33
the prior year, most of which accrue to non-core funds. This is summarized in Display III-5.
Benefits Redesign/HR-Compliance: Family Member Eligibility Verification is a project which, in the last 12 months, validated every single individual claimed as a dependent and covered by UC’s health benefits. By ensuring only eligible dependents were covered, the University expects a $35 million annual reduction in employer costs. As part of the project, a more stringent set of verification measures was put in place and a systemwide Family Member Eligibility Verification process will be conducted every four years. More on this project at:
http://workingsmarter.universityofcalifornia.edu/projects/ent erprise-risk-management/case-study/
Connexxus Travel is a centrally managed travel program offering online and agent-based reservation options and discounts to UC and CSU travelers. Across all locations, average utilization is 39% for all types of UC travel. To increase utilization, the project team recently redesigned the portal to strengthen the user experience. Over $6 million of the reported $7.9 million savings in the program are attributable to negotiated airline discounts. More on this project at:
http://workingsmarter.universityofcalifornia.edu/projects/con nexxus-travel-program/case-study/
Enterprise Risk Management (ERM) takes a strategic approach to managing enterprise-wide risks. These include hazard risks such as workers’ compensation, a variety of liability risks and property. It does the same with other strategic, operational, financial, and reputational risks. UC
campuses continue to enhance their ERM programs through a collaborative effort. UCOP Risk Services supports campuses with investment in new systems and tools to facilitate the efficient management of risk.
UC’s cost of risk is made up of a variety of components, the largest of which is self-insured claims. The cost of
individual claims accounts for about two-thirds of the annual total. The remaining third of the cost of risk goes toward expenses for claims administration, loss control, and loss prevention programs, as well as excess insurance premiums to cover the costs of individual claims above UC’s retention level. UC has been successful in managing its risk by investing in claims administration, loss control, and loss prevention programs. The “Be Smart about Safety” program in particular has positively impacted the loss experience, resulting in a reduction of the actuarial estimates of ultimate losses, which in turn has led to a reduction in the total cost of risk. A similar program, “Shoes for Crews,” is also being credited by Risk Services with reductions in workers compensation injuries and the cost of incurred claims.
More on this program at:
http://workingsmarter.universityofcalifornia.edu/projects/ent erprise-risk-management/overview/
Liquidity Management is optimizing the allocation of campus working capital between UC’s Short Term Investment Pool and its Total Return Investment Pool, as well as to explore the possibility of a systemwide, coordinated approach to liquidity management. By reviewing historical trends and likely future needs for operating capital, and then making moderate adjustments, the University has generated an additional $33.2 million in investment income during 2012-13.
More on this project at:
http://workingsmarter.universityofcalifornia.edu/projects/liqui dity-management/case-study/
P200: Strategic Procurement is a Universitywide program coordinated at UCOP by Procurement Services staff who negotiate vendor contracts to leverage UC’s substantial combined buying power. The ultimate goal is to invest in people, processes, and technology to return $200 million in new savings.
Cross-Cutting Issues
Because the new procurement system is not yet fully launched, Working Smarter has opted not to report negotiated contract savings. In 2012-13, participating UC locations received a combined total of over $23 million from across the 138 UC-wide contracts, comprised of patronage incentive payments, volume incentives, early pay discounts, and e-commerce incentives. In many vendor purchase contracts, to encourage local contract compliance and aid in supporting complementary programs such as
eProcurement use, the University receives quarterly cash rebates of usually 2% of net purchases made under the agreement. These payments are monitored centrally, but made directly to the local campus.
More on this project at:
http://workingsmarter.universityofcalifornia.edu/projects/e- sourcing/p200-program-overview/
Parent Giving places increased emphasis on donations from parents of UC students. Several years ago, UC determined that parent giving at UC was falling short compared with other universities. UCOP provided initial funds and, working with counterparts at each of the nine undergraduate campuses, implemented the Parent Giving and Supplemental Development Fund to boost parent and alumni donations and support other giving models. These funds were matched on a two-for-one basis by the campuses. Due to significant budget cuts and expected maturity of the programs reducing reliance on that support, the funding was recently decreased.
In the first year of the program, systemwide parent giving rose to $10.7 million from $3.6 million the previous year. Parent Giving is expected to top $15 million in 2012-13. These are preliminary results and based on conservative estimates.
More on this project at:
http://workingsmarter.universityofcalifornia.edu/projects/par ent-giving/case-study/
Purchase Card Program generated over $5 million in direct savings, incentive payments, and signing bonuses in calendar year 2012. The program provided additional savings to the UC-operated national laboratories not reported here. While the Purchase Card is acknowledged as a more efficient payment vehicle than payment via hard
copy check, that process efficiency is not monetized in the
Working Smarter reported results.
