Administrative Processes January 14, 1988 Table of Contents 3-1.0 Organization and Administration (6.1) . . . . . 3-1 3-1.1 Governing Board (6.2) . . . . . . . . . . . . . 3-1 3-1.2 Administrative Structure . . . . . . . . . . . . 3-4 3-1.3 Administrative Decentralization . . . . . . . . 3-5 3-1.4 Governance Structure . . . . . . . . . . . . . . 3-6 3-2.0 University-Related Corporations . . . . . . . 3-10 3-2.1 Virginia Tech Foundation, Inc. . . . . . . . . 3-10 3-2.2 Virginia Tech Corporate Research Center, Inc. 3-13 3-2.3 Virginia Tech Intellectual Properties, Inc. . 3-13 3-2.4 Virginia Tech Library Services, Inc. . . . . . 3-14 3-2.5 Virginia Tech Alumni Association, Inc. . . . . 3-15 3-2.6 Virginia Tech Athletic Association, Inc. . . . 3-15 3-2.7 Virginia Tech Student Aid Association, Inc. . 3-16 3-2.8 VPI Facilities, Inc. . . . . . . . . . . . . . 3-17 3-2.9 Issues And Recommendations . . . . . . . . . . 3-18 3-3.0 The Athletic Association (5.5.2.9) . . . . . . 3-23 3-3.1 Issues And Recommendations . . . . . . . . . . 3-23 3-3.1.1 Organizational Structure . . . . . . . . 3-23 3-3.1.2 Functions of the Athletic Board . . . . . 3-24 3-3.1.3 Composition of the Athletic Board . . . . 3-25 3-4.0 Physical Resources (6.4) . . . . . . . . . . . 3-27 3-4.1 Space Management (6.4.1) . . . . . . . . . . . 3-27 3-4.2 Facilities Master Plan (6.4.4) . . . . . . . . 3-30 3-4.3 Buildings, Grounds And Equipment Maintenance (6.4.2) . . . . . . . . . . . . . . . . . . . . . . 3-32 3-4.4 Safety And Security . . . . . . . . . . . . . 3-34 3-5.0 Purchasing And Inventory Control (6.3.6) . . . 3-36 3-5.1 Issues And Recommendations . . . . . . . . . . 3-37 3-5.1.1 Adequacy Of Purchasing Services . . . . . 3-38 3-5.1.2 Modification of Rules and Regulations . . 3-39 3-5.1.3 On-line Processing Procedures . . . . . . 3-40 3-5.1.4 Decentralization and Specialization of Purchasing Functions on Campus . . . . . . . . . . 3-41 3-6.0 Employee Relations . . . . . . . . . . . . . . 3-42 3-6.1 Issues And Recommendations . . . . . . . . . . 3-42 3-6.1.1 Improvements In The Fringe Benefits Package 3-43 3-6.1.2 Increased Freedom From State Rules And Regulations . . . . . . . . . . . . . . . . . . . 3-44 3-6.1.3 Automated Processing Of Personnel Trans- actions . . . . . . . . . . . . . . . . . . . . . 3-46 3-7.0 Appendix Items . . . . . . . . . . . . . . . . 3-48 List of Illustrations Figure 3-1. University Organizational Structure . . . . 3-3 Figure 3-2. Governance Structure at Virginia Polytechnic Institute and State University . . . . . 3-9 Figure 3-3. University-Related Corporations at Virginia Polytechnic Institute and State Univer- sity . . . . . . . . . . . . . . . . . 3-11 List of Tables Table 3-1. Administrative Responsibilities On Boards Of Various Corporations . . . . . . . . . . 3-20 Table 3-2. Space Needed for 21,000 FTE Students Based on Space Guidelines . . . . . . . . . . 3-29 Table 3-3. Inventory of Campus Physical Facilities, Ten Year Comparison . . . . . . . . . . . . 3-30 3-1.0 Organization and Administration (6.1) During the past 40 years, Virginia Polytechnic Institute and State University has had three presidents. In Walter Newman's administration (1947-1962), there was a broadening of curricula that not only strengthened the academic programs in agriculture and engineering, but also laid the foundation for the transition of the University from an essentially male, Corps of Cadet, polytechnic institute to a comprehensive land grant university. Under T. Marshall Hahn's leadership (1967-1974), the University built on this foundation and made the transition. Concomitant with this emergence was a dramatic change in organization and administrative structure. When William Lavery became president in 1975, there were seven undergraduate colleges, an emerging graduate school and a broad- ening of extension and research programs. Not only was fine- tuning needed for the organizational structure put in place during the Hahn years, but additional administrative support was needed as Virginia and the nation moved into an era of increased accountability for public institutions. In the decade ending in 1976, VPI&SU saw dramatic growth in numbers of students (7,020 to 19,299), faculty (684 to 1,473) and wage and classified personnel (3,552 to 8,660). During the past decade, this growth has continued, with a dramatic improvement in quality of students, faculty and academic programs. At the same time, there has been the expected turnover of academic adminis- trators and the establishment of administrative positions as proposed in the 1975-76 Self-Study. These changes in organiza- tional structures and administrative processes are of course expected in a dynamic, comprehensive land-grant university because of continuous realignment and redirection of programs designed to meet ever-changing responsibilities.* The past ten ----------------------------------------------------------------- * There have been several changes in the administrative struc- ture of the University since this report was prepared; the new structure is included in the supplementary materials. ----------------------------------------------------------------- years, viewed in the context of the decade that preceded them, suggest that the primary moving force has been maturation rather than growth. With maturity has come added administrative-faculty interface, which requires a mutual responsibility and trust. This in turn will serve to enhance the academic programs in creating new knowledge and teaching existing knowledge -- the true mission of a university. 3-1.1 Governing Board (6.2) Governance of a major comprehensive land-grant university involves shared responsibility by the faculty and the adminis- tration, with checks and balances essential to ensure efficient operation of the enterprise. Although both cooperate, with student involvement, to develop university policy, responsibil- ities should not be equal, since academic matters are mainly the province of the faculty. Presently, governance at VPI&SU is multifaceted with administrative structure outlined under various vice presidents according to function. A brief organizational chart is presented in Figure 3-1; a more detailed organizational chart is presented in An Organizational Chart for Virginia Tech, Institutional Research and Planning Analysis (IRPA) report, Vol. 86-87, No. 80, April 9, 1987. The Governing Board of the University is the Board of Visitors. Vested in the Board is responsibility for governance and control of all facets of the University. Voting membership consists of 13 individuals appointed by the Governor, subject to confirmation by the Senate of Virginia, one student of the University, and the President of the State Board of Agriculture and Consumer Services, who serves ex officio. Appointments to the Board are for four-year, staggered terms, and members may serve no more than two successive four-year terms. Three of the appointed members may be nonresidents of Virginia, and at least six must be alumni. The Board is empowered to appoint the President, other adminis- trative officers, faculty, and staff; to fix salaries and fees; and to establish appropriate regulations. The Board's policies are executed by the President, and through the President by the faculty and staff. The Board of Visitors restricts its actions to the aforementioned matters and delegates operational decisions and management of the University to the University adminis- tration. In the 1975-76 Self-Study, a recommendation was made to consider ways to improve communications between the faculty of the Univer- sity and the Board of Visitors. One outcome of this recommenda- tion was the establishment of four working committees of the Board that include faculty and students. These committees are: * Academic Affairs, * Student Affairs, * Finance and Audit, and * Buildings and Grounds. Each committee is chaired by a member of the Board. These persons also serve on the Executive Committee of the Board with the Rector and the Vice Rector. 3-1.2 Administrative Structure The President, the chief executive officer of the University, is selected by the Board of Visitors and holds office without term, subject to the pleasure of the Board. The President is charged with the overall organization and supervision of the University and all of the state agencies, services and regulatory activities that have been placed under the President's supervision by the Board of Visitors. Reporting to the President are The University Provost, Vice President for Administration and Operations, Vice President for Development and University Relations, Vice President for Finance, Vice President for Student Affairs, Executive Assistant to the President, Administrative Assistant to the President, Director of the Athletic Association, Director of Institutional Research and Planning Analysis, University Legal Counsel, and the Director of the Office of Equal Opportunity and Affirmative Action. The Vice President for Computing and Information Systems reports to the Provost. The directors and executive officers of the individual agencies, services, and regulatory activities report directly to the University Provost or Vice President under whom the President has placed each organization. The University Provost, who acts in the President's absence, assists the President in the administration, coordination, devel- opment and stimulation of instructional, research, and extension programs. In addition, the University Provost is responsible for maintaining the University's relations with the academic program function of the State Council of Higher Education. The college deans, the Vice Provost for the Extension Division and Director of Virginia Cooperative Extension Service, and the Vice Provost for Research and Graduate Studies report to the University Provost for their areas of responsibility. The Vice President for Administration and Operations, the Vice President for Computing and Information Systems, and the Vice President for Student Affairs report to the President through the University Provost on all matters affecting the instructional, research, or extension missions of the University. Other officers reporting directly to the Office of the University Provost include: the Director of Admissions, Registrar, Director of Financial Aid, Director of University International Programs, Director of the Summer School, and Director of the Honors Program. The structure of the higher administration of a comprehensive university can take any of several forms. An examination of the history of the administrative structure at VPI&SU indicates that no specific pattern has emerged other than that the University has correctly assigned the primary academic responsibilities to the Provost. While the administrative structure and governance process at VPI&SU appears to be cumbersome, efforts to circumvent them for the sake of expediency are unsound. In order for the University to pursue its primary missions of creating new knowledge and teaching existing new knowledge, the academic and support units must function to nurture and to enrich the academic and intellectual efforts of the faculty and students. In this way, the efforts of these latter groups should drive the Univer- sity, while the service units assume supportive roles. One approach to a governance structure would have all the vice presidents report through the Provost, as the Executive Vice- President, to the President. The rationale for adopting this arrangement, which was successfully used earlier in this decade, is that administrative programs are designed to enhance the scholarly mission of the University. Another approach would be to delineate between academic and administrative programs. The Provost would be the chief academic officer and an Executive Vice President for Administration would represent support services; both would report directly to the President. Academic Deans and the Vice President for Student Affairs would report to the Provost, and various nonacademic vice presidents would report to the Executive Vice President for Administration. Recommendation 3-1: Given that the primary academic responsi- bilities have been correctly assigned to the Provost, it is recommended that the remaining organizational structure of the University be examined to ensure that it reflects the relationship of support units to central academic functions. 