Compensation of top UA administrators underreported

The University of Arkansas has significantly underreported the compensation of Chancellor Gearhart, athletic director Jeff Long, and Vice Chancellor Chris Wyrick.

State law requires Arkansas universities to prepare an annual report detailing the compensation of top administrators. Uark Transparency has made all editions of the Administrators Compensation Survey available on its web site (see The Proliferation of Administrators in Higher Education). Comparison of the reported data with the UA’s expenditures database reveals significant discrepancies:

  • Jeff Long's FY 2013 salary

    Jeff Long’s FY 2013 salary

    Athletic Director Jeff Long received a total of $1,140,000 in cash payments during fiscal year 2013 (July 2012 to June 2013) but the survey discloses only $865,000. A $275,000 bonus payment in July 2012 is not disclosed in the survey. The University has declined to comment.

  • The Chancellor house provided by the UA to Gearhart is a benefit worth $21,788 per year but was omitted from the fiscal 2012 and 2013 surveys. UA spokesperson Mark Rushing acknowledged the mistake, stating: “The tables are put together by Human Resources Payroll Office. Since the Housing under IRS rules is not a taxable compensation for a chancellor required by the BoT to live on campus, it is not in their data base and has to be added manually. The lack of this data was simply an unintentional omission. We will add it in the future.”
  • Chancellor Gearhart also received a payment labeled “Special (retirement,etc.)” of $22,986.68 in 10/2012. This doesn’t seem to be disclosed in the FY 2013 survey. The University has declined to comment.
  • Vice Chancellor Chris Wyrick, who became head of the Advancement Division in April 2013, receives a $12,000 per year car allowance in cash that was omitted from disclosure in the FY 2013 survey. Vice Chancellors Gaber, Pederson and Robinson also receive the allowance.

Arkansas law ACA 6-63-316 requires state-supported universities to file the Administrators Compensation Survey with the Arkansas Department of Higher Education (ADHE) by July 15 of each year. The law was enacted in 2009 as “AN ACT TO INCREASE SALARY TRANSPARENCY FOR ADMINISTRATORS IN STATE-SUPPORTED INSTITUTIONS OF HIGHER EDUCATION” (Act 321 of 2009). According to ADHE director Shane Broadway, so far no corrected report was submitted.

The reports are posted on the ADHE web site. In addition, state law (ACA 25-1-118, Act 742 of 2011) also requires all state entities to post mandatory reports, including the Compensation Survey, on their own web sites. The University of Arkansas so far does not comply with that requirement and many reports remain unavailable that by law should be accessible online.

The Proliferation of Administrators in Higher Education

The Administrator’s Compensation Survey has the data

One aspect of the UA Advancement Division budget trouble that perplexed many observers is the fact that so many highly paid professional administrators failed to notice (so they said) what was going on for years. In response to public criticism, the University hired yet another administrator with the title of Associate Vice Chancellor for Budget and Financial Planning (the UA already had the positions of Vice Chancellor for Finance and Administration, Associate Vice Chancellor for Financial Affairs, and Budget Director) whose “job apparently will be to make sure no other highly paid UA administrators create the same sort of public relations nightmare”, as the Courier News’ Roy Ockert put it.

Throughout the world of higher education, the bureaucratic apparatus has expanded way out of proportion with student enrollment and faculty size (see below for a sample of items documenting and debating this trend). Critics of “administrative bloat” point out that the number of administrators per student has increased while the faculty-student ratio is generally flat or declining. There’s also a growing chasm between the salaries of regular faculty and administrators (and, following overall economic trends, growing inequality between top and bottom earners in general). Again Ockert:

“Increasingly, educational administrators claim they must compete with business and industry in offering salaries to administrators. In hiring professors, though, the strategy is to be competitive with other universities. Because of that and other factors, a chasm is developing between administration and faculty at many institutions, not only in terms of salary but also in educational theories, campus governance and academic experience. Too many educational administrators have little or no teaching experience, which may profoundly affect their understanding of the institution’s most important mission — the education of students.

Readers can look up how much individual UA administrators (or any employee) are paid at the OpenUA and BudgetUA portals. A comprehensive overview over administrator pay in Arkansas higher education is provided by the annual Administrator’s Compensation Survey, available on the web site of the Arkansas Department of Higher Education (ADHE). The survey, mandated by state law (ACA 6-63-316), covers all administrators (athletic coaches are included in that category) with salaries of $100,000 or more and includes all benefits. From 2010 to 2013, the survey expanded from 501 pages to 723 pages. The number of University of Arkansas administrators covered increased from 117 to 161 (this includes the System Office). Another tidbit: 20 individuals were listed with a job title of ((Associate) Vice) Chancellor. Note that the line item for the Chancellor house, worth $21,788, was by mistake omitted from Chancellor Gearhart’s compensation page (see below). His total compensation adds up to roughly $400k, plus $225k in deferred compensation.

