Report 2015-107 Recommendation 12 Responses

Report 2015-107: The University of California: Its Admissions and Financial Decisions Have Disadvantaged California Resident Students (Release Date: March 2016)

Recommendation #12 To: University of California

To maximize the savings and new revenue from the Working Smarter initiative and ensure that the university uses them for its academic and research missions, the Office of the President should immediately require that the campuses fully participate in all projects unless they can provide compelling evidence demonstrating a harmful effect.

Annual Follow-Up Agency Response From October 2021

As we have previously noted, the University does require campuses to use common administrative systems or processes in many instances to achieve operational efficiencies, cost savings, or other desirable outcomes. Examples include the University's online undergraduate application for admission, Apply UC; the Integrated Capital Asset Management Program (ICAMP); insurance provided though Fiat Lux, the University's captive insurance program; UCPath, the University's systemwide human resources and payroll information system; and many others. The scope of campus participation in such projects has increased since the time of the audit—most notably with the implementation of UCPath at every UC campus and medical center by 2020.

As noted in our earlier response, however, we believe that in many instances, an "opt-in" approach is often more appropriate than a "top-down" approach. An opt-in approach requires programs to demonstrate their potential value to campuses and allows each campus to determine which administrative priorities to focus its resources on and what resources are required to adopt a systemwide program or system.

Because the University requires full campus participation in some but not all such programs or systems, and because the extent of systemwide participation has increased since the time of the audit, we believe that "Not Fully Implemented" correctly describes the implementation status for this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

The university's response describes the condition at the time of the audit. Because the university has not taken action to mandate the campuses' participation, we evaluate this recommendation as no action taken.

Annual Follow-Up Agency Response From November 2020

The University does require campuses to use common administrative systems or processes in many instances to achieve operational efficiencies, cost savings, or other desirable outcomes. Examples include the University's online undergraduate application for admission, Apply UC; the Integrated Capital Asset Management Program (ICAMP); insurance provided though Fiat Lux, the University's captive insurance program; UCPath, the University's systemwide human resources and payroll information system; and many others. As noted in our earlier response, however, we believe that an "opt-in" approach is often more appropriate than a "top-down" approach. An opt-in approach requires programs to demonstrate their potential value to campuses and allows each campus to determine which administrative priorities to focus its resources on and what resources are required to adopt a systemwide program or system. Because the University requires full campus participation in some but not all such programs or systems, we believe that "Not Fully Implemented" correctly describes the implementation status for this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

The university's response describes the condition at the time of the audit. Because the university has not taken action to mandate the campuses' participation, we evaluate this recommendation as no action taken.

Annual Follow-Up Agency Response From November 2019

The University does require campuses to use common administrative systems or processes in many instances to achieve operational efficiencies, cost savings, or other desirable outcomes. Examples include the University's online undergraduate application for admission, Apply UC; the Integrated Capital Asset Management Program (ICAMP); insurance provided though Fiat Lux, the University's captive insurance program; UCPath, the University's systemwide human resources and payroll information system; and many others. As noted in our earlier response, however, we believe that an "opt-in" approach is often more appropriate than a "top-down" approach. An opt-in approach requires programs to demonstrate their potential value to campuses and allows each campus to determine which administrative priorities to focus its resources on and what resources are required to adopt a systemwide program or system. Because the University requires full campus participation in some but not all such programs or systems, we believe that "Not Fully Implemented" correctly describes the implementation status for this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

The university's response describes the condition at the time of the audit. Because the university has not taken action to mandate the campuses' participation, we evaluate this recommendation as no action taken.

