Unfunded mandates cost UC Davis several million dollars per year and are straining campus coffers at a time of statewide belt-tightening.
The mandates — governmental requirements that do not include funding to cover their costs — often have good intentions, such as protecting health care records, making the campus accessible to disabled people and safeguarding national security. But they can be financially burdensome, and they seem to be increasing in number as the years pass, according to campus officials.
“The topic of unfunded mandates has come up frequently in various campus and UC systemwide administrator meetings,” said Virginia Hinshaw, provost and executive vice chancellor. “Addressing the issue of unfunded mandates is important if we are to meet our fiscal challenges most efficiently and prevent the erosion of vital services and programs during the current budgetary climate.”
Examples of unfunded mandates at UC Davis include new rules for tracking international students, health care privacy rules, various homeland security measures, ergonomics, and accounting standards. Those are just a few of dozens, however.
For instance, the university is attempting to comply with one element of the Patriot Act that calls for the electronic submission of detailed academic and biographical information on the school’s 2,800 international students and scholars. After Sept. 11, 2001, Congress accelerated plans for SEVIS, or the Student and Exchange Visitors Information System. One of the Sept. 11 hijackers had come to the United States on a student visa but had never attended classes.
“The stakes are high,” said Anne George, co-director of Services for International Students and Scholars. “We’re walking a fine line between meeting the government’s requirements and maintaining the respect and dignity of our international community.”
She said if colleges don’t provide accurate information and updates to the new federal Department of Homeland Security about an international student’s or scholar’s academic or research progress, the individual could be in legal jeopardy in the U.S. and in a worst case scenario face deportation.
Schools that do not comply with SEVIS could lose federal funding research and education grants as well as federal scholarships for all students at the offending school. UC Davis receives about $208 million annually from federal coffers, mostly for government-funded research.
Historically, UC Davis has kept track of information on international students, George said.
But new requirements call for detailed electronic reporting on finances, address changes, work authorizations and biographical information about accompanying family members. Two new immigration advisors may be hired to help meet staff workload challenges.
To meet federal demands on tracking international student and scholar information, the campus will spend more than $310,000 on one-time costs and $184,267 in on-going costs for new software in the year ahead, according to Kelly Ratliff, assistant vice chancellor for budget resource management.
In this era of budget crunches, she said, university officials are urging regulators to proceed slowly and carefully before imposing new mandates.
“We may go a little bit overboard in complying with unfunded mandates,” said Lynn Chronister, assistant vice chancellor for research administration. “But the consequences of not complying are too severe.”
Many regulations exist in the research world. Chronister noted that the university spends a great deal of money each year to make sure that animal research subjects are treated as humanely as possible. It all has to be factored into projects from the outset.
“When we apply for a grant, we estimate it may cost us up to a third of the total project figure to cover all the unfunded mandates,” said Chronister. “That’s a huge dollar figure for educational institutions to bear.”
Chronister said another area that creates significant staff workload is monitoring conflict-of-interest issues. The campus is required to ensure that researchers do not reap undue benefits from their projects and links to the private sector.
“It’s certainly a good idea, but it also means we have to carefully watch the progress of the research, and that takes time and money,” she said.
Chronister estimates that about 15 people out of 58 in her office spend a significant amount of time on compliance including filling out paperwork and writing reports to meet unfunded mandates. “We can’t recover the costs.”
A call to duty
The Patriot Act alone and various homeland security rules will cost the campus “a couple million dollars” to implement, Chronister said, noting, “It’s going to be extreme.”
The Patriot Act covers a wide range of activities on university campuses. Some of the activities it covers include putting restrictions on certain biological agents and toxins that might be in research labs around campus and limiting the research activities of international students and other “restricted persons.”
The act imposes criminal penalties, for both institutions and individuals, for many activities that were formerly legal. Critics have complained that Congress hastily enacted the legislation after 9/11.
For libraries on campuses, the new rules raise questions about how to comply with requests for private information like library and academic records.
George Bynon, associate university librarian, said that UC libraries have been studying the potential impacts. Two UC Davis library employees participated in an American Library Association video teleconference earlier this year that focused on the Patriot Act.
“We are in the formative stages of considering the impact of the Act on current practices and the development of any needed policy changes,” said Bynon, noting that UC Davis is involved in a UC systemwide group studying the impact of the Patriot Act on libraries.