Update: The Chronicle of Higher Education has a national survey of Executive Compensation at Public Colleges. Chancellor Gearhart is ranked 64th out of 256 top execs.

Chancellor Gearhart's salary and benefits

Chancellor Gearhart’s salary and benefits

The Administrator’s Compensation Survey (pdf)

Further extensive employment and salary data can be found at the federal IPEDS data center. IPEDS reports that the number of full time UA employees in the category “Executive/administrative/managerial” increased from 181 in 2001 to 290 in 2011, a 60% increase! Meanwhile, full-time instructional faculty increased only 18%, from 834 to 989.

Links discussing the proliferation of administrators in higher education:

The UA’s Athletic Budget

Head scratching about the financial reporting of the UA Athletics Department

How much does the University of Arkansas spend on its athletics department? The total number for fiscal year 2013 was an astonishing 88 million dollars, up from 81 million the previous year and 68 million in 2010, an increase of almost 30% in 3 years. According to the University, these expenses are more than covered by the revenues so that no taxpayer or tuition money is spent on athletics.

It is interesting however to note that the actual revenues and expenditures reported each year are twelve million more than was budgeted (according to certified budget documents filed with the state). Every year. Why are budget makers so wide off the mark? AthleticRevenuesTable
For example, about 3 million are spent every year for game guarantees ($3.6 million in 2013). Yet these amounts never appear in the budget. Could this be related to the UA’s attitude that game guarantees constitute a trade secret? Somewhat bizarrely, the line item for ‘Facilities’ is under-budgeted every year – by seven million in 2013 and a whopping 12 million in 2012. Can you picture the financial officer preparing the budget: “Let’s see, last year we budgeted 3 million but spent 15 million on facilities, so this year we are going to budget 4 million, that should fix it”. On the revenue side, most of the unbudgeted revenue appears in the “Other Income” category (12 million in 2013, up from 9 million in 2010). The same line item, which is said to include “investment, rental, endowment income”, is budgeted as zero ($0) every year. Is this related to the UA’s habit of keeping Razorback Foundation finances in the dark? Or is it another result of the sloppiness built into the UA’s accounting practices, as recently revealed and criticized by the Legislative Audit report?

In an additional twist to the story, google turned up an Economic Impact study from 2012 which quantifies athletic department expenditures for 2010-11 as $84.7 million and revenues as $90.0 million, compared to the official figures of $74.9 million expenditures and $75.2 million revenues. Further, the study (p. 14) lists almost $20 million in private donations, a figure nowhere to be found in the official financial report (which lists $7.7 million in “private gifts”). What kind of creative accounting is going on here???

UPDATE: As a reader points out, athletic revenues and expenses also have to be reported to a federal database known as EADA. Look up an institution and click on “Revenues and Expenses” to see the most current data. They are dramatically different from the figures reported to the state (and also not the same as the economic impact study figures). AthleticFinancesTable The total revenue reported to EADA was almost $100 million in 2012 and 2013. Over the last four years, the Athletic Departent reported $55 million more in revenues and $40 million more in surplus to EADA than was reported to ADHE!

The explanation seems to be that ADHE requires to budget and report only expenditures “paid by an institutionally held fund”, and to report only “monies from foundations, clubs, and other private gifts which are received by institutionally held accounts”, which in effect allows the UA to keep multiple sets of books and thereby defeat state oversight and transparency.

The budget documents and where to find them

State law requires all Universities every year to file a Certification of Budgeted Athletic Revenues and Expenditures with the Arkansas Department of Higher Education (ADHE), and to report the actual revenues and expenditures (AR Code 6-62-106) at the end of each fiscal year (fiscal year 2014 runs from July 2013 to June 2014). The forms to be used are known as ADHE Form 21-2 (budgeted) and ADHE Form 21-1 (actual). Note that each form uses somewhat different line items. Some of the recent reports (both budgeted and actual) can be found on the UA’s Financial Affairs web site. State law requires all state entities, including state-supported universities, to publish on their web site each and every report they file with another state entity (AR Code 25-1-118). Compliance with this law is uneven, as we shall examine in a later post.

University of Arkansas Athletic department financial statements
Budgeted2010, 2011, 2012, 2013, 2014;   Actual2010, 2011, 2012, 2013
Summary 2010-2014

A more detailed breakdown of the 2014 athletic budget can be viewed at Arkansas Business. The ADHE is also required to publish the athletic finance reports, but they are not easy to find. A Summary of Intercollegiate Athletic Revenues and Expenditures, 2012-13 is contained on the last page of the Arkansas Higher Education Coordinating Board quarterly meeting agenda, October 25, 2013. The last agenda item of the board meeting taking place today is approval of the athletic financial survey.