Bacon's Rebellion

Democracy Thrives in Sunlight

Lots of Questions, but No Evidence that UVa “Slush Fund” Is Actually a Slush Fund

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by

James A. Bacon
in

Murky, not illicit
Murky, not illicit

by James A. Bacon

A few more details have emerged about the University of Virginia’s supposed “slush fund,” but not enough to really help outsiders judge whether the university’s financial arrangements amount to a scandal or not. Helen Dragas, the former Board of Visitors member who leveled the accusation in a Washington Post op-ed, talked to Richmond Times-Dispatch reporter Karin Kapsedelis for an article published Saturday Here is Kapsedelis’s summary of Dragas’s allegations:

The board voted in February to create a “strategic investment fund” to support proposals that align with goals adopted for the university as part of The Cornerstone Plan.

But Helen Dragas, … whose term expired June 30, said Friday that members were not informed that the new investment fund would be financed by existing revenue for operations when the resolution was adopted.

She points to a change in labeling after the February vote to support her allegation that the university created a “slush fund” to use on programs that burnish U.Va.’s reputation rather than cut costs for students.

Dragas cited a report from the U.Va. Investment Management Co., UVIMCO, from Dec. 31, 2014, that includes a line item for $1.63 billion in University Operating Funds; in the March report, the line item is labeled University Strategic Funds and valued at $1.83 billion. A third-quarter summary report to the board lists the value of the Strategic Investment Fund as having grown to $2.29 billion with supplementation from other sources.

According to minutes from the February board meeting, the newly established investment fund will support proposals that “clearly align with the university’s strategic plan objectives.”

But the funds will not be used “in lieu of normal ongoing operating costs,” the resolution states.

From this description, it appears: (1) that the same fund has been given a variety of different names, (2) that the mission of the fund has changed from funding operations to funding strategic initiatives, (3) that the fund grew from $1.63 billion to $2.29 billion over nine months, an increase of $660 million, and (4) that the increase can be attributed to both investment returns and “supplementation from other sources.”

It is not clear from this account, however, whether those “other sources” were comprised of donations from friends and alumni of the university or moneys diverted from ongoing operations. Also not clear is whether university administrators reallocated new money to strategic objectives such as buildings, faculty pay and research, or just relabeled existing funds already used for the same purpose.

Certainly the matter bears looking into. But I have seen no indication yet that the Strategic Investment Fund amounts to a “slush fund,” which university officials can dip into for illicit purposes. It may in fact be a slush fund, but Dragas did not present evidence for such a conclusion in Kapsedelis’s article. The real scandal, I suspect, is the one that we have continuously hammered home on Bacon’s Rebellion: the university leadership’s prioritization of the university’s growth and prestige over its founding mission of providing affordable, quality higher education to Virginians.

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29 responses to “Lots of Questions, but No Evidence that UVa “Slush Fund” Is Actually a Slush Fund”

  1. Izzo Avatar
    Izzo

    Good post. I believe clarity is needed, but when the smoke clears this all will come down to semantics on what can be called discretionary funds (endowment and operating funds that are not already earmarked for specific uses like a scholarship fund). Dragas called it a “Slush Fund”, which has a clearly intended negative connotation, because she does not now agree with strategic direction. One person’s strategic investment fund can be another person’s slush fund.

    A fund this large will be used for many purposes, so it will be interesting to see if the board really has understanding of how it is being used. For example, is money being taken away from AccessUVA to fund a professorship in Contemplative Sciences (or whatever this trendy sounding thing that involves Yoga is called). If the board does not have that level of insight, it doesn’t really matter what you name the fund the money is coming from.

    Looking back now, I can’t help but conclude that what could be called opening and parting “shots” from Dragas are wholly inconsistent and at least a bit galling. Back in 2012, her opening shot was trying to remove President Sullivan, which ultimately failed. At that time, once pushed, she cited a lack of strategic leadership from Sullivan. A New York Times article summarized it like this:

    “[Dragas] promised to replace Sullivan with ‘a bold, strategic, visionary leader’ but refused to answer when asked for the reasons behind Sullivan’s departure. Hours later, [UVA Professor] Larry Sabato reached Dragas by phone. She justified the board’s drastic action by arguing that Virginia was falling behind competitors, like Harvard and Stanford, especially in the development of online courses, a potentially transformative innovation.”