More on this project at:
http://workingsmarter.universityofcalifornia.edu/projects/pur chase-card-program/case-study/
The Statewide Energy Partnership is a portfolio of many hundreds of energy efficiency projects at campuses and medical centers. The University of California/California State University (UC/CSU) and Investor-Owned Utilities (IOUs) entered into an Energy Efficiency Partnership with a goal of achieving immediate, long-term peak energy and demand savings, establishing a permanent framework for a sustainable, long-term, comprehensive energy
management program.
Notable highlights in the last reporting period include the completion of the largest single energy savings project at UCSF and the first large-scale energy upgrade project at UCSF Medical Center. In a ceremony at UCSF on February 19, 2013, PG&E (Pacific Gas & Electric Company) presented UCSF with a check for $846,000. Events like this one are becoming increasingly common across UC, as grant-based incentives are paid out for completed projects that also result in significantly lower energy bills.
More on this project at:
http://workingsmarter.universityofcalifornia.edu/projects/stat ewide-energy-partnership/case-study/
UC Equipment Maintenance Insurance Program (UCEMIP) is focused on a standardized, proactive approach to the maintenance of the University’s equipment and technology hardware. The program aims to replace emergency repair and certain original equipment manufacturer maintenance contracts with a central equipment maintenance insurance policy priced to cover a wide range of equipment at any UC location. Over the past year, participating UC locations saw direct savings of over $600,000.
More on this project at:
http://workingsmarter.universityofcalifornia.edu/projects/equ ipment-maintenance/case-study/
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It is important to note that in the first three years of Working
Smarter, progress has included monies that accrue to core
and non-core (such as auxiliaries and other self-supporting functions within the University) operations. The core budget savings will most directly help the University through the current fiscal crisis by freeing up funds that were previously used for other purposes, avoiding costs, or generating revenue. It is estimated that about two-thirds of the positive fiscal impact from Working Smarter projects will accrue ultimately to core operations.
In evaluating projects as candidates for inclusion in the portfolio, an assessment is made of expected fiscal impact or process efficiency. Fiscal impact is reportable within the portfolio only after savings or revenue eclipse any upfront investment (such as in implementation services or new technologies). Across all projects, only direct cost savings and realized revenue are measured and reported as positive fiscal impact under Working Smarter. In addition, some projects incur permanent savings, usually resulting from substantial and transformative changes; others are more opportunistic. The latter, usually one-time events, are measured and accrue to the University’s fiscal goals, but the far greater focus of the initiative is on permanent savings or revenue and those projects that reinforce a focus on process efficiency.
This progress is encouraging: in the third year of the program, the University measured over $170 million in positive fiscal impact (see Display III-5). Over the three- year period, Working Smarter projects have generated a total of $460 million in savings. Maintaining the momentum of the program will rest with both the continued progress of more mature projects and the identification of new strategies to deliver future and sustained impact.
DIVERSITY
UC is dedicated to achieving excellence through diversity in the classroom, research laboratory, and the workplace. It strives to establish a climate that welcomes, celebrates, and promotes respect for the contributions of all students and employees.
In 2007, the Regents adopted as policy the UC Diversity Statement defining diversity as the “variety of personal experiences, values, and worldviews that arise from
differences of culture and circumstance. Such differences include race, ethnicity, gender, age, religion, language, abilities/disabilities, sexual orientation, gender identity, socioeconomic status, geographic region, and more.”3
The value of diversity in all aspects of UC’s educational programs is fundamental to its mission as a land-grant institution.
The unique environment created by UC’s system of 10 top- tier public research universities contributes to the overall quality of a UC education. An important aspect of this environment is the ability to take advantage of the social, cultural, and intellectual contributions enabled by having a diverse population of students, faculty, and staff from a variety of underrepresented populations. A diverse University community enhances the quality of education by infusing perspectives and experiences from people of all walks of life in California and beyond, enriching and contributing to the educational environment.
While there are many pockets of success and innovation, the University is committed to focusing greater
and sustained attention on its diversity efforts. To monitor these efforts, the Regents requested an annual accountability report on diversity at UC. The fourth
Accountability Sub-Report on Diversity at the University of California4was presented to the Regents in January 2013.
The report was presented as a special topic report and focused on the diversity by gender, race, and ethnicity of faculty at UC and provides information about four efforts to enhance that diversity. The report indicated that
diversifying faculty is a national challenge for universities, including UC. Among UC and its eight comparison institutions, of all ladder- and equivalent-rank faculty only 7.8% are underrepresented racial and ethnic minorities, and 29.1% are female. However, UC is more diverse than its Comparison 8 institutions. UC’s faculty is 30.5% female and 8.6% underrepresented racial and ethnic minority (American Indian, Black/African/African American, and Chicano/Latino/Hispanic), compared to an average of 28.1% female and 7.3% underrepresented racial and ethnic minority among UC’s Comparison 8 institutions. The report
3www.universityofcalifornia.edu/diversity/documents/
diversityreport0907.pdf.
