January 27, 2012

Governor Wants to Tackle Pension Crisis

Governor Quinn, speaking to the media at UIC.

GOVERNOR PATRICK QUINN on Jan. 9 asked State legislative leaders to appoint representatives to the Governor’s Pension Working Group. Quinn asked for the appointments shortly after his office released a three-year budget forecast listing pension costs as possibly the State’s largest long-term obligation, rising by $1 billion in the upcoming year.

BEGINNING JULY 1, Illinois pension costs will be about $6.8 billion. A total of $5.3 billion is for pension payments, but an additional $1.5 billion is to pay off money borrowed to cover pension costs paid out in earlier years.

ONCE CONSTITUTED, the panel will have several options. It could propose big changes to the pension system, including reductions to the benefits of current University and other State employees. Or, the panel could move more moderately, going after any instances of waste and redundancy in the current pension systems.

THE GOVERNOR would like pension obligations examined this spring. He told legislative leaders that he would like the group to begin working “as soon as possible.”

QUINN ALSO wrote to the leaders that “Given the multiple challenges facing our public sector pension systems both now and in the coming decades it is critical that we work together this spring to craft appropriate measures to bring fiscal stability to these programs.”

LEGISLATIVE LEADERS may be reluctant to tackle the volatile pension issue in an election year, however. Quinn’s urgency stems from a recent downgrade in the State’s bond rating that made Illinois the state with the worst credit rating of all 50. The Governor cited pension reform as a way to attempt to reverse that credit rating downgrade.

JERRY STERMER, Quinn’s former Chief of Staff, will lead the group.

FOR MORE information, contact the Office of the Governor at (217) 782-0244.

12 Percent Increase in State Higher Education Funding Goes to Pensions

By Andrew Thomason

ILLINOIS’ 12% increase in higher education spending for fiscal 2012 is going into the State Universities Retirement System (SURS) to address its underfunded pension program.

“THESE SURS appropriations do not go to individual institutions or agencies and are not available to be used for educational purposes,” according to the footnote in a study released Jan. 23 by Illinois State University (ISU).

SURS, WHICH is responsible for the pensions of the State’s university employees, is facing an unfunded liability — how much it owes in benefits compared with how much assets it has on hand — of $17.2 billion, according to its 2011 annual report.

ILLINOIS HAS a total stated unfunded pension liability of $85 billion, but a 2009 study by the Northwestern University Kellogg School of Management puts the figure as high as $219.1 billion. The study didn’t specify how much it estimates SURS’ portion to be.

THE “RAPIDLY increasing appropriations” have pushed Illinois’ higher education spending from $3.2 billion in fiscal 2011 to $3.6 billion this fiscal year, according the annual Grapevine study of state support for higher education put out by Center for the Study of Education Policy at ISU.

THE DRAMATIC increase in the amount of money being given to SURS, and the other state pension systems, seeks to make up for decades of chronic underfunding by governors and legislators, and shrinking returns on investments because of the stagnant economy.

FUNDING THAT made it to the college or university classroom decreased this year compared to last year by 0.76 percent, from $1.62 billion to $1.6 billion, according to the Illinois Board of Higher Education (IBHE), which oversees the state’s higher education system. Those figures reflect money going directly to education, such as operating expenses, and don’t include capital spending.

THE AMOUNT of taxpayer money making it to the universities for daily operations has been on a downward slide for a decade, said Alan Philips, deputy director of the IBHE.

“IN MORE recent years, it has been largely a result of the State’s fiscal challenges. The State just doesn’t have a lot of money,” Philips said. “It’s probably not very likely we’re going to see increases in State funding for education, and we’ll be lucky if (higher) education funding is held flat.”

SINCE FISCAL 2007, the total amount of higher education funding, including pensions, in Illinois has increased by 25 percent, from $2.8 billion to $3.6 billion. During that same time, state tax dollars going to SURS have increased from $255 million to $750 million.

THAT FIGURE is set to double next fiscal year, hitting $1.4 billion to meet the requirements of a 1994 law setting a pension payment schedule for the state.

WHEN HIGHER education spending figures are reduced by removing the costs of SURS, spending on higher education has increased by 9.4 percent since 2007, or at about the rate of inflation.

BETH SPENCER, a spokesman for SURS, said the increasing state payments to the pension system are the result of decisions made by past lawmakers and governors.

“THE STATE has systematically, over decades, failed to fully pay the annual required contribution,” Spencer said.

ILLINOIS GOV. Pat Quinn’s three-year budget projection holds education funding flat through fiscal 2015, though the Legislature must approve those figures each year.

QUINN AND legislators are looking to cut the spending on public pensions, including SURS.