3-1.3 Administrative Decentralization Comprehensive universities are complex administrative entities; while academic concerns often derive benefits from the nonaca- demic side, a basic autonomy for academic concerns is essential. While autonomy in academic issues is an unquestioned necessity, autonomy in structural and mechanical issues, as these might be served by administrative decentralization, is more problematic. Nonetheless, such autonomy must be exercised as much as is allow- able for a publicly supported institution. Decentralization should be considered at two levels: 1) inside the University gg from the central administration to colleges and departments, and 2) outside the University -- from state government to the Univer- sity. Based upon interviews with University administrators, results of the faculty survey, and reviews of pertinent documents, the Self-Study Committee on Administration Processes concluded that the present University administration has made great strides in decentralization of academic matters and that it is in fact "nonoppressive administration." A vivid recent example is the support and handling of the issues connected with the "Accuracy in Academia" charges during the spring of 1986 when central administration adopted a supportive role for faculty autonomy and academic freedom. Decentralization at VPI&SU is healthy and should become even more evident as academic units within the University continue to mature. Such a positive administrative attitude allows for initiative by its faculty. It recognizes that the University community has reached a level of maturity that can only enrich academic programs. Although the state government has continued to decentralize, much more is necessary to nurture a comprehensive land-grant univer- sity that serves the entire Commonwealth via its teaching, research and extension missions. Not only must VPI&SU compete on a national level for faculty, but increased sophistication in its missions require that individuals in support services be selected from a larger pool. The need for further decentralization from state government must be vigorously pursued if VPI&SU is to enhance its potential to move into the next tier of comprehensive universities. Recommendation 3-2: Given that the role of a major comprehen- sive land-grant university differs greatly from the roles of other state agencies, it is recommended that efforts should continue to obtain further decentralization of the University from restrictions placed on it by the state government. 3-1.4 Governance Structure It is extremely important that administrative processes include advice and views from various sources, including the faculty. The 1975-76 Self-Study recommended improved communication among all segments of the University, amendments to the Constitution of the Faculty Senate, and a greater role of the Faculty Senate in University governance. These improvements were necessary because the Senate was still in its infancy and greater faculty involve- ment with administration was needed to develop the governance system. While an effective Faculty Senate is essential to university governance, faculty participation should not be restricted to that body alone, since a diversity of faculty views is essential to the evaluation process. This point is partic- ularly important because in a large, comprehensive university, the President and the Board of Visitors may become isolated from routine operations and their decisions can only benefit from views expressed by all segments of the university community. A multigovernance process also provides an important buffer that allows public universities to function independent of political influences and of large financial benefactors. The governance structure of VPI&SU is illustrated in Figure 3-2. The six University commissions, Extension, Faculty Affairs, Graduate Studies, Research, Undergraduate Studies, and Student Affairs (the fourth tier of the figure), are the principal forums for the discussion of policy issues and are responsible for formulating university policy. However, all recommendations from these commissions are sent to University Council for final approval and implementation. As Figure 3-2 illustrates, certain University committees (fifth tier) report to the commissions, while others (seventh tier) report directly to University Council. Regardless of the formal reporting structure, the committees are to be concerned with the administrative implemen- tation of policy and not in its formulation. Given the diffi- culty in differentiating between issues that are clearly policy and those that are administrative implementation, the Self-Study Committee on Administrative Processes determined that, in practice, certain of these committees that report directly to University Council are, in fact, setting and implementing policy without prior review by the Council. The chairs of these commit- tees submit periodic written reports (usually annually) to the Council; however, these reports contain the activities of the committee, including the formulation and implementation of policy. While these committees have representatives from the various organizations listed on the bottom of Figure 3-2, this policy formulation and implementation falls outside the formal governance structure of the university. Recommendation 3-3: Given the importance and pervasiveness of issues discussed by the University committees that do not report through the University commissions, it is recommended that when these committees discuss issues that result in policy recommendations, their reports be brought under the review of the governance structure of the University. While the University commissions provide the primary forum to discuss policy issues, the University Council, the President's 43-member advisory panel, is responsible for final approval of university policy. The Council is composed of administrators (appointed by the President), and faculty and students (chosen in various ways) who provide advice in formulating university policy. As mentioned previously, the past 10 years have brought maturity to the administrative/faculty/student interface with considerable effort directed at broadening the representation and improving the communication in the governance structure and process. However, as with any large organization, the effort/benefit ratio has had to be balanced, a concept that has permeated the University as it has moved from growth during the Newman-Hahn era to maturity under the Lavery administration. Along with the maturation has come the expansion of University Council to its present 42 members to provide broader represen- tation. However, the Council may now be too big to be fully effective, which will have an impact as the University continues to grow and mature. Growth will require that difficult decisions be made, and an efficient and effective organizational and admin- istrative structure is essential to the University's decision- making process. Recommendation 3-4: Given the suggestion from the 1975-76 Self-Study and the review of the Self-Study Committee, it is recommended that the size of the University Council be reduced, but appropriate representation from the adminis- tration, faculty and students be retained. 3-2.0 University-Related Corporations The Board of Visitors has authorized the establishment of eight University-related corporations.Z Each of these corporations conducts its programs or activities in support of the mission of the University. The bylaws of the Board of Visitors require that each University-related corporation be authorized by the board and that each must operate under the following procedures: * Provide the Board of Visitors with a copy of the corporate constitution, bylaws, and certificates of incorporation. * Specify the services that the corporation provides to the University. * Obtain approval for services and space, subject to review from time to time. The Administration, acting for the Board, may make facilities available. * Provide the Vice President for Finance with a copy of its official annual audit, management letter and response, and other documents relating to tax-exempt status. Each corpo- ration must change external auditors no less often than every 5 years. * Coordinate insurance programs for the Corporation, other than employee benefit insurance programs, through the University's insurance office and pay for its share of the premiums. An organizational chart of the University-related corporations is shown in Figure 3-3. A summary describing each corporation follows. 3-2.1 Virginia Tech Foundation, Inc. The VPI Educational Foundation was established in 1948 as a tax-exempt, not-for-profit corporation to receive, manage, and disburse private gifts in support of University programs. Its name was changed in 1983 to the Virginia Tech Foundation to better reflect the general breadth of its activities. The Foundation generates significant funding from private sources and aggressively manages its assets to provide funding that supple- ments state appropriations. The Foundation receives and manages donations and serves as investment agent for the Virginia Tech Athletic Association, Inc.; Virginia Tech Student Aid Associ- ----------------------------------------------------------------- * There has been a change in the governance of the University- related corporations; specifically, the Athletic Association is now included in the new University governance structure. The new governance structure is included in the supplemental materials. ----------------------------------------------------------------- ation, Inc.; and VPI Facilities, Inc. Additionally, gifts received through the Virginia Tech Alumni Association are depos- ited with the Virginia Tech Foundation. The Foundation is governed by a 35-member board of directors and meets one to two times per year. The Executive Committee of the board meets three times per year, and the Audit and Investment committees meet several times a year. The bylaws of the Founda- tion provide that the Rector of the Board of Visitors, the Presi- dent of the Alumni Association, the President of the Student Aid Association, and the President of the University shall be members of the Foundation board. The other 31 members are alumni and friends of the University who are active in providing private support for University programs. They are elected by the board, serve no more than two consecutive 3-year terms, and may be reelected for additional terms after they have not served on the board for one year. Officers of the Foundation, elected annually by the board, tradi- tionally