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Budget Update

posted Feb 15, 2017, 10:35 AM by Emily Tai   [ updated Feb 15, 2017, 11:59 AM ]

By Kay Conway

Governor Cuomo released his Executive Budget last month, which included the Excelsior Scholarship, a program he announced at LaGuardia Community College.  The Excelsior was met with much fanfare and in general is a very positive development.  However, as our UFS Committee on Student Affairs, and USS leadership has noted, the Excelsior Scholarship doesn’t address the needs of our part time students, or those of undocumented students.  The Excelsior also requires students to be enrolled for 30 credits annually--so even some of our currently full time students, taking 12 credits per semester, would not qualify. 

 

The Governor’s overall support for CUNY in the budget was met with a positive reaction from our administration.   Mayor DeBlasio also released his budget and an analysis of both the city and state budgets was presented by SVC Sapienza at our plenary last week.  A couple of key points, (my observations, not SVC Sapienza’s):

  • The NYS budget includes approval of a tuition increase of $250 for the next five years.

  • The budget includes significant planned costs savings from administrative efficiencies.  CUNY hired McKinsey to evaluate our processes and to identify areas where CUNY might improve service as well as reduce costs.  A copy of the related presentation made to the Board of Trustees can be found here.

  • The NYS budget calls for a “tithe” on CUNY’s private foundations – essentially a requirement that 10% of funds be used for needy students.  The details on this are yet to be determined but since the foundations are separate entities and a good portion of their donations may be restricted, this requirement is problematic.   It is also worth noting that a “tithe” was not a proviso in SUNY’s allocation from the State.

  • Gov. Cuomo’s budget also calls for increased oversight of the CUNY Foundations, by expanding the authority of the state Inspector General to investigate the foundations.  Since the interim report of the New York State Inspector General was issued in the fall, CUNY has initiated a number of steps to address the concerns raised.  (A list of the steps CUNY has taken are provided below.) 

  • The NYC budget request by CUNY included an amount for a reduction in workload.  This item was not in the Mayor’s preliminary budget, but might still be a possibility in his Executive budget.

  • Lastly, both the State and the City provided funds for the retroactive salary increase and the City included funding for the future costs associated with the new contract.  The State however did not include funding for the “out” years which could result in a shortfall and a need to make cuts at the senior colleges.  Sone of this shortfall could be covered by the tuition increase noted above.

 

Key Administrative Actions and Recommendations for Board actions subsequent to the IG Interim Report. 

 

   Instituted a new annual report of use of all non-tax levy funds.  The University Chief Financial Officer is implementing a form to be used by each college for annual reporting. 

 

  CUNY's Director of Communications is working with each Vice Chancellor and the Office of the Secretary to make key reports on financial management, enrollment and student success, and staffing and diversity, as well as all materials prepared for Board of Trustees meetings and Board committee meetings unless confidentiality is required by law or Board policy, available promptly and publicly.

 

  The Chief Financial Officer is reviewing all CUNY Financial Management Guidelines, including those with policies pertaining to the Foundations, College Associations, and Auxiliary Enterprise Corporations and Boards, to develop centralized spending policies that ensure sound fiscal practices system-wide. 

 

  CUNY’s Interim General Counsel and the Compliance Officer met in early December with staff of the IG’s Office to review the process for CUNY’s prompt reporting of all required allegations to the Inspector General.  

 

  The Chief Financial Officer and University Senior Counsel met with staff from the Inspector General’s Office to discuss CUNY’s Financial Management Guidelines and Affiliated Foundations Handbook, which includes policies pertaining to university affiliated foundations, college associations and auxiliary enterprise corporations and boards, as well as the memoranda of understanding between colleges and affiliated entities.   

 

  Arranged training sessions with the staff of the IG and appropriate employee groups at CUNY.   The first such training session was with the Administrative Council, the group of chief business and administrative officers from all colleges and the central office.  

 

  Planning mandatory training sessions on internal controls to be conducted by the IG for all college presidents and deans, beginning in March.   CUNY’s Director of Internal Audit will participate in training sessions and serve as a resource to colleges and the central office with regard to ongoing guidance on internal controls.

 

  Established a task force to review the charter and other governing documents for the CUNY Research Foundation to ensure that the policies regulating the relationship between CUNY and the CUNY Research Foundation meet the highest standards.  The task force will propose changes in the Foundation’s charter and a new memorandum of understanding (MOU) governing its relationship with CUNY.  

 

   Directed all presidents and university-wide deans to terminate contracts with outside lobbyists.

 

  Instituted a moratorium on use of non-tax levy funds for supplemental salaries for new presidential and university-wide dean appointments.  Such supplements are now the subject of Board policy, which will be reviewed by the Board as part of the broader consideration of the Executive Compensation Plan.

 

  As noted above, CUNY Retained McKinsey & Co. to review CUNY’s administrative and business functions and make recommendations for operations efficiencies, central business policies, and enterprise-wide risk management.  

 

  Continue to look for ways to reduce administrative costs. In the last fiscal year, University-wide efficiency savings totaled over $51 million, and plans are for additional savings of approximately $37 million in the current year, with disproportionately large savings at the central office.  

 

The following actions are being recommended to the Board of Trustees:

 

  Conduct a comprehensive review and update of the Board’s Executive Compensation Plan (ECP), in consultation with the New York State Division of the Budget and the Governor’s Office of Employee Relations.   

 

  Establish a new senior management position, the University-wide Director of Enterprise Risk Management, reporting directly to the Chancellor.  This new officer will manage all aspects of the risk function, including implementation of processes, tools, and systems to identify, assess, measure, monitor and report risk.   

 

  Conduct a comprehensive review and update of the Board Bylaws and the Manual of General Policy to significantly strengthen central policies, uniform controls and oversight of CUNY’s operations.    

 

  Work with the Association of Governing Boards (AGB), the independent national organization that works with university and foundation boards to support best practices, to convene workshops and training sessions for affiliated foundation board members and staff, as well as relevant college personnel. 

 

Also at the last Board meeting, a new audit committee was established as a full standing committee of the Board, replacing the current Subcommittee on Audit.  The new committee has a considerably broader mission and a new charter, including oversight of risk management.   

 

 

Kay Conway is a Professor of Business at the Borough of Manhattan Community College and Chair of the University Faculty Senate.

The UFS Blog is a forum for CUNY Faculty, and welcomes the expression of all points of view.  

 

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