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Educational reform for private state -approved schools in California

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Educational reform for private state -approved schools in California

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Content EDUCATIONAL REFORM FOR PRIVATE STATE-APPROVED SCHOOLS IN CALIFORNIA by Daniel Lamb A Dissertation Presented to the FACULTY OF THE SCHOOL OF POLICY, PLANNING, AND DEVELOPMENT UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree DOCTOR OF PUBLIC ADMINISTRATION August 2002 Copyright 2002 Daniel Lamb Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: 3094351 Copyright 2002 by Lamb, Daniel Yiukwong All rights reserved. ® UMI UMI Microform 3094351 Copyright 2003 by ProQuest Information and Learning Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. ProQuest Information and Learning Company 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UNIVERSITY OF SOUTHERN CALIFORNIA SCHOOL OF POLICY, PLANNING, AND DEVELOPMENT UNIVERSITY PARK LOS ANGELES, CALIFORNIA 90089 This dissertation, written by D A N IEL.. Y ,,. LAMB .......... under the direction o f h..i.s... Dissertation Committee, and approved by all its members, has been presented to and accepted by the Faculty o f the School o f Policy, Planning, and Development, in partial fulfillment o f requirements for the degree o f DOCTOR OF P UBLIC AD MINIS TRA TION Dean m A r-r<nr▼ s - * r-v^ zr-rmm ir-iTi 'Chairperson Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ACKNOWLEDGEMENTS The completion of this dissertation and the doctoral program could not have been accomplished without the help of many people. First of all, I am deeply indebted to Mr. George Blue, my supervisor during my employment with the former Council for Private Postsecondary and Vocational Education. Mr. Blue provided me with valuable documents, information, and suggestions relating to this research project. He spent innumerable time and effort reviewing Chapters 4, 5, and 6 of the manuscript, and he provided me with valuable suggestions too numerous to mention. I would like to thank Mr. Bill Young and Ms. Eulalie B. Young, my supervisors at the Bureau for Private Postsecondary and Vocational Education. Both provided me with a flexible work schedule and I was allowed me to take leave when I needed time to study for the qualifying examinations and to do research. Special thanks to Mr. Bill Young for his valuable comments and suggestions in Chapter 6. Without their support and encouragement, I could not have completed this dissertation. I would like to express my deepest gratitude to Professor Chester A. Newland, who served as the chairperson of my guidance committee throughout the doctoral program. I am extremely grateful for his valuable guidance and direction, and for his untiring efforts in the editing and correcting of this dissertation. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. I am grateful to Professor Ross Clayton for refining the conceptual framework of this dissertation. Dr. Clayton’s keen insight was not only instrumental to my research, but also served to clarify my ideas in balancing all points of views. My sincere appreciation goes to Dr. A. Barry Noonan for his valuable suggestions. He served not only as a mentor but also as a friend during the writing of this dissertation. I will be forever grateful for his friendship and guidance. Finally, I owe the most gratitude to my wife, Evelyn, and three daughters Philina, Serena, and Cassandra, for their support, encouragement, and patience over the past ten years. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. TABLE OF CONTENTS ACKNOWLEDGEMENTS ABSTRACT viii 1 INTRODUCTION AND RESEARCH QUESTIONS 1 Introduction 1 History of Private Postsecondary Education Statutes in California 3 The Problem Context 7 Purpose of Research 8 Research Questions 9 Assumptions 10 Research Premises 11 Limitations 15 Importance of This Study 15 Dissertation Organization 16 Summary 17 2 THEORETICAL BASES 19 Analysis Using The Lens Theory 20 Other Theory Bases 30 Summary 44 3 RESEARCH METHODOLOGY 45 Introduction 45 Research Design 46 Method of Analysis: Multiframing Analysis 51 Elements Affecting Organizational Change 58 Phases of Reform and Development - Time Sequence 58 Summary 62 4 PERIOD OF DIPLOMA MILLS 63 Introduction 63 Private Postsecondary Education Act of 1977 66 What Transpired in Practice 70 Structural Frame Analysis 77 Organizational Structure 77 Other Student Consumer Protection Programs 79 Veterans Administration Contract 80 iv Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Informational Technology 81 Organizational Culture 81 Classifications of the Professional Staff 82 Funding 84 Communication 84 Market Environment 87 Human Resources Frame Analysis 91 Political Frame Analysis 97 Symbolic Frame Analysis 110 Summary 114 5 PERIOD OF CLEAN-UP 116 Introduction 116 The Private Postsecondary and Vocational Education Reform Act, 1989 116 What Transpired in Practice 132 Structural Frame Analysis 144 Organizational Structure 145 Operations Branch 147 Funding 157 Information T echnology 160 Communication 169 Human Resources Frame Analysis 174 Morale 181 Political Frame Analysis 188 Chronological Event of The Council’ s Sunset 188 Confusion and Turmoil 198 Surprise to Many 199 Analysis of the Council’s Sunset: What happened? 201 Symbolic Frame Analysis 216 Image and the Reality 216 Kenneth Miller’s Vision For the Agency 219 Summary 220 6 PERIOD OF SEARCHING FOR EFFECTIVE IDENTITY 224 Introduction 224 The New Private Postsecondary and Vocational Education Reform Act, 1998 225 Highlights of the New Reform Act of 1998 225 The Transitional Period 234 Structural Frame Analysis 236 Broadbanding Pilot Project 237 Organizational Structure of the Bureau 238 v Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 6 Organizational Culture 239 Classifications of the Professional Staff 241 Information Technology 243 Communication 246 Human Resources Frame Analysis 250 Key Players of the Bureau 251 Management Style 255 Cal-CSEA’s Report on Broadbanding 256 Waves of Staff Departure 259 Another Waves of Staff Departure 261 Appointment of the Deputy Bureau Chief 264 Political Frame Analysis 266 Proposed Fees Schedule Retracted Due to Interest Groups 268 The Legal Approach 269 Symbolic Frame Analysis 273 Rebuilding the Agency’s Culture from Ground Zero 274 Image and the Reality 275 Backlogged Work Accumulated; What Happened? 277 Summary 287 7 SUMMARY AND CONCLUSIONS 290 Introduction 290 Research Design 291 Major Findings and Conclusions 292 Implications for Theory 296 Implications for Practice 296 Implications for Future Research 300 Closing Thoughts 301 BIBLIOGRAPHY 302 APPENDICES 314 A List of Interviewees 315 B Organization and Staff of the Private Postsecondary Education Division, July 1988 325 C Source of Funds, 1982-1987 327 vi Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. D Approval by Other State Agencies 329 E Organization and Staff of the Council for Private Postsecondary and Vocational Education (CPPVE), September 1993 332 F Organization and Staff of the Council for Private Postsecondary and Vocational Education, September 1996 334 G CPPVE Class and Salary Chart 338 H AB 2960 Legislators’ Voting Records and Governor Pete Wilson’s Veto Message 342 I Letter of Application Return, May 30, 1997 347 J Friends of Private Postsecondary Education Support AB 71 (Wright) 349 K My Philosophy, My Expectations 351 L Organization and Staff of the Bureau for Private Postsecondary and Vocational Education, February 1998 356 M News release - Columbia Pacific University Ordered to Close Permanently 358 N News release - Department of Consumer Affairs Wins National Recognition for Outstanding Service to California Veterans 362 vii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ABSTRACT Historically, California laws governing private state-approved schools have been loosely written to facilitate alternative types of postsecondary and vocational education. Proprietary schools are the subjects of these laws, not the public community colleges or public and private universities and colleges that are more commonly identified with higher education. Some proprietary-school owners have sought loopholes and disreputable entrepreneurial opportunities for profit making. As a result, many students who have enrolled in such schools have not been provided with reasonable-quality education or training. End results of their endeavors have often been enormous student-loan debts and worthless diplomas. To probe this situation, this dissertation examines the policies and practices of private postsecondary and vocational education in California from 1978 through 2000, and it analyzes policy alternatives. The historical research focuses on: (1) the period of diploma mills (1978-1990); (2) the period of cleaning-up (1991-1997); and (3) the period of searching for effective identity (1998-2000). Bolman and Deal’s four frames of analysis are used: structural, human resources, political, and symbolic. These frames facilitate analysis of the three research periods in such primary terms as budgetary restraints, employee morale, interest groups actions, and organizational culture. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Public choice theory is examined as an aspect of this research. Also analyzed are theories of interest-group politics and of concepts of commensurate responsibility and accountability in public administration. Findings are that “self interestedness” characterizes California’s facilitative posture toward private state-approved schools. Legislation and regulations of these schools are greatly affected by interest groups’ actions. Even though the regulatory agency - the Bureau for Private Postsecondary and Vocational Education - seeks to interpret the never-perfect law to oversee the schools reasonably in the public interest, its decisions are often criticized as “off-balance.” To deal with this enduring reality, Bureau leadership and management may seek: (1) to develop a shared culture of accomplishment among all levels of employees and officials; (2) to manage conflicts through integrative, participative processes; and (3) to search for shared standards of reasonableness within legal and other frameworks of operations. IX Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER 1 INTRODUCTION AND RESEARCH QUESTIONS Introduction When people consider higher education in California, they often think of mainstream colleges and universities: (i) the public-supported institutions which consist of the University of California, the California State University, the Community Colleges; and (ii) the private colleges and universities accredited by a regional accrediting agency, such as USC, Stanford, and Caltech. However, many other postsecondary institutions in the private sector also play significant roles in higher education in this state. These schools are currently regulated by the 1998 New Private Postsecondary and Vocational Education Reform Act of California1 and are commonly referred to as private state-approved schools. A majority of these schools are vocational, offering certificate programs in fields ranging from electronics to truck driving, cosmetology to business, fashion design to dental assistance. Examples include Bryman College, De Loux Cosmetology School, and the Anthony Schools in real estate. Institutions such as MIT College of Business and Technology, ITT Institute of Technology, Armstrong University, Lincoln The New Private Postsecondary and Vocational Education Reform Act, 1997 covers practically all the private postsecondary schools in California above the 12t h grade except the institutions that are accredited by Western Association of Schools and Colleges (WASC) and/or by the State Bar of California. 1 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. University in Oakland and Palmer College of Chiropractics in San Jose offer degree programs from associate to doctorate. Many of these schools are accredited by national accrediting agencies that are recognized by the Department of Education, and their students are eligible for government student loans. Non-accredited private postsecondary schools can be approved for government-sponsored educational aids such as the veterans program (G.I.-Montgomery Bill), the former Job Training Partnership Act (JTPA) and the rehabilitation program. Examples of these schools are California Southern Law School in Riverside, Hospitality Management Training Institute in San Francisco, and Waterman Training Institute in San Mateo. Approximately 2500 private postsecondary schools are state-approved, distinguished from the mainstream institutions accredited by the Western Association of Schools and Colleges. Students enrolled in these schools borrow more money than students who are in any one system of the public-owned 2 The U.S. Department of Education is vested with the legal responsibility to publish periodically a list of recognized accrediting agencies in the nation. The mainstream higher educational institutions are accredited by the six regional accrediting agencies. This is done as one measure of eligibility for federal financial aid programs for students. In California, the regional accrediting agency that accredits schools like Stanford, USC, the University o f California, and California Institute of Technology is the Western Association of Schools and Colleges (WASC). Approximately 30 national accrediting agencies are recognized by the U.S. Department of Education. Some examples are Accrediting Commission for Independent Colleges, Accrediting Commission for Colleges and Schools o f Technology, the Accrediting Commission for Bible Education, and the Distance Education and Training. All the regional and the national accrediting agencies are private. The accreditation standards set by individual accrediting agencies are not uniform, even among the six regional accrediting agencies. While some accrediting agencies like WASC have very high accreditation standards, many national accrediting agencies have minimal accreditation requirements. 2 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. institutions of higher learning: the University of California, the State University, or the Community Colleges. California, as late as the early 1990s, had been recognized as a “diploma mill” state, and for good reasons. There were schools in California that offered degrees for $20 a piece and others that charged thousands of dollars for tuition and a diploma without having either a faculty or academic resources. Other institutions relied heavily on the idea that certain careers or life experiences could be part of a person’s education, so they gave much credit for such “experiential” prior learning so that virtually everything in a student’s background counted. More immediately, California was troubled by some unscrupulous schools that catered to the students who were eligible for financial aid. These institutions offered far more than they could deliver and resulted in desperate, unemployed students and disappointed employers who were expecting well trained prospective workers. History of Private Postsecondary Education Statutes in California California has maintained a laissez-faire attitude towards the private postsecondary for-profits schools. This liberal atmosphere of providing an alternate means of higher education traces its origins back to the spirit of California’s Constitution which proclaims that the legislature should encourage by all suitable means the promotion of intellectual, scientific, moral and agricultural improvement. Thus, soon after California became a state in 1850, the Legislature provided a charter for collegiate institutions. Under this act, a private institution of higher 3 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. learning had to submit an application to the State Supreme Court for incorporation as a college. The oldest universities in the state, such as the University of the Pacific and Santa Clara University, were bom from this foundation. “The Act of 1850” was amended in 1927 to reinforce the requirements. The amendments required a higher education institution to be incorporated and prohibited individuals from granting degrees by themselves. Also, all degree- granting institutions were required to submit an annual report to the Superintendent of Public Instruction. Specific information such as the number and names of students, the names of teachers, the degrees, diplomas and the subjects taught, were to be included in the report (Sections 24213, 1943 Education Code). After World War II, many veterans were discharged and went back to school. Many private schools were established to accommodate this large number of prospective students. Between 1944 and 1949, the number of proprietary trade schools jumped from some 1,900 to 5,600 nationally. The Department of Veterans Administration wanted to see that educational institutions were offering programs of quality to veterans who were using their veterans educational benefits (G.I. Montgomery Bill). The Veterans’ Readjustment Act of 1944 was enacted to allow governors to appoint the “State Approving Agency” for the approval and monitoring of programs in each individual state for veteran students. Each “State Approving Agency” was awarded federal funding for carrying out this function. California’s Governor Earl Warren assigned the duties of the State Approving Agency” to two state agencies: (i) The Department of Industrial Relations as the 4 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. “State Approving Agency” for on-the-job training and apprenticeships; and (ii) the Department of Education as the “State Approving Agency” for school programs. The Department of Industrial Relations then created the Apprenticeship Standards Division to do this task. Until today, the Department of Industrial Relations still performs this role. The Department of Education, in turn, established the Division of Readjustment to perform the duties of the “State Approving Agencies. That agency later expanded its functions and became California’s regulator of the private postsecondary institutions. Its name was changed in 1958 to “Bureau of Readjustment Education,” in 1969 to “Bureau of School Approvals,” in mid-1970s to “Office of Private Postsecondary Education,” and in 1985 to Private Postsecondary Education Division” After the Korean War in 1952, the number of veterans going to school increased to an even greater extent. However, many veteran students encountered many poor quality educational programs. As a result, Congress passed the Veterans Readjustment Act of 1952 directing the United States Commissioner of Education to publish a “list of nationally recognized accrediting agencies and associations which he determines to be reliable authorities on the quality of training offered by an educational institution” (Section 1775, PL 82-550). This Act added the categories of accredited institutions for acceptance in obtaining veteran educational benefits, in addition to state approval for such purpose. It set the pattern for the federal government’s continuing reliance on accreditation as an indicator of 5 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. educational quality, and it has played a major role on subsequent state education laws, including California’s Amendments of 1958. The Amendments of 1958 to the California Education Code constituted the first legislation providing a more comprehensive law for the private postsecondary education, and this new legislation was strongly supported by the state private institutions. This new legislation incorporated statutory language from the federal education code, the State’s Health and Safety code, its Business and Professional Code, and its Government Code. The 1958 Amendments were codified as Division 21 of the State’s Education Code. They provided for California for the first time a comprehensive policy for the approval and monitoring of the private schools. Although some changes were made to the 1958 Amendments in the 1960s and 1970s, the 1958 Amendments were the basis for oversight of private postsecondary institutions until the 1977 Act. In 1984, amendments were added to the 1977 Act. The Reform Act of 1989 (statutes used by the former Council for Private Postsecondary and Vocational Education) and the New Reform Act (currently the legal statutes for the Bureau for Private Postsecondary and Vocational Education) have origins in the 1977 Act. All these years, California elected officials had perceived that public institutions alone could not meet increasing needs for educational services to the 3 California Private Postsecondary and Vocational Education Reform Act of 1989 was sponsored by then State Senator Maxine Waters who was later elected to the U. S. Congress. California New Private Postsecondary and Vocational Education Reform Act of 1998 was later enacted based on of AB71, AB287, and SB819 after the Act o f 1989 was sunset. 6 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. people of California; they wanted to provide opportunities for those who seek alternative ways of higher education. At the same time, they also attempted to ensure that private postsecondary institutions were providing quality training, and that was seen as a justification for governmental regulation. The Problem Context As far back as the post World War I years, school operators were finding education to be a lucrative business. When World War II and the Korean War veterans began returning to schools after being discharged, unscrupulous school operators became even more aggressive. Historically, the laws in California governing private postsecondary institutions were loosely written to facilitate alternative types of postsecondary and vocational education. Such conditions favored unethical school owners, who would find loopholes and take advantage of opportunities for profit. Some disillusioned students who enrolled in such state- approved schools told horror stories about how the search for quality j ob-oriented training led to enormous debts and a minimum wage future. Many of them — poor, under-educated, unemployed or under-employed — were recruited in welfare lines, in neighborhood parks and through TV commercials. Many received loans but did not receive the education promised and eventually dropped out with defaulted loans and no means to repay them. Education units from private state-approved schools were often not transferable to other schools. Many students found that institutions in the public 7 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and the private traditional educational sectors had little faith in the state-approved schools’ educational standards. Credits that were previously earned were not transferable to other schools after a brief enrollment in the “undesirable program.’ The California Legislature had perceived that there were increasing problems with the services provided by many of the private postsecondary institutions. Throughout the past decades, many attempts had been made to remedy the recognized faults in these state-approved schools. The obvious solution, of course, was to toughen standards to levels that were comparable to those found in states like New York, which did not tolerate “fly by night schools.” However, the political culture of California continued to maintain a laissez-faire attitude towards the private postsecondary for-profits schools. Concerned partied introduced many suggestions and many reform efforts had been legislated into law. However, throughout the past decades, the state agency that regulates the private postsecondary education institutions was continually under criticism and complaints. Purpose of Research It had been difficult for legislators to form balanced decisions while making the laws for regulating these schools. It had been much more difficult for the professional bureaucracy (administrative policy makers and street-level staff) to interpret and execute these laws in a balanced manner. At times, the lines between private school owners and student protection advocates were sharply drawn in 8 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. legislative hearing sessions. In the past fifty years, there had been progress and shortcomings in the reform of the private state-approved school programs. This research seeks to analyze the current regulatory issues facing private postsecondary education programs and to provide some recommendations by using multiple theoretical frames. Research Questions Using historical records and interviews as a base, public-choice and public administration theories as tools, and calling upon my six years o f experience in the postsecondary education field, this dissertation addresses a primary question - “what happened?” which leads to seeking answers to the following research questions: 1. What has been the history o f educational reform o f California’s state- approved schools? 2. What have been successes and shortcomings o f governmental regulation and attempted state-govemment facilitation o f success o f these enterprises? 3. How do theory frameworks set forth in this study, such as mutiframing analysis, public choice, interest groups, term-limits and organization cultures, facilitate understanding o f the history? Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 4. How does this historical analysis advance understanding of these theory frameworks? These questions are explored in a multi-theoretical framework with the input from interviews with school owners, student advocates, legislators and agency administrators. Public administration theories related to the subject research that are relied upon include institutions, leadership, conflicts, organizational culture, policy-making, and term-limits. These help to interpret the findings. The focus of the study is to examine the modem history of private postsecondary (state-approved) education reform in California through multiframing theoretical analysis. The primary focus is to leam from historical events and to formulate potential applications of these lessons for future policies for private postsecondary education. Assumptions Public choice perspective In the study of private post-secondary education, the history can be characterized from a public choice perspective that assumes: 1. Individualism — the assumption that an individual’s behavior is motivated by his/her self-interest irrespective of his/her role in society. 2. An individual can: (a) express his/her preferences between alternatives; (b) make consistent choices in rational ways; and (c) try to maximize utility, i.e., maximize benefits in making decisions. 10 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 3. Bureaucrats promote policies that are of relative importance to the agency. 