by Dr. Mark H. Shapiro
Commentary of the Day - June 2, 2000: CSU Fullerton, the Campus Where Audits are Preeminent.
Last December the Irascible Professor published an account of Cal State Fullerton's response to a report from the California State Auditor's Office. This report was highly critical of management practices on the campus. Basically, campus administrators chose to stonewall. While admitting that mistakes had been made and that they must be corrected, Cal State Fullerton officials did not provide the press or the public with any details of the administrative deficiencies that led to the problems nor with any information about how the problems were being addressed.
As noted in our previous article, the CSU, Fullerton Academic Senate voted to have its Planning, Resources and Budget Committee (PRBC) conduct its own investigation of the situation to determine if new or revised policies were needed to correct existing deficiencies and to avoid future problems. The IP served on this committee, which includes faculty, administrators, staff and student members. The PRBC completed its investigation, and delivered its report to the Academic Senate shortly before the end of this semester. (The IP wrote the initial draft of the report, which went through several revisions by the committee before it was approved for delivery to the Academic Senate.) The PRBC report now is a public document.
The process that produced the PRBC report was a remarkable example of something known throughout the California State University system as the "Fullerton Way". While it is difficult to provide the reader with a precise definition of the "Fullerton Way", it is an approach to administration and governance in the academy that involves substantial consultation and accommodation between the various constituencies on the campus. In this case, even though two of the principals in the State Auditor's investigation were members of the PRBC - in fact all of the top university administrators serve on it - there was no serious attempt to deflect the investigation from its stated purpose. Neither was there an attempt to keep committee members from asking the hard questions that needed to be asked. In the end, each line of the PRBC report was carefully vetted to ensure that objectivity was achieved. The result was a document that fairly described the errors made by the administration, and their attempts to change procedures and policy to avoid future problems. Deficiencies in the audit process itself were pointed out, and a number of recommendations were made for the establishment or modification of policies to reduce the likelihood of future problems.
The PRBC report confirms some of the key allegations made by the State Auditor. Namely, that the establishment of an "all-purpose" university trust account in the early 1990's was done without appropriate legal authority. This was done to avoid returning unspent funds to the state general at the end of each fiscal year, as required by law. The PRBC also came to the same conclusion as the State Auditor regarding the establishment of the University Advancement Foundation. This foundation, which was put in place to facilitate the private fundraising activities of the university and to manage donated funds, should have been established as an official "auxiliary" of the university. Instead, it was created as an independent 501(c)(3) foundation with no direct ties to the university. This apparently was in violation of state laws and regulations.
Many of the other issues raised by the State Auditor were not nearly so clear cut. For example, the State Auditor questioned a number of personnel actions carried out by the university's Chief Financial Officer. The committee learned that she acted aggressively to revamp and modernize operations in the Business and Financial Affairs division of the university. In doing so, she may have pushed the flexibility allowed in administrative contracting and hiring close to the allowable limits. Clearly, some of her actions upset personnel in her division, but no evidence was uncovered that would indicate that the actions taken were in violation of law or policy.
The State Auditor raised a number of concerns about the operations of the University Advancement Foundation. In some cases there appeared to be misunderstandings on the part of the Auditor about how fundraising activities are carried out. Poor accounting controls and procedures in the UAF also contributed to the problems, but many of these problems since have been resolved. However, the UAF is not entirely out of the woods yet.
The IP has learned that a new audit of the University Advancement Foundation is underway now, and that additional problems may have been uncovered. In late May the vice president in charge of university advancement resigned owing to health reasons. We also have received information from reliable sources that the CEO of the University Advancement Foundation recently tendered his resignation.
Meanwhile, we have learned from reliable sources that the State Auditor has conducted two additional audits on campus during the spring semester. The first of these, which looked at the use of campus purchase cards (these essentially are credit cards that can be used by university employees to purchase goods and services up to preset limits), apparently found only minor problems. The second audit is looking into the operations of the university's physical plant department, with particular attention being paid to the way in which other parts of the university are charged for the services of physical plant employees. So far we have not learned the results of this audit.
This brings us
to the lead for this article. When our current president took office
a decade ago, he immediately began a process to revise the "mission and
goals" statement for the university. The outcome of that process
was an effort to position Fullerton as the campus "where learning is preeminent".
However, in light of the events of recent months us jaded old-timers have
begun to refer to Fullerton as the campus "where audits are preeminent."
It seems that even though today's university administrator is more a manager
than a scholar he or she is no more capable of managing the enterprise
than the administrators of a previous era who were more scholars than managers.