Annual Follow-Up Agency Response From October 2018

As a point of clarification, there is no longer a "Working Smarter" initiative; there is, however, a growing number of examples where the University has established systemwide or multi-campus purchasing or strategic sourcing agreements to achieve cost savings and/or new revenues related to the procurement of goods and services. The University continues to believe that, generally speaking, demonstrating the potential value of these agreements to campuses and departments in order to gain and expand their participation is preferable to mandating participation in a top-down manner. UC campuses operate with a high level of autonomy, which fosters local innovation and allows each campus to "opt in" to those systemwide or multi-campus agreements that best meet its particular needs. This approach also requires systemwide efforts to demonstrate the highest possible value since they must prove themselves to campuses and departments instead of relying on top-down mandates. By providing shared tools, timely access to information, training, and periodic outreach to campus leadership and relevant staff, the University has been able to increase participation by campus departments in a variety of programs to realize benefits, avoid costs, and deliver savings in support of the University's mission.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Although we concur that campuses should have autonomy in academic decisions, having autonomy in administrative decisions does not take advantage of the significant efficiencies that can occur when the campuses use common systems. Until UC directs the campuses to use the administrative processes that it asserts are more efficient and cost beneficial, we will consider this recommendation as will not implement.

Annual Follow-Up Agency Response From November 2017

The Office of the President has reached out to coordinators of cost savings and revenue-generating programs (originally part of the Working Smarter initiative) to assess the level of participation, potential for additional savings, and barriers to further participation. Most of the programs already have high levels of participation by campuses, and are contributing benefits to campus departments that may be used to support core academic, research, and public service missions. However, there are opportunities to expand participation further in the areas of Procurement, Travel, Purchase Card, and Equipment Insurance. UCOP will discuss programs with coordinators to recommend policy changes, investments, or incentives that will be needed to increase participation to maximize savings and revenue.

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

The university does not indicate whether it has directed campuses that they must participate in the Working Smarter initiative, as our recommendation states.

1-Year Agency Response

Cost-savings and revenue-generating efforts that were originally part of the Working Smarter initiative have now become embedded in processes and programs throughout the UC system. UCOP will reach out to coordinators of programs that were initiated under Working Smarter to identify the potential for additional savings made possible by their programs - e.g., through greater utilization of systemwide contracts. UC expects that it will be able to identify and assess those potential savings and to make any recommendations regarding increased participation by July 2017. The University disagrees with the State Auditor that the University's proposed timeline suggests that it is not "serious about generating savings and new revenue." Rather, it reflects a combination of competing priorities - including but not limited to providing timely responses to the State Auditor in conjunction with a subsequent audit of the Office of the President - and limited staff resources at UCOP.

California State Auditor's Assessment of 1-Year Status: No Action Taken

The university failed to provide documentation of any assessment conducted with campuses related to savings or new revenue from its Working Smarter initiative. Further, its response indicates that it has not yet reached out to program coordinators to identify the potential for additional savings. Moreover, the university does not indicate whether it has directed campuses that they must participate in the Working Smarter initiative.

6-Month Agency Response

The University will assess with campuses the feasibility of participating in the remaining programs within the Working Smarter portfolio. Each campus, together with UCOP, must evaluate the timing and deployment of limited resources toward systemwide or local campus priorities. Separately, existing projects that are fully implemented but not yet experiencing full participation at every UC location (such as UC Travel /Connexxus) can be re-examined for near-term opportunities to expand the adoption rate where there is room for improvement.

California State Auditor's Assessment of 6-Month Status: No Action Taken

The university indicates that it will assess and evaluate campus participation in Working Smarter programs, however these activities have yet to take place. Further, the university's response does not demonstrate an urgency to optimize savings from the Working Smarter initiative. If the university was serious about generating savings and new revenue, it would have at a minimum, begun an assessment of campus participation in the remaining Working Smarter programs and mandated full participation of campus staff in existing programs.

60-Day Agency Response

Sent as attachment

California State Auditor's Assessment of 60-Day Status: No Action Taken

In its attachment, the university stated that over the next several months, it will assess with campuses the feasibility of participating in the programs within the Working Smarter portfolio. The university also acknowledged that opportunities exist to increase participation where feasible. However, the university did not provide evidence that it has begun this process.

All Recommendations in 2015-107

Agency responses received are posted verbatim.