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UMass Ordered to Pause Privatization of Advancement Jobs for Legal Review

State Auditor Diana DiZoglio invoked her office’s right to review whether the reorganization plan is really best for taxpayers, a right which UMass disputes.

Union members and allies rally against a privatization plan for UMass Advancement workers in March. Sarah Robertson photo.

By Sarah Robertson

UPDATE 5/19: The headline and subhead for this story have been updated to reflect the fact that UMass has not paused efforts to privatize the Advancement office, and is proceeding with the transfer of jobs to the nonprofit foundation. On Monday, a lawyer for UMass responded to the state auditor’s office claiming that state laws governing privatization contracts do not apply in this situation.

AMHERST – The state auditor’s office called on the University of Massachusetts Amherst last week to pause the privatization of over 100 jobs within the school’s Advancement office until, as is required by law, the contract is put out to competitive bid and it is proven that the move would save taxpayer money.

Earlier this year, university officials announced their intention to outsource jobs from the marketing and fundraising office to the private nonprofit UMass Amherst Foundation, saying the move was necessary to comply with state retirement laws. Unions representing Advancement office employees, the Professional Staff Union (PSU) and University Staff Association, have held rallies opposing the plan, which could end members’ participation in the state pension system as well as their union membership. 

“The Auditor has made clear that the privatization of this state work cannot move forward at this point,” PSU co-chair Andrew Gorry said in a written statement released by the union. “Our Advancement employees must be allowed to continue their work at UMass, and the foundation must immediately stop all attempts to perform this state work, including hiring for these positions, and reverse all existing effort towards privatization.”

On May 1, UMass Chancellor Kumble Subbaswamy notified 124 employees that they would be offered jobs with the Foundation, or could choose to be laid off this month. Congressman Jim McGovern, state senator Jo Comerford, and state representative Mindy Domb issued a joint statement two days later calling on the university to halt the layoffs and meet with public officials. 

“Lives and careers dedicated to public service are at stake,” the joint statement read. “The University must re-engage with the union and rely on expert mediation rather than issuing ultimatums. A public university must have public accountability.”

Last Wednesday, the university and unions reached a temporary agreement to avoid layoffs if the privatization plan moves forward. 

“[T]he university is pleased to have reached an agreement with the unions that ensures there will be no layoffs by providing union members expedited transfer rights should they choose to remain at the university rather than move to the UMass Amherst Foundation,” university spokesperson Edward Blaguszewski told The Shoestring. Blaguszewski did not respond to follow-up questions about the agreement and the reasons for the privatization.

“This is a welcome end to the outlandish threat of layoffs, which was a clear attempt to coerce us into at-will positions at the private UMass Amherst Foundation,” said PSU member Jay Johnson. “But the larger issue of UMass’s union-busting bid is far from over. Our unions and legislators maintain that public education is public work that requires public accountability.”

Last Thursday, Massachusetts state auditor Diana DiZoglio sent a letter to UMass Amherst chancellors warning that the school has not submitted mandatory documentation justifying the privatization. “Our records indicate that we have not received the request for proposal, analyses, or any other documents related to this privatization,” she wrote, “which are required before privatization can occur.”

According to DiZoglio, moving the marketing and fundraising jobs from the Advancement office to the Foundation “does not appear to comply” with MGL Ch. 7 §54, known as the Taxpayer Protection Act. This state law requires public agencies to solicit bids for any privatization contracts over $678,044, submit a written statement to the auditor explaining the “specific quantity and standard of quality of the subject services,” and certify that the winning bidder meets those standards. The proposals must also prove to be less costly for taxpayers.

The Advancement office’s annual budget is roughly $13 million, according to union officials. The two unions also contend that privatizing the jobs would violate a 2020 agreement signed by the university outlining the scope of their members’ work, some of which is performed in partnership with the UMass Amherst Foundation.

Under state law, employees of a public college may not spend more than 25% of their working hours on projects for an affiliated private foundation. University officials’ original rationale for transferring the jobs to the Foundation was that most Advancement employees’ work exceeds this limit. The unions, however, maintain that fewer than 10% of their members are out of compliance with the standard, and have accused the university of ulterior motives for the outsourcing plan.

Arwen Staros Duffy, who serves as both UMass’s vice chancellor for Advancement and the executive director of the UMass Amherst Foundation, told employees in February that the proposed transfers were intended to protect their past pension contributions. At a March meeting of the Massachusetts Retirement Board, state treasurer Deborah Goldberg called the situation a “tremendous misunderstanding” and refuted the claim that past contributions were at risk. 

Goldberg, however, agreed at that time that the university would need to address the issue of its staff working too many hours under the Foundation.

“The university will continue to work closely with the state to ensure compliance in all areas,” said Blaguszewski this week. “The university is confident that the prescribed reorganization, following guidance and direction from state regulators, and under the bargained transfer agreement between UMass Amherst and the unions, can continue as planned in full compliance.”

However, the state auditor’s letter casts doubt that the university can legally outsource the jobs to a private entity of its choosing without putting the work out to bid.

“The University’s effort to privatize these functions may not proceed without analysis and determination from the [Office of the State Auditor], as required by law,” DiZoglio wrote. “If you believe OSA has received, reviewed, and approved the proposed privatization, or that the above laws do not apply to the University, please provide documentation to substantiate that position. Until such documentation is provided, however, it is our position that the proposed privatization violates Massachusetts General Law and cannot proceed.”

A version of this article was published in the Montague Reporter.

Sarah Robertson is an independent journalist living in western Mass.

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