    Dragas tried to clarify her reasons in a UVAToday article ( https://news.virginia.edu/content/deans-ask-sullivans-reinstatement-dragas-offers-further-explanation-her-removal-bov-sets ), where she listed ten reason (none of which included keeping UVA affordable for Virginians). She concluded by saying “in the face of these challenges, the University still lacks an updated strategic plan,” she wrote. “We deserve better – the rapid development of a plan that includes goals, costs, sources of funds, timelines and individual accountability.”

    So fast forward four years. A chastened President Sullivan who stood accused of not working to keep up with Harvard and Stanford, and not having a strategic plan that includes sources of funds, has worked hard to 1) develop an approved strategic plan called the Cornerstone Plan and 2) put in place an identified funding source called the Strategic Investment Fund. This was done with the approval of the board, which included Dragas.

    Isn’t that what Dragas wanted given her earlier statements and actions to dismiss Sullivan?

    No. Evidently she’s had a change of view. Now, in her second completely inconsistent shot, the Washington Post editorial, Dragas is not concerned with strategic objectives that keep up with Harvard and Stanford in the rankings world. Instead, she urges “denouncing the rankings and embracing an identity that is more diverse, more affordable, more accessible and more nimble in adjusting to the dynamics of today’s learners.” President Sullivan’s head must be spinning.

    As James Bacon pointed out, there are two largely inconsistent objectives that could be pursued. The first is chasing prestige and rankings (largely versus private institutions) by behaving increasingly as a private entity and trying to level the funding playing field. The second is a focus on delivering affordable education for Virginians. Dragas has now thrown bombs touting each (inconsistent) cause. UVA’s reputation has taken the collateral damage.

    1. Cville Resident Avatar
      Cville Resident

      Izzo,

      I had the same thought. Wasn’t 2012 about a “lack of strategy/long term focus”? Then one of the same individuals complaining about that lack of strategy criticizes the administration for developing strategic objectives and funding to pay for those objectives.

      Another point that is lost in all this: When did U.Va. become an institution to serve the middle class? From its founding, it was always a “gentleman’s school”. Its first classes were majority out-of-staters from very wealthy Southern families. The legislature and “middle class Virginians” were furious with Jefferson because he recruited almost the entire faculty from Europe and didn’t consider American academics for employment.

      Those “middle class Virginians” then tried to get the school shut down in the 1840s/50s b/c its “values” did not reflect “Christian values.”

      After the Civil War and through the 1960s it was a Northern aristocratic playground as well as a Southern gentleman’s school. Take a look at the history of Brooks Hall (funded by a Northern industrialist after the Civil War) or the fact that the Roosevelts as well as the Kennedys owned homes in Albemarle County b/c so many of their family members went to U.Va.

      In more recent times the Washington Monthly has pointed out for decades that U.Va. has the least economically diverse student body of any major public university in America.

      The school has never served the “middle class” of Virginia. Some “middle class” families sent/d their children there, but its student body remains one of the wealthiest in America.

      Whether that’s a good or bad thing is open for debate. But the rhetoric coming from Dragas/Ramadan/etc. makes U.Va. sound like Berkeley or Michigan. They are acting as if U.Va. was some sort of middle class paradise until the last few years and then the tuition hikes of the last few years have radically changed the school. That’s simply not true. It’s a lie.

      1. LarrytheG Avatar
        LarrytheG

        re: The school has never served the “middle class” of Virginia. Some “middle class” families sent their children there, but its student body remains one of the wealthiest in America.

        Totally true .

        Never heard an outcry that UVA “provide” an “affordable” education for low income , sub-middle class folk…. hmmmm

        But the amusing thing to me is the idea that somehow Virginia should “force” UVA to lower it’s costs – coming from folks who also say they are opposed to the Govt “forcing” UVA to do other things ….

        sometimes it seems that what folks support the GOvt “forcing” is totally arbitrary – and according to one’s individual politics… but, in fact, for the things they do support – they actually do want the govt “forcing”.

        I would think that Dragas and accolades would be one of those free market types and want to let UVA thrive by operating on a supply/demand basis rather than being “forced” to provide “affordable” education. I’m betting she does not support the govt providing funding for “affordable” healthcare, eh?

        😉 gezze oh man…..

