REPORT DIGEST ILLINOIS PUBLIC UNIVERSITIES -- Management Structure, Expenditures, and Salaries MANAGEMENT AUDIT Release Date: May 2013 State of Illinois, Office of the Auditor General WILLIAM G. HOLLAND, AUDITOR GENERAL To obtain a copy of the Report contact: Office of the Auditor General, Iles Park Plaza, 740 E. Ash Street, Springfield, IL 62703 (217) 782-6046 or TTY (888) 261-2887 This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov SYNOPSIS Legislative Audit Commission Resolution Number 143 requested a management audit of the State’s nine public universities to compare their management structure and costs, operating expenses, administrative to faculty salaries, and selected administrative expenditures. This report also includes a separate Supplement on each university. The audit reported the following information on universities for fiscal year 2011: 1. Revenues. Total revenue for the nine public universities was $8 billion and expenditures were $7.5 billion. 2. Structure. Management structure of the universities varied due to different missions, funding, and programs. 3. Expenditures. Operating expenditures per Full-Time Equivalent (FTE) student ranged from $20,000 at NEIU to $59,000 at University of Illinois, with an average of $40,500. SIU was second highest at $34,600. 4. Faculty. Universities employed 10,750 full-time faculty who were paid $910 million and 5,050 part-time faculty who were paid $98 million: (a) U of I had 4,300 full-time faculty paid $425 million; (b) SIU had 2,200 full-time faculty paid $180 million; and (c) ISU had 950 full-time faculty paid over $70 million. 5. Administrators. Universities had over 4,000 administrators (including 100 part-time) paid over $365 million. • U of I -- 2,549 administrators (63% of 4,024) -- paid $224 million (61% of $365 million). • SIU -- 312 administrators (8% of 4,024) -- paid $37 million (10% of $365 million). • CSU -- 308 administrators (8% of 4,024) -- paid $20 million (5% of $365 million). 6. Average Compensation. The average pay of full-time administrators was $91,650 and faculty was $84,775. • NIU -- 179 administrators, average pay $122,900 -- 894 faculty, average pay $75,700. • SIU -- 308 administrators, average pay $119,800 -- 2,217 faculty, average pay $81,400. • U of I -- 2,459 administrators, average pay $88,750 -- 4,301 faculty, average pay $98,900. 7. Compensation Ratio. Universities spent 27 percent on administrators and 73 percent on faculty: • CSU -- spent 45 percent on administrators -- 55 percent on faculty. • U of I -- spent 31 percent on administrators -- 69 percent on faculty. • GSU -- spent 28 percent on administrators -- 72 percent on faculty. 8. $100,000 (full-time). Universities paid 1,233 administrators (31%) and 2,793 faculty (26%) at least $100,000. • NIU -- paid at least $100,000 to -- 120 of 179 administrators (67%) -- 162 of 894 faculty (18%). • SIU -- paid at least $100,000 to -- 188 of 308 administrators (61% ) -- 534 of 2,217 faculty (24%). • ISU -- paid at least $100,000 to -- 100 of 209 administrators (48%) -- 152 of 954 faculty (16%). 9. FTE/Administrator. Universities had an average of 45 FTE students/administrator (cost: $2,025 per FTE): • CSU -- 18 FTE students per administrator -- cost: $3,610 per FTE students. • U of I -- 30 FTE students per administrator -- cost: $2,960 per FTE students. • GSU -- 39 FTE students per administrator -- cost: $2,350 per FTE students. 10. Administrative Expenditures. University of Illinois paid $350,000 for its president’s residences (over 50% of all universities’ housing cost of $650,000) and $680,000 for its administrators’ entertainment expenses (nearly 60% of all universities’ entertainment expenses of $1.15 million). INTRODUCTION Legislative Audit Commission Resolution Number 143 directed the Auditor General to conduct a management audit of the State’s nine public universities to compare the following: 1. Management structure and related costs; 2. Operating expenses by function; 3. Administrative salaries to faculty salaries; and 4. Selected administrative expenditures. These comparisons were made and are summarized in this Report Digest. In addition, this report includes a separate volume (Supplement) which has a detailed report on each individual university. The time period covered for this audit was fiscal year 2011. OVERVIEW The State of Illinois has 9 public universities which have 12 campuses, along with a number of other satellite facilities located in different parts of the State from Chicago in the north, to Champaign and Charleston in the middle, to Carbondale in the south. The management structure of the universities varied due to different missions, funding, and programs. In fiscal year 2011, the total revenue for the public universities was $8 billion and total expenditures were $7.5 billion. Universities received one-third (34%) of the revenues from the State of Illinois, 22 percent from tuition and fees, and the remainder from other sources, such as federal funds, sales & service, hospital, bookstore, investments, etc. Student Enrollment The Illinois public universities had more than 205,000 students enrolled in Fall 2010 (fiscal year 2011). Over 162,000 were full-time students (80%) while the remaining 43,000 were part-time students. More than 150,000 students (75%) were undergraduates, while