are chairman of the board and president of the board (elected from the board membership) and three University officers who are not members of the board: -executive vice president--Vice Present for Development and University Relations -vice president --Vice President for Finance -secretary-treasurer --University Treasurer and Associ- ate Vice President The daily management of the Foundation is the responsibility of the executive vice president, who manages Foundation development activities, and the secretary-treasurer, who manages Foundation business and financial affairs. These officers invest endowment funds as recommended by the Investment Committee of the board, disperse the Foundation funds as approved by the board or execu- tive committee, and report to the board and its committees at each meeting. During the past 5 years, the endowment funds have produced an average annual return of 23.1 percent. Gifts and investment income have been used to provide support to the University and its colleges and departments. During fiscal year 1986-87, the funds were distributed as follows: 54 percent for University programs 17 percent for financial assistance for students 17 percent for additions to the physical plant 6 percent in support to alumni programs 6 percent for miscellaneous projects, including investment management, trust distributions, and student organizations 3-2.2 Virginia Tech Corporate Research Center, Inc. The Corporate Research Center (CRC) was established in 1985 as a taxable, not-for-profit, wholly owned subsidiary corporation of the Virginia Tech Foundation. The Center is working to develop and operate a research park on land adjacent to the University to attract industrial research and development operations to Blacksburg, where they can interact with University research programs. The Center also will provide space and assistance to small, start-up companies that use technology developed within and outside the University. These and other efforts provide consulting opportunities for faculty and employment opportunities for graduate students, graduates, and faculty/staff spouses. The Corporate Research Center is governed by a 14-member board, elected by the board of directors of the Virginia Tech Founda- tion. The board of the Virginia Tech Corporate Research Center, Inc. is made up of: * three faculty members, * two members of the Virginia Tech Foundation board of direc- tors, and * nine University administrators, who are voting ex-officio members (Provost, Vice President for Development and Univer- sity Relations, Vice President for Finance, Vice President for Administration, Vice President for Computing and Informa- tion Systems, Vice Provost for Research and Graduate Studies, Treasurer and Associate Vice President, Dean of the Extension Division, and an academic dean). The board meets about six times per year. The officers of the Corporate Research Center are the president (the University Vice President for Development) and secretary- treasurer (University Treasurer and Associate Vice President). The management of the Center is the responsibility of the presi- dent, secretary-treasurer, and the director of the Corporate Research Center, who is hired by the board of directors. The salaries of the director and his staff are paid by the CRC. The director is responsible to the board of directors of the CRC. 3-2.3 Virginia Tech Intellectual Properties, Inc. Virginia Tech Intellectual Properties (VTIP) was established in 1985 as a tax-exempt, nonprofit corporation to own title to and commercialize intellectual properties for the University. VTIP seeks copyright or patent protection for intellectual properties, provides capital for continuing research and development, enters into licensing and other contractual arrangements for the commercialization of intellectual properties, and distributes a portion of royalties or other income to creators of intellectual properties. VTIP also is a majority stockholder in Virginia Tech Library Services, Inc. (see "3-2.4 Virginia Tech Library Services, Inc." on page 3-14). VTIP is governed by an eight-member board of directors, which consists of: * three faculty members elected by the board from a slate of nominees submitted by the Faculty Senate, and * five University administrators, who are voting, ex-officio members (Provost, Vice President for Development and Univer- sity Relations, Vice President for Finance, Treasurer and Associate Vice President, Vice Provost for Research and Graduate Studies). The board meets about eight times per year. Officers of VTIP are a president and a secretary-treasurer. The Vice Provost for Research and Graduate Studies serves as president and the Univer- sity Treasurer and Associate Vice President serves as secretary- treasurer. The management of VTIP is the responsibility of the president, the secretary-treasurer, and the business manager. The business manager is hired by the board of VTIP and is respon- sible to the board. Proceeds from VTIP are used to pay expenses associated with the protection and commercialization of intellec- tual properties developed in University departments and to provide royalty payments to the faculty and department. 3-2.4 Virginia Tech Library Services, Inc. Virginia Tech Library Services (VTLS) was established in 1985 as a taxable, for-profit subsidiary corporation of Virginia Tech Intellectual Properties. VTIP issued a license to VTLS to develop, market, and provide continuing services to a library automation software system, which has been purchased by 80 libraries worldwide. The interests of the University are served by VTLS through the commercialization of an intellectual property developed at VPI&SU and the payment of dividends to VTIP. The University also receives favorable publicity as VTLS becomes a major provider of library automation services around the world. VTLS is governed by a six-member board of directors elected by the stockholders and meets about six times per year. VTIP is the majority stockholder. Five members of the board are University administrators (Provost, Vice Provost for Administration, Vice President for Finance, Treasurer and Associate Vice President, and Director of the Library). The sixth member of the board is the president of VTLS, who is hired by and responsible to the board. VTLS is responsible for payment of the salary of the president of VTLS and his staff. Profits from the VTLS are retained in the corporation and may be distributed to stockhold- ers. 3-2.5 Virginia Tech Alumni Association, Inc. The Virginia Tech Alumni Association was organized on August 11, 1875, and was incorporated June 23, 1924. It is a tax-exempt, not-for-profit corporation to improve resource development and communication between the University and its several publics: students, parents, alumni, faculty, industry and business, the Commonwealth of Virginia and its official representatives, and the public. The Alumni Association solicits alumni contrib- utions; works with 83 alumni chapters at the local level; coordi- nates class reunions; promotes Homecoming, Founders Day, and other activities to recognize distinguished graduates, faculty, and students; and organizes alumni travel programs. The Alumni Association is governed by a 30-member board of direc- tors that usually meets two times per year. All directors must be members of the Alumni Association, are elected by the board of directors annually for no more than two consecutive 3-year terms, and may be reelected after they have not served on the board for at least one year. The University President and his staff are invited to participate in board meetings to keep the board informed of University needs and request assistance where the association may be of service. Officers of the Alumni Association are the president, one or more vice presidents, and a secretary-treasurer. The Alumni Associ- ation, with the concurrence of the University, appoints an execu- tive vice president who may hold one or more of the above offices and customarily is the secretary-treasurer. The Alumni Associ- ation is managed by the executive vice president of the associ- ation and the associate director responsible for alumni annual giving. The associate director is appointed by the executive vice-president and is customarily elected the assistant secretary-treasurer by the board of directors for a two-year term. Twelve other full-time employees assist with association programs. The Alumni Association is responsible for the salaries and operating expenses of the association and maintains its own employee benefits program. Contributions received through the Alumni Association are deposited with the Virginia Tech Founda- tion. Monies for salaries and operations of the Virginia Tech Alumni Association, Inc. are from unrestricted contributions. The president of the Alumni Association serves on the board of the Virginia Tech Foundation, Inc. Other members also may serve on the board of the Foundation, Inc. or on the Board of Visitors. 3-2.6 Virginia Tech Athletic Association, Inc. The Virginia Tech Athletic Association was organized on May 21, 1958 as a tax-exempt, nonprofit corporation to provide athletic activities and promote athletic interest among the students, alumni, and friends of the University. The Athletic Association provides competitive intercollegiate athletic opportunities for students and provides athletic programs of interest to the University community, alumni, and friends. Athletic programs also provide opportunities to showcase the other programs of the University. The Athletic Association is governed by a board of directors of 11 voting members and two ex-officio non-voting members. The board meets four times per year. The 11 voting members are: * the President of the University, * the Faculty Chairman of Athletics, * five faculty members, appointed by the President of the University to 3-year terms, * one alumnus, who is not a faculty member of the University, elected by the board to a 3-year term, and * three students: the President of the SGA, the Regimental Commander of the Corps of Cadets, and the President of the Residence Hall Federation. Ex-officio non-voting members are the Athletic Director and the President of the Student Aid Association or his designee. Appointed members are eligible for reappointment one year after their previous term of service expired. Officers of the Athletic Association are a president, who is faculty chairman of athletics, a vice president, a secretary, and a treasurer. The vice president and secretary are members of the board and are elected by the board. The treasurer is an associ- ation employee. The Executive Committee is appointed by the board president and currently consists of the president, vice- president, secretary, treasurer, and another faculty member from the board. The Athletic Association is managed by the athletic director and his staff. The association has 67 full-time employ- ees and pays salaries and operating expenses of the association and maintains its own employee benefit program. Contributions to the Athletic Association are deposited with the Virginia Tech Foundation. 