    2. Virginian Avatar
      Virginian

      As a former BOV member at UVA I agree completely with Ms. Dragas’s comments in the Washington Post. One of the biggest issues about the concerns raised by Ms. Dragas is the lack of factual and complete information from the administration of the University of Virginia to the Board of Visitors and to the public which they are supposed to serve.
      To specifically address Izzo’s comments:
      When I asked (as a BOV member) what this “Long Term Pool” of “University Operating Funds” was (when it was $1.2B) I was told by the most senior of Administration officials that it was mandatory cash to maintain the UVA bond rating and additional monies approved by the BOV for long term projects that had not been spent. I now know that those statements are false.
      You stated that President Sullivan developed the Cornerstone Plan which was “approved”. It was never approved and never put to a vote. The vote in the November, 2013 BOV meeting was to approve the “framework” of the Cornerstone initiative. There were two abstentions from that vote which voiced concerns about the costs involved which had not been specified. The costs floating around from the administration at that time were $500,000,000++ with no identified sources of funding other than tuition increases. The “Cornerstone Plan” has NEVER been approved by the BOV.
      The so-called “funding source” for the never approved Cornerstone Plan was a change of language from the administration on the UVIMCO statement starting Jan. 1, 2016. The first discussion of this issue was during the BOV meeting on June 10, 2016 (six months after the change) in a closed session to discuss “personnel matters”. The administration has steadfastly refused to identify the sources of these funds or explained why they have shifted from “operating” funds (which could DECREASE tuition) to monies spent on administrator’s favorite pet projects on a strategic plan that was never approved! The discussion about this slush fund and how to keep it secret was obviously a violation of the Virginia open meeting laws and is subject to FOIA discovery if any news service will pursue it.
      The cost of higher education in Virginia is wildly out of control. UVA and William and Mary have increased in-state tuition at ridiculous multiples over affordability levels for people with middle class incomes. Ms. Dragas is a voice of sanity on this issue.

      1. LarrytheG Avatar
        LarrytheG

        re: ” ……… monies approved by the BOV for long term projects that had not been spent. I now know that those statements are false.”

        maybe I do not understand – but “money for long term” SOUNDS LIKE it COULD be a strategic plan…. no?

        re: ” The cost of higher education in Virginia is wildly out of control. UVA and William and Mary have increased in-state tuition at ridiculous multiples over affordability levels for people with middle class incomes. Ms. Dragas is a voice of sanity on this issue.”

        Actually not – in my view – because Ms. Dragas has made this about UVA not about costs at all Va colleges…. she has personalized it.

        is the cause of “out of control costs across Va” due to a rampant pattern of slush funds at all these schools? Is that the claim? That UVA and other schools are essentially hoarding operating funds that could be used to lower tuition costs?

        I’d have to see more than an accusation at one College to be convinced…

        Is it true – that folks on the BOV believe that tuition costs could be actually lowered – over the longer term -by using this “slush fund” to buy down costs. What will happen to costs once this fund is exhausted?

        So I don’t see this as a realistic answer to the “out of control costs” deal as much as it appears to be a back and forth between UVA and some BOV about priorities. Use of the slush fund will not get at the core reasons for increased costs – you’re just grabbing at what appears to be extra money to buy down that cost – temporarily.

        What I’d like to hear from BOV and leaders is what should UVA – and other colleges in Va do – to lower costs?

        Making claims about hoarding operating funds as the cause has too much of a conspiracy flavor for my tastes.

        I still think an auditor that is funded by and reports to the BOV can provide good objective info – from which intelligent and informed proposals for reform -could come.

        Lacking that – and accusing the University of “lying” and obfuscation is not a constructive approach.. it’s just more of this contemporary culture of ” we don’t like what you do so we’re going to blow it all up”.

        we need folks who are serious about reform and careful with their rhetoric.

        1. James A. Bacon Avatar
          James A. Bacon

          Larry, has it occurred to you that “Ms. Dragas has made this about UVA not about costs at all Va colleges” because she served on the UVa Board of Visitors, not the State Council for Higher Education in Virginia?

          1. LarrytheG Avatar
            LarrytheG

            Jim – that’s not what she said … though . she was talking about “out of control costs” for all Va schools and even compared it to Brexit! She’s the one that drew the parallels beyond UVA.

            Basically she disagrees with UVA priorities. She wants what she considers to be, discretionary money to go for subsidizing college costs for students”.

            They consider that money more vital for improving their school to make it more competitive against other schools – something you and Don and others here have also advocated to boost the economy of Virginia.