the remaining 25 percent were graduate students, as shown in Digest Exhibit 1. Tuition and Fees The total cost for in-State undergraduate education at an Illinois public university, which includes tuition, fees, room, and board, ranged from a low of $16,200 at SIUE to over $22,500 at the UIUC and UIC in fiscal year 2011 (GSU and NEIU do not have dormitories and were, therefore, not considered). • Undergraduate tuition and fees ranged from $8,400 per year at SIUE to $13,500 at UIUC. Room and board ranged from $7,800 at SIUE to over $9,600 at UIC and NIU. • Graduate tuition and fees ranged from approximately $7,500 at NEIU and GSU to $13,500 at UIUC and over $35,000 at the University of Illinois’ College of Medicine. (pages 8-13) 1. MANAGEMENT STRUCTURE AND COST The management structure of the universities varied as they have different missions, goals, and objectives; funding and tuition; enrollment and academic programs; number of campuses; competitiveness and ranking; and sports and extracurricular activities. Two of the universities operated medical and dental schools (SIU & U of I), two did not have dormitories (GSU & NEIU), one operated a hospital (U of I), and one operated an upper division university only (GSU). Most of the universities had between three and five operating divisions (such as academics, business/finance, student affairs) with a range of administrators from 87 at GSU to over 1,000 at UIC and UIUC. There were up to 25 direct reporting offices. The operating expenditures of the University of Illinois were more than all expenditures of the other eight universities combined (nearly $4.5 billion vs. less than $3 billion). • The University of Illinois paid $224 million to its administrators (i.e., management), which was 61 percent of universities’ administrative compensation of over $365 million (approximately $2,950 per FTE student). • SIU paid the second highest amount of $37 million, or 10 percent of universities’ administrative compensation (approximately $1,300 per FTE student). • EIU paid the lowest compensation to administrators per FTE student at $872 per FTE. Number of Administrators The nine Illinois public universities employed approximately 4,000 administrators. The university that reported the most administrators was the University of Illinois (2,549), followed by SIU (312) and CSU (308). CSU had the most administrators per student at 1 administrator for every 18 students, followed by the University of Illinois which had 1 administrator for every 30 students, and GSU which had 1 administrator for every 39 students. The average for all the universities was approximately 1 administrator for 45 students, as shown in Digest Exhibit 2. CSU reported the third most administrators of any public university (308) and included lower level positions, such as coordinators and specialists. We informed CSU of this difference in December 2012 but it did not want any change: “. . . the administrator salaries should remain as reported at 308 persons for $19.7 million.” Cost of University Administration The nine public universities reported paying over $365 million in fiscal year 2011 to its administrators: nearly $360 million (average of $91,500) was paid to 3,921 full-time administrators and nearly $6.5 million was paid to another 103 part-time administrators (average of $62,500). Digest Exhibit 3 shows the cost for administrators per student, which ranged from $872 at EIU to $3,609 at CSU (which counted many lower level positions as being administrators - e.g., coordinators, specialists). ? • Presidents. Each university was headed by a president and the nine university presidents were paid a combined total of approximately $3 million in fiscal year 2011, as shown in Digest Exhibit 4. – The University of Illinois had the highest paid president in fiscal year 2011 at $620,000. – ISU had the second highest paid president at $369,000. – NIU had the third highest paid president at $328,834. Digest Exhibit 5 shows the $365 million in compensation that was paid to administrators at all of the nine Illinois public universities in fiscal year 2011. Universities’ Organizational Charts To visually depict the uppermost organizational structure of universities, this section shows the first page of the organizational chart for the nine public universities which has the university president, any chancellors, and vice presidents, along with their annual salaries for fiscal year 2011. The Supplement shows more extensive organizational charts for each university. [University colors are used to the extent possible.] (pages 19-41)? (Please see full report and supplement for organizational charts) 2. OPERATING EXPENDITURES In fiscal year 2011, the revenues for the nine Illinois public universities were $8 billion and expenditures were $7.5 billion. Most of these expenditures, $7.3 billion, were for operations (as opposed to capital expenditures) and are categorized into the eight functional areas reported in the OAG financial audits, as shown in Digest Exhibit 7. • In terms of percentages, operating expenditures for all universities were over 25 percent for instruction, 10 percent for research, 8 percent for academic support, and 7 percent for public service. • The University of Illinois had the highest operating expenditures of approximately $4.5 billion out of $7.3 billion (61%) for all nine Illinois public universities, followed by SIU which had over $1 billion in operating expenditures out of $7.3 billion (14%) for all universities. • The highest operating expenditure per FTE student was also at the University of Illinois at $59,000, with SIU being over $34,600, and all the remaining universities being less than $27,500. The average for all universities was approximately $40,500 as shown in Digest Exhibit 8. (pages 43-54) ? 