In health care, the issue of unfunded mandates seems more complicated than ever before.
Just now hitting the university world, the Health Insurance Portability and Accountability Act (HIPPA) is a federal law that takes health care privacy and confidentiality to new heights. Yet the American Hospital Association estimates HIPPA will
cost institutions at least $400 million and possibly up to $2.2 billion nationwide to implement.
HIPPA provisions require, for example, doctors to obtain consent from patients before disclosing information; hospitals to strictly limit the amount of information that can be disclosed; and hospitals to rewrite contracts with suppliers.
At the UC Davis Medical Center, Rory Jaffee, chief compliance officer, said HIPPA privacy regulations are more than 600 pages and they “profoundly affect” the system’s handling of health information.
“Large numbers of personnel hours have been dedicated to developing UC system-wide policies, UC Davis policies, and policies of the campus units most directly affected, including the medical center,” Jaffee said.
Campus safeguards
The federal government now regulates a growing list of more than 61 deadly “select agents” in all domestic labs, including ebola, herpes B and a variety of toxins on college campuses.
The materials must be kept under lock and key; and access to them must be restricted to people cleared by government background checks. Scientists must also dem-onstrate a “bona fide research purpose” for working with a given material.
All this makes Carl Foreman’s job even more important.
Foreman, the director of environmental health and safety, has put a system in place that tracks which and how much of those agents are on campus as well as information about when they are shipped and who is handling them.
“It’s an expensive priority,” he said. “But our job is to keep the campus safe, and we’re fully complying with all their requirements.”
The less dangerous issue of ergonomics is another example of a costly unfunded mandate.
The UC system has a pending agreement with a union that campuses provide an ergonomic evaluation and report for any newly assigned Coalition of University Employees employee.
While the university strives for the safest possible workplace environment, it is estimated this measure will cost the UC system more than $1 million initially and might be replicated in other union contracts.
Foreman’s office has one staffer FTE currently assigned to the ergonomics program.
“We’d be overwhelmed if we had to conduct these evaluations for each and every new employee,” he added.
Foreman expects to spend about $4,000 to do background checks on the 26 people who work in his office as part of the Patriot Act and Select Agent program requirements. The Environmental Health and Safety staff provides surveillance, education and consultations services for the campus community.
As of July 1, 2001, the university is required by the UC system to conduct background checks of employees in “critical positions,” such as those involving finances, property or safety.
Diane Davies-Conley, associate budget director, said it will cost the campus $151 per individual background check in the year ahead.
Providing feedback
In some cases, it’s possible to provide feedback to the government on the anticipated impacts of unfunded mandates.
When HIPPA was proposed, for instance, a national public comment period generated more than 52,000 comments. But that didn’t necessarily result in big changes to the draft version. Indeed, since Congress’s much ballyhooed Unfunded Mandates Reform Act of 1995, unfunded mandates continue to grow.
“It puts a financial burden on operating the university when funds are ample,” said Michael Allred, associate vice chancellor for finance.
“You can only imagine how tight it is when funds are scarce.”
It’s difficult if not impossible, Allred said, to put an overall price tag on all of UC Davis’ unfunded mandates. No separate category exists for “unfunded” portions of programs in the campus’s accounting system. “They are absorbed into those programs as overall costs.”
Yet some impacts are clear enough. For example, Allred noted, the accounting services unit has to abide by the “72-hour rule.” That means if an employee leaves or transfers to another job, the university has to provide them with a final paycheck within three days. The campus must process about 3,000 such checks every year, Allred said. The garnishing of paychecks by outside creditors is another huge unfunded mandate.
Allred explained that staff cutbacks in the early 1990s make it even harder to keep up with new regulations that come with no dollars attached.
There’s also a state requirement that the university must send financial information on any independent contractor it’s doing business with. That way, if the contractor owes the state money from another project, the state can take steps to require payment.
“This may have nothing to do with the university’s relationship with the contractor,” said Allred, “but we have to send the state information twice a month for about 100 or so contractors.”
New rules on universities to disclose their accounting standards and principles to the government also constitute yet another project that is required but not funded. “Now we have to record depreciation figures, which was never the case before.”
Allred said unfunded mandates “get worse every year.” In the last five years, he has witnessed a “dramatic increase” in such regulation, he said.
“We will, of course, meet all our obligations but there will be less available for other institutional priorities.”