            I’ve pointed out several CONSTRUCTIVE ways to go about effecting reforms as contrasted with bomb throwing fire hydrant dousing contests..

            Someone interested in real reforms – goes about it in many different ways that draws supporters and builds consensus towards options to pursue to effect change.

            The fact that she is on her own and saying opposite things from other BOV including the Chair – demonstrates what she is really after – the proof is in her own actions and non-actions.

            I still find it odd that we have Conservatives here advocating for subsidies for college … when the same folks argue against subsidies for things like health care for the working poor. They argue instead for subsidies for the middle class.. geeze..

        2. Virginian Avatar
          Virginian

          I will clarify the statement I made about funds for long term projects not being spent. The administration (going back many years) requests a sum of money for a project that will completely cover the cost of that project. In many instances that request is larger than what is needed and in some instances there are actual operational efficiencies that do not require all the approved monies to be spent. Those extra funds are then placed into the “long-term” category where they earn investment returns along with the rest of the long term pool. If that is a small number no one thinks there is an issue. That fund of extra monies approved for operational purposes at UVA now exceeds $2B and at 5% annual returns (the actual 10 yr. annualized return from UVIMCO on March 31 of this year is 8.4%) generates well in excess of $100,000,000 per year, a significant sum of money that, could be used for operational purposes which could reduce the in-state tuition burden for all students. Instead the administration has renamed this fund and reallocated it from operations to “strategic” objectives, i.e., a slush fund for pet projects and for image enhancement.

          I agree completely with your comments and the comments of others that the BOV should have an independent audit for their use to monitor uses of approved funds and to prevent accumulations of unspent funds for reallocation to administrative whims. I also think that most colleges and universities are inefficiently run and, in the specific case of UVA (and I suspect most others), the administrative bloat and salary scale is a massive and unnecessary cost to tuition paying students.

          1. LarrytheG Avatar
            LarrytheG

            @Virginian – the situation you describe is not the way that budgets work at the locality school level where money is specified for categories and unspent money has to come back to the BOS to be re-allocated for something else.

            Odd that Virginia works that way at the locality level but not the State level.

            If that’s true -then obviously you BOV folks should be purusing some changes from legislators… consistent with how localities deal with unspent funds.

            here’s an article that describes that “scandal” in Stafford:

            http://www.fredericksburg.com/news/local/stafford/stafford-schools-audit-points-at-now-deceased-official/article_1b0a2bca-01ab-11e6-9fed-bb2f20ab5300.html

          2. TooManyTaxes Avatar
            TooManyTaxes

            This is actually a reply to Larry’s comment about unspent money from SCPS coming back to the BoS for re-allocation as required by state law.

            It does not happen in Fairfax County. The Supervisors close their eyes and “bless” the Schools keeping their surplus. Who cares about state law when it’s “for the children”?

      2. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Virginian –

        I want to thank you. Now at last we are getting a window into something that is truth that has for so long been hidden to us before.

        I suspect that it is the tip of an iceberg.

      3. Lift Avatar
        Lift

        So the principal complaint that Dragas had about Sullivan in 2012, that she had not produced a plan for the university, remains true 4 years later. Still no plan. The bunch of silos in the unapproved Cornerstone plan is not a long-range, strategic guideline by which a behemoth organization with 14,000 employees and a $1.392B annual budget can steer for success. UVA has no road map by which it can forge a future, set benchmarks, gauge success or failure. Add to this $1.3 B in available funds for loose purposes and there is too much left to chance/mismanagement. While many of UVA’s challenges are share by other Virginia schools or other states’ universities, this bad recipe is unique to UVA.

        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          Here is a post I wrote four years ago. Perhaps it has relevance today.

          “A serious read of Dr. Sullivan’s June 18 Statement to the Board provides important insights. This is obviously a highly able person, deeply engaged in the art and craft of her demanding job, and has the technical skills to grapple with some of UVA current problems. However, one does get the feel from that statement that she is trying to do to much, “may not have fully considered” the challenges UVA currently faces, and lacks the focus these challenges demand. So I believe DJRippert’s fear is well founded. What’s transpired since June 18 should be a huge wake up call for her. We’ll see. Hopefully structures will be put in place to insure the “wake up”.”

          It looks to me that UVA is obsessively focused on theory and words and studies instead of focused and effective action per a practical well thought out plan driven by strong, effective and disciplined leadership from the very top of the Organization. Instead, the monkeys look to be running the zoo.