4. Legislators are motivated by a desire: (a) to gain and maintain power; (b) to attain higher political positions; and (c) to pursue these policy interests. The above four assumptions place public-choice within the tradition of neoclassical economics. An essential theoretical question becomes: how applicable are neoclassical assumptions to state regulation of state-approved schools? Redefinitions of the primary roles of this framework are necessary to answer the question. State-approved schools become the suppliers of educational services; students are consumers who demand those services. School owners (producers), students, legislators (political policy suppliers), and government regulatory agencies (bureaucracies) take on roles of utility maximizers. The behaviors of politicians and the influence of lobbyists in policy-making play critical roles in this study. Research Premises In considering the research questions discussed earlier in this chapter, the following premises were developed. Self-interest programs The Private Postsecondary and Vocational Education (or private state- approved schools) Program is a “self-interest” program. In public organizations, there are many politically sensitive programs I call “self-interest” programs. In a 11 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. “self-interest” program, two or more parties compete for self- interests while bureaucrats act as arbitrators based on laws and regulations relating to the case. Whatever the decision of a bureaucrat is, the ruling will have a direct positive or negative impact on the interests of the involved parties. One good example is the unemployment insurance program. If the unemployment insurance adjudicator rules that the worker should receive unemployment insurance benefits after being discharged, the employer’s payroll tax rate will be subject to an increase. If the unemployment insurance adjudicator rules favorably for the employer, the worker will not receive unemployment insurance benefits. Another example is a police or highway patrol officer making a ruling on a two-party automobile accident. If the officer rules favorably for one party, the other party will be subject to financial and or legal consequences. Other examples are often seen in consumer protection cases. The rulings of the bureaucrats often alter the balance, either the consumer or the manufacturer or vendor will benefit from the decision. Very often, the disfavored party will seek a higher-level review or settle the case in court. Therefore, public bureaucracies at the street level must have very good fact-finding and make their decisions based on laws, regulations and policies of the institution. Private Postsecondary and Vocational School Programs are considered one of the “self-interest programs” in the sense that the school owners and the students are both utility-maximizers. On one hand, the school owners often seek less regulation of the industry and more flexibility in their operations; on the other hand, 12 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. students and student advocates demand stricter regulation and more student protection. Off-balance rulings The decisions and the policies of the professional bureaucrats of this program are often considered “off-balance.” Legislators, most often than not, make laws that require bureaucrats to interpret them. As noted by Michael Lipsky (1980), public service workers occupy a critical position in American society because the actions of most public service workers actually constitute the service by government. The discretionary actions of public employees determine the benefits and sanctions of government programs and determine access to government rights and benefits. To achieve a balanced decision from government employees that will favor all interested parties is impossible. Often the scale of ruling is “off balance” and found to be more favorable to a certain party. In reality, program administrators (policy-makers), staffs’ personal beliefs, and/or the organizational culture affect the policies of a “self-interest” program. For example, during the administration of President Bill Clinton, a Democrat, the environmental protection policies were more favorable to environmentalists. After President George W. Bush, a Republican, took office, environmental protection policies have become more favorable to business corporations. A liberal unemployment insurance adjudicator’s ruling may be found “off balanced” and more favorable to the claimants than to the employers because of the adjudicator’s ideological belief. 13 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Even though the most non-biased, knowledgeable government worker, e.g., an unemployment insurance adjudicator, has made a really “by-the book” ruling, one of the involved parties, either the employer or the claimant, would consider the ruling “off-balanced” and be unhappy. The unhappy party does not like the decision because his/her interests are adversely affected. Another example is the mandate of nursing staffing level in California hospitals. In the two years since California passed the nation’s first law mandating how many hospital patients each nurse can attend to, state officials have been mediating between California Nurses Association and California Healthcare Association to decide upon some real numbers that are agreeable to both sides. This law would take effect January 1,2002. The California Department of Health Services struggled to decide on the nurse-to-patient ratios. One way or the other, the State’s ruling makes one side unhappy and its ruling is considered “off-balance” by the unhappy side. In the case of the private postsecondary education program, the regulatory agency is often caught in-between interested parties, including schools, students and sometimes elected-officials. Even though this agency makes its best effort to interpret the never-perfect education law in order to approve or disapprove private postsecondary institutions and their programs, its decisions are often considered “off-balance.” 14 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Limitations 1. Due to time constraints, it is impossible to cover all the issues found in the development of the private postsecondary education. This research has focused on the development of the regulatory program as an organization. Some of the sub-areas such as STRF, Enforcement, and information technology in small agencies are not considered. 2. Many people involved in Private Postsecondary Education reform are still active in their employment positions and respective work fields. Many of these people (in the public and the private sectors) did not want to be officially interviewed because they were afraid to say things that would make people unhappy. School owners/administrators were afraid that they might say something that would upset the Bureau program administrators and/or staff with whom they have been working. Bureau staff members were uneasy talking about the shortcomings of their current superiors. This researcher obtained some valuable research information by agreeing to anonymity in informal interviews. Importance of This Study 1. The educational services provided by private state-approved schools are at stake in terms of both their quality and student-loan default rates. Whenever a serious call is made for reform, the defenders of the status quo argue that such a reform would deprive some worthy person somewhere of a chance at self- 15 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. betterment. This study attempts to provide a more balanced theoretical understanding of the situation. 2. A 1998 report by the Rand Corporation’s Institute of Education and Training, which had been commissioned by the California Higher Education Roundtable, warned that the school-age population is growing very fast. By 2005 and until 2015, California’s higher educational institutions will face a wave of students as a result of this second baby-boom generation. It is described as “Tidal Wave II” in education circles. The Rand report further points out that the mainstream educational environment may not be able to accommodate the majority of the “Tidal II” college-bound students. Steps must be initiated to take care of this situation. One partial solution to the “Tidal Wave II” problem would be to divert students to state-approved schools in California. 3. Specific programs of the California Private Postsecondary and Vocational Education Reform Act were under criticism from 1998 to 2000, with respect to their effectiveness and efficiency. The Act is scheduled for a sunset hearing in 2002. This dissertation research can be used as a reference source for the parties involved. Dissertation Organization In the following chapters, the multi-frame organization analysis approach is presented (Chapter 2) and explored as a means for answering the research questions 16 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. posed in this front chapter. Using the theory and methods discussed below, Chapters 4, 5, and 6 provide a case study analysis (using multi-framing modeling) by focusing on the state-approved program from 1978-2000. Time frame analysis mapping is used. Three distinct periods of activity are identified and mapped: 1. The “Period of Diploma Mills” is characterized by the identification of the state as a haven for diploma mills. 2. The “Period of Cleaning-up” deals with years when many diploma mills disappeared. However, some state-approved schools closed their operations or moved to other states. 3. The “Period of Searching for Effective Identity” deals with recent years, in which the agency has faced continual challenges such as heavy backlog, high personnel turnover rates, public complaints, and lawsuits. Chapter 7 discusses and summarizes the identified key strategies for change, their implications for administrative theory and program operations, and possible directions for future research. Summary This chapter provides an introduction to the Private Postsecondary and Vocation Education Program, commonly know as private state-approved school program. The private state-approved schools generally identified as proprietary, have distinguished themselves from the publicly funded higher education programs such as the University of California, California State University and the California 17 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Community Colleges. California has recognized the state-approved schools as an alternative means of higher education for the residents of the state. During the past decades, California had maintained a laissez-faire attitude towards the institutions in this private sector, mainly for-profit schools. As a result of this atmosphere, California had been troubled by diploma mills that preyed on students who were eligible for financial aid. Throughout the past decades, many attempts had been made by elected officials to remedy the recognized faults in these state-approved schools. People saw successes and shortcomings. This chapter discussed the issues related to this program and the research questions of this study. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 18 CHAPTER 2 THEORETICAL BASES The complex issues of the state-approved school reform cannot be explained by using only one type of theory. A theory viewed as appropriate by some may not be acceptable to others. What is applicable at one point in time may not be useful at another point in time. What is true today from one perspective may not be true the next day. The state-approved school reform must be viewed and understood in contexts of a network of many influences taking place in a dynamic and constantly changing environment. One must use the scholarly work of many disciplines to explain issues at different times. A model of applying multiple views to issues has evolved over the past thirty years - that of multi-framing or use of multiple lens. Different scholars use different lenses depending on their perspectives to explain a particular issue while all provide unique and plausible answers to critical questions that are complex and obscure. It is this form of analysis that this researcher has chosen to apply to understanding the behaviors of the major players in the development of the state Private Postsecondary and Vocational Education reform. These behaviors have affected the success and shortcomings of the private state-approved schools regulatory agency. This chapter provides a discussion of selected authors who offer 19 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. useful theory employing the multiple framing/lens model of organizational analysis in their own varied ways. Analysis Using The Lens Theory Pfiffner and Sherwood - The concept of overlays The “concept of overlays,” originated by Pfiffner and Sherwood (1960) suggests the merit of analyzing organizations from multiple perspectives. Their text, Administrative Organization, focused on people and the work they do together, with an emphasis on the person-to-person and job-to-job relationships in complex organizations. The text describes the overlaying principles in the chain of supervisory command, and the vertical and horizontal flow of authority. It also offers formal, hierarchical descriptive information such as the power field, communications patterns, the informal organization and detailed information on overlaying organization formalization, work division, and individual differences. The authors analyze the complex factors of a formal organization using the concept of “overlays;” they offer their theory with the following contextual definition of organization: Organization is the pattern of ways in which large numbers of people, too many to have intimate face-to-face contact with all others, and engaged in a complexity of tasks, relate themselves to each other in the conscious, systematic establishment and accomplishment of mutually agreed purposes (p.30). 20 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Five basic overlays are described for the study of an organization. 1. The socio-metric network that consists of the relationships among people of a group. Desired and rejected relationships are found to be very responsive to other dynamics of the group. 2. The functional overlay is like a relationship between a professional and his/her client. The authors consider this overlay different from the formal authority structure. This relationship occurs where specialized information is needed; through functional contacts the technical experts exert their influence upon operations without direct responsibility for the work itself. The network is unique depending on the expert’s special skills and knowledge. 3. The decision overlay conceptualizes the network pattern of approach in an organization that permits many cross-contacts. In an organization, the decision pattern normally follows the structure of the formal hierarchy or the job-task pyramid. However, the authors contend that the power and authority network, together with the functional network, may cut across hierarchical channels. The relationships of interaction and influence should be viewed in terms of a decision process rather than a decision point. Thus, decisions are part of a network of influence and are related closely to patterns of power and authority. 4. The power overlay reflects the politics at work. It is a network of influence, not just a network of power and authority in an organization. The authors consider that power may or may not be authorized. It exists when one has the 21 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ability to influence someone to behave in a particular way or to make decisions. Sometimes “the person to see” may or may not be the person in authority. Therefore, the mapping of power centers may or may not follow the pattern of a typical hierarchy; and 5. The communication overlay is described as a complex of decision centers and channels that process and transmit perceptions as well as information data in the organization. The authors point out that communication is itself clearly an identifiable facet of behavior. The communication overlay reflects the inter-relationships of the various overlays. The authors’ concept of overlays has provided a clear explanation of the complex factors in an organization. The authors have also explained the behaviors of organization members in terms of their relationships in an organization through the concept of individuals, groups, and institutions. However, their work in this book does not provide any analysis of the behaviors of the “managerial,” the “political,” and the “legal” players that have crucial impacts on the over-all behavior and the development of an organization. Allison - View in the eye of the beholder The next author who used the concept of multiple-frame analysis is Graham T. Allison. His book, Essence o f Decision: Explaining the Cuban Missile Crisis (1971), provides a lens to the process of decision making during the Cuban Missile Crisis. He uses three unique frames as “conceptual lenses” to magnify, highlight, 22 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and reveal the events in this international conflict. The three frames are the rational actor model, the organizational process model, and the governmental politics model. These three models, or lenses, or paradigms (Allison often shifts terms) are used as alternative ways of analyzing events, of viewing different facts and of emphasizing different assumptions. Through these models, Allison argues that foreign policy decisions reflect the priorities of a rational state, the importance of organizational constraints, and of bureaucratic influences. Allison’s case study using multiple-frame analysis provides a vivid view of how the major players made their decisions. Accompanying each model of decision-making is a summary of events happening during the two weeks of the crisis that illustrated the respective models. Each model provides readers a different lens to view a peculiar quality of fragmenting reality; all three approaches together make up a comprehensive picture of the crisis from the beginning and to the end, similar to looking at a three-dimensional view. His scholarly work has helped to shape interpretations in disciplines interested in decision-making and has provoked many methodological and conceptual critiques, far removed from foreign policy and the U.S. government. In 1999, Allison published his revised edition of this book. The new edition is considerably richer in evidence and in interpretation of the missile crisis. The multiple-frame analysis remains the central methodology for analysis. An expanded discussion of organization theory, rational choice theory, psychology and game 23 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. theory in the chapters on the three models further illustrates that one must use the scholarly works of many disciplines to view issues at different times and places. Rosenbloom - Lens of the three powers In his article “Public Administrative Theory and the Separation of Powers” (1983), David H. Rosenbloom provides a lens to view the modem administrative state. In classical theories, managerial theory was tied to the executive branch, political theory to the legislative branch and legal theory to the judicial branch. He argues that an administrative agency may at times have the responsibility for executive, legislative, and, adjudicative decision powers. He uses three disparate approaches — the managerial approach, the political approach, and the legal approach -- to examine an administrative agency, to analyze different types of organizational structures, and to explain the behaviors of individual players involved. He offers his views of the three government functions with the following analysis: The central problem of contemporary public administrative theory is that it derived from three disparate approaches to the basic questions of what public administration is. Each of these approaches has a respected individual tradition, Emphasizes different values, promotes different types of organizational structure, and view individuals in a markedly distinct terms. These approaches are conveniently labeled ‘managerial’, ‘political’, and ‘legal’ (p. 510). Rosenbloom compares managerial, political, and legal approaches to public administration and shows how each has separate values, origins, and structures. 24 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. • The managerial approach to public administration promotes organizational structure essentially along the lines of Max Weber’s ideal-type bureaucracy. It stresses the importance of functional specialization for efficiency. Hierarchy is relied upon for effective coordination. Programs and functions are to be clearly assigned to organizational units. In its view of the individual, the managerial approach promotes an impersonal view of individuals. Employees and clients are victimized and depersonalized in an effort to promote the managerial values of efficiency, economy, and effectiveness. • The political approach to public administration stresses the values of representativeness, political responsiveness, and accountability through elected officials to the citizenry. These values are viewed as crucial because in a democratic society an administrative state is based on popular vote. The organization structure is set around the political values of representativeness, political responsiveness, and accountability. In its view of the individual, the political approach sees the individual as part of an aggregate group and identifies the individual’s interests as being similar or identical to others in collective terms. Chief executives and the legislators tend to think in terms of organized interests, e.g., the “black” vote, the “farm” vote, the “labor” vote, and so forth. • The legal approach to public administration stresses the values of protecting the rights of private citizens against illegal, unconstitutional, or detestable administrative action. The organizational structure is organized through three 25 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. inter-related areas: (i) administrative law; (ii) administrative procedures; and (iii) the constitutional law. Administrative hearing officers, jurors, and judges are essential parts of this organizational structure. Players under this approach embrace values very different than those of the other two approaches. This approach militates against efficiency, economy, managerial effectiveness, representativeness, responsiveness, and political accountability. In its view of the individual, the legal approach values the legal rights of a person. Every person is considered equal in front of the law. Wilson - Lens of operations reality The next author who employs multi-frame analysis is James Q. Wilson, in his book, Bureaucracy: What Government Agencies Do and Why They Do It (1989). Wilson uses an array of lenses: organizations, “operators,” managers, executives, and institutions (the Congress, the President, and the courts) to explain the behavior of government agencies. He provides a different lens to view the organizational behaviors in different institutions and to explain how bureaucrats behave in accordance with their institutional tasks. He argues that the crucial importance of bureaucratic behaviors at different institutions is related to their tasks: soldiers at war, guards in prisons, teachers in their classroom, the police in the streets, case workers at their desks. From the differences among these tasks, Wilson presents his primary concept of agencies. 