3-2.7 Virginia Tech Student Aid Association, Inc. The Virginia Tech Student Aid Association was organized June 10, 1949 as a tax-exempt, nonprofit corporation to raise scholarship funds for student athletes. The Student Aid Association also organizes clubs throughout the state and surrounding areas that promote and support the University's intercollegiate athletic program. The Student Aid Association is governed by a 40-member board of directors, 10 of which are ex-officio. Ex-officio members are: * Vice President for Development and University Relations, * Vice President for Administration and Operations, * a full-time faculty member, who is a member of the Student Aid Association, * a full-time student, * the athletic director, and * five members of the association management and support groups. The other 30 directors, including the faculty member, are elected from the membership of the association by those members attending the annual meeting of the members. The board usually meets two times per year. Officers of the Student Aid Association are a president, vice president, secretary, treasurer, executive director, and one or more assistant secretaries and assistant treasurers. The presi- dent and vice president are elected from the voting members of the board of directors. The executive director of the associ- ation is hired by the board and serves as secretary-treasurer. An association employee serves as assistant secretary-treasurer. The Student Aid Association is managed by the executive director. The association has six full-time employees. The association is responsible for the monies for its salaries and operating expenses and maintains its own employee benefits program. Endowment gifts to the Student Aid Association are managed by the Virginia Tech Foundation. 3-2.8 VPI Facilities, Inc. VPI Facilities was organized May 11, 1967, as a tax-exempt, nonprofit corporation to provide supplies and services to students, faculty, staff, and alumni. VPI Facilities provides textbooks, trade books, supplies, and services to the University Community. Textbook prices are at least 10 percent below the national average, providing indirect financial assistance to students. Surplus earnings are given to the Virginia Tech Foundation for use by the University. Earnings have been used to provide a $6.1 million scholarship endowment for academically gifted students, to create a $3.0 million endowment whose earnings are used to reduce costs to students, for the renovation and expansion of Squires Student Center, and to collateralize University-issued debt to finance academic equipment acquisi- tions. Additionally, $225,000 is provided annually for athletic scholarships in consideration of the Virginia Tech Athletic Association relinquishing this activity. VPI Facilities is governed by an 11-member board of directors composed of: * four University administrators, who are voting, ex-officio members, * six faculty members, elected by the board from a slate prepared by the nominating committee, for not more than two 3-year terms, and * one student, elected for one year by the board. University administrators on the board are the Provost, Vice President for Finance, Treasurer and Associate Vice President, and Director of University Services and Auxiliary Enterprises. The corporation is managed by the director of VPI Facilities, who is hired by the board. The board usually meets three times per year. Officers and the Executive Committee of VPI Facilities are a president, vice president, and secretary-treasurer. Officers are elected from the board. Traditionally, the president and vice- president are faculty members and the secretary-treasurer is the Treasurer and Associate Vice President of the University. The management of VPI Facilities is the responsibility of the direc- tor. The corporation employs a full-time staff of 65 with an additional 40 to 50 part-time student employees. The Director coordinates operations with the Executive Committee of the board and reports directly to the board of directors. 3-2.9 Issues And Recommendations The University-related corporations may be placed in two catego- ries: A. those that provide external support in generating and manag- ing financial resources (Alumni Association, Virginia Tech Student Aid Association, Virginia Tech Foundation), and B. those groups closely associated with University-related functions (VPI Facilities, Virginia Tech Athletic Associ- ation, Virginia Tech Intellectual Properties, Virginia Tech Library Services, and Virginia Tech Corporate Research Center, the first two of which function as auxiliary enter- prises). The roles of the corporations in these two categories are quite different; consequently their relationship with the University is structured differently. After reviewing the various University-related corporations, it is evident that they offer many advantages to the University community. To enhance the continuation of these advantages, there is a need to recognize potential problems, then take appro- priate steps to decrease possible abuses inherent in the exist- ence of such auxiliary corporations. Such is the purpose in identifying the following issues. a. It appears that the nature and purpose of many of the University-related corporations are unknown or not clearly understood by either the faculty or the public. Special steps should be taken to clarify the coordination and control of the various corporations and to periodically communicate to the University community and the public the rationale and activities of the various University-related corporations. Recommendation 3-5: Given the lack of understanding of the various University-related corporations, it is recommended that annual reports (and other appropriate informational materials) should be made available to the University commu- nity and to the news media in the spirit of the freedom of information legislation. b. Close examination of the organizational structure of the University-related corporations suggests that they are not "free standing" but rather that some are linked, at least, through interlocking directorates or officers (see Table 3-1). It is also apparent that some type of control is exercised by the University administration, either directly through board membership or indirectly through other means. However, as evidenced by recent experiences within the Virginia Tech Athletic Association, formal control of the policies of an organization by a board of directors may be minimal. Moreover, the chief executive officers should be responsible to their board of directors, who set policy. In addition, the present composition of the board of directors, while providing certain advantages, also poses potential problems. With the interlocking directorates, it is apparent that a few key persons are vested with primary knowledge of the operations of many of these University-related corpo- rations. In particular, certain persons with specific exper- tise, such as the Vice President for Development, the Vice President for Finance, and the Treasurer, play key roles in the corporate activities. A concern expressed by the Self- Study committee was that the operations of one or more of the corporations could be seriously impaired if one or more of these key persons would be unable to serve them. Vice President for Administration - William Van Dresser VT Corporate Research Center board member (ex-officio) VT Student Aid Association board member (ex-officio) c. After reviewing the corporate structure of the various corpo- rations, it appears that the issue of members of the Board of Visitors serving on the boards of corporations having University-related functions (Category B) should be addressed. Since these functions relate mainly to academic matters, student life, and athletics, which are within the responsibilities of the Board of Visitors, there are poten- tially more disadvantages than advantages to having members of the Board of Visitors serving on these corporate boards. d. The level of academic faculty representation on the boards should be consistent with the spirit of the customary role of faculty in student and academic matters at a major univer- sity. Faculty should be formally represented on the Boards of all University-related corporations with the degree of representation depending on the category of the corporation. e. The purpose of certain University-related corporations is to manage and promote income-producing activities (Category B). These activities can be expected to interface extensively with traditional University functions. Inevitably, there will be pressures to influence corporation or University functions, policies, and personnel for the benefit of the income-producing activities. The purpose of certain other income-generating University-related corporations (Category A) is to seek and manage increased private funding from individuals and institutions. Again, there is the potential that donors may consciously or unconsciously attempt to use their donations to secure special influence on functions, policies, and personnel of the corporation or University. Because the management and operation of all of the corpo- rations are not a direct part of the University's internal governance system, the existence and extent of such pressures and influence may be unknown to many various segments of the University until consequences are irreversible. Recommendation 3-6: Given the diverse nature of the various University-related corporations, it is recommended that a small task force, with majority faculty representation, be appointed to study and to make recommendations with regard to the following: 1. the legal and corporate structures of the corporations (individually and collectively) 2. the interlocking directorates or officers of the corpo- rations 3. the representation of members of the Board of Visitors of the University on the board of directors of the corpo- rations 4. the proportional representation of faculty on the board of directors of the corporations 5. the placement of the corporations within the governance structure of the University f. The name of the Virginia Tech Student Aid Association implies that it serves the general student population, whereas its purpose is to raise funds for scholarships for student- athletes. Recommendation 3-7: Given the purpose of the Virginia Tech Student Aid Association, it is recommended that the name of this corporation should be changed to reflect accurately its function and to eliminate potential confusion. 3-3.0 The Athletic Association (5.5.2.9) Throughout the nation, intercollegiate athletic programs have been besieged by major problems in the last 5 years, which raise fundamental questions about the role of athletics in the univer- sity community. VPI&SU has not been spared from these problems, although they have not been as large or as serious as those in some institutions. When problems have occurred here and elsewhere, evidence shows a noticeable lack of accountability of the athletic program to academic officials. To have accountabil- ity, a clearly defined administrative chain of responsibility must be established between the athletic and the academic units and maintained as a integral part of university governance. At VPI&SU, the current administrative links between the Athletic Association and the University have been carefully reviewed by the Blueprint Committee on Athletics and the Self-Study Committee on Administrative Processes. Based upon these reviews, it was concluded that some changes in the existing structure are neces- sary to make the athletic program a more integral part of Univer- sity governance. These changes would ensure that a broad constituency at the University is both aware of and supportive of the athletic administration and the athletic programs. 