          A 2012 article worth reading again today in light of current events is One Jim refers to above. “UVa Needs Someone Who Thinks like Helen Dragas but Isn’t Helen Dragas.”

      4. Izzo Avatar
        Izzo

        Virginian,

        Thanks so much for weighing in and clarifying. If a former BOV member is not completely clear on these funds, just think where it leaves the general public. I agree it should be clearer and more transparent.

    3. Lift Avatar
      Lift

      Izzo, you’ve gone to lengths for citations, but unfortunately much of what is presumed to be the record of events in the media coverage of 2012 is simply false. Here’s one correction in the time I have: Dragas lamented to Sabato that UVA lagged Vanderbilt, not Harvard & Stanford. And Sabato concurred that UVA had been losing ground since Casteen and was reversing the drift under Sullivan.

      1. Lift Avatar
        Lift

        Oops critical word omission: “and was NOT reversing the drift…”

        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          Yes, this downward drift has been my sense of things at UVA for some time. By this I mean losing ground against competitors, other universities such as Vanderbilt and Emory if rankings are a rough guide.

        2. Izzo Avatar
          Izzo

          Thanks for the clarification.

          I still think there was a significant shift from 2012 to 2016 that was worth calling out. In 2012, Dragas’s focus was on keeping up with Harvard, Vanderbilt, etc. This implies a focus on rankings and strategic funding. In her 2016 opinion piece, she advocated “denouncing the rankings” and embracing affordability.

  2. LarrytheG Avatar
    LarrytheG

    Izzo has it -right. The truth hurts.

    Slush Fund is a bomb-throwing word and it’s pretty much the way that Dragas chose to operate and all this editorial is – is more of the same – the parting shot for a term that accomplished nothing other than disruption and tea-party type actions and words. She even compared UVA to Brexit… !!!

    She is from the “I don’t like it so tear it down” crew.

    there is more than enough room for some major reforms in higher ed in Virginia – at UVA and other but this is not the way you do it.

    One simple change could have major impacts and that is to give BOV across Virginia (not just UVA) the authority and the funds to commission their own auditors to do independent audits – and explain in clear objective ways the budgets.

    And for all the wailing and gnashing of teeth we hear – at the same time we also hear complaints that the Fed Govt is using the power of the pursue to force UVA to do certain things. Why can’t Virginia and the General Assembly also do that? They do just that on a variety of other issues in Virginia.

    I can only conclude that the General Assembly – INTENDS for BOVs to NOT have that power and to essentially be more or less toothless rubber-stampers.

    Dragas could have led reforms – for all higher ed -using UVA as an example.

    instead she chose to get into this very public fire-hydrant spraying contest with them.

    If you’re going to contest the system – then gosh darn – do it with skill and effectiveness and don’t make an obnoxious butt of yourself.

  3. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Frankly, at this point, I welcome Draga’s candor. We are all big boys and girls. We can take her point of view, perhaps even benefit from it. And do so without further gossip.

    In any case the issues here far transcend Ms Dragas and Ms Sullivan and a rehash of mudslinging over “she said/ she said” four years ago. What we should be talking about now is how UVA functions now and in the future. Not about old cat fights. Or Harvard, or Stanford, Yale, or whatever.

    My views over UVA’s actions over the past five years are on this website. They try to deal with a litany of chronic public troubles. All I hear back from UVA insofar as press or public outreach is a constant stream of over the top sophomoric self – congratulations, obvious nonsense, failed promises and declarations, and “lets have coffee some morning at your convenience at your place” fund raising ploys. All this would be laughable if the real events that I’ve read about and looked into at Mr. Jefferson’s University were not so sad and outright dishonorable.

    On the current issue of so called “Slush Funds”, I care not about what they are called but what I perceive the issue is about – another internal fight.

    What I recall reading several years back was a draft proposal among a raft of proposals to bring UVA up to “world class standards”as a research institution, including STEM as I recall. I gathered and intuited at the time of reading that particular proposal was that this initiative had apparently given rise to issues over who got control over the monies raised to build the infrastructure (bricks and talent) for the Venture, and who got to control, keep, and spend the revenue and other fruits thereafter spun off by the many sub ventures typically spawned by a world class research institution. Whether those revenues and other goodies be generated by selling its talents and work products to others (public and private), or internally divvying up the profit, patents, credits, and the like, including long lasting profits that arguable might be split many ways.