QUINN SAID that one possible solution would be shifting the cost of the pensions. He highlighted shifting costs of elementary school teachers’ pensions to their local districts, a move that also could be applied to the collegiate retirement system.

ILLINOIS HOUSE Republican Leader Tom Cross (R-Oswego) and House Speaker Michael Madigan (D-Chicago) plan to have public employees either pay more to keep their current retirement packages or pay less and switch to a 401(k)-style system.

Illinois Auditor General Examines University

THE UNIVERSITY of Illinois in January received the findings of a self-requested, 20-month long audit of University financial management by the Illinois Auditor General. While the audit disclosed no material weaknesses in internal controls of the University or improper use of public funds appropriated by the Illinois General Assembly, the Auditor General provided 20 University recommendations for improvement in certain areas, all of which the University accepted and has already begun to implement.

U OF I Board of Trustees Chairman Christopher G. Kennedy said the audit findings confirmed high expectations for transparency and adherence to best practices in the conduct of University business.

“ON BEHALF of the University and the Board of Trustees, I want to express our thanks to the State Legislative Audit Commission and the Auditor General for this audit,” Kennedy said. “University internal controls are intact and University management will continue to be held to high standards of professionalism and the adherence to business operating processes prescribed by the University and the State.”

THE UNIVERSITY, which has an annual operating budget of $5 billion, routinely undergoes auditing scrutiny by a wide array of authorities. These include annual financial and compliance audits of University finances by an external auditing firm under the auspices of the State Auditor General, as well as audits by federal agencies in connection with millions of dollars in research grants and contracts the U of I receives. In addition, the Executive Director of University Audits annually conducts internal audits on a wide variety of matters.

NEVERTHELESS, UNIVERSITY trustees in January 2010 approved a resolution to authorize a “transition” audit of certain University transactions because of the significant change in the composition of the board in September 2009, when seven of nine trustees appointed by the Governor were replaced. The reconstituted board requested that the transition audit “focus on purchasing, finance and investment, and construction transactions that required board approval during the period 2007 through 2009 to determine whether the approval process followed all applicable laws, rules, practices and procedures.” As requested by the board, the management audit was authorized by the Legislative Audit Commission (Resolution #139) in March 2010.

THE MAJORITY of the University recommendations made by the Auditor General related to the retention of transaction documentation or the adequacy of the transactions documentation. Click here for a link to the executive summary of each of the audit recommendations and the Board/University’s responses.

THE RECOMMENDATIONS concern submission of transactions to the Board of Trustees for approval; use of the Board of Trustees Executive Committee; sole source justification forms; copyright and patent support; use of contracts vs. purchase orders; contract approval routing forms; purchasing documentation; contractor performance reviews; conflict of interest; procurement of financial advisors; use of construction managers; alternate bids; procurement documentation; change orders; minority and female business enterprise (MAFBE) subcontractors; qualifications based selection; evaluation; and oversight of subcontractors.

Investigation Into Anonymous E-mails to University Senators Completed; Report Cites Lone Sender

AN INVESTIGATION was completed by outside experts for the University of Illinois into a pair of anonymous e-mails sent to members of the University’s Academic Senates Conference (ASC), in connection with an enrollment management initiative. Conducted by Jones Day and Duff & Phelps, the investigation concluded there was no evidence of “hacking” or vulnerabilities in the network and concluded that the e-mails were drafted on and sent from the laptop of the former Chief of Staff to the President, and that the laptop was in her possession at the time the e-mails were created and sent.

THE TWO anonymous e-mails were sent on Dec. 12, 2011, and an inquiry was launched later that day to ascertain the source and whether the University’s information technology security was compromised. That inquiry was led by the University IT department. The incident was later reported to the University Ethics Office, which consulted with the IT department and assumed control of the investigation, assisted by the University’s chief legal counsel. On Dec. 22, the president approved the use of outside experts to assist in the investigation. External legal counsel Jones Day was retained, who engaged forensic data analyst Duff & Phelps to conduct an independent forensic analysis.

IN A final report, which was based on a comprehensive forensic examination of e-mails and computers, and interviews with relevant personnel, the investigative team drew the following conclusions:

  • The e-mails were composed and sent from the University laptop computer of Lisa Troyer. Examination of browser activity, firewall logs, e-mail headers, and e-mail fragments found on the Troyer laptop all support this conclusion. Troyer resigned her administrative post as Chief of Staff to President Michael J. Hogan effective immediately on Jan. 4.

  • The investigative record does not support a conclusion that any other person, including Hogan, knew that Troyer intended to send or had sent the anonymous e-mails.