3-3.1 Issues And Recommendations The Self-Study Committee on Administrative Processes reviewed the current organization of the Virginia Tech Athletic Association, the bylaws of the Athletic Association, and the report of the Blueprint Committee on Athletics at Virginia Tech, then identi- fied several issues that should be addressed concerning the administrative structure of the Athletic Association and its relationship to the administrative structure of the University. The issues considered were: * the role of the Board of the Athletic Association in the organizational structure of the University, * the functions of the Athletic Board, and * the composition of the Athletic Board. 3-3.1.1 Organizational Structure A major issue regarding the Athletic Association is the relation- ships between its board, the Athletic Director, and the President of the University. There are questions that need to be answered, such as "What are the reporting lines of the Athletic Director?" and "To whom is the Athletic Director principally responsible on issues concerning management of the corporation, adherence to University academic policies, and adherence to NCAA rules and regulations?". Unless these relationships are clarified and codified, the recent history of poor management and poor communi- cation between the Athletic Board, the Athletic Director, and the President of the University could be repeated. Recommendation 3-8: Given that the Athletic Association is one of several University-related corporations and consistent lines of responsibility and reporting are necessary, it is recommended that the University adopt a standard chain-of- command for its corporate/University relationships that is applied to all University-related corporations, including the Athletic Association. 3-3.1.2 Functions of the Athletic Board In the past, the role of the Board of the Athletic Association in policy development and management of the Association was not clear. Policies were developed and implemented, important personnel decisions were made, and financial obligations were increased without consultation with the Athletic Board. The result was that the board became a non-functioning appendage of the Athletic Association. The removal of the Board from the policy/management process has led to an uneasy and suspicious relationship between the academic community and the Athletic Association, and contributed to the financial exigencies which have come to plague the Association over the past several years. For the Board to take a more active role in the policy/management process, it is essential that the role and responsibilities of the Board be clarified; these include the review and approval of all major policies and programs instituted by the Athletic Association that deal with the management of the Association, and the interface of athletics and academics. Recommendation 3-9: Given the need for more involvement of the Athletic Board in the policy/management process, it is recom- mended that the bylaws of the Athletic Association be revised to include the creation of two standing committees that would report regularly to the full board of the Athletic Associ- ation; these committees are 1) Financial Management Committee and 2) Student/Athlete Academic Affairs Committee. The Financial Management Committee would have major responsibil- ity for the oversight of the financial affairs of the Athletic Association. This committee would meet regularly with the treas- urer of the Association, and would prepare financial reports to be presented to the full Board and, in turn, to the University community. The Student/Athlete Academic Affairs Committee would have major oversight of the academic performance of student/athletes. This committee would meet regularly during the academic year to monitor the academic standing of all student/athletes. In addition, this committee would be responsible for an annual report, which would include (but not be limited to) an evaluation of the admissions standards and retention/graduation rates of student/athletes. Recommendation 3-10: Given the need for more involvement of the Athletic Board in the policy/management process, it is recom- mended that the bylaws of the Athletic Association be revised to reflect the need for more frequent meetings of the Athletic Board. Specifically, the bylaws should be revised to state that, at a minimum, the Board of the Athletic Association should convene regularly scheduled meetings three times a semester. These meetings should be convened at times that will permit full participation of all Board members, and that will allow for a thorough review and discussion of all the pertinent activities of the Athletic Association. 3-3.1.3 Composition of the Athletic Board According to the bylaws of the Athletic Association, the Athletic Board consists of 13 members, 11 of whom are voting members. A majority (6) of the members are faculty at the University. Five of the faculty members are appointed to 3-year terms by the President of the University from a slate of nominees drawn by the Faculty Senate. Reappointment to a second 3-year term is permit- ted under the bylaws. One additional faculty member is the University's faculty representative to the NCAA and is the faculty chairman of the Board; this member is appointed by and serves at the discretion of the President. Student representatives on the Board (all of whom are voting members) are the Regimental Commander of the Corps of Cadets, President of the Residence Hall Federation, and the President of the Student Government Association. The 10th voting member of the Board is the President; the 11th is a member of the Alumni Association. Ex-officio members are the Athletic Director and the President or designated representative from the Student Aid Association. Since the last amendments to the bylaws of the Athletic Associ- ation, the number, composition, and relative size of the Univer- sity's constituent groups have changed. If the Athletic Board is to be representative of the University community, it is important that its composition reflect these changes. Additionally, proce- dures for appointment to the Board ultimately influence the confidence that the University community has in the actions taken by the Board. Thus, Board members must have the ability and willingness to devote the necessary time and effort for making the Board effective in policy development and financial manage- ment. Recommendation 3-11: Given the change in the University's constituent groups and the need for the Athletic Board to be representative of them, it is recommended that the bylaws of the Athletic Association be revised to expand the membership of the Athletic Board from 13 to 16 members, with 12 members accorded voting privileges. The voting members of the Board would be: * One faculty member appointed by the President of the Univer- sity to serve as the faculty representative to the NCAA. The length of term for this member would be at the discretion of the President. * Two faculty members elected directly by the Faculty Senate. These members would serve a 3-year term with a possible renewal of an additional 3 years. * Four faculty members appointed by the President from a slate of candidates developed by the Board of the Athletic Associ- ation, after soliciting nominations from the faculty associ- ations. These members would serve a 3-year term with a possible renewal of an additional 3 years. * Two student members appointed by the President from a slate of candidates developed by the Commission on Student Affairs. These members would serve a 3-year term with possible renewal. * One academic dean elected by the Deans' Council. This member would serve a 3-year term with a possible renewal of 3 years. * One representative from the Alumni Association. * The President of the University or designate. The non-voting members would be: * The Athletic Director * The President of the Student Aid Association or designate * The Vice President for Finance * The Vice President for Student Affairs The Chair of the Athletic Board (not to be the faculty represen- tative to the NCAA) would be elected by the Board to serve a 3-year term. The terms for the other members would be staggered to ensure continuity. 3-4.0 Physical Resources (6.4) The physical plant of the University includes 3,980 acres of land and 214 buildings in the Blacksburg area. This total acreage includes the approximately 1,800 acres along the New River that was recently acquired for the expansion of agricultural research activities. The University also owns approximately 1,792 acres throughout Virginia, primarily at 12 agriculture experiment stations. 3-4.1 Space Management (6.4.1) The development and maintenance of a comprehensive land-grant University with academic superiority requires a physical plant that adequately meets current needs and lends itself to future qualitative and quantitative growth. Regarding the current physical plant at VPI&SU, the State Council for Higher Education in Virginia has established guidelines for the amount of space needed for 21,000 FTE enrollment; these guidelines are found in Table 3-2. In this table, the space requested reflects the Business and Chemistry in-fill projects presently under construction. Note that when the projects are completed, there will still be a space deficit of nearly 520,000 square feet, including a deficit of 53,000 square feet in classroom space and 88,000 square feet in teaching laboratory space. The deficien- cies in classroom space translate to a need for 69 additional classrooms, each seating 50 students; the deficiency in teaching laboratory space translates to 76 additional laboratories with 24 stations. Serious deficiencies are also noted in other catego- ries, particularly in the library and physical education/activities areas. Table 3-3 documents the change in assignable space by use category from the 1975-76 Self-Study until June 1987. Substan- tial gains have been made in most categories except classroom space. The major gains were made in research-related space to support the greater research enterprise now in place. A compar- ison of the total assignable space in 1975 with that in 1987 reveals a net increase of 10 percent, or approximately 340,000 square feet. However, the FTE enrollment has increased from approximately 18,000 to 21,000, a 16 percent increase. Thus, the space available per student has declined slightly. In addition, the graduate student enrollment (space intensive) has increased about 50 percent. Clearly, significant gains have been made in total space in the last decade, but critical deficiencies still exist. Recommendation 3-12: Given the current critical space deficien- cies, it is recommended that the University strive to secure the funding for capital projects that will alleviate space deficiencies and that it maintain the current FTE enrollment until the physical plant conforms to the SCHEV guidelines. 