    The proposal I read at time left me less than impressed. This of course was against the background of the then most recent food fight of the moment at UVA, the various firings, dismissals, slanders, temper tantrums, and public displays of emotion and dysfunction we’ve come to expect there.

    The truth and reality is that these sorts of stresses and strains of change and conflicting interests of various constituencies and stakeholders are very common in major institutions, including major research universties. Or any college or university in general. Or indeed is most any organization.

    But what is so disheartening there at UVA is its chronic inability to deal with these stresses and strains in a adult, straightforward, honest and humble way. But instead to default to its now all to familiar routine of opaque behavior and silence, or to preen its virtue and declare its excellence and worldwide ambitions, or to express its solidarity with its latest victim while manufacturing its latest scapegoat, typically someone or group within its own community, while declaring its intent to use its latest crisis of the day to show and teach the world how to solve the problem using new innovative best practices. Only then to do less nothing but foment the next crisis.

    After a while, some people who’s been around for a while with their senses open gets a nose for institutional dysfunction, prevarication, hidden agendas, lack of candor, dishonest cheap and false talk and the general B/S of PR that grows the suffocate or otherwise shut down the health of particular places. I sense that coming out of my old college now for the past five or six years.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      My comment was directed only at Izzo’s comment.

  4. TooManyTaxes Avatar
    TooManyTaxes

    One of the biggest problems for the public in understanding financial documents from public entities is the inability to trace programs or funds from year to year. Quite often what described as X or said to include D, E & F in one year, is not described as X or includes E, F & G the next.

    Whether this confusion is purposeful, convenient or accidental, it’s not good accounting and its not good government. Accounting conventions and programs change, and cannot be kept static forever. But there should be consistency in terms from year to year and the components of a fund or category should also be consistent so stakeholders and the public can understand what’s going with their tax dollars or fees and government operations.

    When changes are made (and they will, from time-to-time), there needs to be explicit explanation of the changes and a reasonable roadmap from year to year. And the new conventions should not change the next year. We deserve more than a moving target. It’s been my experience that too few governments or agencies in Virginia truly try to make it easy for the public to review and, indeed, critique financial documents. But it is not too much to expect.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      You are right, Too Many Taxes.

      And, in fact, we are most always given a moving target covered in indecipherable expertise and finely spun language in order to hide the truth from the many by a few for political advantage.

      This has to stop!

      But only we the “uninformed” can stop it.

      Otherwise the experts in alliance with the corporate elite crooks will overrun us, our society, our way of life, and our way of government.

      Lift, I owe you an answer to your earlier question. I hope to get to it with the best answer I can provide tomorrow.

  5. LarrytheG Avatar
    LarrytheG

    TMT and I agree again.

    Let me give an example – Most public school systems spend millions of dollars more than the State requires them to – and they spend it on stuff the state does not mandate but few if any of Virginia’s public schools explicitly show how that discretionary money is spent and so the School Boards as well as the public are pretty much clueless.

    It’s not that the money is wrongly spent – it’s about priorities – which is what the UVA issue is about also.

    The public, the School Boards -and the BOVs should be able to know what the priorities chosen by the administrations are – and not – and to provide their input especially if it is different.

    But now days – it’s common practice for these entities to provide hard-to-understand budgets… I would say intentionally so… given some of the discussions I have heard where the Schools say it is THEIR prerogative to decide priorities -and they are not compelled to make it easy to understand – much less actually have a dialogue about priorities.

    That’s why I support the ability of oversight boards – BOVs, School Boards, METRO, any activity with a citizen oversight board to have it’s own auditors who will themselves ferret out the information and explain it in easy-to-understand terms to the citizen oversight folks.

    Anyone who has taken the time to look at School board – and the UVA budget by the way – knows that average lay folks are just not going to be able to make heads nor tails of it unless they themselves are auditors.

    My bigger point here – is that it should be no surprise that these entities run by humans will seek to prevent other humans from understanding because the don’t want them messing with their stuff. It’s a normal human condition.

    But we don’t burn it down because of that – that’s foolish. We work to get more transparency and accountability – that’s the gig. If you want to sit on an oversight board – your job is to help make it work – not vandalize it because we don’t like it.

    1. TooManyTaxes Avatar
      TooManyTaxes

      The Fairfax County BoS has a very small office of program auditor that reports directly to the elected officials and not to the County Executive. The Board’s audit committee consists of four supervisors and two members of the public, with audit experience. County staff is not on the committee. I regard this as a good practice.

