Questions about Extra Compensation at UofA

UPDATE: Some readers have confused extra compensation with outside employment. This is not related to outside employment. It’s the University paying some faculty extra salaries, entirely from public money.

A handful of UofA faculty members receive substantial extra compensation awards for extra service or teaching duties. Forty-three individuals received extra compensation totaling $10,000 or more in calendar year 2012, according to data (pdf) provided by the University of Arkansas under the Freedom of Information Act. In total, about $1.6 million were awarded in extra compensation to some 350 individuals, $640,700 of which went to just 43 individuals.

Largest cumulative extra compensation awards at University of Arkansas, 2012

Largest cumulative extra compensation awards at University of Arkansas, 2012

Matthew Waller, Supply Chain Management Department Chair in the Walton College of Business, received a total $38,875.00 in extra compensation for service duties. Steve Boss, Geosciences professor, received the largest single extra compensation award of $23,302.50, also for service.

The little known practice of awarding extra compensation to some faculty members raises a number of concerns. According to University policy (pdf), “Approval should be obtained prior to the start of the activity”. A review of approval forms (pdf) for large extra comp awards shows that this was not the case. Dr. Boss was awarded three months’ worth of his regular pay for a service activity started 7/1/11 and ended 6/30/12 and the approval form was signed on 5/30/12. Dr. Waller was awarded $16,556.60 for “curriculum development” from 7/1/12 to 8/31/12, equivalent to one full monthly salary (according to http://openua.uark.edu), and the approval form was signed 7/23/12. He was awarded $12,375 for an activity from 4/1/12 to 5/26/12 and the approval form was signed 6/5/12. Marcia Shobe, Associate Director of the School of Social Work, was awarded $11,808 (1.4 regular monthly salaries) for editing the Journal Inquiry from 3/1/12 to 5/11/12 (2.5 months). The approval is dated 4/18/12. Eleven extra compensation forms with amounts of $10,000 or more were reviewed and all but two of them were approved after the start of the activity, in most cases even after the end of the activity. The recently released Legislative Audit report has, of course, faulted University officials for not following policies and procedures related to the approval of expenditures.

Policy also requires that extra compensation duties “are performed outside the normal work schedule”. Dr. Waller and Dr. Shobe were effectively paid 150% of their regular salary during certain periods. Are we to imagine that they worked an extra “shift” after their regular work day (of course, faculty members, as exempt employees, do not have fixed work schedules)? Service duties are part of the regular duties of all faculty members. It is unclear why some service activities are compensated while most are not (aren’t most faculty members engaged in curriculum development, for example?), why a handful of individuals receive unusually large awards, and whether these activities are really performed in addition to a full workload. Faculty members with onerous service duties usually receive reductions in their teaching load and research expectations. In that case, extra compensation seems like double-dipping.

The issue of transparency is also raised. The nominal salaries of faculty members are published in the University annual budget (now available online) and reported to the National Center for Education Statistics. Extra compensation is not included in these figures. A policy that allows the award of large amounts of money to a small number of individuals out of public view looks like an invitation to favoritism and good ol’ boyism.

University officials, when asked about the issue, defended the practice. Barbara Abercrombie, Human Resources Director, wrote on behalf of Don Pederson, Vice Chancellor for Finance and Administration: “The policy does not prohibit later review and approval of payments made for bona fide activities that fall within the scope of the policy. The activities indicated on the forms were appropriate to pay under the extra compensation policy.” “‘Should’ is not the same as an absolute requirement”, wrote Pederson in an internal email (pdf). True, but it’s not the same as “whatever” either. The policy may be intended to allow for limited exceptions to the pre-approval rule, but University officials have made the exception become the rule. If that’s acceptable, why have a policy at all?

Let’s be clear that this is not an “academic” debate about semantics. This is a policy put in place to safeguard the financial and ethical integrity of the University. When large monetary awards are approved ex post, oversight becomes dubious, as evidenced by an internal email (pdf) by Provost Sharon Gaber recounting that she was asked to approve extra compensation forms for classes already taught. “Why are we just now approving these? There is no way that I can say no? They have already taught the classes.” She suggested that “we should require up-front approval”, apparently unaware that it was already required under the policy.

The University of Arkansas is currently under heightened public scrutiny (to understate a bit) due to financial irregularities and sloppy budgeting. The academic community and the public have the right to expect extraordinary financial diligence and scrupulous compliance with all rules and policies from the administrators of the state’s public University. The cavalier way in which disbursements of large amounts of public money as “extra compensation” were handled and then justified by questionable reinterpretation of the applicable policy is everything but reassuring.