26 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In Bureaucracy, Wilson uses different approaches to explain how bureaucracies perform or rather, how they fail to perform. He provides numerous historical examples to explain how public agencies are different from private ones in reference to their organizational culture, missions, and operational constraints, such budget planning, personnel, a monopoly on providing a service, or the absence of private property. Wilson examined the individual roles played by operators, managers and executives. Although agency theories apply to the relationship between the President and federal agencies, it is very different between the owners of a firm and its managers. He points out the problems posed by laws passed by legislatures and, argues public institutions are destined for compromise. Wilson emphasizes that public agencies do not produce a service in the ordinary sense, they have a host of intrinsic goals, such as due process, that Congress, the courts, and taxpayers at large have imposed upon them in increasing degrees. Wilson contends that effective managers and professionals have to become skilled in the art of reading the situations they are to organize or manage. He argues that effective managers should understand what agencies actually do, the environment they work in, the incentives they face and also be aware of the separate values, and self interests that individual groups have. He sees organizations as cooperative systems where the function of the managers is to maintain the dynamic equilibrium between the needs of the organization and the needs of its employees. Wilson cited numerous real life 27 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. examples to view how critical roles are played by bureaucrats and interest groups in real life. By using numerous historical cases to illustrate his concepts, he allows readers to view bureaucratic behavior with different lenses. Bolman and Deal - Reframing organizations Other important authors who used multi-framing analysis are Bolman and Deal, in their book, Reframing Organizations - Artistry, Choice, and Leadership (1997). The authors argue that theory and research in organizational behavior can be analyzed using four conceptual perspectives or “frames” which they describe as “windows on the world and lenses that bring the world into focus” (page 11). Drawing from both research and practice, Bolman and Deal borrow from the major schools of organizational thought and come up with four analytical categories or “frames:” (i) Structural; (ii) Human Resources; (iii) Political; and (iv) Symbolic. The Structural Frame is based upon the division of labor concept; the organization as factory or machine, emphasizes organizational goals, specialized roles, formal relationship and technology. Structuralists look for ways to develop structures that best fit organizational purposes and environmental demands. The Human Resources Frame emphasizes the interdependence between people and organizations. This frame focuses on the organization as family, taking ideas from organizational psychology and querying individual worker needs, skills, wants, and relationships. The Political Frame is rooted in political and administrative politics concepts. It describes power, conflict, and the distribution 28 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of scarce resources as the central issues. Political Frame theorists see the organization as arena or jungle, with competition for power and scarce resources. Finally, the Symbolic frame focuses on the organization as theater and/or carnival; it draws on social and cultural anthropology, and examines roles, symbols, culture, myths, rituals, ceremonies, stories, and heroes. Managers must rely on images, drama, magic, and sometimes, even luck or the supernatural to bring some semblance of order to organizations. Bolman and Deal have written a lively and generally comprehensive overview of modern organizations. The overall theme and framework of the book is its emphasis on leadership development, and its insights into the world of practice. The first half of the book introduces and explains each of the frames. The second half of the book examines the requirements for successful organizational leadership in the context of the preceding multi-framing analysis. Bolman and Deal describe how much existing literature focuses on only one or two approaches and thus provides a partial view or incomplete sense of the situation as a whole. The authors explain that leaders must look at old problems in a new light and attack old challenges with different and more powerful tools - the multiple frames. This book provides a constructive framework for managers who need to deal with different organizational situations and problems. Limits to the Bolman and Deal model of analysis are the authors’ too brief discussion of the systems theory. In their first edition (1991), Bolman and Deal provide two or three pages to discuss system theory. There is virtually no 29 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. discussion about systems theory in their second edition (1997). Throughout the book, they treat organizations as self-contained entities. Although they have some discussion in passing of boundary issues, they do not examine the perspectives that have at their core, the interaction between the organization and its environment. In general, the book does not emphasize the importance of the organization- environment interface. Market theories are not discussed at all. Both public and private organizations are increasingly vulnerable to environmental forces. Other Theory Bases Interest group theorists California’s state-approved schools, at times act collectively as interest groups to maximize their self-interests. Legislators’ decisions are often influenced by lobbyists of individual interest groups. This phenomenon is rooted in the philosophy of a free democratic society. The United States and most countries of the Western World enjoy the freedoms of constitutional democracies and market economies. In democracies, the principle of political equality is important, and de Tocqueville (1956) connected the principle of equality to rights of association. In short, a democratic society commonly embraces the concept of one-man one-vote, but, each individual citizen is essentially powerless to act alone with respect to the remaining citizenry. Strength and influence come with numbers. Since no single individual action is 30 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. influential by itself, the solution to strength and influence is to connect voluntarily with others with similar goals and objectives. Based on de Tocqueville’s view of American society to address the problems of California private postsecondary educational reform one can view parties involved in the state-approved schools as interest groups. De Tocqueville was not the only observer who viewed the influence of associations on American democracy. Max Weber, the German sociologist and bureaucracy theorist, reached similar conclusions, albeit for different reasons. Weber argued that associations grew out of earlier religious sects and addressed the basic needs of primary groups. Weber said that the study of association was relevant not simply because of numbers and the influence of interest groups, but because associations strengthened capitalism and had strong political overtones. Although religious in part in their origin, associations behaved much like guilds that sustained their ability to be selective about membership. This selectivity permitted associations a great degree of control over their environments, limited competition among members, and later helped them to exercise political power. De Tocqueville found the origin of the American democratic society in the principle of equality, Weber found it in the early protestant sects and the Puritan Church of New England. Olson (1965) rejects both the variants of group behavior presented by de Tocqueville and Weber because they did not address the principles governing the relationships among firms in the marketplace or between taxpayers and the state. Olson argues, based on classical economic theory, that self interested 31 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. individuals act to maximize their needs and that de Tocqueville’s principle of equality and Weber’s historical sects provide little explanation. The principles of utilitarianism, for Olson, better explain the behaviors of interest groups than do traditional theories of groups: voluntary associations evolve not from the principle of equality or as extensions of the primary group, but due to society’s increasing complexity and the need to stabilize relationships. Some political scientists view the role of interest groups as negative and some view it as positive. Theodore Lowi criticizes how the modem democratic government is influenced by the paralyzing effects of interest group pluralism. He argues that public authority was parceled out to private interest groups and has resulted in a weak decentralized government incapable of long-range planning. He asserts that modem democratic government has become not an institution capable of making hard choices among conflicting values, but a holding company for interests. He denies the very virtues that Robert Dahl, E. Pendleton, John Commons, and other group theorists see in their promotion of interest group pluralism. In a gradual progress, the once-prevalent view that interest groups are a threat to the general public interest has generally given way to the pluralists’ view that interest groups now constitute a legitimate source of information and demands of people. One characteristic of traditional market theories is belief in the rationality of individual choice. Somewhat similar to individual dignity, rights and responsibility are the basis for the creation and preservation of democratic government. 32 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Individuals make choices, reveal preferences, and perform actions. It is assumed in economic theory that self-interested individuals seek to maximize their interests through the exercise of rational choice. This self-interest approach profoundly influences the practical implications of market theories. Herbert Simon largely rejects public choice economics, but he focuses on decision-making. “Choice” is synonymous with making a decision which itself is a conclusion drawn from a set of value and factual premises. The separation of facts from values results in dividing knowledge from the practical purposes for which it is used. Knowledge, from Simon’s perspective, is neutral in a moral or ethical sense; it is the values of the user and of society that imbue the application of knowledge with meaning of good or bad. For Simon, to be rational means to challenge entrenched assumptions and to assess alternatives available within clearly given systems of values. In that context, he stresses bounded rationality and the need for disciplined decision making that probes all assumptions and that often requires “artificial intelligence” to achieve a reasonable measure of rationality. According to Breton (1974), political participation includes joining an interest group. Aharoni’s The No-Risk Society (1981) provides a detailed explanation of interest groups in the context of the individual, society, and social choice. Aharoni argues that, if society is basically a loose combination of individuals, then, under market systems, each individual decides and chooses according to his or her beliefs, wants, and desires, selfish as they may be. However, community needs and public interests are both vague and undeniable. Different individuals find different things 33 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. to be in the public interest. As a result, public policy is an interplay of organized interest groups. In grander terms, public expenditures result from power plays between large organizations as each one tries to get as much as possible from the state. Madison in Federalist Paper #10 mentioned the effects of pluralism in a democratic government. Lowi (The End o f Liberalism: The Indictment, 1969) describes how interest groups generate so much political pressure that they can adversely affect the making and executing of government policies within an agency. Lowi contends that the general public usually is not fully informed or aware of policy items and that the interest groups are often drawn to issues. Interest group liberalism, according to Lowi, corrupts democratic government to the degree that it weakens the capacity of governments. Government policies are often made based on the strong influence of interest groups. However, Terry Moe (1990) argues that interest groups can provide positive input to policy making and policy executing. He suggests that interest groups are the primary actors in institutional politics. He notes that the general public knows little about the implications of administrative procedures and organizational arrangements; interest groups are highly attentive to issues of their interests and affect the organization at hand accordingly. Although interest groups at times may affect policy formulation in organizations, people’s representation is basic in a democratic society. Waldo in the Administrative State (1948, 1984) argues that democracy and efficiency are 34 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. synonymous or at least reconcilable. In a democratic government, all people should represent the administration. James March and Robert Dahl (Dilemma of Pluralist Democracy, 1982) share this idea. In addition, George Federickson believes that society should be one with social equity. Both Donald Kingsley (1944) and Samuel Krislov (1967) believe that without group representation, true equity would not exist. In reality, interest groups can have positive and negative effects on policy formulation and operations of an organization. James Wilson in "Bureaucracy" has illustrated how interest groups can be helpful in one situation and harmful in another. Public choice theorists In the “Period of Searching for Effective Identity,” leaders of the Bureau for Private Postsecondary and Vocation Education were seen making efforts to expand the budget of the agency as explained in public choice theories. Public choice is a broad topic that crosses over into many areas of public administration, economics, political science, and sociology. Many public choice theorists have studied and explained how the economic study of non-market decision-making can be used to explain the behaviors of various interest groups. In this dissertation, the research will focus on Dennis Mueller’s (1979) assertion that public choice is “the economic study of non-market decision-making” (1979:1; 1989:1). He states that public choice deals with the positive and normative properties of voting rales, the study of interest 35 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. groups, the theory of regulation, the theory of political parties, and a variety of other subjects (Mueller 1989). James M. Buchanan, one of public-choice theory’s most noted advocates, characterized public choice in the following revealing words (1972, page 12): The critically important bridge between the behavior of persons who act in the marketplace and the behavior of persons who act in the political process must be analyzed. The “theory of public choice” can be interpreted as the construction of such a bridge. The approach requires only the simple assumption that the same individuals act in both relationships. In Buchanan’s view, the self-interested, rational, utility-maximizing individual of economic theory can be used as a model for the politician, the citizen, and the public servant (bureaucrats) alike. The analysis is made on the basis of the assumption of self-interest maximization, which is also the basic assumption of microeconomics. As observed by Nagel (1979:8), “A number of economists, political scientists, and other social scientists have extended that basic conception (of optimizing actors) of microeconomics to the non-market behaviors of such political decision-makers as voters, legislators, administrators, judges, and people who are regulated by or recipients of government programs.” He asserts that the basic conception of optimizing actors has been the key concept in public-choice models. Much traditional economic theory is predicated on the self-interest assumption, which supports today’s general market theories. These assumptions 36 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. are applied by public-choice advocates to public policies and organizations as follows: (1) Individual choice is the basis for organizational or collective action, which in reality is the aggregation of individual choices. (2) Individual choices are expressions of individual preferences, which differ from and conflict with one another. Conflict is, therefore, inherent in social life and cultures. (3) Rules are needed to adjudicate among conflicting preferences where market failures occur. These limited rules serve to simplify and bring order to those situations in which collective decisions are required. (4) Differences in individual and group preferences as well as other limitations tend to produce satisfaction rather than maximizing efficiency and equity strategies by decision makers. (5) Organizationally, these satisfying strategies result in decisions that typically differ only incrementally, rather than fundamentally, from earlier decisions and states of affairs. (Nagel 1979:8) Buchanan & Tullock (1962) and Vincent Ostrom (1974, 1976, 1980) provide powerful explanatory frameworks in support of this public choice theory. Similarly Niskanen (1971) asserts that the rational choice approach in the political process applies to four categories of participants: (i) voters; (ii) elected officials; (iii) appointed executives; and (iv) career bureaucrats. Each is assumed to maximize some dimension of self-interest, just as firms try to maximize profits and 37 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. consumers try to maximize utility. Voters are considered to be associated in special interest groups; they choose to participate in collective decisions by voting and by other means. Elected officials are assumed to maximize the prospects of elections and re-election; appointed executives and career bureaucrats are usually assumed to maximize their agencies’ budget size, or at least to attempt to do so. Both elected officials and appointed executives are faced with making choices and judgments that are within legal limits and that satisfy the public interest. Efficiency, effectiveness, and equity may compete with each other’s normative criteria — what is efficient, for example, may not be fair. Officials must see that efficiency, equity, and other values are well balanced. It is often a trade-off of one with the other because economic resources are limited. Trade-offs involve issues of ethics, fairness, and justice, which are indispensable to a human society. Other distinguished writers, including Mancur Olson (1978), Anthony Downs (1957), and William Niskanen (1971), also believe that public choices or collective choices are rooted in microeconomics. In a liberal democratic society, the decision-making behaviors of producers, consumers, and other economic actors can be analyzed in the context of microeconomics on the basis that these entities seek to maximize their utilities, revenues, or some other economic variables representing their interests. Because the public-choice perspective offers an alternative to both conventional forms of bureaucratic organization and conventional (or liberal) forms of orientation toward governmental responsibility for societal well being, the degree 38 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of interest in this approach among elected officials and bureaucrats greatly increased from the middle 1970s through the middle 1990s. Public-choice theory ignited a new and rapidly growing influence in public administration during that period, but it has subsequently moderated. Books and published articles on public-choice theory and its applications are extensive, making an exhaustive review impractical. Hence, in a review of literature on public choice, the focus is on fundamental works on public administration applications. These works include Kenneth Arrow (1951), Keith G. Baker (1976), Jeffrey Berry (1989), D. H. Blair and R. A. Pollack (1983), Kevin Butterfield (1981), Thomas Degregori (1974), Robert Golembiewski (1977), Charles Lindblom (1977), Nicholas Lovrich (1984), R. B. McKenzie and G. Tullock (1981), Elinor Ostrom (1990), Peter Robertson and Shui-Yan Tang (1995), andG. J. Stigler (1971). As noted earlier, a key concept of public-choice theory is the rational- choice approach: participants are assumed to try to maximize their self-interests. The means are assumed to be consistent with the ends, whatever those ends might be. The most influential works in the rational-choice literature in the development era include An Economic Theory o f Democracy by Anthony Downs (1957), The Calculus o f Consent by James M. Buchanan and Gordon Tullock (1962), The Logic o f Collective Action by Mancur Olson (1965), The Politics o f Bureaucracy by G. Tullock (1965), and Bureaucracy and Representative Government by William A. Niskanen, Jr. (1971). 39 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Another key concept of public choice theory is “interest group theory.” Madison, in Federalist Paper #10, mentioned the effects of pluralism in a democratic government. Lowi (The End o f Liberalism: The Indictment, 1969) describes how interest groups generate so much political pressure that they can adversely affect the making and executing of government policies within an agency. Although interest groups, at times, may affect policy formulation, democracy cannot survive without the people’s representation in a democratic society. Waldo, in The Administrative State (1948, 1984), argues that, democracy and efficiency are reconcilable. He further argues that in a democratic government, administration should be representative of all peoples. James March and Robert Dahl (Dilemma o f Pluralist Democracy, 1982) share this idea as well. Both Donald Kingsley (1944) and Samuel Krislov (1967) believe that, without group representation, true political equity will not exist. Lowi contends that the general public usually is not folly informed or aware of policy items and that special interest groups are often drawn to particular issues. Interest group liberalism, according to Lowi, corrupts democratic government to the degree that it weakens the capacity of governments. Government policies are often made based on the strong influence of various interest groups. However, Terry Moe (1990) argues that interest groups can provide positive input to policy making and policy executing. He suggests that interest groups are the primary actors in institutional politics. He notes that the general public knows little about the implications of administrative procedures and organizational 40 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. arrangements; conversely, interest groups are highly attentive to issues of their interests and can affect the organization at hand accordingly. In reality, interest groups can exert positive and negative effects on policy formulation and operations of an organization. James Wilson in "Bureaucracy" (1989) has also illustrated how interest groups can be helpful in one situation and harmful in others. Herbert Simon (1998) presents his updated interpretation of the meaning of self-interest. He finds that the argument presented by Adam Smith, which describes human behavior in organizations to be only driven by self-interest, is badly flawed. He asserts that: “Human beings make most of their decisions, not in terms of individual interests, but in terms of the perceived interests of the groups, families, organizations, ethnic groups, and national states with which they identify with and to whom they are loyal to” (1998, Page ii). Conflict theories Throughout the three periods of this research, Bureaucrats came across many conflicts. Some conflicts were internal, and some were external. Many arose because the schools and the students were not happy with decisions or policies that the agency had made. In the context of public administration, it is contended that the process of policy-making is characterized by conflicting motivations of politicians and bureaucracies. A politician’s utility function and a bureaucrat’s utility function do not have identical or similar arguments. Their motivations as egoistic utility- 41 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. maximizers are, therefore, different. A dominant objective of legislators is to increase the probability of their re-election, whereas the quests for budgetary increments and operational effectiveness are the primary objectives of bureaucrats. Bolman and Deal (1991:186) find that . .political arenas house a variety of individuals and group interests”, and summarize the political arena as follows: 1) Organizations are coalitions composed of varied individuals and interest groups, for example hierarchical levels departments, professional groups, gender and ethnic subgroups. 2) There are enduring differences among individuals and groups in their values, preferences, beliefs, information, and perceptions of reality. Such differences change slowly, if at all. 3) Most of the important decisions in organizations involve the allocation of scarce resources: they are decisions about who gets what 4) Because of scare resources and enduring differences, conflict is central to organizational dynamics, and power is the most important resource. 5) Organizational goals and decisions emerge from bargaining, negotiation, and jockeying for position among members of different coalitions.” Bolman and Deal contend that a compromise is reached between what politicians want to achieve and what bureaucrats want to achieve. 42 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Term-limits theories The independent Council for Private Postsecondary and Vocational Education was dismantled in 1997. Term-limits played an important role in this agency’s sunset. Term-limits policy in California is used to analyze the passage of the current Private Postsecondary and Vocational Education Reform Act. Term limits can be interpreted in the context of conflict theory (Dick and Lott, 1993). Term limits have both positive and negative effects on politics. Term limits positively result in a frequent rotation of some officials in political power and purportedly reduce the power of special interests. Frequent rotation of offices means less experienced legislators are in office. This may alter their effectiveness in dealing with various pressure groups in the process of policy making. It is assumed that positive and negative effects were reflected in the passage of the Reform Act. Some former bureaucrats had been criticized for the administration of the Reform Act. These bureaucrats might have come across many barriers and issues that they had not encountered before. Rosenbloom in Public Administrative Theory and the Separation o f Powers (1983) argues that traditional management theories can be applied to the executive branch, political theories can be applied to the legislative branch, and legal theories can be applied to the judicial branch. However, for public administrators, this is not always true. Many times bureaucracies have found that private postsecondary education laws passed by the legislature have contained conflicting information, and the court has set very few 43 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. precedents 4 Bureaucrats often need to integrate all three functions when the legal information is not clear. Lipsky, in The Street-level Bureaucracy (1980) provides a vivid analysis regarding this matter. In terms of public administration, concepts of reasonableness in philosophy and law, as explained by such authorities as Carl Friedrich and Benjamin Cardozo, are basic. These theories can be borrowed as references in carrying out the Reform Act. Summary This chapter provides theories relevant to this research. The theories are classified according to the topic area or discipline and are selected because of their relevance to private state-approved school reforms, specifically the aspects examined in this study. This study draws upon theories in a variety of fields, mainly interest groups, public choice, organizational culture, term limits and public policy-making. These theories have provided a framework for designing the study model, setting premises, and for the developing conclusions. 4 Many examples can be cited regarding the unclear sections o f Private Postsecondary and Vocational Education Reform Act. For example, Section 94932 (b)(3) of the Act requires the Bureau “to mediate student complaints to achieve balanced outcomes for students and institutions.” However, the law in this section only specifies “to mediate”. There are no specific guidelines for the Bureau to follow. 44 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER 3 RESEARCH METHODOLOGY Introduction This chapter defines the methodology used in analyzing the changes that occurred in California Postsecondary Education Reform for private state-approved schools. Chapters 4 to 6 provide the analytical results of the study over the course of the research period. The time frame for analysis is from 1978 to 2000. This frame includes the periods of time when the private postsecondary and vocational education program experienced serious problems in Department of Education; when an independent board attempted to make changes to improve negative publicity; and when the program in the Department of Consumer Affairs (DCA) attempted to solve new, and in some cases continuing, issues. Chapter 7 summarizes the findings and discusses implications for theory, practice and future research. The overall research design utilizes a multi-framing approach. Three different but complementary research methods are used: the case study method, the researcher as a lens, and interviews. 