      After considerable pressure, much of it from the McLean Citizens Association, the School Board removed all but one staff person from its Audit Committee, and added two members of the public, also with audit experience. I regard this as kicking and scratching progress, but genuine progress nonetheless.

      Auditing standards for governmental entities provide that an audit committee should not have any staff members, report to the CFO or CEO of the governmental entity.

  6. LarrytheG Avatar
    LarrytheG

    just to keep things accurate :

    ” The University of Virginia’s rector says there is nothing surreptitious about the establishment of a $2.3 billion investment fund that a former board member has called a “slush fund.”
    “All of the board’s actions regarding the strategic plan and the long-term financial plan have been discussed and voted on in public session,” William H. Goodwin Jr., the Richmond businessman who leads the board of visitors, said in a statement Friday. “The monies have always been included in the university’s audited financial statements, which include the operations of the U.Va. Medical Center, representing more than half of the university’s operating revenues.”

    1. James A. Bacon Avatar
      James A. Bacon

      I see the situation at UVa as analogous to the Commonwealth Transportation Board (CTB), which I covered diligently for a couple of years. It’s one thing to say that the administration (UVa or VDOT) reported certain information. It’s another thing to say that the administration brought it to the attention of the board and explained its context and significance. CTB board members received huge volumes of information. But the intricacies of transportation funding and policy are so Byzantine that a newcomer is totally overwhelmed and cannot possibly hope to understand everything that transpires. Gaining a full understanding could take years. I would surmise that the intricacies of a university are similarly daunting.

      What Goodwin said about UVa — “All of the board’s actions regarding the strategic plan and the long-term financial plan have been discussed and voted on in public session” — could have been said of the CTB. But we know how that turned out. I documented how Gov. McDonnell’s transportation secretariat withheld germane information from the CTB to get approval for the Charlottesville Bypass. And who can forget the U.S. 460 fiasco?

      Boards are only as good as the members who are willing to ask tough questions. Helen Dragas asked tough questions, even though many despise her for it. Fortunately, Bill Goodwin asks tough questions, too. He’s not as confrontational as Dragas, but I expect he will make his mark.

  7. LarrytheG Avatar
    LarrytheG

    I more or less agree with Jim – but point out that – that does not lock your feet in concrete in terms of doing something about it.

    The CTB was/is very different in that it’s representatives are of specific geography and the interests in those locales as opposed to a board that is overseeing just one entity.

    Be that as it may, the job of a citizen performing oversight – is, in some respects, what you want to make of it – not endlessly complaining about what it is not.

    You can choose to remain largely ignorant about how transportation works or you can put some time on task.

    Ditto with BOVs.

    For instance, another constructive thing that Dragan COULD have advocated FOR – would be restricted funds for Higher Ed – so that some restricted funds could ONLY be used for specific purposes and a separate accounting for the spending IS required. That’s the way the Feds fund a lot of things. You only get the money for specific purposes and you have to account for it.

    Why not do that for the funds that people like Dragas think – should go to “buy down” affordability? Restrict the funds. Requires means-testing to assure they only go for real need, etc.

    There are a half dozen steps like this that could be advocated for – to go along with your complaints about things that maybe nothing can be done about – to demonstrate that you really are a credible advocate for reform and not just a bomb-throwing malcontent.

  8. Lift Avatar
    Lift

    I think we’re seeing some carefully crafted PR coming from the University. When Rector Goodwin says that funds have always been on the balance sheet, this echoes what Dragas says. But when you categorize something as Operating Funds, and later shift it to something that is everything BUT Operating Funds, and rename it Strategic Funds and later Strategic Investment Fund, all prior to explaining its new purpose to full BOV, and tell them that a committee of 5 faculty will be vetting the projects to be granted funds, it feels like not only the BOV but the public is being denied full transparency. Adding to that to the possibility that the BOV was led into closed session perhaps improperly, it feels even more wrong, or at least, as if there are more questions to be answered.

    https://www.washingtonpost.com/news/grade-point/wp/2016/07/13/u-va-set-aside-2-2-billion-for-strategic-investments-a-former-board-member-calls-it-a-slush-fund/

    http://www.roanoke.com/news/ex-uva-rector-dragas-voices-concern-over-closed-meeting/article_2c037f68-4c60-5756-a593-ab322aa65573.html

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