3. COMPARISON OF SALARIES The total amount of compensation (i.e., base salary plus additional compensation, such as for overload courses) paid to all faculty and administrators in fiscal year 2011 was $1.375 billion: over $365 million (27%) to administrators and over $1 billion to faculty (73%), as shown in Digest Exhibit 9. The average full-time compensation was approximately $91,650 for administrators and $84,775 for faculty. Faculty members are paid based on a 9-month contract and administrators are paid based on a 12-month contract which, according to SIU, is a reason for the higher compensation for administrators. • The University of Illinois paid the highest compensation to all faculty (nearly $500 million) and administrators (nearly $225 million) for a total of approximately $725 million. • GSU paid the lowest dollar compensation to faculty ($20 million) and administrators (nearly $8 million) for a total of approximately $28 million. ADMINISTRATORS The nine public universities employed approximately 4,000 total administrators whose total compensation was over $365 million in fiscal year 2011. These included 3,921 full-time administrators who were paid nearly $360 million and 103 part-time administrators who were paid more than $6 million, as shown in the inset. • Compensation. The average compensation for full-time administrators was over $91,600. The average compensation for part-time administrators was over $62,500. The highest administrative compensation was paid to the president of the University of Illinois at $620,000. • $100,000. Nearly one-third (31%) of the full-time administrators (1,233 of 3,921) were paid at least $100,000 in fiscal year 2011, as shown below: 1. NIU -- 120 administrators -- 67% 2. SIU -- 188 administrators -- 61% 3. ISU -- 100 administrators -- 48% 4. GSU -- 28 administrators -- 33% 5. EIU -- 33 administrators -- 32% FACULTY The nine public universities employed nearly 16,000 faculty whose total compensation was over $1 billion ($1,008,624,732) in fiscal year 2011. These included nearly 10,750 full-time faculty who were paid over $900 million and 5,050 part-time faculty who were paid approximately $100 million, as shown in the inset. • Compensation. The average compensation for the full- time faculty was under $85,000. The average compensation for part-time faculty was over $19,000. The University of Illinois paid the highest average compensation to faculty at nearly $99,000, followed by SIU at over $81,000 and NIU at over $75,000. • $100,000. One-quarter (26%) of the full-time faculty (2,793 of 10,746) were paid at least $100,000 in fiscal year 2011, as shown below: 1. U of I -- 1,606 faculty -- 37% 2. SIU -- 534 faculty -- 24% 3. NIU -- 162 faculty -- 18% 4. EIU -- 115 faculty -- 17% 5. WIU -- 117 faculty -- 17% Faculty vs. Administrative Salaries The nine public universities employed nearly 10,750 full-time faculty and over 3,900 full-time administrators and reported their total compensation (salaries plus additional compensation) at approximately $1.25 billion in fiscal year 2011: $911 million for faculty and nearly $360 million for administrators. Total compensation including part-time faculty and administrators was $1.375 billion. The nine public universities paid an average of approximately $84,775 to faculty and $91,650 to administrators. SIU School of Medicine had the highest average compensation for faculty at $133,000, followed by UIC at over $104,500, while the lowest were NEIU and UIS at over $64,000 (see Digest Exhibit 10). The highest average compensation for administrators was paid by the SIU System Office at over $136,000 per year (total expenditure: over $2.25 million). • The campus with the highest compensation was SIUC at over $123,000 per year (total expenditure: over $18 million), followed by NIU at nearly $123,000 per year (expenditure $22 million). • The lowest average compensation for administrators was $64,000 per year at CSU (total expenditure: nearly $20 million) followed by UIS at over $73,000 per year (total expenditure: $7.25 million). Highest Paid Administrators The University of Illinois paid the highest salaries to 15 of 20 administrative positions in fiscal year 2011 (see Digest Exhibit 11). • The highest paid administrator was the University of Illinois President at $620,000, followed by the UIUC Athletic Director at $600,000, the UIC Vice Chancellor for Research at $560,000, and the UIC HealthCare CEO at over $445,000. • NIU paid the highest salaries to 3 of the 20 positions: Senior Executive Vice President (nearly $306,000), Associate Vice President ($278,000), and Provost (nearly $269,000). • SIU paid the highest salaries to the remaining 2 of 20 positions: Associate Provost ($201,500) and Assistant Provost (over $140,500). Nearly one-third (31%) of the full-time administrators and over one-quarter (26%) of