4http://accountability.universityofcalifornia.edu/documents/
Cross-Cutting Issues
also indicated that new faculty hires at UC are more diverse than the faculty as a whole at UC, which indicates a positive trend in enhancing diversity among UC faculty. Information on efforts to enhance diversity of faculty at UC can be found at http://ucop.edu/academic-
personnel/programs-and-initiatives/index.html.
UC is determined to create a welcoming environment for everyone and help nurture a culture of inclusiveness and respect throughout every campus and location in the system. In recognition of the importance of gauging campus climate to create more inclusive and welcoming environments, in 2010, UC President Yudof formed an Advisory Council on Campus Climate, Culture, and Inclusion charged with monitoring campus progress and metrics and examining campus practice and policy. Each of the chancellors created similar councils on the 10 campuses and, in May 2010, the Regents created the Ad Hoc Committee on Campus Climate. The Advisory Council commissioned a systemwide campus climate study in June 2011 in order to gather a variety of data and assess the quality of life at UC for students, faculty, and staff. This major study will provide much-needed data and accountability measures. The study was conducted between October 2012 and March 2013 and included all populations – students, faculty, and staff – at the
campuses, medical centers, the Office of the President, the Division of Agriculture and Natural Resources, and the Lawrence Berkeley National Laboratory. Study findings will be presented to the Regents in January 2014 and made publically available at http://campusclimate.ucop.edu. UC has taken a leading role in creating more welcoming and inclusive campus environments and is the first higher education institution of its size to complete such a project.
Diversity Within the University Community
UC often describes its diversity aspirations in terms of “reflecting the diversity of California.” Both the University and the state are much more diverse than the nation as a whole. However, while the University community has become increasingly diverse, it has not kept pace with demographic changes in California, especially the rapid growth of the Chicano/Latino population. In Fall 2012, the University community of approximately 365,000 students, faculty, and staff was 17% Chicano/Latino compared to
about 38% for California as a whole. African-Americans represented 5% of the University community compared to 6.6% for California as a whole.
Racial and ethnic diversity at the University changes slowly over time as populations turn over. At the undergraduate level, students turn over every four to five years, providing an opportunity for the University to become more
responsive to demographic shifts in the graduating high school population. Conversely, faculty careers can last 30 to 40 years, requiring a longer trajectory for these population shifts. Since new faculty hires are more diverse than the faculty as a whole, slowing of faculty hiring in response to budget cuts could result in delays in diversifying the faculty. Over the last 16 years, proportions of underrepresented minorities (Chicano/Latino, African- American, or American Indian) have increased among undergraduates by 33% compared to an increase of only 24% among ladder-rank faculty. In Fall 2012, 24.8% of UC’s almost 182,000 undergraduates were underrepresented minorities, compared to only 18.6% of 133,000 undergraduates in Fall 1996. In Fall 2012, 8.7% of all 9,800 ladder rank faculty were
underrepresented minorities, compared to just 7% of all 8,000 ladder rank faculty in Fall 1996.
Staff Diversity. The most diversity is seen among UC’s Professional and Support Staff, and the least among its Senior Management Group, although UC now has its first female President and its top two leaders, the President and the Provost, are women. Despite some progress over the years, in 2012, the Senior Management Group (consisting of 182 employees) was 80% white and 59% male. Among the over 92,000 Professional and Support Staff, two-thirds are women across all racial and ethnic groups. In Fall 2012, 27% of all 102,500 non-academic staff were underrepresented minorities and 51% were racial and ethnic minorities (including Asian Americans), up from 25.4% underrepresented minorities and 42% racial and ethnic minorities in Fall 1996 (72,500 total non-academic staff population in Fall 1996). The largest increase was among Asian Americans who comprised 17% of all staff in Fall 1996 compared to 23% in Fall 2012, followed by Chicano/Latino staff (13.5% in Fall 1996 compared to 19% in Fall 2012).
Cross-Cutting Issues
Faculty Diversity. The ladder-rank faculty at the University of California is more diverse, on average, than the faculty at American Association of Universities (AAU) public and private institutions. Of all faculty and academics (34,700 in Fall 2012 and 24,000 in Fall 1996), 9% were underrepresented racial and ethnic minorities in Fall 2012 compared to 6.7% in Fall 1996. In Fall 2012, 6% of faculty and other academics were Chicano/Latino (international and domestic), 3.8% were American Indian (international and domestic), and 2.3% were Black/African/African American (international and domestic); 23% of faculty and other academics were Asian or Asian American
(international and domestic) in Fall 2012. Despite some gains overall, UC’s over 9,800 ladder- and equivalent-rank faculty is still over 74% white and nearly 70% male. At the assistant professor level, UC’s hiring of underrepresented faculty in life sciences, arts and humanities, social
sciences, and education exceeds national availability but is below estimated national availability in engineering and physical sciences.
Graduate Academic Students. Similar to graduate programs across the country, UC’s graduate academic programs struggle with increasing racial and ethnic diversity. Just over 11% of all 31,400 graduate academic students were underrepresented minorities in 2012. This number has only slightly increased as a proportion of all graduate academic students since Fall 1996 (when about