45 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Research Design Case study method The case study method (Yin 1994) is used as the basis of inquiry for the dissertation. Historically, case study methodology has been considered a “weak sibling” in social science inquiry. Researchers who do case studies were regarded as having deviated from their scientific disciplines, and their investigations were considered by some to lack sufficient precision, objectivity and rigor. The case study was viewed as a major alternative means of acquiring knowledge and was communicated through storytelling and descriptive narratives. However, Hummel (1991) provided a positive view of case study methodology and challenged the views of these “scientific critics.” He described how managers see their world differently from the way scientists see it and, therefore, tend to rely on stories to provide insight into their unique contexts. Knowledge acquisition in management was basically functional for the administrator’s own purposes. Case study design answers “how” or “why” questions primarily when the researcher has little control over the events and/or when the focus is on contemporary phenomenon within some real-life context. Such case studies can be complemented by two other types - exploratory and descriptive. After considering the complexity of variables and types of questions presented in this dissertation, the case study methodology was selected for testing the premises. What case studies have never done is to explore the possibility that 46 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the prevailing form of knowledge acquisition in management is basically healthy and functional for the administrator’s own purposes. Hummel (1991) describes storytelling as a “tool of engagement” - a means of participating with others in the construction of reality. This researcher approached the development and writing of this dissertation with this concept in mind. For the manager of an agency there is not one “right answer” or one truth to a problem posed by a story. Only until the manager is engaged in both the perception of the problem and the development of the solution can a truth be found. Analytical science, in contrast, provides events that are objective fragments of reality and, therefore, leave the learner separated from the truth. Stories provide a series of coherent and meaningful events to engage the learner. Using Hummel’s descriptions, the following story can be described as a “biographical anecdote” - a recalled experience - which serves the function of making a new situation part of the learner’s previously experienced world, broadening or intensifying the meaning of the story’s content. The story of a state-approved program reform opens up with biographical references to set the stage for the learner. The constant conflict between the desires of the school owners, those of the students, and bureaucrats is often evident in this story. The “Period of Diploma Mills” provides background information as to why there was the need to change. Why the passage of the new law following this period was oriented to protection. The “Period of Cleaning-up ” provides insight into the influence of key players. This period also addresses the effect on the 47 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. bureaucrats, schools and students as a result of an agency’s sunset. The “Period of Searching for Effective Identity” examines the results of a government agency that lacked direction and progression. The importance of presenting the reform story of the state-approved school agency is that it is a story set in the context of other stories - intertwining and interdependent. Additionally, the story is told from the perspective of a core group of individuals who, for the most part, were members of the story from start to finish; this perspective adds learning value to the listener. In this day and age of downsizing, high employee turnover rates and short tenure of leaders, the lack of an institutional memory and contextual references - bom from having “been there” when historical learning events occurred - render the process of learning from the past very difficult for organizational members. This, it seems, dooms organizations to repeating the same mistakes. Researcher as a lens As Patton (1990, p. 14) pointed out, “In qualitative inquiry, the researcher is the instrument.” The researcher has a unique opportunity to interpret and analyze the information. In this case, the researcher is a senior education specialist with the Bureau for Private Postsecondary and Vocational Education. Since he began his employment with the former Council for Private Postsecondary and Vocational Education (CPPVE) in 1994, he has kept a log of information regarding key meetings, discussions and events critical to the agency’s development and change. 48 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Prior to CPPVE, the researcher was employed with EDD, a non-voting member of the Council, for over 19 years. During the last seven years of this tenure, he worked in the Job Service Division and the Labor Market Information Division that involved coordinating with other state training agencies including CPPVE. In a similar manner, the researcher documented the development, reform, success, and shortcomings of programs during his employment with EDD and has continued to do so during his employment with Bureau for Private Postsecondary and Vocational Education (BPPVE), a unit with California Department of Consumer Affairs (DCA). Experienced as an employee in the programs related to private higher education, the researcher is able to provide first-hand information regarding the development and reform of the program. His bias often can also affect the creditability of the report even though the researcher has constantly sought to play a neutral role. Interviews Personal interviews have been conducted to obtain inside perspectives. School owners, student consumer advocates, elected officials, and government staff vested with oversight responsibilities were spoken with. The interviews serve two primary objectives: (1) to solicit qualitative information from the major players during the research period; and (2) to verify information. Interviews supplement the primary sources of information. Through interviews, it is possible to describe 49 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. what goes on, who or what is involved, when and where things happened, how they occur, and why things happen as they do in particular situations. The interview questions were designed to facilitate a free flowing discussion. Special attention was given to make sure that the questions were jargon-free and that no “double-barreled” items were asked. Responses were recorded and analyzed. Participants were contacted when information required clarification. Description of interviewees School owners/administrators, student consumer advocates, elected officials, and government agency staffers were selected to participate in the interviews. Priority was given to those who had had work experience or personal observations in all three phases of the 22-year research period. Records review Private post-secondary education can be learned about in part through written sources. However, due to the unique situation of the California educational system, very few articles on theoretical perspectives have been published. Most historic references to private state-approved education were found in newspaper articles. Academic references concerning policy-making for this study were drawn from political science and public administration sources. In addition to interviews and newspaper articles, information was gathered from personal observation records, departmental files and records, correspondence, 50 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. memos, local and national publications (newspaper, professional journals, books, and magazines). These sources provide an in-depth view of private postsecondary and vocational education. Method of Analysis: Multiframing Analysis A theory of lens (Mu Dan Ping, 1993) suggests that each individual tends to view other people’s behavior in the context of his or her own background; that is, people look at others from their own perspectives of the world - their lens. Looking at the world through a lens thus implies two seemingly contradictory tasks. As noted by Glazier and Powell (1992:27), people often decipher what is real from what they desire it to be and create mental maps of the actual world. Such maps are part of cultural and communication systems. People usually are not conscious of these maps until they perceive a change or a paradigm shift. Schwartz and Ogilvy (1979) also observe that mental processes, instruments, and disciplines are not neutral. Culture, language, and worldviews influence what people see and what they ignore; objectivity may be an illusion. Any one observation can provide only a partial view. Thus, each involved party in the postsecondary educational reform may have his/her individual lens views. The method of analysis for this study is Bolman and Deal’s (1991,1997) multi-framing. A brief description follows of the four frames of reference utilized in the analysis of the State-approved Schools case study. The researcher’s own personal experience as a Private Postsecondary and Vocational Education Specialist 51 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. will be used to illustrate how people look at things during the process of state- approved school reform. Readers are referred to the Bolman and Deal texts for more detailed information regarding the lens (frame) theory and its development. The structural frame The structural perspective focuses on the way that structure develops in response to an organization’s task and environment. This frame has two intellectual sources. The first is found in the work of industrial psychologists, for example, Fredrick W. Taylor, who wanted to determine how organizations could be constructed for maximum efficiency. The second source is rooted in the work of the German sociology Max Weber whose model outlines the major dimensions of a bureaucracy. The basic elements of the structural frame are centered on division of labor and structural design. Division of labor centers on dividing work or responsibility into manageable jobs or positions. Structural design helps to link individual efforts into a unified whole. This frame emphasizes the importance of formal roles, relationships and coordination. Organizations allocate responsibilities to workers (division of labor) and create rules, policies, and management hierarchies to coordinate differentiated activities. Effective managers would look for the best combination of differentiation and coordination. Basic assumptions in this model are that organizations exist to accomplish established goals and that structure compels people to focus on reaching those goals rather than doing whatever they please. Coordination and control are essential to effectiveness and 52 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. may be achieved through authority, rules, policies, standard operating procedures, information systems, meetings, lateral relationships, or other informal techniques. When at times the structure does not fit the situation and problems arise, some form of reorganization is needed to correct the misfit. Bolman and Deal summarize this idea in the following: In general, organizations operating in simpler and more stable environments are likely to employ less complex and more centralized structures, with authority, rules, and policies as the primary vehicles for coordinating the work. Organizations that operate in rapidly changing, turbulent, and uncertain environments are likely to need much more complex and flexible structures. Understanding the complexity of organizational contexts and the variety of structural possibilities can help to create structures that work for, rather than against, both people and the purposes of organizations (p. 78). Bolman and Deal employ Mintzberg’s (1979) concept of structural configurations. Organizations can laterally create functional groups based on knowledge, skill, work time, the product, the market, and around clients. Vertical coordination should include the operating core, which perform the basic work of the organization. Directly above the operating core is the administrative component. Positions at this level relate primarily to the organization’s external environment. On each side of the administrative component posit the techno structure and support staff components. The techno structure consists mainly of analysts whose role is to standardize the work of others by inspecting outputs and processes. The support staff component performs tasks that indirectly facilitate the work of the operating core. Bolman and Deal believe that the relative importance 53 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of vertical and lateral coordination depends mainly on the organization’s task and environment. Vertical coordination is more likely to be significant when the environment is relatively stable. Lateral communications are likely to be a dominating factor in organizations that perform complex tasks in environments of high uncertainty and rapid changes. The human resources frame This frame focuses on the relationship between people and the organization. Workers are viewed as having needs that motivate their behavior. These include physiology needs, social needs, and needs for self-esteem and self-actualization. When the fit between the needs of an organization and the needs of its employees is good, both benefit. When there is a poor fit, the organization will find under utilization of human energy and talent, as well as frustration and psychological conflict for the individual. Unhappy employees may become apathetic, put up resistance, or even attempt to sabotage or exploit the organization in return. From a human resources respective, the key to effectiveness is to tailor organization to people - to find an organization structure that enables people to get the job done while feeling good about what they are doing. Bolman and Deal present the concepts of Douglas McGregor (1960), William Ouchi (1981), and other motivation theorists to address their view of interpersonal dynamics and effective human resource strategies. This frame emphasizes the importance of interpersonal competence as a basic managerial skill. The authors believe that the most effective 54 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. supervisors tend to be high on both consideration (how well a leader showed concern for and sensitivity to people) and initiating structure (to what degree a leader actively structured subordinates’ activities). Some critics question the validity of this frame. They argue that the human resource theorists impose an academic, middle class value system on human nature and do not consider the possibility of co-optation by power elites in the organization. Another argument is that these theorists ignore individual differences and the imperatives of organizational structure. Additionally, these theorists are too optimistic about the possibility of integrating individual and organizational needs, and they underplay issues of power, conflict, and scarcity in organizations (page 178). Units of analysis in this frame include human needs, (e.g., physical, economic, social), personality, interpersonal, dynamics (e.g., leadership and decision making), and group dynamics. The political frame The political frame looks at power, conflict and coalitions, the role of the manager as a politician, and problems and opportunities in organizations as political settings. This frame asserts that “in the face of enduring differences and scarce resources, conflict is inevitable and power is the key resource” (p. 164). The authors argue that organizations are political arenas that house a complex variety of interest groups with enduring differences. Most of the important decisions in organizations involve the allocation of scarce resources. The authors argue that 55 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. organizations are political arenas that house a complex variety of interest groups with enduring differences. Most of the important decisions in organizations involve the allocation of scarce resources. As a result of scarce resources and enduring differences, conflict is inevitable and power is the most important resource. Organizational policies often emerge from an ongoing process of bargaining and negotiation among the major interest groups. Those who possess power may or may not be persons at the high hierarchy of the organization. Government agencies may be controlled more by the civil servants belonging to a strong union than the administrators at the top. Bolman and Deal point out that courts play an important part in the political frame. They can invalidate the laws that have been sponsored by the administration and passed by the legislators. The authors cite as an example that in the earlier years of the new Deal, the Supreme Court consistently invalidated major pieces of economic and social legislation that the Roosevelt administration was able to get passed through Congress. The authors emphasize that managers should understand the implications of the political frame. They explain that authorities may control the power of position inherent in occupying an office, but they are only one among many contenders for other true forms of power in the organization. In addition to organizational and interpersonal skills, managers need to become effective net-workers, negotiators, and coalition builders. An effective manager needs to develop an agenda, build a 56 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. base of support for that agenda, and learn to manage relations with those who might support or resist the agenda. With the political sensitivity in today’s state approved schools arena, this frame appears to be most noteworthy of the four presented by the authors for the parties involved. Units of analysis in this frame include coalitions, power, decision process, conflicts, politics, self-interests, bargaining and negotiation. The symbolic frame The symbolic frame is the most intriguing frame because within it the authors incorporate an eclectic assortment of ideas drawn from sociology and cultural anthropology. This frame focuses on organizational culture and symbols that an employee or worker can feel but not tangibly touch. These cultural and symbolic items include rituals, saga, ceremony, myths, stories and fairy tales, metaphor, humor, and play. They often are the invisible forces that help develop internal cohesion, maintain the confidence of external constituencies and provide a sense of the general direction in an organization. However, the authors point out that these cultural and symbolic items can also sustain resistance to constructive change and prevent an organization from adapting positive revolution. Bolman and Deal, in the chapter entitled “The Organization as Theatre,” emphasize the non-instrumental nature of many common activities and draw on the work of March and Olsen (1976), Weick (1976), Edelman (1977), and others to introduce the importance of action to the creation of meaning. In many 57 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. organizations, goals are multiple and elusive, the technology is underdeveloped; the linkages between means and ends are poorly understood, and effectiveness is almost impossible to determine. The authors suggest that one way to achieve public agencies’ organizational legitimacy is to maintain an appearance that conforms to the way society thinks they should look. Politically, regulatory agencies are often imprisoned by those whom they are supposed to regulate. In practice, agencies should legitimize elite values and reassure the public that they are zealously protecting its interests and struggle for continuing funding from the legislature. This frame conceives that organizational events and ceremonies are important more for what they express than for what they produce. It abandons the assumption of rationality that appears in other frames. Managers not only need to understand but need to become adept in the creation and manipulation of myth, symbol, belief, and ritual as tools for cohesion and bonding. Units of analysis include symbols, rites of initiation, culture, rituals and ceremony, myths, stories and fairy tales, metaphors, play, humor, theater, and organization actors and roles they play. In addition to using Bolman and Deal’s perspective as the primary reference for multi-frame analysis, relevant scholarly works are cited in different sections of this thesis to provide support for and illustrate findings of state-approved school reform. 58 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Elements Affecting Organizational Change From the historical perspective, the world is changing all the time. As observed by James O’Toole (1995), leaders must face all the changes that come to them whether they like them or not in the form of disorder fueled by volatile economic conditions, rapid technological obsolescence, market dislocation, upstart new services providers, and continually shifting political and social conditions. The principal elements that affect the changes of course of the state-schools reform will be discussed after the multi-framing analysis in Chapter 4, 5, and 6. Phases of Reform and Development - Time Sequence Three time periods were developed from 1978 to 2000 for comparison and analysis. Critical events and elements in these periods were gathered and examined using Bolman and Deal’s multi-framing method of analysis. The three periods were identified as follows: 1978-1990: “The Period of Diploma Mills” This phase was defined as the time during which the Private Postsecondary and Vocational Program was in the California Department of Education. This period is so named with reference to a Sacramento Bee editorial article dated August 28, 1989, which stated in part, “California has long been known as the diploma-mill state, and often for good reason.” Many students were ripped off by “fly-by-night” schools during this period. Employers lost faith in the graduates of 59 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. state-approved schools when considering employment. The default rate of student loans was extraordinary high in state-approved schools. A number of financial institutions went bankruptcy because of defaulted student loans. The public had the impression that either the California Department of Education had not done an adequate job regulating the state-approved schools, or the current law was not adequate for the regulating purposes. Its environment created a need for the elected officials to act: to have better consumer protection laws and regulations for the students in the private sector. The public was apt for constructive reform for the regulatory agency. 1991-1997: “The Period of Cleaning-Up” This phase was defined as the time during which the Private Postsecondary and Vocational Program was in the independent Council for Private Postsecondary and Vocational Program. This period was so named with reference to Dan Smith’s (1997) article in the Sacramento Bee which stated in part, “Regulated schools acknowledge the 1989 oversight law has helped weed out unscrupulous operators...” The characteristics of cleaning-up was also reflected in former Governor Pete Wilson’s veto message of AB2960 dated September 30, 1996, which would extend the sunset date for the Private Postsecondary and Vocational education Reform Act. The message stated in part, “The Council has done much to rid California of its prior ‘diploma mill’ status. 60 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. This period was characterized by a substantial decrease in the number of state -approved schools. Program operations were faced with continual challenges due to the cultural differences between the two agencies: the former independent Council for Private Postsecondary and Vocational Education and DC A. During the end of this period, key players played influential roles in shaping the legislation in relation to interest group theories. 1998-2000: “The Period of Searching for Effective Identity” This phase was defined as years when the Private Postsecondary and Vocational Program was transferred to the State Department of Consumer Affairs to become a bureau after the former Council was sunset. The complexity of work, the sensitivity of the program, and the culture of the Bureau are very different than those of the Department of Consumer Affairs. The Bureau is still in the process of searching for its own organizational identity for effectiveness and efficiency. This period was characterized with low morale, cumulated backlogged work, legal cases against the agency, and a significant number of litigation cases. The final chapter, Chapter 7, provides a conclusions and recommendations. It also summarizes the research findings. The administration is under criticism with respect to effectiveness and efficiency and the Act is scheduled for a sunset hearing in 2002. Chapter 7 provides suggestions that can be used as a reference for the parties involved. Future research recommendations are also provided. 61 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Summary This chapter defines the methodology used in analyzing the changes that occurred in the California Postsecondary Education Reform for private state- approved schools. The overall research design utilizes a multi-framing approach. Three different but complementary research methods are used: the case study method, researcher as a lens (participated observer), and interviews. Three time periods were developed from 1978 to 2000 for comparison and analysis: (i) the Period of Diploma Mills; (ii) Period of Cleaning-up; and (iii) Period of Searching for Effective Identity. This chapter provides the reasons why these chapters were so titled. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 62 CHAPTER 4 THE PERIOD OF DIPLOMA MILLS Introduction For the purpose of this study, the period of Diploma Mills spans twelve years from 1978 to 1990, when the Division of Private Postsecondary Education and Vocation was regulated by the Department of Education. During this period, California was considered to be the nation’s diploma mill capital. This phase was characterized with aggressive promotions by diploma mills, numerous phony accrediting agencies, and a high default rate in student financial aid loans. The Private Postsecondary and Vocational Education Reform Act of 1989 signifies the end of this period. What is a Diploma Mill? Although the term “diploma mill” has been used historically in reference to educational institutions which have questionable academic standards, there is no a codified definition of the term. A diploma mill institution often lacks both residency requirements for students and recognition from authorized accrediting agencies. Diploma mills award degrees as well as certificates. Stewart and Spille in their book Diploma Mills (1988) provided a clear description of a diploma mill: Basically a diploma mill is a person or an organization selling or awarding degrees without an appropriate academic base and without requiring a sufficient degree of postsecondary-level 63 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. academic achievement. The diplomas may bear the name of the issuing organization itself or may be fraudulent productions of diplomas awarded by legitimate colleges or universities. Diploma mills may operate either legally or illegally under state and federal laws (pp. 9 & 10). Stewart and Spille explain that diploma mills differ from acceptable educational institutions in that a diploma mill does not have academic and financial bases sufficient to enable the institution to fulfill its ostensible mission. The faculty does not have academic credentials appropriate for the teaching services of the subject matter. The course requirements are not in place to determine whether students have indeed acquired skills or knowledge at the designated level. The curriculum does not reflect sound planning of subject content delivery. Instructional support services (e.g., academic advising, computer services) are not available as needed. A diploma mill usually does not have a system to maintain and store students’ academic records. The setting The Division of Readjustment Education was first formed in the early 1940’s as a unit of the California Department of Education. Its primary function was to administer the provisions of the Montgomery G.I. Bill through a federal contract with the Veterans Administration (VA) for approving public and private education for the reimbursement of educational benefits to veterans by the VA. The Department was responsible for the governance of California’s state and two- year junior colleges. In 1960 the control of state colleges was assigned to the 64 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Trustees of the newly organized California State College system (California State University), and in 1972, junior college functions were assumed by the new Board of Governors of the California Community Colleges. However, the Division of Readjustment Education had been the only unit of the Department that regulated any degree-granting institutions. In 1958, the statutes enacted to regulate the burgeoning “diploma and degree mills” were encrypted into the Education Code with the Superintendent designated to carry out the statutory function. Personnel functioned as investigators of the private postsecondary education sector were classified to regulate private postsecondary degree and vocational educational institutions. The agency later became known in 1969 as the Bureau of Readjustment Education and the Bureau of School Approvals in 1969. With the passage of the Private Postsecondary Education Act of 1977, the agency became the Office of Private Postsecondary Education. The Act brought the first substantial revision to the statutory provisions by removing most exemptions and making the Superintendent, in his function as “Director of Education,” the principal state agent for governance and oversight of private education at all levels. In the early 1980’s, the agency became known as the Private Postsecondary Education Division, a unit in the Department of Education that was staffed by professionals who had public school administrator’s training and experience. Diploma mills have been around for many years. California lawmakers’ first significant attempt to control the problem, resulted in the passage and signing 65 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. into law of Assembly Bill No.6 on April 7, 1958 (Hood 1970). However, during the late 1970s to late 1980s, the diploma mill problem had reached very embarrassing proportions {Sacramento Bee, June 15, 1987) despite legislators’ attempts to ease the problem. Private Postsecondary Education Act of 1977 During the period from 1978 to 1990 the Private Postsecondary Education Act of 1977 was the statute for the regulation of the private postsecondary institutions. The Act authorized the California Department of Education to license and regulate private postsecondary educational institutions. Legislation was passed in 1984 to further strengthen the licensure process for private degree granting institutions and vocational schools (Senate Bill 2151, Watson; Chapter 1727, Statutes of 1984). The legislature wanted to encourage privately supported education without compromising the integrity of degrees and diplomas offered by these private institutions (Section 94301). Degree schools By the late 1980s, approximately 350 private colleges and universities were licensed to award degrees in California under the Act of 1977. Only about half of these institutions were accredited by recognized accrediting associations. Accreditation is one of five requirements (listed below) for a degree granting institution to operate in California. 66 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1. Under Education Code Section 94310.1 (a), accreditation of in-state institutions by either the Western Associations of Schools and Colleges (WASC), the California Committee of BAR Examiners, or a national accrediting association that is recognized by the United States Secretary of Education, such as the National Association of Trade and Technical Schools and the Association of Independent Colleges and Schools (AICS). 2. Under Education Code Section 94310.1 (b), accreditation of out-of-state institutions by a regional accrediting association other than the WASC that is recognized by the United States Secretary of Education and licensure by the State Superintendent of Instruction. 3. Under Education Code Section 94310.2, approval by the State Superintendent of Instruction. 4. Under Education Code Section 94310.3, authorization by the State Superintendent of Instruction. 5. Under Education Code Section 94310.4, authorization by the State Superintendent of Instruction structured by schools of theology and awarding degrees primarily in theology and other areas of religious study. In essence three types of licenses were available to a private degree granting institution operating in California: authorized, approved, or accredited. 67 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Authorized schools California used the term authorization to refer to its minimum license for private postsecondary institutions. Unless a degree-granting institution was exempted from the provisions of the law for religious reasons, it was required to obtain authorization from the Superintendent of Public Instruction to operate and grant degrees. The Superintendent granted authorization for up to five years to colleges and universities on the basis of an on-site review, or for up to three years to schools of theology on the basis of the accuracy of their documents and $50,000 of net education assets. Some institutions preferred to remain authorized rather than move to state-approved status or seek accreditation; and, according to the Private Postsecondary Education Division in the State Department of Education, 78 of them were authorized as colleges or universities and 12 were authorized as schools of theology in November 1988. Approved schools Authorized institutions could earn State approval if they wished, but they were not required to do so. Degree programs of state-approved institutions were recognized by the Superintendent on the basis of an institutional self-study and a more comprehensive on-site evaluation of the quality of these programs. Historically, approval was considered as the State’s highest level of review. Moreover, only state-approved institutions were eligible to be accredited by the region’s recognized accrediting agency - the Western Association of Schools and 68 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Colleges (WASC). By the late 1980s, seventy institutions were approved by the Superintendent for periods of up to three years. Accredited schools The State allowed California-based accredited institutions to award degrees based on an annual affidavit of their accreditation by the Committee of Bar Examiners for the State of California or an accrediting agency recognized by the United States Secretary of Education. By the late 1980s, 197 institutions were operating under this section of the Education Code. If out-of-state institutions operated branches within California, their license was primarily contingent upon their accreditation. During the late 1980s, a dozen institutional branches were operating in the state, although some were licensed as authorized and not out-of- state accredited. Religious exemption schools Non-profit, religious institutions were exempt from the provisions of the law if they restricted the areas of instruction to the principles of a church or denomination. These institutions were not licensed by the state. The Superintendent exempted some 87 religious institutions by the late 1980s. However, it is unknown how many religious institutions actually operated without applying for an exemption. The three-licensure system (authorized, approved, or accredited) served specific purposes. The authorization provision existed as a means by which new 69 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. educational institutions could be started and an existing institution could operate with little or no government oversight. The approval provision was considered the highest level of state review; the overall quality of the institution and its programs were assessed. The accreditation provision allowed in-state institutions to substitute periodic peer review, through an accrediting association, with examination by the state oversight agency - the Private Postsecondary Education Division in the Department of Education. What Transpired in Practice Authorized degree schools Shortly after its instigation, authorization was considered a joke in the eyes of educators. Until 1984, institutions applying for authorization had only to submit an application including confirmation of $50,000 in assets. The law did not require the State to investigate or confirm the accuracy of the documentation, nor did it specify what type of assets could be claimed for the $50,000 requirement. Authorized Institutions declared old, out-of-date textbooks and teaching equipment as assets, items that did not provide the school with a viable cash base. Although this provision was originally instigated to eliminate the low-budget, fly-by-night school, by the 1970s and 80s, $50,000 did not have the same value as it did 30 years earlier. 70 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In 1984, legislation was passed requiring authorized schools to meet stricter criteria. Inspectors from the Department of Education began to assess an institution’s curriculum, degrees offered, methods of operation, facility, faculty and financial responsibility. Schools licensed under Section 94310(c) were merely required to file an annual affidavit of full “disclosure” describing these elements. If the affidavits were accurate, the Superintendent of Public Instruction could not deny or withdraw authorization to operate. In practice, this provision encouraged diploma mills to prosper in California. For example, one state-authorized school’s application for reauthorization for 1986-1987, reported a student-faculty ratio of 450:1. The reauthorization was accepted by the Department of Education. In the same application, it said that it anticipated improving this to 400:1 during the next year. As a comparison, the ratio of full-time equivalent enrollment to full-time instructional staff at all accredited institutions in 1982 was 16.4:1 (Stewart and Spille 1988, page 140). After the strengthening legislation in 1984, The Department of Education required authorized schools to meet some stricter criteria with regard to their curriculum, methods of operation, faculty, and financial responsibility. An on-site inspection by a state team was also required as part of the authorization requirement. Even with the introduction of the new provisions, diploma mills thrived in California. A school licensed under Section 94310(c) was merely required to file 71 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. an annual affidavit of full “disclosure” describing its curricula, faculty, facilities, course of study, and degrees offered. However, the Superintendent of Public Instruction could deny or withdraw authorization to operate only if the affidavits were inaccurate. Approved degree schools Until 1984 “approval” meant that the state had inspected the academic programs at the school and found them to meet the minimum legal requirements. Approval was granted only for individual programs within a school, not for the entire school. For instance, an authorized school could also have some approved programs. After the 1984 legislation, the state was required to approve entire institutions rather than individual programs. An approved institution by law was supposed to meet standards for curricula and student achievement that were “comparable” to accreditation. However, these schools were only required to meet some minimal requirements. Many programs of the approved schools fell short of acceptable standards as compared to the programs offered by WASC-accredited institutions. Even though state-approval was intended to be a step toward achieving recognized accreditation, the law did not require an institution to evolve from approved to accredited status. Many approved institutions maintained this status to avoid the much more stringent requirements required by WASC and other accrediting agencies. 72 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Religious exemption schools Section 94303(b) of the Education Code provided exemption provisions for the licensing of religious schools if they meet the requirements: A nonprofit institution owned, controlled, and operated and maintained by a bona fide church or religious denomination if the education is limited to instructions in the principles of that church or denomination, ...and the diploma or degree is limited to evidence of completion of that education, and the meritorious recognition upon which any honorary degree is conferred is limited to the principles of that church or denomination. There were three issues with the “schools” exempted under this section: (1) some “schools” claimed that they were non-profit organizations, but in fact they did not meet the guidelines; (2) many “schools” existed illegally without filing exemption applications; and (3) the enforcement was very loose on these schools. Without clear definition of the law, the state Department of Education often interpreted this exemption as automatic upon an institution’s application unless it found it otherwise. The staff often accepted the application as prima facie evidence of exemption without requesting submission of its real nonprofit institutional status. One example was the Church of the Harley Davidson. Davidson filed an automatic exemption under the law claiming riding a motorcycle was a religious experience. Davidson stated that the “church” worshipped motorcycles and had as a tenet of its faith the belief that each of its members possessed intricate knowledge about its “deity” to warrant the teaching of motorcycle mechanics under the exemption. The Office of the Attorney General took a long time in proceedings to reject its claim. 73 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. During the period of Diploma Mills, some religious institutions neither applied for state licensing as a degree school nor filed exemption under Section 94303(b). Some examples were Sacramento Theological Seminary and Bible College in Del Paso Heights and Pacific Coast Bible College in Sacramento. Throughout this period of research, law enforcement on these schools had been very loose. One example was Feather River University in Paradise, California. Feather River University offered bachelors, masters and doctorate degrees in martial arts through correspondence study and transfer of credits. As of 1986, it charged Americans $20 and foreigner students $100 for the application fees with $1,500 tuition for its bachelors program and $1000 for its graduate programs. Feather River University did not consider itself a “church” because it “did not conduct services or anything akin to this strictly Western concept.” Instead, it advertised itself as a “religious denomination,” since practitioners of the martial arts would undergo spiritual as well as physical training. Although the institution received tax exemption status as a religious organization from the California Franchise Tax Board, it did not meet the requirements for religious exemption with the Department of Education. Its application was denied. Although this “university” continued its operations claiming a religious exemption status, the Department did not take action for many years. The former assistant director of the Division explained the reason for seldom challenging such claims. When we have legal reasons to question and investigate, the materials submitted - if any are submitted voluntarily - generally require our legal office to examine them and advise us, a very 74 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. costly and time-consuming act, one which is, we might add, of the lowest priority with our legal office and the Attorney General (State Oversight of Postsecondary Education #89-21, page 30). Vocational schools More than 1800 private vocational institutions were licensed under the Act of 1977 to offer diplomas or certificates with approximately 300 of these institutions accredited. Institutions were eligible to operate in California if they met one of the four requirements: 1. Under Education Code Section 94311(a), licensure of a hospital to award diplomas under the provisions of the Health and Safety Code. 2. Under Education Code Section 94311(b), licensure by the Federal Aviation Authority or one of two boards in the Department of Consumer Affairs - the Board of Barber Examiners, and the Board of Cosmetology. 3. Under Education Code Section 94311(c), accreditation by either the National Association of Trade and Technical Schools (NATTS), the Association of Independent Schools and College (ACIS), The National Home Study Council, or another national or regional accrediting association recognized by the United States Secretary of Education. 4. Under Education Code Section 94311(d), approval by the State Superintendent of Public Instruction. 75 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Schools approved under Section 94311(a) and (b), in general, provided quality vocational programs. These schools were subject to additional stringent assessment criteria under other review agencies, e.g., Health and Safety Code for Section 94311(a) schools, FAA regulations for Section 94311(b) schools. However, many diploma mills were found among schools approved under Section 94311(c) and (d). Schools approved under Section 94311(c), deficiencies were found in two major areas: (a) Variations in accrediting standards and procedures among the national accrediting agencies existed. They were found in areas of school administration, graduation requirements, quality in curriculum and faculty quality. (b) A common flaw in most of the accreditation requirements was weak student protection provisions. Most of these non-governmental accrediting agencies did not require their member schools to have student complaint procedures. Most schools under this section did not provide a basic level of student consumer protection. As a result, student loan default rate was found especially troubling in these schools. As of 1989, an average default rate of 30.6 percent was found in the student loans of private vocational schools. (Sacramento Bee, June 2, 1989) Approved vocational schools under Section 94311(d) had one primary problem: the budget. The Division of Private Postsecondary Education was unable to adequately regulate the number of private vocational schools due to lack of staff. 76 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Its funding was affected by the philosophy of “doing more with less.” The Department of Finance, the Legislature, and the Council for Private Postsecondary Educational Institutions continuously imposed funding constraints (State Oversight o f Postsecondary Education, Report 89-21). Structural Frame Analysis The private sector of postsecondary education in California, with more than 350 degree-granting colleges and universities and 1800 non-degree granting vocational institutions, was by far the largest of any state in the country. It was second only to the California Community Colleges in the number of students it enrolled annually. Statutory changes were made almost annually in the responsibilities of the regulatory agency and educational institutions alike, producing an extremely complex set of provisions and procedures for the licensure of private institutions seeking to award degrees or diplomas. Organizational Structure The California Department of Education and the Division of Private Postsecondary Education demonstrated the organizational structure of Max Weber’s bureaucratic model. Weber’s model has six major dimensions of bureaucracy: (1) a fixed division of labor; (2) a hierarchy of offices; (3) a set of rules governing performance; (4) separation of personal from official property and 77 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. rights; (5) technical qualifications for selecting personnel (not family ties or friendship); and (6) employment as a long-term career. A director (Administrator II) was the head of the Division, with offices in Sacramento and Los Angeles. Los Angeles and Sacramento offices were each managed by an assistant director (Education Administrator I). An area education consultant was assigned jurisdiction for the administration of state and federal mandates, in each of the 10 geographic zones dividing California (Appendix B). Each zone consisted of approximately 250 to 300 institutions. Additional Education Consultants, who were based in Los Angeles and Sacramento, tracked potential school violators and reviewed out-of-state accredited institutions under the provisions of Education Code Section 94310.1(b), respectively. The geographically assigned education consultant in Sacramento also acted as the Veterans Administration liaison, and the one in Los Angeles also handled the religious exemptions. A special Education Consultant acted as advisor to the educational institutions and liaison between the Council and the Division. The area education consultants were assigned the duties of all three major programs: degree schools, vocational schools, and the veteran program. All the Education Consultants and Education Program Assistants were considered to be professional staff under the supervision of an Education Administrator. Under the Director of the Division, there were semi professional units related to the private postsecondary education program. These units included the Student Tuition Recovery Fund (STRF), Certificates of Authorization, Consumer 78 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Complaints, Consumer Complaints, School Violators, Private School Agents Permits, information technology and clerical support (See Appendix B). Other Student Consumer Protection Programs Student Tuition Recovery Fund (STRF) The STRF was a fund for the purpose of reimbursing students for paid but unused tuition when an institution closes untimely. Private postsecondary institutions were assessed one tenth of one percent of the cost of the program for each new enrolling student and transmit it to the Superintendent quarterly. A statutory maximum of $50,000 annually was provided for administration of the STRF. After paying nearly all student claims at the end of 1980, the STRF had a remaining balance in excess of $1,300.00. About 1,800 institutions participate in the STRF by statutory mandate. Certificates of authorization Persons performing as “administrators” and “instructors,” as defined in statute, were required to possess an appropriate Certificate of Authorization for Service to work in an institution approved under Education Code Section 94311(d). 