the full-time faculty at the nine public universities were paid at least $100,000 in fiscal year 2011. Digest Exhibit 12 shows the salaries of the top 40 university employees paid with public funds. Most receiving additional compensation taught additional classes (e.g., physicians at UIC hospital) or had additional responsibilities according to the University of Illinois. In fiscal year 2011, 1,233 of 3,921 full-time administrators (31%) were paid at least $100,000 by the public universities, as shown in Digest Exhibit 13. They were paid $180 million of the nearly $360 million that universities paid to administrators (50%). As shown in Digest Exhibit 14, approximately 2,800 of 10,750 full-time faculty (26%) were paid at least $100,000. Their total pay was approximately $400 million of the more than $910 million that was paid to faculty (44%). We compared the fiscal year 2011, 2012, and 2013 base salaries of the presidents and chancellors versus their starting salaries, as shown in Digest Exhibit 15 below. (pages 55-72) ? 4. ADMINISTRATIVE EXPENDITURES The total expenditures for the top 86 administrators sampled were approximately $21 million in fiscal year 2011 with 85 percent being for salary ($17.75 million), followed by 5.5 percent for entertainment ($1.15 million). We reviewed expenditures paid by university funds (i.e., State appropriations, tuition, or gift funds) and excluded expenditures paid by University Related Organizations (URO), such as foundations or alumni associations. Details about these expenditures are in the main report; however, Digest Exhibit 16 shows the expenditures for the expenses reviewed: salary, additional retirement, housing, vehicle, memberships, travel, entertainment, and other expenditures. • Salary. The nine Illinois public universities paid approximately $17.75 million to its top 86 administrators sampled. -- University of Illinois paid the most - over $6 million to 26 administrators. -- SIU paid nearly $3.5 million to 18 administrators. -- NIU paid $2.3 million to 12 administrators. • Additional Retirement. Universities paid nearly $300,000 for additional retirement benefits (beyond the State Universities Retirement System) for eight administrators sampled. -- Pursuant to their contracts, SIU paid over $100,000 for three administrators (including $55,000 for the SIU President who was not in SURS). -- NIU paid nearly $85,000 for its President (who paid his own contributions to SURS). • Housing. Universities paid approximately $650,000 for housing benefits to 13 of 86 administrators sampled. -- University of Illinois paid the most for housing - over $400,000 for three administrators, primarily for President’s residences (house and condominium) at $350,000. This was over 50 percent of the combined total for the universities. -- GSU and NEIU paid $35,000 for housing allowances to their presidents. • Vehicle. Universities paid over $175,000 for vehicle expenditures of 18 of 86 administrators sampled. The University of Illinois had the highest expenditure for vehicles at $98,000 for five administrators, or 56 percent of the total for universities (including driver $52,800), followed by CSU at $26,000 (driver $8,500). • Memberships. Universities paid approximately $7,000 for membership fees of 26 of 86 administrators sampled. GSU paid the most; approximately $4,000 for three administrators, followed by the University of Illinois at $2,400. • Travel. Universities paid approximately $375,000 for travel expenses by 76 of 86 administrators sampled. The University of Illinois paid the most for travel - approximately $170,000 for 22 administrators, followed by SIU at $75,000 for 15 administrators. • Entertainment. Universities paid over $1.15 million for entertainment expenses by 53 of 86 administrators sampled. These expenses were for hosting events at the university or at private facilities/residences, such as for catering, meals, party supplies, flowers, tickets provided by the university, etc. The University of Illinois paid the most -- approximately $680,000 for 26 administrators, followed by ISU which paid $300,000 for its administrators. ISU said the amount of expenses reported varies between universities as some, like ISU, account for it centrally within senior administrative departments while others account for it in a decentralized manner throughout various departments. • Other Expenditures. Universities spent approximately $500,000 on other benefits provided to 46 of 86 administrators sampled. -- WIU paid the most at over $260,000 for five administrators’ expenses, such as for sick/vacation time ($257,000), cell phones, internet, and retirement gifts. -- University of Illinois paid approximately $130,000 for 14 administrators, including for a bonus ($45,000 to the President for coming to Illinois), moving expenses, cell phones, and parking. (pages 73-92) CONCLUSION Legislative Audit Commission Resolution Number 143 called for a management audit to compare the nine public universities of Illinois. This report makes the comparisons and presents the results in both the report and a Supplement which contains a report on each university. A draft of this report was provided to the nine public universities. WILLIAM G. HOLLAND Auditor General WGH:mad This audit was conducted by the staff of the Office of the Auditor General.