3-4.2 Facilities Master Plan (6.4.4) The University master plan, 1983-1993 Master Plan: Concepts, Data, and Strategies for Implementation was published in 1984. This plan articulates an "incremental in-fill construction" concept, whereby new construction will be built adjacent to and connected to present core buildings. These would be relatively small building increments, as opposed to large projects on the campus periphery. Although there are some obvious advantages to this concept, caution is needed so as not to lose the aesthetic features of openness and space. The first two in-fill additions (Business and Chemistry) are now approaching completion. Recommendation 3-13: Given that there is a critical space deficiency on campus, the University Planning Department must give highest priority to planning for new capital construction. * All requests for capital construction projects should include the total costs of planning, design, construction, the neces- sary furnishings and equipment, and new positions for custo- dial and routine maintenance attendant to placing the facility into the required state of operation, as well as an appropriate level of increased continuing operating funds. * A comprehensive plan of land acquisition, street and road construction and other features of the physical plant should be developed. Wherever the campus interfaces with the Blacksburg community, joint University-town coordination is essential. * The campus should be kept pleasing and attractive through imaginative landscaping and care of the grounds. Plans should be developed to use landscaping and plantings to transform the campus into a "living laboratory" of arboretums and gardens. One of the outstanding aesthetic features of the campus is openness. This feature may be compromised as the Master Plan with the in-fill concept unfolds. This loss to the beauty of the campus should be considered in future planning. There is also a committee called the Virginia Tech-Town of Blacksburg Liaison Committee. The purpose of this committee is to implement joint strategies to achieve goals and to solve problems in a team-building atmosphere of concern and cooper- ation. The formulation of this committee, which is co-chaired by the Vice-President of Administration and Operations and the Town Manager, provides an opportunity for Virginia Tech and Town of Blacksburg officials to informally discuss topics of mutual concern. Traffic on campus, both vehicular and pedestrian, and inadequate parking facilities have become major issues. Numerous letters in Spectrum over the last year attest to the level of frustration (mostly faculty) associated with these problems. The Faculty Senate has appointed a committee to study the parking situation. Recommendation 3-14: Given that traffic and parking problems are a major concern on campus, a study should be initiated immediately through the University governance system to review campus vehicular and pedestrian traffic and parking and develop a long-range, comprehensive plan to deal with all facets of the situation. 3-4.3 Buildings, Grounds And Equipment Maintenance (6.4.2) Existing campus and outlying facilities must be maintained and renovated in concert with the construction of additional facili- ties. Accomplishment of these needs must be given high priority and requires restructuring of the University Planning/Physical Plant Department operations. Currently, renovation and remodel- ing projects are funded from department (and college) operating budgets. With "level funding" of operations and the expensive nature of renovations, most departments cannot fund even their most essential renovations. Consequently, research and instruc- tional activities suffer from inefficient and nonfunctional facilities. Many buildings on campus, but away from the central core, do not receive normal maintenance and support. Individual departments with such facilities must hire their own custodial staff; pay their own electrical and heating bills, and assume all the maintenance costs. Yet, these facilities function in every sense as any other academic building in instructional, research and extension activities. The Self-Study Subcommittee on the Physical Plant has heard numerous complaints from faculty and administrators about the lack of adequate routine custodial service and routine mainte- nance. This is borne out by the faculty/staff responses on the Self-Study questionnaire. The mean response to question #35 "I have reasonable influence over decisions about my physical environment within the University" was 2.14 (tend to disagree). Recommendation 3-15: Given the problems of "level funding" and renovation, the University must maintain the physical plant commensurate with the need to preserve and enhance the physical integrity and aesthetic qualities of the campus. This extends to those University facilities located in the Blacksburg area away from the central campus and in locations around Virginia, including farm and experiment station facil- ities. Specific attention should be directed to the following concerns: * Routine maintenance must be funded at the level that is required to maintain and preserve the integrity of the physical plant. * A uniform policy of servicing all facilities in the Blacksburg area needs to be developed and promulgated. This includes utilities, custodial work, routine day-to-day maintenance, etc. * The comprehensive plan for major maintenance needs, such as new roofs, heating systems, painting, etc. that exists for the central campus must be extended to all University facili- ties in the Blacksburg area and to the 12 outlying experiment stations. Lack of responsiveness of service units of the University was the most-often cited and most vocal complaint of academic administra- tors and faculty surveyed and interviewed by the Physical Plant Subcommittee. The two service units that were most often singled out for criticism were University Planning and the Physical Plant Department. The committee has heard a long litany of examples where renovation requests have taken 12, 18, 24 months and more to be accomplished. In many cases, these were relatively simple tasks that cost modest sums. The time delays and costs of essen- tial renovations seriously jeopardize research projects and future funding. The College of Engineering has recently completed a study of the problems associated with remodeling/renovation projects. ("Report of Strategic Planning Implementation Team on Remodeling/Renovation Projects", College of Engineering, April 1987). Their report cites specific examples and makes recommendations that are substantively similar to those reached by this committee. There is an almost universal perception by faculty, department heads, and deans that the process to request and accomplish renovations is seriously flawed and that immediate corrective action is required. This perception extends all the way from the Space Committee and its setting of priorities, to the design, cost estimation, timeliness of response, and the actual work. (The Committee is pleased with the innovations and procedural changes put in place during the last year by the Physical Plant Department to add efficiency, control and accountability to the operations of that organization.) Lack of overall management of renovation projects, however remains a serious problem, and there appears to be relatively little interaction and coordination between University Planning and the Physical Plant Department. Recommendation 3-16: Given the problems with planning and implementing building renovations, the organization and procedures of those service units charged with renovations to the physical plant must be restructured to be responsive to the needs of the University. * A university group or committee with significant academic representation should be constituted to review renovation requests and set priorities. * The Architectural Services Division of University Planning (Renovation Design Group) should be transferred to the Physical Plant Department. This unit should incorporate more engineering skills and less architectural refinements into renovation design. Each renovation project should be assigned a Project Manager to oversee the project from initi- ation to completion. The design of large renovation projects should be contracted to commercial architectural and engineering firms. * The process to request renovations should be changed so that the client is given reasonably firm preliminary estimates of the costs early in the process, before the detailed design is done. This will eliminate many projects before significant planning work is invested. The process should have suffi- cient flexibility to allow procedures appropriate to the complexity of the job. 3-4.4 Safety And Security The University must provide a healthful, safe, and secure environment for its students, faculty and staff. The responsi- bility for these functions is under the Vice President for Admin- istration and include two main groups; namely, the Department of Health and Safety and the Virginia Tech Police. The mission of the Department of Health and Safety in the broad sense is to ensure that members of the university community are provided a safe and healthy environment. This department has assumed greater responsibilities during the past decade, especially because of a need for compliance with federal and safety regulations. It maintains and complies with routine evaluations of a comprehensive safety plan, which include: * a sound OSHA compliance program, * employee awareness of risks associated with their work and measures needed to protect them, * a satisfactory health insurance program, * a good physical environment in all buildings, work and teach- ing areas, * conformity of all building spaces to safety codes, including a fire safety program, * disposal of all hazardous materials in a legal and environ- mentally sound way, * maintaining a radiation safety program, and * providing emergency medical services to the University. The primary mission of the Virginia Tech Police Department is the protection of life and property within the University community. Vital to this mission is the prevention and detection of criminal activity and ensuring an orderly atmosphere in support of the University instruction, research and extension programs. Consistent with this mission is the regulation of traffic and parking on a campus that includes over 40 miles of roadway, 45 parking lots that cover 95 acres, and over 11,110 parking spaces. The basis of all police action is the law, and the credibility of the department's professionalism is measured by its contribution to the welfare of the University community it serves, its concern for excellence, and by the guidance it provides to its members toward a high level of ethical practice. 3-5.0 Purchasing And Inventory Control (6.3.6) The University Purchasing Department is responsible for the procurement of goods and services for the University. Specif- ically, the major responsibilities of the Purchasing Department are to: * establish and maintain a strong, beneficial purchasing program that meets the needs of the University in regard to the procurement of goods and services, * provide purchasing expertise to the entire University commu- nity to facilitate an efficient and effective procurement process with minimal duplication, * establish and administer purchasing agreements and contracts to acquire quality goods and services at the lowest cost possible, * ensure compliance with applicable University, state, and federal laws, rules, and regulations, * manage the University's central stores and food stores to provide easy, quick access to a wide variety of supplies, and * manage an effective surplus property program. Items are obtained from Central Stores, the state Central Warehouse, vendors on state contract, and outside vendors. During the last fiscal year, approximately 14,000 purchase orders totaling $44.8 million were processed. The Department does not initially process Speed Purchase Orders (SPOs), but it is ultimately responsible for the 90,000 SPOs, totaling about $8.6 million, that were initiated by departments during the last fiscal year. As VPI&SU has evolved into a comprehensive university, the Purchasing Department has also changed. These changes include the upgrading of professional positions to reflect the increased knowledge and abilities required to service the University and emphasize the automation of purchasing processes. The Director of Purchasing reports to the Vice President for Administration and Operations and must comply with University regulations. The University Purchasing Department must also comply with the state Division of Purchases and Supply Agency Manual and other rules and regulations about purchasing. It is also guided by the Virginia Public Procurement Act. The Purchas- ing Department receives most of its guidance from the state Department of Purchases and Supply; however, some purchasing functions are also vested with three other state agencies, including the Department of Information Technology. 3-5.1 Issues And Recommendations The 1975-76 Self-Study produced several recommendations and suggestions concerning the purchasing function. The review of those items revealed that considerable progress has been made during the last 10 years. However, further improvements can be made in context of the present where VPI&SU has emerged as a major research University. The study of the purchasing function included interviews and participation in a series of focus group surveys. The surveys were conducted by the Office of Institutional Research at the request of the Purchasing Department.* This format brought ----------------------------------------------------------------- * Virginia Polytechnic Institute and State University, Office of Institutional Research and Planning Analysis, "Preliminary Summary of the Purchasing Survey," IRPA Vol. 1986-87, No. 81, April 1987. ----------------------------------------------------------------- together numerous faculty, administrators, and staff from various parts of the University with varying job responsibilities. The candid discussions had the goal of generating ideas on how the purchasing function could be improved. There are two items readily apparent from this review. 1. The Purchasing Department has made significant progress during the last few years to address concerns about respon- siveness of the Department and the need to address the unique procurement needs of the University. 2. Major problems remain in terms of restrictive rules and regulations, timely processing of procurement transactions, and the ability of Purchasing to respond to the needs of the University community, especially in the areas of research and off-campus operations. While numerous issues and concerns were identified, they can be summarized in four major categories: 1. Ability to adequately serve the entire University community. 2. Need to obtain modifications to existing rules and regulations. 3. Ability to develop efficient, effective on-line procedures for processing and recording purchasing transactions. 4. Desire to decentralize and specialize the purchasing process to the extent it is reasonable and practical. 3-5.1.1 Adequacy Of Purchasing Services Usually procurement of goods and services (other than personal services), travel expenditures, and capital outlay expenditures are subject to oversight by the Purchasing Department. Providing quality purchasing services to the entire University community requires a strong, committed purchasing function. However, there are concerns about the service attitude, creativity, efficiency, and commitment of the Purchasing Department. Specific concerns include: * An unimaginative service approach, focusing on telling manag- ers what can't be done rather than attempting to find answers to problems. * A lack of understanding by departmental personnel of Univer- sity purchasing regulations and when exceptions can be obtained. * Delays in the procurement process, resulting in delivery of goods and services too late, especially in the research area. Although these concerns were voiced, the sense of the faculty and staff interviewed is that major improvements have occurred during the past several years. The feeling is that the Purchasing Director understands the needs of the University, has identified several areas where improvements are needed, and is working to further improve service to the University. Recommendation 3-17: Given the importance and visibility of the purchasing function, it is recommended that the Purchasing Director continue the recent efforts to deliver the needed quality of support to all segments of the University. While improvements have been made, the committee believes that it will be a long-term effort to establish and to maintain a quality purchasing program. Specific steps can be taken to achieve this goal, as follows: 1. A communications program should be established that will effectively convey purchasing information to and from faculty, administrators, and departmental personnel. 2. A training program should be established that will reach various levels of University personnel on a periodic basis, and be appropriate for the needs of the personnel involved. 3. An internal training procedure should be developed for purchasing personnel that would: a. stress the need for a creative, helpful approach in dealing with University personnel, and b. help develop specialized purchasing skills in areas such as scientific equipment. 3-5.1.2 Modification of Rules and Regulations The University has numerous rules and regulations that must be adhered to in the procurement process. Some of these regulations are mandated by state and federal laws and agencies; others have been developed by the University. Although numerous rules may be necessary because of the environment in which the University operates, faculty and staff believe that many are unduly restric- tive and unnecessary, place undue emphasis on price as the deter- mining factor in purchasing decisions, and hamper efforts to make improvements in the purchasing process. Some regulations estab- lished by the Commonwealth and by the University might be elimi- nated altogether. In the focus group surveys, many participants felt that the Purchasing Department was on Richmond's "side," acting as an extension of the state bureaucracy, resulting in delays in the procurement process and lower-quality goods. Such an inflexible purchasing environment is not conducive to carrying out the missions of the University. Recommendation 3-18: Given the restrictive rules and regulations established at the state level, it is recommended that the University should strive to create a flexible purchasing environment that can meet the needs of the Univer- sity's diverse clientele. Three specific actions are recommended: 1. The levels of flexibility currently provided to the Univer- sity as a decentralized purchasing operation should be evalu- ated to determine if any additional freedom could be obtained or exercised, 2. The University should propose and develop draft legislation for the General Assembly in order to develop purchasing policies customized to the needs of higher education, thus gaining the additional flexibility needed by the University to carry out its missions. There are specific items that would significantly benefit the University, such as: * Acceptance of educational discounts from vendors greater than those offered by state contracts * Freedom to opt out of state contracts when better-quality or better-priced products are available * Establishment of contracts with specific vendors through consortiums not under state control * Increased ability to use the sole-source procurement process in cases of specialized equipment where time, quality, or specifications are critical, such as sponsored research projects * Higher dollar ranges for each category of purchasing requirements, such as the dollar range for which only phone quotes are needed * Consolidation of purchasing authority from four state agencies to one state agency 3. Existing University-developed rules and regulations should be evaluated to ascertain if the resulting procedures are still needed and are structured in an efficient, effective manner. 3-5.1.3 On-line Processing Procedures During the 1970s, an automated purchasing system was developed and integrated with the University's central accounting system, which automated several of the central processing procedures. Yet the entire purchasing cycle, from the initiation of a purchase requisition to the delivery of goods by a vendor, still requires considerable manual effort, much of which is duplicative. Considering the major expansion of the University's computing environment during the 1980s, along with the strain that budget cuts and freezes have placed on the operating budgets and faculty and staff positions, the time and effort required for manual processing functions is excessive and very costly. Recommendation 3-19: Given that a new, on-line central account- ing system is being installed, it is recommended that the Purchasing Department acquire a compatible, integrated, on-line purchasing system, which will eliminate duplicative entry by stressing source-point data capture. Installation of such a system should provide additional manage- ment information at the department level while creating immediate encumbrance of transactions in the accounting system. The on-line system should be consistent with the University's goals of establishing a paperless transaction-processing environment where feasible and using the concept of an electronic-signature approval process. To the extent possible, the system should reduce the overall time expenditure at the department level needed to execute purchasing transactions. The Purchasing Department should identify the savings to be obtained from current and future decentralization efforts and focus the result- ing personnel resources on resolving major procurement problems encountered by research projects. 3-5.1.4 Decentralization and Specialization of Purchasing Functions on Campus During the 1980s, the Purchasing Department established a Speed Purchase Order (SPO) system, which resulted in a significant decentralization of the purchasing function to the department level. The SPO, which was initially set at a maximum of $200, allowed departments to purchase many items at a much faster pace while reducing overall paperwork requirements. Later changes increased the SPO level to $500. While the ability to procure many routine, low-cost items was made easier, the continuing evolution of the University's research mission has placed a significant burden on the Purchas- ing Department. Departments need assistance in the procurement of various research items, especially complex scientific equip- ment. The University community continues to have doubts and concerns about the ability of the Purchasing Department to deliver the needed level and quality of services in this area. Recommendation 3-20: Given the need to procure complex scien- tific equipment, it is recommended that the Purchasing Department examine the feasibility of expanding the SPO beyond the $500 level. 3-6.0 Employee Relations Along with the growth of VPI&SU into a comprehensive University have been commensurate increases in personnel. To meet the needs of the University and its employees, the Office of Employee Relations provides personnel and payroll services to the approxi- mately 5,500 salaried employees and 5,500 wage personnel, includ- ing students. These functions are conducted under the direction of the Director of Employee Relations, who reports to the Vice President for Administration and Operations. The Employee Relations Office is divided into six sections of major responsi- bilities, which include: 1. Employment of individuals for classified wage and salaried positions. This section recruits, interviews, determines applicant qualifications, consults about job needs, and identifies and refers applicant finalists. 2. Compensation and position classification plans for classified and wage employees. This area encompasses all activities concerning an employee's status and documents, such as position descriptions. 3. Conducting training sessions. These sessions address such topics as new employee orientation, supervision, career development, employee interviewing, and University policies and procedures. 4. Administration of policies covering grievances, standards of conduct, performance evaluation, layoffs, and pay-for- performance programs. 5. Processing payrolls for all employees, maintaining personnel files for salaried employees, and processing personnel trans- actions through the state and University personnel systems. 6. Administration of the University benefits program, including oversight of the state retirement and life insurance programs, health care programs, and the tax-sheltered-annuity program and providing individual counseling and guidance to employees about disability, retirement, worker's compen- sation, and death claims. 3-6.1 Issues And Recommendations The 1975-76 Self-Study recognized the administration of faculty and classified personnel as "one of the University's most impor- tant administrative functional operations." Procedures for position approval, advertisement, and evaluation were described as cumbersome. The major recommendations presented expressed the need for greater University autonomy in managing personnel, payroll, and the classification of personnel. It was recommended that procedures be simplified by computer applications. The Commonwealth identified VPI&SU as a model agency in 1979, and latitude was provided for as much or more authority than any other state agency. With this latitude, VPI&SU gained the authority to process many personnel transactions (within a set range) without state approval. VPI&SU also took the lead to decentralize several classification and compensation functions, as well as to implement training programs not mandated by the Commonwealth. Each agency has a unique contract with the State Department of Personnel and Training concerning the specific amount of authority delegated to the agency. The latest study of the Employee Relations function was conducted through interviews, requested critiques from members of the Employee Relations Advisory Committee, and results of the faculty and the staff survey processes of the Self-Study. Respondents to the faculty and staff surveys reported a positive attitude about the performance of the Employee Relations office concerning the timely processing of transactions, with an overall agreement rating of 81 percent. However, because this is a dynamic process and additional improvements can be in accord with the University's present comprehensive nature. These are summarized as follows: * Continued improvement in the fringe benefit package for both faculty and classified employees. * Increased freedom from state rules and regulations, even more effective use of the delegated authority, and leadership in seeking changes and improvements to existing state programs. * Further automation of processing tasks to improve efficiency, effectiveness and responsiveness. 3-6.1.1 Improvements In The Fringe Benefits Package Considerable progress in the recommended areas of employee benefits has been made since the last Self-Study, with a more comprehensive benefit package now available to faculty and salaried staff. Employee benefits constitute an important element in the ability of the University to recruit and retain qualified faculty and staff. While the University has made great strides in the employee benefits package over the past several years, additional improvements are needed, including: * health care benefits for retirees, * a cafeteria plan for all employees, * maternity (paternity) leave, and * proportionate fringe benefits for part-time faculty, classi- fied staff and full-time wage employees, Recommendation 3-21: Given the importance of the fringe benefit package in the recruitment and retention of qualified faculty and staff, it is recommended that the University continue to identify the needed components of comprehensive benefits packages for both faculty and staff and pursue implementation of those benefits at the state level. 3-6.1.2 Increased Freedom From State Rules And Regulations Since being identified as a model-agency in 1979, VPI&SU has been given considerable latitude in handling personnel activities without prior state approval. However, the level of authority is still insufficient for a comprehensive research university. One illustration of this concern is the amount of control exercised by the state over positions that are not funded by state appro- priations. This situation is exacerbated because funds generated by the University are funneled to the state and then appropriated back to the University. In general, it is difficult for the University to operate in an efficient and effective manner when the Employee Relations Office still must depend on a central state agency to approve many personnel transactions. Recommendation 3-22: Given that VPI&SU has been afforded model- agency status, it is recommended that the senior adminis- tration at the University must continue to convey to the state Department of Personnel and Training the evolving needs and concerns of a comprehensive research university for exercising autonomy, within state and federal regulations, in the processing of routine personnel and payroll actions. Although the performance and success record of the Employee Relations Office has been good, some concern has been expressed about whether the office has been exercising its authority to the maximum. It is commendable that the office has "model agency" designation; very few of its personnel actions have been challenged by the state. The Employee Relations Office believes that the consistent application of rules and regulations contin- ues to be most beneficial in establishing VPI&SU as first in line for any additional delegated authority that may be available from the Commonwealth. Such authority is necessary for VPI&SU to compete for personnel with similar institutions across the country. Recommendation 3-23: Given the need for greater autonomy in procuring personnel actions, it is recommended that the Employee Relations Office and the Vice President for Adminis- tration and Operations should examine the University's policies to ensure that: 1. existing delegated authority is fully utilized, and 2. a more liberal interpretation of state regulations that would result in more timely processing of transactions and in more internal approvals of requested personnel actions. The nature of the classified employee program creates certain problems in the operation of the University. For example, the classified system is not sufficiently flexible for some depart- ments to recruit and retain employees with specialized skills. The research function is particularly hard hit in the area of hiring entry-level professionals and technicians. In some cases, the classified system is unable to adequately compensate deserv- ing employees and employees who have topped out in their classi- fication level. One of the greatest concerns voiced during the self-study was with the administration of the classified staff system. The majority of the respondents to the classified survey agreed with the statement that "reaching the top of the salary scale is a serious career block." Additionally, the Commonwealth's recently developed Pay-for-Performance program received severe criticism from survey respondents and from the VPI&SU Employee Relations Office as being an excessive, unrealistic program that is neither cost-beneficial nor effective. Recommendation 3-24: Given the highly structured nature of the classified employee program, it is recommended that the Employee Relations Office and the Vice President for Adminis- tration and Operations study the classification, title, and salary of most classified positions, to make the classified employee system less cumbersome and more responsive to the needs of multiple University constituencies. There are specific issues that should be acted upon: * The University needs to increase the level of position approvals and reallocations that can be approved at the institution. * VPI&SU should gain greater control over the policies and procedures used to process positions that are not funded by state appropriations. * The University should resist reinstatement of the pay-for- performance program of classified personnel because it is unrealistic and ineffective. In addition, the University should change the present evaluation system and standards so that honest and meaningful evaluations can be expressed. 3-6.1.3 Automated Processing Of Personnel Transactions During the 1980s, the University's computing environment has become increasingly sophisticated, which has in turn encouraged the automation of various administrative processes. In fact, processing procedures for the University's wage payrolls, includ- ing graduate students, were among the first to convert to an almost paperless processing environment. Because of the large number of personnel transactions processed annually and the minor nature of many changes, personnel activities are often viewed as primary targets for automation. Two more personnel processes are being considered for automation by the Employee Relations Office. The "Report of Appointment or Change of Status" form (P-3A), because of its complexity, will require an extensive training and transition period before it is totally automated. However, the "Monthly Leave Report" can easily be converted from paper to computer within a short time. The Monthly Leave Report is an example of how automation of routine personnel transactions would seem to offer considerable benefits to the University community. Specifically, such automation would result in the shortening of the time required to prepare the forms and a reduced time frame from the initiation of the transaction to its ultimate disposi- tion. Recommendation 3-25: Given the sophistication of the Universi- ty's computing resources, it is recommended that the Employee Relations Office aggressively pursue the automation of additional personnel transaction processing tasks as a means of increasing the efficiency and effectiveness of both academic departments and central administrative functions. 3-7.0 Appendix Items 1. Institutional Research and Planning Analysis, "An Organiza- tional Chart for Virginia Tech", IRPA Vol. 86-87, No. 80, April 9, 1987. 2. Faculty Handbook 3. Report of Strategic Planning Implementation Team on Remodeling/Renovation Projects, College of Engineering, 1987. 4. Office of Institutional Research and Planning Analysis, "Preliminary Summary of the Purchasing Survey," IRPA Vol. 86-87, No. 81, April 1987. 5. People interviewed included all of the upper administration (VP and higher), all academic deans, and heads of support services. In addition, the heads of departments and academic units were written for specific opinions.