State audit: Cal Poly hired too many managers, gave raises without evaluations

Cal Poly’s Highland Drive entrance.
Cal Poly’s Highland Drive entrance.

Cal Poly unjustifiably grew its management staff and gave raises to administrators without up-to-date performance evaluations, according to a state audit of the California State University system.

The report, released Thursday, detailed the California State Auditor’s findings on CSU system finances from fiscal years 2007-08 through 2015-16. Auditors visited six CSU campuses, including Cal Poly, while developing their report.

Cal Poly faculty members have been outspoken about the university increasing its administrative staffing while denying faculty raises. CSU faculty threatened to go on strike in February 2016 over stalled pay raise negotiations. The CSU system and the faculty union in April 2016 agreed to a two-year, 10.5 percent salary increase.

The audit report focuses on the need for greater scrutiny of campus budgets and management personnel hiring and compensation across the CSU system. But it specifically lays out concerns about three aspects of Cal Poly’s hiring and compensation practices.

▪  The university expanded hiring of management staff without justifying the additional positions.

▪  Cal Poly gave raises to management staff without performance evaluations to back them up.

▪  The university doesn’t properly oversee moving expense reimbursements.

Management personnel growth

According to the audit report, from 2007 to 2016 management personnel positions grew by 15 percent across the CSU system, while faculty positions grew by 7 percent. Cal Poly added 83 new management positions during the same period, going from 168 staff members to 251 — a nearly 50 percent increase.

The report noted that the university nearly tripled its student services management staff from 2007 to 2016, adding 23 positions, including six positions to help with its housing expansion program. No staffing analysis was provided to back up the need for the new hires, according to the report.

Cynthia Lambert, a Cal Poly spokeswoman, said in an email that the university gave auditors “background information and justification” for every management position added, and the six new housing administrators were needed to keep up with the 3,300 additional students being housed on campus.

“Overall, the term ‘management personnel’ or ‘MPP’ is very broad,” Lambert wrote. “Much of the recent hiring of new employees in this classification is related to the university’s effort to increase student achievement and reduce time to degree, as well as fundraising.”

Unjustified management raises

Cal Poly in 2016 also gave raises to 70 management personnel who either had outdated performance evaluations or lacked evaluations altogether, according to the state report. Those raises will cost the university $175,000 per year.

The vice president of human resources told the auditors the raises were justified because “human resources felt it was unfair to penalize management personnel who did not receive timely performance evaluations from their supervisors.”

Lambert noted Friday that the management personnel had gone without raises for several years.

“The evaluation process became less relevant in regard to merit pay raises when those increases ceased for a period of about seven years during the Great Recession,” she said.

In the future, President Jeffrey Armstrong won’t allow managers without up-to-date evaluations to receive merit-based pay raises, she said.

Moving expense reimbursements

Cal Poly’s process for giving expense reimbursements “raised concerns” because the approvals go through only vice presidents or deans, according to the report. CSU policy “requires campuses to establish monetary thresholds that require progressive levels of authority for approval, culminating in presidential approval above the highest threshold.”

The audit singled out Cal Poly for not adhering to a progressive approval system for reimbursements.

“The university follows all CSU guidance regarding relocation packages and is in compliance with CSU policy,” Lambert said.

The audit also criticized the CSU systemwide policy that allows the Chancellor’s Office to approve large moving reimbursement packages for executives and presidents without setting a limit.

Moving expense reimbursements can sometimes run the system tens of thousands of dollars — according to the audit, Armstrong was reimbursed about $50,000 for moving expenses when he became the university’s president in 2011.

Audit ‘shameful’ for Cal Poly

When asked about the additional management hires and pay raises, Graham Archer, Cal Poly’s faculty union president, called the university’s practices “shocking,” “shameful” and “an embarrassment.”

“I can’t imagine why the administration would think that a staffing analysis was not necessary prior to hiring new staff,” Archer said of the audit’s conclusions about the university’s management hires.

Archer said it’s “shocking” management personnel received raises without performance evaluations: “This is an embarrassment for Cal Poly and there is no excuse for it.”

He suggested the raises could have been applied retroactively, after evaluations were given, instead of issuing the increases without assessing managers’ job performances.

“Of course this happened on the administration side and not on the faculty side,” Archer said. “The administration controls the purse strings. For faculty, those strings are kept tight. For administrators, the strings are kept loose.”

Lindsey Holden: 805-781-7939, @lindseyholden27

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