Breaking News - February 16, 2011.  California State University System Spends Millions on Consulting Fees and Administrator Raises in the Face of Severe Budget Shortfalls.

The Irascible Professor has learned that in spite of the on-going, major budget crisis in California that has resulted in substantial fee and tuition increases for students, freezes in faculty and staff salaries, layoffs for many part-time faculty members, mandatory furloughs for full-time faculty and staff, and a severe shortage of class sections for students, the California State University System has managed to find enough money to fund 607 raises for CSU managers and administrators.

In addition, the CSU System was able to find millions of dollars to hire outside consultants to lobby the State Legislature, and to provide labor relations services even though the CSU Chancellor's Office maintains a fully-staffed Advocacy and State Relations Office in Sacramento and has a fully-staffed labor relations office in Long Beach.  Each of the California State University campuses also employs their own legislative advocates, and each of the individual campuses also maintains fully-staffed labor relations offices.

The budget problems of the California State University System continue.  Governor Brown has proposed another half-billion dollar cut to the CSU budget for the 2011-12 fiscal year.  Brown is proposing "targeted cuts" that would minimize fee and enrollment impacts on students.  CSU Chancellor Charlie Reed, on the other hand, is lobbying for "maximum flexibility" in applying the new budget cuts.

It appears, however, from information obtained by the California Faculty Association (the faculty bargaining agent) that the Chancellor has taken advantage of previous "unallocated" cuts to approve significant raises for a large number of managers and administrators in the system, and to spend millions of dollars on contracts for private consultants that essentially duplicate the work of current CSU employees.

Between July 1, 2008 and June 30, 2010 a total of 607 management raises were approved by the campus presidents and the Chancellor.  The cost of these raises amounted to over $6.5 million.  These raises were awarded to managers and administrators who already were earning, on average $98,000 per year.  While many of the raises were the result of "reassignment" or "temporary reassignment" of managers and administrators that may have warranted modest salary increases, the raises averaged more than 10% per person.  In an era where faculty and staff salaries actually declined some 10% owing to the number of furlough days they were required to take, 10% raises for several hundred managers and administrators seems excessive.

More egregious, however, is the Chancellor's Office practice of hiring outside consultants to do work that duplicates the efforts of CSU employees.  For example, since 2005 the Chancellor has spent $1.2 million on outside consultants to lobby the California State Legislature even though the CSU has a full-time Advocacy and State Relations Office in Sacramento, which is led by an Assistant Vice Chancellor who receives a salary of $183,000 per year.  This office employs three lobbyists whose pay ranges from $74,000 to $130,000 per year.  Surely the taxpayers are owed an explanation of why the outside lobbyists are needed, when the Chancellor's Office already has highly paid lobbyists who are CSU employees.

On the labor relations front, the Chancellor's Office has been employing an outside labor relations consultancy, C. Richard Barnes and Associates, which received at least $4.3 million in fees from the CSU between 2006 and 2010 even though the system has a fully-staffed labor relations division with a Senior Director for Labor Relations and a Vice Chancellor for Human Resources whose combined salaries are in excess of $400,000 per year.  (The IP would note that the contract between the CSU and  the Barnes organization was the subject of some controversy, because it was awarded on a no-bid basis.)  Barnes and Associates charge the CSU $5,000 per day to offer training sessions to CSU employees, and $4,000 per day to perform bargaining, mediation, and arbitration services for the system.  Again, the question arises as to why both system employees and outside consultants are being paid for essentially the same duties.

Irascible Professor invites your  .

© 2011 Dr. Mark H. Shapiro - All rights reserved.
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