79 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Consumer complaints An average of 30 formal written complaints were received, logged, investigated, and responded to each month. Numerous other complaints were handled through consultative services by staff. School violators Approximately three potential violators were referred to this agency each week. A violator was an ownership offering education without appropriate approval or authorization from the Superintendent. Private school agents permits Persons representing institutions on a face-to-face basis were required, under specified conditions, to possess a valid Private School Agents Permit identifying the individual as being of good moral character and backed by a bond. Veterans Administration Contract The governor assigned the Division the Federal Veterans Administration contract. The Division was responsible for overseeing California institutions, public and private, that sought approval to enroll veterans under Section 94311(d). In 1987, approximately 400 public and 800 private postsecondary educational institutions had programs with Title 38 approval for veterans and other eligible students to receive educational benefits. The Division was reimbursed based on set 80 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ratios and performance criteria, and payment was made after appropriate billing by the Department. The VA contract was renewed yearly. Information Technology The Division maintained a large database on the private sector using the main computer system of Department of Education. The Department of Education sustained a computer system for pertinent records of the state-approved schools. The Division maintained school data for administrative purposes and public inquires, i.e., callers requesting the status of an institution or information on an institution’s course offerings. Maintaining a legal status for public inquiry was the primary motivation for institutions desiring to be listed by the Superintendent rather than to be exempted or to be unlisted. Organizational Culture Every organization has a culture, and many have several. When a single culture is broadly shared and warmly endorsed, it is a mission. The great advantage of mission is that it permits the leader of the agency to be more confident that staff will act in particular cases in ways that the leader would have acted had he or she been in their shoes. There are fewer distortions in the flow of information because both the sender and the recipient of the message share common understanding. Many government agencies have multiple, competing cultures. Some agencies manage the competition well, but some do not. A major responsibility of an 81 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. administrator is not only, as Selznick has put it, to infuse the organization with value, it is also to discover a way by which different values (and the different cultures that espouse those values) can productively coexist. The principal challenge to the PPED came from the dominant culture of the Department. The advantages of a clear sense of mission are purchased at a cost. Tasks that are not defined as central to the mission are often performed poorly or starved for resources. Subordinate cultures may develop around these peripheral tasks, but promotional opportunities for members of these cultures may be so restricted that the best members will avoid assignment to these sub-units because service in them is “not career enhancing (Wilson, p. 110). Classifications of the Professional Staff The California Department of Education (CDE) used the classifications (Chi, 1998) of Education Administrators, Education Consultant, Education Program Assistant for positions of its professional staff. The Department recruited professional staff members that consisted of former experienced principals, vice principals, directors or superintendents in individual school districts. The minimum education qualification to apply for the consultant’s examination was a bachelor’s degree with a valid California teacher credential, or a related master’s degree if the candidate did not have a valid teacher credential. However, an unwritten rule that if the candidate did not have a doctorate degree, he/she would be much less competitive. Since the consultant’s salary was comparable to that of an assistant superintendent in a school district, the Department usually had no difficulty in recruiting candidates with these qualification specifications. Employees with 82 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. regular civil service classifications, such as Staff Services Managers, Associate Government Program Analyst, Office Technicians, etc., filled the semi-professional positions. Associate Governmental Program Analysts processed the formal consumer complaints, which entailed review, analysis, consultation and mediation of complaints for an effective resolution between disputed parties in complaints. Staff Services Analysts provided full administrative support and handles all fiscal and personnel matters. One Staff Services Analyst processed up to three new school applications each day under the occupational and vocational objective portion of the law. One Staff Services Analyst was assigned the large task of processing and control of the Student Tuition Recovery Fund and also dealt with entering, formatting and reporting computer data. This analyst also provided technical support to Consultants under the degree-granting portion of the law and was responsible for the promulgation of administrative regulations. Office Technicians maintained the large database with its complex and voluminous revisions and executed the annual renewal procedures for institutions. Office support staff were assigned to clerical projects. For example, one handled the Private School Agents Permit program; another processed applications each day for a Certificate of Authorization for Service as an administrator or instruction; another coordinated all federal approvals; another was secretary to the Special Advisor Consultant; etc. 83 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Funding The Division received funding from two sources: licensing fees and the VA contract. The State did not allocate public funds to this agency because it licensed private institutions (See Appendix C). California private postsecondary institutions (excluding the number of approved schools in the veterans program) and its total students were more than those of the state-funded community colleges. Despite its size in education share, the Division was awarded relatively limited State resources for maintaining and promoting the agency. Communication Organizations communicate internally and externally through unique communication systems (Chester Barnard, 1968; Herbert Simon, 1959). During the Period of Diploma Mills, the Department of Education had very basic internal communication systems. Its employees obtained official information through the three organization systems — downward communication, upward communication, and horizontal communication — the same as the Hersey and Blanchard (1993) organization model. Formal communication within the Department and the Division was transmitted through job descriptions, memorandums, directives, policy statements, performance feedback and reports. Informal communication took place via the “grapevine” (Barnard, 1938; Keith Davis, 1953) and staff networks (P. V. Lewis, 1987). According to staff, personnel relied on these 84 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. channels of communications because Division employees did not sit in K-12 committees nor were they included in Department staff meetings. Information regarding the Department’s proposed operational objectives and other changes was obtained rather informally via word of mouth. The primary external communication lines were the Division’s membership in the Private Postsecondary Education Commission (CPEC) and contact with the Council for Private Postsecondary Educational Institutions. CPEC was an independent board established in 1974 by the California legislature and the governor. Its main objectives were to coordinate the efforts of California’s colleges and universities and to provide policy analysis recommendations to the governor and the legislature. To this end, CEPC reviewed matters affecting the postsecondary institutions in California — community colleges, four-year colleges, and universities, professional and occupational schools in the public and the private sector. As an advisory planning and coordinating body, CPEC did not administer or govern any institutions, nor did it approve, authorize, or accredit them. During the Period the Diploma Mills, the commission consisted of 15 members, wherein nine were members of the general public. The other six were representatives from the major segments of postsecondary education in the state, i.e., University of California, California State University, California Community Colleges, Council for Private Postsecondary Educational Institutions, California State Board of Education, and California’s independent colleges and universities. The governor, the Senate Rules Committee, and the Speaker of the 85 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Assembly appointed three of the general public commission members for six-year terms. The Council for Private Postsecondary Educational Institutions’ appointee provided the Division the opportunity to participate in debate and CEPC studies as well as to express the Division’s positions on proposed legislation. The Council was established in 1972 by the California legislature as an advisory body for the Superintendent of Public Instruction. It reviewed, made recommendations, cooperated with the Superintendent, performed independent tasks and assumed a leadership role. It is the intent of the Legislature that the council provide leadership and direction in the continuing development of private postsecondary education as an integral and effective element in the structure of postsecondary education in California. The work of the council shall at all times be directed toward maintaining and continuing, to the maximum degree permissible, private control and autonomy in the administration of the private postsecondary schools and colleges in this state (California Education Code Section 94304(4)). The Council was comprised of 15 voting members and three non-voting state agency representatives. The voting members were the Superintendent (or designee), four appointees of the Superintendent, five appointees of the Senate Rules Committee, and five appointees of the Speaker of the Assembly. The three non-voting, ex-officio representatives were representatives from the Department of Consumer Affairs, the Department of Employment Development, and the California Postsecondary Education Commission. The Council usually met in Sacramento. Specific meeting details were announced several weeks prior to such meeting. Public attendance at the meetings 86 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. was encouraged. With its authority to set its meeting agendas, the Council was able to network with other postsecondary educational entities concerning the Division’s policy affairs. As time went by, the Council had evolved from initially being a promoter of the private postsecondary educational industry to a policy advisory body. The only area where it has decision-making responsibility is in the area of approving licensure fees. In addition to maintaining periodic communication with members of CPEC and the Council, the Division also communicated from time to time with other work related entities, namely, accrediting agencies, U.S. Department of Education, California Student Aid Commission, and other licensing agencies (California BAR, Cosmetology Board, etc.). These contacts usually were conducted as needed. Market Environment Why diploma mills thrive in this period? The answer was a result of a combination of various reasons, namely financial incentives, insufficient staff due to funding, the laissez-faire philosophy of the Department and weak enforcement law. Financial incentives The American public has sharply increased its level of educational accomplishment as measured by its years in school. In 1940, the median number of school years completed by Americans was 8.6. By 1983, the same median figure 87 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. had risen to 12.3 according to a 1985 report of the U.S. House of Representatives Select Committee on Aging. Postsecondary education accounts for a large proportion of the increase in educational levels of Americans. The percentage of Americans completing four or more years at public and private colleges went up from 7.7 percent in 1960 to nearly 20 percent in 1985. Americans’ credential consciousness begins with the opportunities for job or salary advancement. A nationwide survey to determine the role of educational credentials was conducted by Malizio and Whitney (1985). Fifteen members of the American Society for Personnel Administration (ASAP) were asked to rate their company’s emphasis on educational credentials in its employment practices. The results indicated that employers placed considerable emphasis on educational credentials. About one-fourth of the companies had no jobs for adults with less than a high school diploma or equivalency credential. About half of the employers indicated that personnel hired with less than a high school diploma could enhance their in-house promotional opportunities by obtaining a high school diploma. According to a congressional study (1985), holders of a college and university degree would have a competitive edge in the job market. Many more occupations and professions are available only to those holding college or university degrees. Many jobs, which were upgraded, would require higher level of skill preparations. Many “victims” of diploma mills seek a degree (usually a higher degree) for self-satisfaction and to gain respect from others. They might have barriers in life to earn a legitimate degree, but would feel validated for a worthwhile career with a 88 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. degree title after their name. No statistics on degree title abusers were available because so few institutions in this period ever bothered to check on other people’s degrees. Most exposures occurred when a person gained high visibility in the public. Examples were two of the 1988 presidential hopefuls, Biden and Robertson. They collected a lot of press coverage when it turned out their academic credentials were not as they had represented them. Philosophy of the Department According to the staff members interviewed, they did not recall rejecting any school’s licensure in this period. The schools usually were not licensed because they were asked to comply with certain regulations and failed to respond timely. The consultants found that they did not have time to prepare documentation required by the Department’s attorneys and the district attorney’s office to go through a legal process to reject an application or revoke a license. In many instances, the standards are embarrassing. The Private Postsecondary Education Division’s guidelines allowed up to 50 percent of the credits awarded toward a degree to come from work experience or other non- instructional learning. Some schools used this rule too liberally and credited virtually anything the student ever did. One example was Columbia Pacific University. In April 1987, Columbia Pacific University in San Rafael awarded a student a bachelor’s degree in psychology based in large part on experience gained from owning an automobile repair shop. This “student” was granted a masters 89 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. degree in psychology three months later also based in large part on the same experience gained from owning an automobile repair shop The Department’s main focus was the overseeing of instruction in grades K- 12. Overseeing institutions in the public sector is very different from private sector oversight. Weak enforcement Another reason why so many diploma mills existed in California was because the law for enforcement in the state was weak. To close down a fly-by- night school, the Department of Education required legal court action. The Department needed the cooperation of the district attorney of the county where the school was located to take action. By the time the Department and the District Attorney’s office had the legal papers properly prepared and served to a school in violation, the school would relocate to another state where the law was not so strict. The legal process was often found fruitless. In addition, with the passage of Proposition 13, district attorney offices experienced budget constraints. Prosecuting a fly-by-night school was always considered a back burner case unless there was high-profile media publicity. Diploma mills were legitimate or not legitimate because the previous California laws were weak. 90 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Human Resources Frame Analysis Differences in individual character and style often present recognizable managerial challenges. Management style can be found as autocratic, democratic, and laissez-faire. Douglas McGregor’s (1960) Theory Y can be used to describe the organizational culture of the Division. Theory Y based on Maslow’s need hierarchy suggests that workers are not passive or indifferent by nature, but that they become so as result of their experience in organizations. The essential task of Theory Y management is to arrange organizational conditions so that workers can achieve their own goals best by directing their efforts toward organizational rewards. Theory Y relies on self-control and self-direction. CDE considered the educational staff members were professionals and maintained a hands-off working culture. From the interviews, the participants shared the same conclusion that the consultants were treated like real professionals and were given quite a free hand of authority in their own territories. The administrators normally exercised minimum control. Each consultant enjoyed a high level of autonomy. The organization culture can be reflected in the following newspaper article: A year ago, the executive officer of the state agency that licenses family counselors and psychologists wrote the state Department of education asking for an investigation into Columbia Pacific University. The unaccredited college in San Rafael, the official noted, had granted one of its students a master’s degree in psychology without ever requiring him to take a graduate-level course. In addition, the student’s transcript indicated that the master’s degree, as well as a bachelor’s degree in psychology, was based in large part on experience gained from owning an automobile repair shop. 91 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. However, the department’s Private Postsecondary Education Division never completed an inquiry into the matter. Joseph Barankin, the Division Director, said: Not that the Division didn’t want to, he insisted. Instead, the employee assigned to the investigation went on administrative leave before it could be completed, and there was no one else in the understaffed who had the time to take on the task... (Herbert Sample, January 29,1989, Sacramento Bee). From the above article, one can tell that the staff was in a laissez-faire working culture. Although the unit might be understaffed, the supervisor had not taken any constructive action after another state licensing agency had submitted a written inquiry for a year. According to Lewin, Lippitt, and White (1939), autocratic leadership produces dependence and frustration; laissez-faire leadership leads to aimlessness and confusion; and democratic leadership produces a positive group climate. Insufficient staff due to funding Although the Department of Education had recorded some successes in efforts to improve the instruction offered in private schools after the enactment of 1984, chronic under-staffing hurt the Department. Joseph Barankin said that the Division had suffered grossly insufficient staff to do the job (Herbert A. Sample, January 29, 1989, Sacrameneto Bee.). In 1986, the Division’s workload substantiated to add additional staff. However, the request to increase licensure fees to hire additional staff was disapproved by the Council. 92 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. By the end of the period, according to a report by CPEC (89-18), the Division had oversight responsibility of more than 2,500 privately supported institutions of postsecondary education. This number far exceeded that of publicly supported institutions (then 536) including regional occupational centers and adult schools. Publicly supported institutions enrolled over 1.5 million students while nearly a million students attended private vocational schools. The private postsecondary sector was second in size only to the community colleges. However, the Division had about a dozen or so consultants handling the entire state’s private postsecondary schools with the help of only a handful of analysts and some clerical staff. The state had not devoted the resources necessary to do the job in part because the definitions and standards were too indefinite to be effectively enforced. For example, Herbert Sample reported in the Sacramento Bee on January 29, 1989, that more than a dozen school applications due in June 1987 were still pending reviews. Morale According to agency staff (George Blue, Rick Mejia, and Charles Williams) and school administrators (Nina Bouley, Linda Harris) interviewed, the Division had been treated as a distant stepchild in the Department. There were several reasons for this atmosphere. First, the focus of K-12 was very different from that of postsecondary education. The Department’s main focus was oversight of 93 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. instruction in grades kindergarten through 12, not higher education, and the Division of Private Postsecondary Education was considered an “added-on” program” to the Department. State schools chief Bill Honig acknowledged that some aspects of the Division’s mission were “peripheral” to the main focus of the Department (Herbert Sample, Jan.29, 1989, Sacramento Bee). Second, the funding sources of K-12 and the Division of Private Postsecondary Education were distinctively different - one was from publicly supported allocations and the other was from collected fees mainly from private institutions and contracted federal services (Title 38 Program). Third, the K-12 programs were more politically sensitive to the public. The public, legislators and the media paid a lot more attention to K-12 education. Unless something big happened, the media seldom devoted any coverage to state-approved schools. Fourth, most of the consultants in the Division were originally employed with experience as administrators in public schools or in a school district. Staff in the Department preferred to work in the K- 12 programs rather than in the Division programs because there were a lot more positions in the K-12 programs and, as a result, the upward mobility in K-12 was better. According to Wilson (1989), there are four types of public agencies from a managerial point of view: the production organizations; procedural organizations; craft organizations; and coping organizations. In production organizations managers are able to observe both the work (outputs) and its results (outcomes) and so are in a position to evaluate workers on the basis of their contribution to 94 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. efficiencies. For example, the Franchise Tax Board can observe the activities of its account technicians and auditors and can measure the amount of money collected in taxes as a result of their efforts. In procedural organizations the managers can observe what their subordinates are doing but not the outcomes that result from those efforts. For example, the administrators of a juvenile reformatory can learn what the counseling staff is doing but cannot easily observe the results of the counseling. Since the work of the staff can be watched, it is watched all the time. In craft organizations, managers can evaluate and reward staff on the basis of the results they achieve even if the former do not know how the latter are achieving them. This type of agency often practice goal-oriental management. For example, detectives in a police department may be evaluated on the basis of crimes solved, not procedures followed. In coping organizations, the manager can observe neither the outputs nor the outcomes of their key operators. A good example is the situation of a school administrator. A college president cannot watch instructors teach and cannot tell how much students have learned. In these organizations, effective direct management is almost impossible. The managers of these agencies must cope with a difficult situation. The Division of Private Postsecondary Institutions fell within the alignments of a craft organization and a coping organization. Administrators of the Division were able to evaluate the number of applications approved and reward consultants on the results they achieved. However, the administrators of the Division could not readily tell the level of quality the consultants maintain on their 95 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. application approvals. Administrators of the Division, like managers in any coping organization, try to achieve compliance by attending to alarms - periodic complaints filed by unhappy students and newspapers articles written by concerned reporters. Punishing those workers who set off the alarms by their apparently wrongful action sends a message to all workers. Commending those employees whose good conduct happens to come to light also sends a message, but since citizens have more incentives to complain of the abuses they have suffered than to praise the virtues they have seen, there tend to be more punishments than commendations issued by coping managers. Since the alarms were set off randomly, the behavior that triggered them might not be an accurate example of how an Education Consultant normally worked and so the punishments might not be perceived as fair. Consequently, Education Consultant in the Division (a coping organization) often felt that s/he was treated unfairly by managers who did not “back them up” or who were “always getting on their case.” During the Period of Diploma Mills, multiple interviewees stated that the morale of the Bureau was endurable in general. The program staff constantly faced the pressure of being required to do more work with less resources due to budget constraints. In addition, most of them were emotionally distressed from time to time because they were affected by a fluctuating workload because school applications came in at unpredictable times and they had to work on them pursuant to mandated time frames. Occasionally, the office was in an overcast mood when an unfavorable article concerning the program appeared in the newspaper. Staff 96 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. frustration grew when major media provided increasing negative coverage about the program. Nonetheless, the staff felt the management of the Postsecondary program was considerate and professional in general. The working atmosphere in the Postsecondary program was indifferent compared to other units in the Department of Education. As some interviewees noted, the morale of the staff changed progressively at the latter part of the Period as the 1989 Act was making ways in the legislature. The sense of paranoia was high by the time that the program was mandated to become the independent Council for Private Postsecondary and Vocational Education. Political Frame Analysis Agency sunset Since there is government, there is a need for program evaluation. In general, program evaluation allows policy makers to confront the problems of resource allocation. Policy makers must choose among competing social objectives based on principles of justice, equity, and political reality. Zero-base budgeting (ZBB) gets its name from the fact that each year's budget is computed from a hypothetical "zero base." It employs two steps. The first step is the development of decision packages for each agency. The agency head ranked these packages in accordance with the overall agency priorities. The 97 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. second step requires that each decision package be evaluated by top management to determine whether it is justified for further funding. Programs that are considered ineffective or have outgrown their usefulness are discarded, modified, or combined in other agencies. Peter Pyhr first developed ZBB for Texas Instruments and then for the state of Georgia while Jimmy Carter was Governor. Carter ordered its adoption by the federal government when he became the president. ZBB is often associated with sunset laws. Programs and agencies are reviewed periodically by the legislature under the threat of termination. Some states including California, are still shadowed by ZBB and its corresponding sunset laws. Legislation was enacted in 1984 to strengthen the licensure process for non accredited degree granting institutions (Senate Bill 2151, Watson; Statutes of 1984). The enactment also directed the Postsecondary Education Commission to review and evaluate the effectiveness of existing law and the implementation of this law by the State Department of Education in “protecting the integrity of degrees and diplomas issued by private postsecondary education institutions.” The Commission’s report was completed prior in 1989. With its recommendations, the Private Postsecondary and Vocational Education Reform Act of 1989 was enacted. 