  • Troyer’s laptop computer was not improperly accessed and was in her possession at the time the anonymous emails were sent. There is no evidence of hacking or vulnerabilities in the University network.

HOGAN THANKED the investigative team for its comprehensive and expeditious work in a four-week period that included the year-end holiday season, and expressed his disappointment in the events.

“THE INVESTIGATIVE team has made a thorough examination of the facts on which to base its conclusions. This was a disappointing event, and we have taken the necessary steps to address it,” Hogan said.

ON DEC. 12, 2011, two anonymous e-mails were sent to 20 members of the University of Illinois Senates Conference (USC). Both e-mails were identified in the text as having been written by an unnamed Senator, and the address from which the e-mails were sent, aboutintegrity@yahoo.com, did not identify a specific individual as the sender. One of the recipients noticed embedded data in the email indicated that it was created on a computer with the user account of “troyer.” This was quickly brought to the attention of the University IT department, the University ethics department, and the subsequent investigation ensued.

INVESTIGATORS REVIEWED more than 3,500 emails from Troyer’s University e-mail account from the month of December, and additional e-mails from the fall, which contained key search words. Troyer voluntarily supplied access to her personal gmail account and records of calls to and from her cell phone. Troyer, President Hogan, and others were interviewed, and Duff & Phelps performed a rigorous forensic analysis of the hard drive of Troyer’s laptop, examining Internet activity, browser history records and deleted material. They were able to verify that “the system’s firewall was functioning normally” … and the “activity found on the network security systems was consistent with activity found on the Troyer laptop.”

U OF I Board of Trustees Chair Christopher G. Kennedy said that the “misguided attempt by one individual to sway opinion” must not distract the University community from important work around the enrollment management initiative.

“THIS IS an unfortunate incident and a personal, ethical lapse which the president moved swiftly to investigate,” said Kennedy. “There is no relationship between this incident and good work being done on key initiatives, like the enrollment management plan, which is the result of months of research, hard work and consultation with faculty groups and others. The Board and the administration have made great progress toward improving this essential function, addressing concerns as they have been expressed. This important work will continue, unhindered.”

TROYER SERVED as the president’s chief of staff since July 2010. Troyer also holds an appointment as a tenured Professor of Psychology in the College of Liberal Arts and Sciences on the Urbana campus and plans to transition to back to teaching and research.

APAC Meetings Scheduled; All Invited

ALL APs are invited to the monthly APAC meeting at 12:30 p.m. on the second Wednesday of the month. Meetings are held either in Room 5175 of the College of Medicine Research Building, 909 S. Wolcott, or Room 2750 of University Hall on the East Campus. Scheduled meetings are Feb. 8 in Room 5175 CMRB, March 14 in Room 2750 UH, April 11 in Room 5175 CMRB, May 9 in Room 2750 UH, June 13 in Room 5175 CMRB, July 11 in Room 2750 UH, Aug. 8 in Room 5175 CMRB, Sept 12 in Room 2750 UH, Oct. 10 in Room 5175 CMRB, Nov. 14 in Room 2750 UH, Dec. 12 in Room 5175 CMRB. For information, call (312) 996-0306.


Marelet Kirda, proudly showing UIC loyalty in Angkor Wat, Cambodia.

Marelet Kirda Focusing on Conversion Concerns

By Ivone De Jesus

MARELET KIRDA is the Assistant to the Executive Director at the Center for Advanced Design, Research and Exploration (CADRE). CADRE is a research center in the Office of the Vice Chancellor for Research. She has worked there for a little less than two years, but previously worked at the Office of the Vice Chancellor.

HER ROLE allows her to work on a variety of projects that provide the opportunity to not only connect with the highest level of offices at the University, but to continue her connection with various offices around campus. Having been in an assistant role for more than ten years now, she jokingly describes her job as being a “jack of all trades and master of none.” But the assortment of tasks is the reason why Kirda loves being an assistant. She commented, “Best of all is ‘meeting,’ via phone calls, and working with so many great people across the campuses,” she said.

HAVING SERVED as the AP Representative on the Search Committee for the Selection of the President in 2010 made her realize that staff need to come together and “have a collective voice on the campus,” she said. Kirda is thrilled to be a part of APAC to do just that. She points out that APAC has done a lot over the past few years to be “responsive to the concerns expressed by APs,” as well as providing forums and information that should be disseminated to the campus community.

THERE IS still much work to be done. Kirda would like to see APAC continue to address the conversion of AP positions into Civil Service positions, including but not limited to the issues of seniority and research positions. She stated, “I think I can help by continuing to share the concerns that my colleagues have about the conversion, through APAC, to the campus administration.”

