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March 5, 2009

Public release of revenue/expense report on hold

The Senate budget policies committee won’t receive anytime soon the athletics funding information it expected to receive in a University report last June. The report, prepared by the Office of Budget and Controller for the University Planning and Budgeting Committee (UPBC), shows the revenues and expenses attributable to each Pitt unit.

BPC, which reviewed a draft of the University’s fiscal year 2007 attribution report in executive session last May, sought the public release of the final document as a precursor to inviting Pitt Athletic Director Steve Pederson to discuss athletics funding in an open BPC meeting.

BPC’s plan has been put on hold as the administration, which last year indicated that the report would be made public once a final version was approved by UPBC, since has failed to release it.

None of the three chancellor’s liaisons to BPC attended the committee’s Feb. 27 meeting. Richard Henderson, budget director for Health Sciences, cited travel, and Vice Chancellor for Budget and controller Arthur G. Ramicone cited the 11:30 a.m. trustees meeting in regrets sent to BPC chair Richard Pratt. Robert F. Pack, vice provost for Academic Planning and Resources Management, told the University Times he missed the meeting because a grant proposal was due.

With no administrators present at BPC’s Feb. 27 meeting, the committee got few answers about the public release of the study, but this week Pack told the University Times that UPBC is questioning the utility of the attribution report and will not take up the discussion again until fall, when budget discussions are complete. Among UPBC’s duties is to advise the chancellor on the University’s operating budget.

BPC members at the committee’s Feb. 27 meeting questioned whether transparency within the administration is eroding and whether another sort of report might be of value. Both are issues members plan to address with Provost James V. Maher, who also chairs UPBC and who is scheduled to meet with BPC April 17.

Pratt, who as BPC chair is a voting member of UPBC, said there had been “reasonably extensive discussion” about the attribution study at the Feb. 19 UPBC meeting. UPBC’s meetings are not open to the public.

Pratt added, “It was agreed that if I was asked what happened, I would defer to [Pack] to make a statement.”

In his Friday regrets message to BPC, Pack sent a statement for Pratt to convey. “If the subject of the attribution report comes up you can simply say that the UPBC discussed it at its recent meeting and is considering the utility of the study and its relevance to understanding the University’s overall budget process. Pending completion of that review, the UPBC felt that it would be premature to subject the attribution report to wider scrutiny,” Pratt read.

BPC’s concerns center on two main issues: Whether the attribution report is an open or closed document and the questioning by UPBC of the value of the report, issues that Pratt said he felt would be legitimate to discuss with the provost in April.

“Is there some reason they feel a document which didn’t seem to do much harm when it was a public document because nobody paid much attention to it” no longer should be available? Pratt asked. “Has that changed? Has the external environment changed? Or is it that the administration is becoming more cautious?”

Staff Association Council representative to BPC Michael Semcheski noted, “It seems a key point is that some level of transparency and openness isn’t a complement to good management, it’s a component of good management.”

BPC members noted that skepticism about the value of the study is nothing new, but maintained it remains useful.

BPC member Phil Wion, who also has served on UPBC, said that the attribution report not only calls attention to the finances of individual units but also provides a record, and aids in decision making. Over time, study of the annual document can reveal the effects of decisions that change the structure or relationships among various programs and functions of the University, Wion said.

The study shows not only the direct revenues and expenses of the various schools and units, “but reminds everybody that those units require the support of the registrar and the auditors and the Facilities Management people and the Provost’s office and the Chancellor’s office and all those other parts of the University that otherwise we tend to lump together as administration and as bureaucracy that many people tend to assume is bloated and full of fat,” Wion said. “When you have this study you see it’s not that simple. The relationship is complicated and the costs of all those staff people and support people are going for something. They don’t pay for themselves.”

Transparency is another benefit, Wion said, pointing out that such transparency didn’t exist prior to the implementation in 1992 of the University’s planning and budgeting system.

“I think [UPBC is] saying they’re finding it of not much use in the decisions that they’re making about priorities among units,” Wion said, adding, “The value of transparency is that people who are interested — like the Senate budget policies committee and UPBC and deans and potentially faculty in the various units — can see what’s going on rather than being confronted by a black box.”

The lack of information puts interested parties in a position to wonder whether the University is being run responsibly, he said. When the connections between units are visible, “then [BPC] can say, ‘We’ve seen a much greater increase in efficiency and responsibility than when this process started.’ We have some credibility because we have something to base it on.”

Wion said having a measuring stick is crucial. “Take that away and you take away grounds for realistic understanding and judgment of the institution,” he said, comparing it to the secrecy among bankers who seek government bailouts but don’t want to disclose what they’re doing with the money. “That’s not the direction I’d like to see this institution go.”

Wion said he saw no reason for withholding the report, noting it is “dull budget stuff” and “nothing scandalous and controversial.”

If disclosure prompted unwarranted attention to small parts of the report, Wion said, “Sometimes I think it’s worth the risk of somebody pouncing on some little detail and making a fuss about it because it can be countered by people like us who’ve invested the time to understand the institution and its finances.” Without having the data available to the University community, “It’s harder to counter whatever suspicions or ill will somebody out there might have,” Wion said.

Former BPC chair Stephen Carr, who also has served on UPBC, said that if UPBC doubts the value of the attribution report, he would be open to an alternative. “I don’t see what the problem is. But let’s hear what the problem is and what would be a better way of doing it,” he said.

“Rather than say simply we want this — and we do want this — we’re open in principle to simplifying it, perhaps adding some things,” he said. “And if this isn’t a useful document, then what would be a useful document?”

Carr said, “Rather than see this as an occasion to get rid of information, in the interest of transparency it would be useful to share documents, in whatever appropriate form and with whatever appropriate restrictions, that actually are used in decision making.”

Pack told the University Times that the attribution report was implemented when UPBC was new, to help the committee gain an understanding of the University’s structure and distribution of resources. “From discussion quite early, it was weak,” Pack said, noting that the report “doesn’t reflect the reality of what is going on.” For instance, Pack noted, the units don’t get a percentage of the state appropriation nor do they keep tuition dollars they generate. In addition, the report attributes support expenses using a formula that is applied across the board, which likewise doesn’t reflect reality.

BPC members noted, and Pack confirmed, that the attribution report does not factor into the allocation of resources to units.

“It was developed as a tool for UPBC,” Pack said. “It was never designed for other purposes.

Pack said UPBC has not asked the Office of Budget and Controller to prepare a fiscal year 2008 attribution study. He had no estimate of the study cost, but noted that from the perspective of the Office of Budget and Controller, “It’s a very time-consuming enterprise. As resources get constrained, that’s when the question of utility comes to the fore.”

No alternative has so far been proposed, Pack said, adding that the question of what alternate tool would be useful to UPBC would be pondered in the fall.

Until then, the report will not be released. “UPBC has decided to review the utility of the report,” Pack said. “Until there has been such a review, there’s no reason to release something whose utility is seen in such serious question.”

Pack questioned BPC’s interest in the document, noting that BPC’s role is not one of budget overseer and adding that the committee hasn’t showed interest in discussing the attribution report as it applies to other units.

“BPC is not an investigative organization,” he said. “I can understand they have an interest in athletics, but I’m not sure that’s an area in which they have budget oversight,” Pack said.

In addition, he questioned the need for the report as a prerequisite for discussion with Pederson. “I think you can have a reasonable conversation with people about their goals and ambitions without being able to look at their budget,” he said.

—Kimberly K. Barlow

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