98 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Conflict of roles Conflict in organizations is inevitable (Waldo, 1988; Weeks, 1992). It can come at all levels. Sometimes conflict is harmful to an organization (Perrow 1986; Walton, 1987). Other times, conflict may be beneficial to the organization (Kelly, 1970; Kahz and Kahn, 1978; Lawler, 1986; Luthans, 1989). It is not conflict itself that is a shortcoming, but rather its mismanagement (Schmidt, Tannenbaum, 1960; Walton, 1969; Bramson, 1981; Hampton, Summer, Webber, 1982; Walton 1988). According to March and Simon (1966), three main classes of conflict can be identified: individual, organizational, and inter-organizational. Individual conflict usually involves “Role conflict.” Role conflict occurs when a person is faced with conflicting orders, such that compliance with one would make it difficult or impossible to comply with the other. Organization conflict includes conflict between individuals, between individuals and groups, and among groups. Organizational conflict often involves inter-group conflict, which often involves two or more organizational units that, while interdependent, find themselves with conflicting goals. Inter-organizational conflict, the third class of conflict proposed by March and Simon, occurs when conflict between two or more organizations arises. However, March and Simon believed that the sources and processes of such conflict are usually quite similar to those involving competing units within single organizations. Sources of inter-group conflict include misunderstanding (communication failure), personality clashes, value and goal differences, substandard performance, differences over method, responsibility issues, lack of 99 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. cooperation, authority issues, frustration and irritability, competition for limited resources, noncompliance with rules and policies. During the period of Diploma Mills, organizational conflicts and inter- organizational conflict affected the effectiveness of the Division. They involved conflicts between the primary organizational culture and its sub-culture (private vs public) and relationships with other agencies. Public vs. Private A majority of the staff in the Division held professional degrees and/or credentials specifically structured for the education of grades K-12; they had gained their work experience in public schools before working for California Department of Education; they moved up the career ladder through the years of working in the K-12 environment; their career upward mobility in the Department would be better if they were proficient with the K-12 school system. Should they regulate private state-approved institutions like they oversee the public schools? Few critics say yes to this question, and many have a negative answer. Woodrow Wilson, considered by most to be among the founders of Public Administration, once said that: “the field of administration is a field of business. In Barry Bozeman's book, All Organization Are Public, he asserts that the public and private sectors are alike in the essentials, different only in the non-essentials. ” Graham Allison said the opposite, as noted below. 100 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. James Wilson in Bureaucracy: What Government Agencies Do and Why They do It (1989) uses a variety of examples (Massachusetts Registry of Motor Vehicles and McDonald’s; U.S. Postal Office and UPS) to draw his concepts that managing rules for public agencies are different from those for private businesses. Wilson explains that the two cannot be evaluated by using the same criteria. Other critics/experts who believe that major differences exist in the public sector and the private include Laurence Lynn, Hal Rainey, Doug Yates, and James Perry. Graham Allison in Public and Private Management (1980) provides an in- depth analysis of the difference between the public and the private. He suggests the common similarities of a public and a private manager’s duties are the ones suggested by Guilick and Urwick (1937) — planning, organizing, staffing, developing, coordinating, reporting and budgeting (POSDCORB). He also found that many public executives have also been private managers (George Schultz, George Romney, Lyman Hamilton, Casper Weinberger). He cites many differences between public and private management. Based on Allison’s analysis, the following are some major differences between regulating public grade K-12 schools and private postsecondary institutions: 1. Equity effi ci en cy In private schools, efficiency and competitiveness are the keys to survive while in public schools greater emphasis is placed on providing equity among different constituencies. While the public school administrators rarely have a clear 101 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. bottom line, the private school administrators must always pay attention to profit, market performance, and survival. 2. Monetary incentive Private schools are run on a profit basis. They acquire capital and profits by charging student fees, retaining earnings, borrowing money, or selling shares of ownership. Public schools cannot capture surplus revenues. Students are not required to pay tuition fees. Public schools obtain their capital and budget by appropriation. 3. Performance measurement The private postsecondary institutions are licensed to operate as long as they meet the minimum requirements specified by law. The public schools are expected to provide the best quality in every aspect of the K-12 educational system in terms of instruction, equipment, extracurricular activities and instructional facility. 4. ,P,ersonneL.qualificatiQn Many instructors and administrators in private schools are not required to go through proper training to be a teacher. The instructors in private schools were not required to go through a careful scrutiny of their qualifications before they were hired. During the period of diploma mills, some even did not possess the generally accepted qualification to teach certain courses. The classified employees and administrators in school districts are required to go through a lengthy course of training before they can obtain a teaching position. 102 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 5. Public view The private state-approved schools were considered as an alternative means of schooling by the public. They do not draw as much attention from the public nor from elected officials as their counter parts. The media has much less focus on reporting the events of the private state-approved schools, unless something extraordinary happens. The public schools to the contrary are routinely on display. 6. Decision making Private school management is more private and its processes are more internal. Public schools tend to be exposed to public scrutiny and to be more open. They are subject to a wide variety of pressures and often need to put together a coalition of inside and outside groups to survive, especially parents, teachers and union groups. 7. Authority Subject to concurrence from the owner or the Board of Directors, the private administrators have a full range of authority to set school goals, reorganize structures, procedures and personnel to suit, monitor results, review key operational decisions, and deal with key outsiders. The administrators of public schools must share power with the school board, the elected officials (for appropriation), teachers, parents, and unions. Private schools, especially vocational schools, are very competitive. They are subject to demands of the market. In order to survive, they need to offer new 103 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. programs and revise curricula to meet new developments of modem technology. The programs and instructional curricula are more traditional in public schools. Offering a new program or revising a program curriculum often requires a time- consuming review and approval process. Because of the education, work experience, and organizational culture orientation, the consultants in the Division were not trained on the differences between a public operation and a private one. Many sub-conscientiously regulated the private state-approved schools in the way they regulated their counterparts. Major differences distinguish public and private services. Wilson, in his book (1989), argues that public citizens cannot be served as private clients (customers). People should not expect efficiency from the public sector in the same sense that they expect in the private sector. He suggests that managing a government agency is not the same as managing a private business. He uses numerous real world examples to illustrate this concept (Registry of Motor Vehicles and a fast food restaurant). Many constraints are illustrated in his book.. Private, market-oriented organizations not only enjoy much greater autonomy in securing and spending revenues, but they also have fewer rules and regulations to observe (the difficulties of military procurement and the work of the FBI). In legal aspects, many public services were guided by law and the Constitution, but not the private organizations. Sovereign functions are often a very important consideration. Gilmour and Jensen (PAR, 1998) state that many non judicial authorities are only legally vested in the government, such as issuing of 104 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. currency, making laws, imposing taxes, national defense, taking property without consent, drafting individuals for military service, declaring war, enforcing contracts, and imprisoning individuals, just to name a few. Another difference is that the rights and obligations of citizens are very different from the rights and obligations of business clients. Citizens have more rights as well as more obligations — the rights of equitable services and obligations to pay taxes. Business clients usually have preferences regarding a business service. Thousands of people in California, in other states, and in other countries obtained degrees from extremely questionable California institutions because the existing laws were weak, and in effect, encouraged development of diploma mills in the state. Herbert Simon {PAR, 1998) argues that the danger today in democratic society is that business uses its economic power to corrupt government, and a centralized government uses its political and legal powers to corrupt its own electoral process. He suggests that the history of the past 20 years in United States and much of Europe shows that change in the balance between private and public do influence the distribution of social goods in predictable ways. Public and private sectors can play productive roles in their society in its own ways. Organizations are not enemies. They are the most effective tools for use to meet human needs. One should not expect institutional operations in the public grade K-12 schools to be the same in the private postsecondary sector. 105 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Relationship with other agencies The approval process itself was under fire during the Period of Diploma Mills. The review committee process was aimed at guaranteeing better quality education in authorized and approved schools. At that time, external educators, especially staff members of CPEC, were invited to be committee reviewers. The cooperative effort became infighting at times. Dan Walters, in his Sacramento Bee article (June 15, 1987) had the following comments: Infighting has been especially fierce this spring as the Department of Education has granted to schools over the objections of some review committee members - and in the absence of regulations that are supposed to lay down uniform standards. The independent Postsecondary Education Commission (CPEC) and its representatives have consistently exhibited a tougher attitude than the Department of education in evaluating the private schools seeking state sanction to operate - more willing to make qualitative judgments even in the absence of regulations. The article further reported in one case, Pacific Western University of Los Angeles was granted a two-year authorization after a CPEC staff serving as one of the three review team members had urged a negative decision. The CEPC staff was highly critical of the school’s willingness to grant degrees based on what the student already knew, rather than any new learning process. In another case, California University for Advanced Studies of Petaluma, the same CEPC staff and the other two members of the review committee unanimously recommended rejection of the school’s application, citing a lack of on-site staff and other deficiencies. Subsequently, the Department of Education convened another 106 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. committee that conducted another review and eventually granted the school a one- year authorization. In the same article, Dan Walters also raised the issue of political “soft money.” He added the following comments: The approval of Pacific Western University also raised eyebrows of some within the tight world of educational evaluation because the school had contributed $1,000 to state schools chief Bill Honig’s campaign last year when its case was still pending — one of a number of contributions from private schools (Sacramento Bee, June 15, 1987). Honig responded by saying that he was unaware that Pacific Western had contributed the money and did not intervene in the review process. Another issue of conflict was with the California Student Aid Commission on defaulted student loan. During this period of Diploma Mills, the California Student Aid Commission periodically complained about the student loan default situation in the state’s private postsecondary schools licensed by Department of Education. Although the California Student Aid Commission had taken some tough measures to ban some “bad” private vocational schools from participating in the guaranteed student loan program, things had not improved. During a five- year period from 1979-80, the default rate had risen from 6 percent to 14.2 percent (John L. Smith, January 31, 1986, Sacramento Bee). In 1989, spokesman for the California Student Aid Commission said that the majority of loan problems occurred with private vocational schools, which had an average default rate of 30.6 percent (Deb Kollars , June 2, 1989, Sacramento Bee). Edgar Sanchez (October 27, 107 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1990, Sacramento Bee) reported that defaulted student loans from California for- profit vocational and trade schools amounted to $136 million for fiscal year 1989- 90, a 62 percent default rate. The nationwide and state defaulted loan situation caused closure of financial institutions, e.g., First Independent Trust Co. and forced banks, e.g., BankAmerica, to put up a higher reserve for potential losses. Judy Tachibana (December 5, 1988, Sacramento Bee) quoted in her article of the serious remarks of the California Student Aid Commission spokesman: About 36 percent of vocational students default on their state- guaranteed loans. The average default rate at University of California is 7.5 percent and 12.7 percent at California State University. The default rate at California community Colleges is 31.3 percent, but that rate is slowly declining. The real problem in those schools that abuse the program is that students come in, receive a loan, don’t get the education, drop out and have a default and no education and no wherewithal to pay the loan. For them, $2,500 might as well be $25,000. It’s always the student who ends up holding the bag, and it’s the school owners who end up with their pockets lined. Several interviewees recalled instances when some student recruiters of some schools would periodically dispatch a bus to neighborhood parks to lure the homeless, the drunk to the schools. These “students” were signed up for training and student loans. Such “students” were given a small monetary reward and the school recruiters ended up with their pocket filled. All these loan defaults eventually cost the taxpayers. 108 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Political environment From one interviewee’s perspective, the Department did not care one way or the other whether the Division should remain there. The Department appeared to be happier to do without the Division, given the culture of laissez faire operating in California and the political pressure that was generated whenever real attempts were made to tighten up. However, the very point of diplomas and degrees is to have them mean something; the idea is to maintain some standards and to exclude those who did not meet them. Interest groups influence Government agencies are often influenced by the impact of forces and interests. California’s state-approved school, at times acted collectively as interest groups to maximize their self-interests. The United States and most countries of the Western World enjoy the freedoms of constitutional democracies and market economies. In democracies, the principle of political equality is important, and de Tocqueville (1956) connected the principle of equality to rights of association. In short, a democratic society commonly embraces the concept of one-man one-vote; but, each individual citizen is essentially powerless to act alone with respect to the remaining citizenry. Strength and influence come with numbers. Since no single individual action is influential by itself, the solution to strength and influence is to connect voluntarily with others with similar goals and objectives. Based on de Tocqueville’s view of American society to address the problems of California 109 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. private postsecondary educational reform, one can view parties involved in the private state-approved schools as interest groups. At the end of the Period of Diploma Mills, the public had the impression, although was not totally true that most private state-approved schools were not fly- by-night schools. The student consumer advocates took this opportunity to convince the Legislators to pass the Reform Act of 1989 that contained many stringent consumer protection provisions. As multiple interviewees observed, the schools put up a good fight at the beginning. Eventually, they had to yield to the student advocates. Symbolic Frame Analysis The “symbolic” view suggests a number of non-instrumental purposes that structure can serve. One purpose is to express the prevailing values and myths of the society. In many organizations, goals are multiple and elusive, the technology is underdeveloped, the linkages between means and ends are poorly understood, and effectiveness is almost impossible to determine. Schools, churches, mental health clinics, personnel departments, and management consulting firms all share the characteristics. One way for such organizations to achieve legitimacy is to maintain an appearance that conforms to the way the society thinks they should look. The diploma mill explosion finally reached embarrassing proportions and all sides reached near consensus that change was needed. 110 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reliance on accrediting associations In the eyes of the public, the Division had not been effectively protecting the integrity of the degree and certificate programs regulated by it. Some educators and concerned citizens had the idea that this problem could be resolved by vesting the overseeing authority of these programs vested in the accrediting associations. This was not a viable solution based on a research by the California Postsecondary Education Commission. According to the report (89-21), some associations, which accredited degree-granting institutions, rely almost entirely on the state’s licensing agency to set the standards and monitor the quality of those degree programs. Among those associations that did provide degree program standards, the variation was extreme. One association - the WASC Senior Commission - provided extensive details regarding educational objectives, structure, and content of degrees at both the undergraduate and graduate levels, while the Accrediting Commission of the Home Study Council (ACHSC) provided general guidelines applicable to both undergraduate and graduate programs. The section from the WASC standard was clearly more comprehensive, more specific, and provided a rationale for the requirement of general education within a particular level of degree - the bachelor’s degree (The senior commission did not accredit institutions offering the two-year undergraduate degree). The ACHSC guideline essentially instructed an institution to “identify and describe” what was “necessary to meet the requirement of each degree” without 111 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. requiring any particular amount or rationale for its inclusion in the degree program. Apparently any amount of core curriculum at any level would be acceptable. The variations among accrediting association standards and procedures cited here were only a sample of the areas of important differences. Additional examples could be provided in the areas of governance, graduation requirements, evidence of quality in curriculum, and faculty qualifications. The point to be drawn was that if the State was to rely on a group of non-governmental agencies for oversight, the schools would be subject to a wide range of standards and various levels of reliability. There would not be an equitable single point of accountability. At times these responsibilities were conducted with great care and effectiveness by some accrediting agencies; at other times serious deficiencies had occurred. When accrediting agencies were lax in their oversight, tremendous harm would occur if oversight responsibility had been delegated to them. Self-interest program The elements of “self-interest” program were noticeable in this period. The private postsecondary educational (private state-approved) program always had two or more parties competing for self- interests while the bureaucrats needed to interpret the available law to make a decision. In the case of the private state- approved school program, the agency and its staff constantly needed to make the decision as to approve or to deny an application. Whatever the agency’s decision, it affected the welfare of the involved parties, schools or students. In this period, the 112 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. policy of the oversight agency was considered by student consumers “off-balanced” to the schools. Students felt that the regulatory agency staff had interpreted the law too leniently towards the schools, and thus, the consumers, in this case, the students, were subject to immediate or consequent negative effects. In reality, program administrators, staffs subjectivity and the organization’s culture affected the balance of a “self-interest program.” During the Period of the Diploma Mills, the balance was often considered biased in favor of the schools. Many applications from questionable schools were not denied. They were repeatedly given another chance to operate although numerous problems were identified in these schools’ operations. Public’s reaction to bad publicity During this period, fly-by-night schools, some illegal and many having legal status, launched aggressive student recruitment during this period. Every now and then, a news article would appear reporting a school was closed because of defaulted student loans and how much money the state had lost because of defaulted student loans. Another article would appear reporting how diploma mills had ripped off students. With so much bad publicity in newspapers, the public had the impression that most of the private state-approved schools were “bad apples.” The business community and prospective employers lost faith in the graduates of private state-approved schools. The legitimate institutions felt pinched because fly- by-nights had eaten into their tough competition share of profit. Prospective 113 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. employers had reservations to hire graduates of private state-approved schools. The public, the legislatures, the consumer advocates and other parties involved in this industry were in the set for reform. The Private Postsecondary and Vocation Education Reform Act of 1989 was passed by the Legislature and signed into law under this political setting. It was understandable that the new 1989 Act contained many provisions for student protection. Summary The condition of private postsecondary education in California during 1978 until 1989 was bleak at best. It was a circumstance that left all participants dissatisfied. Nevertheless, private postsecondary proprietary institutions, which had variable business objectives and educational standards, offered students educational opportunities. Despite the fact that many of these institutions attempted to establish credibility through accrediting agencies, their negative reputation caused California employers to have reservations about hiring graduates of these schools. Graduates could not compete in the job market. There was a high default rate on student loans, and many of the lending institutions went bankrupt under the burden. Credible learning institutions were unsatisfied because their reputation was being damaged as well and their profits suffered. Elected officials were embarrassed by the bad publicity as California developed the reputation of a “diploma mill” state. 114 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Regulation was difficult. Private postsecondary education legislation prior to 1977 was outdated and did not require the regulatory agencies to enforce much of anything. The Act of 1977 and the legislation passed in 1984 strengthened the licensure process and thereby began to establish the integrity of the diplomas offered by private institutions. Consumer protection provisions for students were not introduced until 1989. The Division of Private Postsecondary and Vocational Education received increased enforcement power. However, the cohesion between the Division and the Department of Education was problematic due to the differing organizational cultures and goals, and this resulted in internal conflicts. The Private Postsecondary Education and Vocational Education Program was a “self-interest”, politically sensitive program. Decisions as to how the schools should be regulated and how students should be protected produced a constant struggle between the schools and the consumer advocates. During the period of Diploma Mills, the decisions of regulatory agency were considered relatively “off- balanced to the schools because of a “give them one more chance” philosophy and because of the bleak law. This period was characterized by high student loan default rates and bad publicity for private state-approved schools. The Private Postsecondary and Vocation Education Act of 1989 was passed by the Legislature and signed into law under this political setting. The 1989 Act and its effects are discussed in the next chapter. 