A secretary of state audit on the Oregon University System labeled 126 pay raises granted by the University and Oregon State University as “questionable” because they may not comply with a statewide salary freeze instituted to ease Oregon’s increasing budget woes.
However, representatives for the University, Oregon State University, the Oregon
University System and the Interinstitutional Faculty Senate said the pay raises being scrutinized are in compliance with the salary freeze, as they were approved before the beginning of the biennium, the two-year period for which the budget applies.
“The UO fully complied with the 2003-2005 salary freeze,” Lorraine Davis, University vice president for Academic Affairs, said. “In fact, all of our departmental increases were approved during the 2001-2003 biennium … and were absolutely consistent with the 2001-2003 law and existing policies at the time they were approved.”
Allegations that the University was granting pay raises first arose in February when an anonymous caller tipped off the secretary of state’s office. According to an Oregon University System press release, the allegations were not justified, but the secretary of state’s office decided to undertake the audit anyway.
The audit, published Nov. 10, identified $810,000 in pay increases granted by both universities; about $660,000 of the pay increases were granted at the University and about $150,000 were granted at Oregon State University. Most of the increases at the University were granted to faculty in the College of Arts and Sciences, Davis said.
The audit comes in the midst of attempts to repair damaged relations between the Oregon University System and the legislature.
“One of the problems … is the legislature doesn’t trust us,” said professor Peter Gilkey, president of the Interinstitutional Faculty Senate.
The crux of the dispute is largely over when the statewide salary freeze actually took effect. In January 2003, Gov. Ted Kulongoski proposed a pay freeze for state employees. On May 27, a legislative subcommittee expressed intent to institute a pay freeze. The biennium for which the budget applies did not officially begin until July 1, and the governor did not sign the budget until Aug. 29.
However, secretary of state spokeswoman Anne Martens said the salary freeze should have been considered effective after May 27.
“It’s not the law, but it’s pretty clear legislative direction,” she said. “I don’t think you could get any clearer.”
The Oregon University System countered that the effective date of the salary freeze is July 1, the beginning of the biennium.
“All OUS salary/pay increases were effective, committed or obligated prior to July 1,” a statement released by the Oregon University System said.
Gilkey further argued that the legislative intent shouldn’t be considered binding.
“You can’t base your actions today based on what might be legislated tomorrow,” he said.
Gilkey added that because many of the pay increases were contractually binding, not granting them could put the University at risk of lawsuits.
“That would be a violation of
contract,” he said. “It’s my belief … that the University would get hammered on that.”
However, Martens said a salary freeze applies to all state employees, regardless of their circumstances.
“What a statewide pay freeze means is that no one that works for the state gets a pay raise for any reason,” she said. “That’s why it’s called a pay freeze.”
Acting Oregon University System Chancellor George Pernsteiner said to his knowledge, all of the increases were approved before July 1, and added if he finds they were approved after this date, “we’re going to take a look at those more carefully.”
Davis said she didn’t believe there would be any legal consequences as a result of the audit findings; Martens said she wasn’t sure if there would be any repercussions for either university.
“That’s up to the governor and the state board,” Martens said.
Kulongoski said in an e-mail to The Oregonian that he would closely scrutinize the audit’s findings.
“I intend to examine this matter further to ensure that the university system is complying with both the letter and the spirit of my instructions,” he said.

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