Reconcile Yourself to the State Budget

You might as well reconcile yourself because you won't find a reconciliation from any official source between the governor's accrual budget (released in late June) and the state controller's cash budget (released today).

In theory, there are advantages to accrual accounting over cash accounting in judging performance, whether of a state budget or a corporation.  Accidents of timing of receipts and expenditures can distort the results for any given period.  For example, there really is no difference in a check arriving on June 30 or July 1.  But if you are on a July 1-June 30 fiscal year and look at cash flows rather than accrual, it will make a seeming difference.

That's the theory.  In practice, accrual opens the door to cosmetic adjustments as practiced in California state budgeting for the general fund (the operating budget for the state).  The fiscal year that just ended on June 30, 2013 began with a negative reserve in the general fund as the controller (cash) saw it of -$9.6 billion, as you can see on the table below.  Yet the governor (accrual) tells us that the reserve was -$1.7 billion.  The gap between them of well over $7 billion is large.  But you will find no table to reconcile the reports from any official source.  At the end of the fiscal year, the unreconciled gap had narrowed.  The controller still put the reserve as of June 30, 2013 for the general fund in negative territory (-$2.4 billion) while the governor shows it as slightly positive ($0.9 billion). 

             Controller    Governor      Absolute

$billions          Cash     Accrual    Difference

- - - - - - - - - - - - - - - - - - - - - - - - -

Beginning

GF Balance        -$9.6       -$1.7          $7.6

Inflow*           103.4        98.2           5.2

Outflow**          96.3        95.7           0.6

Surplus***         +7.2        +2.5           4.6

Ending

GF Balance         -2.4        +0.9           3.3

- - - - - - - - - - - - - - - - - - - - - - - - -

*Refers to “revenue and transfers” in governor’s budget and “receipts” in controller’s budget.

**Refers to “expenditures” in governor’s budget and “disbursements” in controller’s budget.

***Inflow minus outflow.

Note: Details differ from totals due to rounding.

- - - - - - - - - - - - - - - - - - - - - - - - -
Now neither version of the budget suggests some imminent danger.  The California economy is recovering and the governor got his temporary tax increases under Prop 30.  Both factors are bringing in more state revenue.  Moreover, even with a negative reserve in the general fund, other state funds currently provide a comfortable cushion.  The controller can borrow from these other funds - outside the general fund - to cover short-term state cash needs.  We are far removed at present from the situation we experience only a few years ago when the state had to hand out IOUs instead of paying its bills.

However, for cosmetic reasons, the governor wanted a positive general fund reserve at the end of the just-concluded 2012-13 fiscal year so that we could "sleep well" as he put it in signing the 2013-14 budget.  And his outgoing finance director delivered.  Any harm done?  Not immediately.  But over time, the notion that the state budget is conveniently adjustable undermines public confidence.  When there is a budget crisis in the future - and at some point there will be one - impressions that the numbers aren't real is a Bad Thing.
---
The governor's budget summary can be found at http://www.dof.ca.gov/documents/FullBudgetSummary.pdf.  The controller's budget can be found at http://sco.ca.gov/Files-ARD/CASH/fy1213_june.pdf.

Waiting for the MOOCows to Come Home

From the Chronicle of Higher Education comes the sad tale of a MOOC in waiting:

It was big news last fall when Colorado State University-Global Campus became the first college in the United States to grant credit to students who passed a MOOC, or massive open online course. For students, it meant a chance to get college credit on the cheap: $89...  Yet almost a year after Global Campus made the announcement, officials are still waiting for their first credit bargain-hunters...

Full story at http://chronicle.com/article/A-Universitys-Offer-of-Credit/140131/

Our advice is to be patient and wait for a student.  Someday he will come:

UC Egypt Programs Suspended

UCLA student at the Sphinx

From the LA Times:

Worried about student safety amid the political violence in Egypt, the University of California has suspended its fall semester program in Cairo, officials said Monday. The move affects 22 students who had signed up to study advanced Arabic and other classes at the American University in Cairo... Those students can enroll instead in UC programs in Jordan, Turkey, Morocco and Israel that also offer Arabic classes... The move comes a few days after the safe evacuation of 10 UC students from a UC Davis-sponsored summer program in Egypt and the worsening of violence in the wake of the military coup that pushed president Mohamed Morsi from power...

Full story at http://www.latimes.com/local/lanow/la-me-ln-uc-egypt-20130708,0,4719676.story.

Acountability Report to Regents: Data Source

At the July Regents meeting, there will be consideration of the "Accountability Report."  While this report tends to be a booster publication, it contains interesting information on budgets, enrollment, etc.  For example, the impact of the Great Recession and its budgetary aftermath can be seen on the chart above from the report.  Nonresident undergrads - who pay full tuition - were increased as a percent of total enrollees.  (Clicking on the chart will enlarge it and show more detail.)

The Accountability Report is at http://regents.universityofcalifornia.edu/regmeet/jul13/l1attach.pdf.

Regents to Consider Modifying Code of Faculty Conduct to Protect Academic Freedom

In an earlier post, before the full Regents' agenda for July was posted, we noted there was an item involving a modification of the faculty code of conduct.  It appears that the main modification to be proposed is explicit protection for faculty to comment on institutional UC policies.  Specifically, there is proposed explicit recognition of the "freedom to address any matter of institutional policy or action when acting as a member of the faculty whether or not as a member of an agency of institutional governance."

The report on this matter can be found at http://regents.universityofcalifornia.edu/regmeet/jul13/e3.pdf.

Keeping Online Ed In-House at UC: Regents Report

Readers of this blog will know that the governor and legislative leaders have been pushing UC to do "more" online ed.  The governor originally earmarked $10 million in the UC budget for that purpose but then line-item-vetoed his own language on the promise that UC would do it anyway. 

The Regents next week will consider a report on online higher ed at UC.  What is interesting about the report is what is highlighted and what gets little mention.  At the January Regents meeting, guest speakers from commercial MOOCs were given the floor to tout their wares.  But the report for next week doesn't talk much about outsourcing to commercial vendors.  It says in the introduction that "faculty have continued to explore MOOCs (Massive Open Online Courses), and more campuses have established formal agreements with one or more MOOC providers."  Thereafter, it's almost all about various internal initiatives ranging from full courses to regular courses that are enhanced by online elements.

Nowadays, the buzz acronym is now ILTI which stands for Innovative Learning Technologies Initiative.

The report is at http://regents.universityofcalifornia.edu/regmeet/jul13/e1.pdf

Of course, there can be problems, inside or outside:

Regents Will Consider Privacy (in Public)

We noted in an earlier post that a preliminary agenda for the Regents' meeting next week had been posted.  The more detailed attachments for the meeting have now been posted.  One topic to be taken up is UC policy on "privacy."  At this point, however, it is all processes to set a policy rather than the policy itself.  According to the agenda item, UCLA Chief Privacy Officer Kent Wada is involved.  (Did you know we had a Chief Privacy Officer?  See http://kentatucla.files.wordpress.com/2012/10/uclacpo-ddmemo1.pdf.)

The agenda item can be found at http://regents.universityofcalifornia.edu/regmeet/jul13/a3.pdf

It's harder to keep things secret nowadays than it was back in the day: