State Audit on Contracting to Be Reviewed by Regents

A UC-San Francisco decision to outsource some IT work created a national controversy and attracted the attention of the legislature. As a result, there was a state audit of contracting practices - which will be reviewed by the Regents Compliance & Audit committee at its upcoming meeting. With regard to that specific outsourcing decision, the state auditor concluded that UC-SF followed proper procedures internally but did not appropriately apprise UCOP of its decision: [excerpt]

...(I)n July 2016, the University of California, San Francisco, campus (San Francisco campus) entered into a contract to outsource certain information technology (IT) services, which it estimated would save $30 million over five years. As the displacement guidelines require, the San Francisco campus conducted a cost analysis to justify the business and financial necessity for its contracting decision. Although the San Francisco campus made the Office of the President aware of its plans, it did not provide formal, written notification of the displacement that included analysis justifying its outsourcing decision as required to the Office of the President for its review. Ultimately, the contract displaced 49 career and 12 contract employees...
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...To ensure that all university locations adequately justify the necessity of contracts that will displace university employees, the Office of the President should do the following:
• Actively enforce compliance with the displacement guidelines by monitoring university locations for compliance and providing regular training on the displacement guidelines to university locations.
• Revise the university’s contracting policy to address situations in which university locations are contemplating entering into services contracts instead of hiring university employees to perform an activity. In these situations, the Office of the President should require university locations to perform an analysis that is similar to the one it requires when current university employees are displaced...

Source: http://regents.universityofcalifornia.edu/regmeet/sept17/c4.pdf