KIRDA HAS been married for 15 years, and her husband, Mike, also works at UIC. He is the Information Technology Director in the College of Applied Health Sciences. They have a seven-year-old daughter and six-year-old son, who participate in many extracurricular activities, which keep the Kirdas quite busy.


UIC’s Environmental Savior: Office of Sustainability

By Jennifer Costanzo

UIC’S LARGE campus area may lead you to question its ability to assure a cleaner environment. However, the Office of Sustainability “helps coordinate initiatives on campus that bring UIC towards greater social, economic, and environmental sustainability,” said Cynthia Klein-Banai, Associate Chancellor for Sustainability. Her office has been working towards the “green” cause since January of 2008, and has sparked many programs that are beneficial and interesting for employees as well as students.

THE OFFICE of Sustainability is better known for its recycling program, which encourages individuals to not only properly dispose of their recyclable material, but also to conserve their resources through reusable items, as well as cut back on daily products altogether. UIC discards an average of one pound of waste per person every day. Through increasing awareness of its initiatives, the office hopes to decrease this number.

ACCORDING TO Klein-Banai, one of the new “go-green” initiatives making great headway here at UIC is called the Green Office Challenge. For participating buildings on campus, employees work together to cut back on emissions and waste from their particular space, and increase their green score. Banai stated that “the six areas of sustainability include energy management, recycling and waste reduction, office supplies, food and beverage, transportation, and networking /engagement.”

THROUGH A checklist process, certain goals are achieved every day. Klein-Banai believes that in order to engage employees to participate, certain benefits must be present. “Currently, employees are aware that their assistance with this project can significantly cut the costs from the University through less paper consumption, lower amounts of energy, as well as transportation emissions,” said Klein-Banai. In addition, those involved receive recognition on the Sustainability web-site, as well as on signs to be displayed in the department and logos for departmental materials.

FOR THOSE looking to make a difference on and off of campus, the newest transportation initiative is productive and convenient for all. It is called iCarpool, and information about it can be found on the Office of Sustainability’s main site. “Once an account is set up, the ride-matching software will find people from your local areas who can ride together to reduce car emissions,” Klein-Banai said. She also stated that this program is “dynamic, since you are not limited in your options. The more who sign up, the greater time flexibility you receive in your arriving/leaving schedules.”

“THERE ARE many other ways to get involved, or to learn more valuable information about going green either at work or in your spare time,” said Klein-Banai. A quarterly e-newsletter is sent out with various facets of information, and you can also find representatives present at the Marketplace during student orientation sessions. Currently, “83% of UIC’s total emissions come from the running of facilities themselves,” said Klein-Banai. With all members of the University working together to conserve energy, there’s no telling the levels we could reach by 2013.

FOR MORE information, log on to http://www.uic.edu/sustainability/.


Protesters advocate corporations paying State taxes.

Get Involved; Volunteer Opportunities Available

THE SERVE Illinois Commission is seeking applicants for a variety of volunteer opportunities. By entering a zip code, county, and area(s) of interest, applicants can view local volunteer opportunities in their area. Currently, the Serve Illinois Commission has over 100,000 volunteer opportunities state-wide, and is always looking for bright, motivated, volunteers to fill positions. Interested applicants may visit www.serve.illinois.gov or call (800) 592-9896.


Editor’s Note: “The Continuing Crisis” is a section of APAC News which links to news pertinent to the state budget crisis and other financial matters as they affect the University and Academic Professionals. These news outlets are not affiliated with or endorsed by APAC.

CHICAGO TRIBUNE says “Springfield politics wreaked havoc on retirement code.” See http://www.chicagotribune.com/news/watchdog/ct-met-pension-code-20111216,0,7785082.story?page=1, Dec. 15, 2011.

CORPORATE TAX dodge report reveals millions lost in Illinois. See Progress Illinois, Dec. 15, 2011. http://www.progressillinois.com/posts/content/2011/12/15/corporate-tax-dodge-report-reveals-millions-lost-illinois

ILLINOIS’ UNPAID bill tally nears $8.5 billion, says State Comptroller Judy Baar Topinka. See Progress Report, Jan. 18, 2012. http://www.progressillinois.com/news/content/2012/01/18/illinois-unpaid-bill-tally-nears-85-billion

Vol. 5, No. 1 January 2012

ISSN 1946-1860
Editor: William S. Bike
Writing Staff: Jennifer Costanzo, Ivone De Jesus, Gail Mansfield, Tomeiko Sewell

Chair: Michael Moss
Vice Chair: Jennifer Rowan
Secretary: Jacqueline M. Berger
Treasurer: Virginia Buglio
Webmaster: Jeff Alcantar