115 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER 5 THE PERIOD OF CLEANING-UP Introduction The period of Cleaning-up for the purpose of this study covered seven years (1991 to 1997). With the passage of the Private Postsecondary and Vocation Education Reform Act of 1989, the period of Cleaning up commenced with the transfer of the Division of Private Postsecondary Education in the Department of Education to the independent Council for Private Postsecondary Education and Vocation (CPPVE). It ended with the sunset of the independent Council by the passage of the New Private Postsecondary and Vocational Education Reform Act of 1998 (AB 71). The Private Postsecondary and Vocational Education Reform Act, 1989 The Reform Act, which passed in 1989 and went into effect in January 1991, applied mainly to the state-approved private postsecondary institutions in the state. The new law was aimed at enumerating the abundant problems observed in the 1980s. Under the Reform Act, the institutions previously licensed to operate under the 1977 Act were grandfathered in, but were subject to the 1989 act when their operating licenses expired. 116 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The Private Postsecondary and Vocational Education Reform of 1989 was passed and the intent of the Legislature was: (i) to improve the educational programs and services of the state-approved schools while protecting the state from fraudulent or substandard operations; (ii) to recognize the enormous diversity of California’s private postsecondary educational enterprise; and (iii) to provide standards of student protection (Section 94301). This new law had several distinctive provisions that were different from the 1977 Act. Characteristics 1. The Act eliminated the PPED in the Department of Education and its advisory body, the Council for Private Postsecondary Educational Institutions (CPPVE). In its place, an independent regulatory board, which would serve to develop policies and to implement rules that would oversee private colleges and vocational schools, was established (Section 94304). 2. Regulations related to the new Act were passed by the newly established CPPVE. The 1989 Act was codified from Section 94300 to Section 94385 and the Regulations were listed from Sections 7000 to Section 76210. 3. The Act eliminated the confusing array of licensing categories for degree schools. To be approved, a school offering degree and certificate programs was required to meet set standards in the specific areas (Section 94310). 4. The Act established specific minimum requirements for approving schools offering vocational programs (Section 94311). 117 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 5. The Act provided a specific timeframe for the agency to follow in the process of approving an application (Section 943 lOd and Section 94311b). 6. The Act established student protection provisions, including protection in the area of student loans (Maxine Waters Article 2.5). 7. The Act defined private postsecondary educational institutions subject to the new Act (Section 94302). Some private postsecondary educational institutions were exempted from regulation by the newly established regulatory agencies. Regulatory exemptions included the following: 1. Schools accredited by Western Association of Schools and Colleges (Section 94303). However, the new law required that schools accredited by the other five regional accrediting agencies and national accrediting agencies would be regulated by the newly created CPPVE. a) Vocational programs regulated by other government regulatory agencies that CPPVE had signed a memorandum of understanding (MOU) delegating the regulatory responsibility to these government agencies (Section 94311 .h). Some of these programs included: real estate continuation courses regulated by the State Department of Real Estate, nursing continuation courses regulated by the State Department of Health Services, and Flight courses regulated by the Federal Aviation Administration (FAA) (See Appendix D). 118 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 2. Training programs not offered in a “private postsecondary school” setting. These programs included courses primarily for K-12th grade students; vocational courses; courses sponsored by a bona-fide trade, business, professional, or fraternal organization; and programs operated by government agencies (Section 94302w). Degree schools 1. The new law removed the confusing, multilevel (authorized, approved, and accredited) licensing system and replaced the licensing system with a common set of standards that private postsecondary institutions were required to meet (Section 94310). The new requirements included using visitation teams to conduct reviews of each type of degree offered by an institution and to complete qualitative assessments in 16 areas: (1) curricula; (2) instruction; (3) faculty; (4) physical facilities; (5) administrative personnel; (6) admission standards; (7) financial resources; (8) governance; (9) institutional purpose and mission; (10) degrees offered; (11) graduation requirements; (12) financial aid policies and practices; (13) library; (14) student services, (15) ethical principles; and (16) practices and financial stability. 2. All private degree-granting institutions were required to comply with the above statute. However, some institutions were exempt if they were: a) An institution that exclusively conferred degrees upon the completion of a course of study that required two or more years [Section 94303(a)(G)]; 119 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. b) A WASC-accredited institution which was incorporated as a non-profit corporation [Section 94303(a)(H)]; and c) A religious institution that was incorporated as a non-profit organization and offered degrees in areas pertaining to its religious beliefs. This religious exemption was similar to the exemption provided in the 1997 Act [Section 94302(w)(5)]. 3. Time Frame for Processing Section 94310(d) prescribed a time frame for the CPPVE to follow in the approval process of new and renewal applications. If the Council determined that the operational plan of an application for re approval satisfied the legal requirements, the visiting committee was to be impaneled to conduct a quality review of the school within 90 days of receipt of the completed application. If the Council determined that the operational plan for a new school satisfied the legal requirements, the Council was to grant a temporary approval to operate and the new school would be subject to any additional restrictions that the Council deemed necessary. The visiting committee was required to visit and evaluate the school between 90-180 days after the school had begun operations. The visiting committee was to be impaneled within 90 days of the receipt of a completed application by the Council. Within 90 days of the receipt of the visiting committee’s evaluation report and recommendations, the Council was required to take one of the following actions: (i) to grant an approval; (ii) to grant a conditional approval that was not to exceed two years; or (iii) to deny the application. 120 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 4. Article 2.5 Provisions (Maxine Waters Consumer Protection) were not applicable to: 1) institutions that exclusively conferred degrees upon the completion of a course of study in two or more academic years (coursework was not to be completed in less than 18 months); and 2) institutions that regularly conferred graduate degrees (Section 94316). 5. The minimum requirements that degree-granting institutions would need for approval would not exceed the accreditation standards used by WASC. 6. An institution was approved for a period not to exceed five years. 7. The term “university” was also defined in Regulation Section 74150. A school was not allowed to use the name “university” unless it offered programs at the graduate level. Vocational schools 1. All private vocational (non-degree) schools and their programs were required to comply with a common set of standards and requirements (Section 94311). Council staff would conduct a site visit to assess the institutional operations of the school and to determine whether the school's application met the provisions of the 1989 Act. Thirteen areas were to be reviewed: (1) content and quality of each program of instruction and the program objectives; (2) physical facilities; (3) faculty and administrative staff qualifications; (4) student records, which were to be kept for at least five years; (5) student fee schedules; (6) student performance records; (7) adequate health and safety 121 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. standards; (8) enrollment that did not exceed the capacity of facilities and the school equipment; (9) school owner’s ability to meet financial and fiduciary responsibilities; (10) policies and procedures designed to ensure compliance; (11) no circumstances existed which would be grounds for the revocation or suspension of an approval to operate; (12) compliance with Article 2.5., which outlined student protection requirements; and (13) any written statement claiming exemption from Article 2.5. 2 Time frames were prescribed for CPPVE to follow in the approval of new and renewal applications. Within 90 days of the receipt of a completed renewal application, a Council staff member was required to visit and evaluate the school. Within 90 days of the receipt of a new school application and the Council determined that the operational plan satisfied the legal requirements, the Council was to grant temporary approval to operate and this approval was subject to any restrictions that the Council deemed necessary. A Council staff was required to visit and evaluate the school between 90-180 days after the school had begun operations. Within 90 days of the staff member’s visit, the Council was required to take one of three actions: (i) grant an approval; (ii) grant a conditional approval; or (iii) deny the application (Section 94311c). 3. An institution was approved for a period not to exceed three years [Section 94311(c)]. 122 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 4. Vocational (non-degree) programs were subject to Article 2.5 except for the following circumstances: a) Institutions that were incorporated and lawfully operated as nonprofit corporations'or nonprofit religious corporations and were not managed or administered by any entity for profit. b) Educational service charged $750 or less. c) For the educational service who charged between $750-$l,500, no part of this fee was to paid from the proceeds of a loan or a government grant, and it had to meet any of the following conditions: a. The educational service consisted of 250 hours or less, b. The educational service did not provide a student for employment, c. The educational service consisted exclusively of home study or correspondence instruction. d) The educational service was approved by a governmental licensing authority and was offered as continuing education. e) The educational service was to prepare the student to take an entrance test, such as the SAT, GRE, or MCAT, into an accredited college program. f) The educational service was to prepare the student to take a professional licensing test, such as the BAR or CPA. g) The educational service was three or more academic years, scheduled to be completed in no less than 27 months, and student admissions to the educational service was equal to or less than four times a year. 123 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. h) The educational service offered training exclusively in the fine arts or performing arts. i) The educational service was more than 30 months in length, the total charge for the educational service was payable in equal monthly installment over the entire length of the course, and the school did not obligate the student for more than one month’s advance payment. j) The educational service was offered pursuant to a contract between the school and a community college, a high school or an employer, and the student was not required to pay any of the educational service. Major features of the student protection provisions The primary intent of the Maxine Waters Provisions was to provide consumer protection to students attending non-degree vocational schools. The beam balance was tipped heavily towards the students. The following are some examples: 1. A major feature of Maxine Waters provisions (Article 2.5) was to prohibit schools from offering courses if they had former students who had a poor history of completing the program and/or obtaining employment. Schools were required to maintain a 60 percent completion rate and a 70 percent employment rate for each program. If the school failed to meet the performance standard, the Council required the institution to implement a 124 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. corrective program to achieve compliance. The corrective program may include any of the following (Section 94316.5): • Limitations on enrollment; • Revision of admission policies and screening practices; • Increase of student counseling and other student support services; • Improvement of curricula, facilities, and equipment; • Revisions to the qualifications and number of faculty; and • Any other reasonable procedure required by the Council. 2. A school had to administer an “Ability to Benefit Test” (ATBT) before enrolling a student. This test would be a standardized test that was designed to measure the student’s ability to be successful in job-related training ' (Section 94319.2). 3. Enrollment Contract - Sections 94312(f)( 10) and 94319(a). Schools were required to sign an enrollment contract with students. This contract was required to provide the following information: (1) a description of the course; (2) the total number hours and lessons; (3) the total fees for the program; (4) the total amount for equipment; (5) a schedule of payments; (6) the student’s right to withdraw; and (7) a detailed explanation of the student’s right to cancel the agreement. The contract was also required to include a statement printed in 12- point boldface on the first page that stated: . “ If you have any complaints, questions, or problems which you cannot work out with the school, write or call the Council for Private Postsecondary and 125 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Vocational Education.” The Council’s current address and telephone number were required to be included in the statement. The Council approved two model enrollment contracts for the schools to follow. 4. Refund Policy (Section 94312). Schools were required to maintain a specific refund policy as prescribed in Section 94312. “The institutional refund policy for students who have completed 60 percent or less of the course of instruction shall have a pro rata refund. The institution shall, for all students, without penalty or obligation, refund 100 percent of the amount paid for institutional charges, less a reasonable deposit or application fee not to exceed one hundred dollars, if notice of cancellation is made prior to or on the first day of instruction.” Institutions were required to pay or credit refunds within 30 days upon the student’s withdrawal. Schools were also required to identify and list any non- refundable charges. 5. Withdrawal from Enrollment (Sections 94317, 94318). • A student has the right to cancel the enrollment agreement without any penalty until midnight of the fifth business day after the student attended the first class of the program. • A student in a home study or correspondence program has the right to cancel the enrollment agreement without any penalty until the midnight of the fifth business day after the student received the first lesson. If the home study or correspondence materials were sent by mail, the student has 126 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the right to cancel the enrollment until the midnight of the eighth business day. The school was required to send the lessons by first class mail and document the delivery with a certificate of mailing. • Cancellation Forms with the applicable last date for cancellation were to be given to students at the time of enrollment. 6. Calculation of Refund (Section 94318.5). The methods of how to calculate the unused portion of fees and charges were elaborately described in the Model Enrollment Agreements. 7. Administrative Staff and Instructors-Sections 94311 (a) and 94311.1. Individuals working as administrators and instructors were required to obtain a certificate of authorization. Specific qualifications were set for each classification: (a) A instructor was required to have all of the following qualifications: • No record of any violations of this chapter; • Verification that he/she possesses a combination of at least three years’ experience and training or education in the occupation or job title category for which certification is sought; and • An instructor for a degree program shall possess a degree of equal or higher level in the occupation for which certification is sought. (b) Directors shall have both of the following qualifications: • Five years’ experience in an administrative position in a public or an approved private postsecondary school; and 127 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. « No record of any previous violations. (c) Associate directors shall have both of the following qualifications: • Two years’ experience in an administrative or other responsible position in a public or state approved private postsecondary school; and # No record of any previous violations. (d) Financial aid directors shall have all of the following qualifications: 0 Verification of completion within two years of a training seminar or workshop certified by the California Student Aid Commission as providing up-to-date comprehensive information on financial aid programs and policies; 0 No record of any previous violations; and 0 Any other requirements the Council deemed necessary. (e) Financial aid officers shall possess all of the following qualifications: 0 Verification of completion within two years of a training seminar or workshop certified by the California Student Aid Commission as providing up-to-date comprehensive information on financial aid programs and policies; 0 No record of any previous violations; and 0 Other requirements the Council deems necessary. 128 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. (f) Each individual certified for authorization for service in the positions listed above was required to complete three units of recognized continual education. 8. Reports Section 94312.2. Each institution that was approved to operate under the Reform Act of 1989 was required to provide data of operations to the Council. This was to completed by July of each year and it needed to include the following: • The total number of students enrolled, by level/degree/type of diploma program, and by gender, ethnicity, and race; • The number of degrees and diplomas awarded, by level of degree, and by gender, ethnicity, and race; • The degree levels offered; • Program completion rates; • Placement data for vocational training programs, unless that data was already required to be provided by the institution under other requirements of this chapter; • A copy of the audited financial statement if the school had to submit one to the US Department of Education; • The schedule of tuition and fees required for each term, program, course of instruction, or degree offered; and • Financial information demonstrating the school’s financial stability (Compliance with Section 94318.6). 129 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 9. Agent’s Permit (Sections 94302, 94316.3). • Agents working on behalf of the school to recruit students at sites away from the institution’s premises were required to be licensed. • If the program length was 90 days or less, consideration/commissions to the agent were to be paid after the student had completed the program. • If the program length was more than 90 days, up to one-half of the consideration/commissions was to be paid after the student had successfully completed 90 days of the program. The remainder of the consideration/commissions was to be paid after the student had successfully completed the entire program. • No school or its representative was allowed to provide monetary incentives to prospective students to induce enrollment for a program of instruction. 10. No False, Deceptive, Misleading, or Unfair Statements or Acts. Section 94316.3(b) stated that: “No institution or representative of an institution shall engage in any false, deceptive, misleading, or unfair act in connection with any matter, including any of the following: the school’s advertisement and promotion, the recruitment of students for enrollment, the offer or sale of a course of instruction, course length, course credits, the withholding of equipment, education materials, or loan or grant funds from a student, training and instruction, the collection of payments, or job placement.” 130 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Prohibited activities pertinent to private postsecondary institutions were also described in Section 93420. Prohibited activities included: employment promise or guarantee; advertisement and promotional materials; and the degree of skill and length of time required to learn a trade, etc. As a result of this provision, vocational schools were required to publish their school catalogs once a year (Reg. Section 73750). The contents in the state-approved institutions school catalogs were found to be much more comprehensive than those published by WASC-accredited schools. 11. Sequence of Classes 94319.4. The Reform Act prohibited a school from enrolling a student in any point of a program unless the lessons were not sequential. The school was required to enroll a student beginning with the first class or lessons in the appropriate sequence. Religious exemption schools Non-profit, religious institutions may be exempt from State licensure and oversight under Section 94302(w)(5) of the Reform Act of 1989 if the areas of instruction were restricted to the principles of a church or denomination. Other notable provisions Section 94302 and Section 94310 were revised to contain definitions that clarified the terminology used in the statutes. Terms commonly used in the academic field were defined so that private state-approved schools would have a 131 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. consistent way to use these terms. It was the intent of the legislators to decrease confusion that consumers (students and prospective employers) and the general public had. Some of the defined terms included ‘accredited’, ‘approval or approval to operate’, ‘correspondence school/home study school’, ‘course of study’, ‘degree’, ‘degree title’, ‘diploma’, ‘private postsecondary educational institution’, ‘faculty’, ‘full-time study’, ‘general education’, ‘quarter’, ‘semester’, and ‘unit/unit of credit’. What Transpired in Practice Degree schools With the introduction of the 1989 Reform Act, private-degree schools were approved under a uniform set of requirements. Following the passage of this law, notable progress was being made. The 1989 Reform Act improved and increased the quality and the services offered by the degree programs. According to the interviewees (Axelrod, Houtrouw, Nathanson, and Tyler), the new requirements did not generate complaints from most degree institutions. In fact, some schools were thrilled with the new law because it brought integrity to their schools and better recognition of their degrees and diplomas. Highly regarded schools found the new law acceptable. The majority of complaints arose from substandard schools that felt the new law was harsh and unreasonable. 132 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The Reform Act also improved the degree unit by decreasing the amount of work backlog. The new CPPVE was required to process degree applications within a defined time frame in accordance with Section 94310(d). At the time of the transition in 1991, a large number of applications for approval were delayed for more than a year. By 1994, the backlog of applications in the degree unit had markedly decreased. School applications (approvals for new schools and renewals for existing schools) were reviewed and processed according to the legally required time frame. After the introduction of the 1989 Act, innovative methods to approve degree programs arose and were implemented. It had become an ever-growing trend in the late 1970's for institutions of higher learning, in the private sector and in the public sector, to develop educational programs that utilized Innovative educational formats. These formats were very well received and flourished in the 1980s. Innovative methods of education include, but were not limited to: • Granting life experience as transfer credits to fulfill graduation requirements; • Granting credits for passing examinations; • Residence units achieved in trimesters, weekend classes, and other forms of intensive seminars; • Minimum class meetings plus independent study for residence requirements; and 133 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. • Residence units achieved through computer-linked classes. Instructors would teach in a normal classroom setting and distance learning students would participate in the class by computer. By the late 1980s, many diploma mills had been created and were found to be abusing these innovative methods of instruction. California Legislators encoded Section 94310(a)(7) and Section 94310 (d)(2) to correct these abuses. Section 94310(a)(7) stated that, “If the institution offers credit for prior experiential learning, it may do so only after an evaluation by qualified faculty and only in disciplines within the institution’s curricular offerings that are appropriate to the degree to be pursued. The council shall develop specific standards regarding the criteria for awarding credit for prior experiential learning at the graduate level, including the maximum number of hours for which credit may be awarded.” Section 94310 (d)(2) stated that, “When evaluating an institution whose purpose is to advance postsecondary education through innovative methods, the visiting committee shall comprise educators who are familiar with and receptive to evidence bearing on the educational quality and accomplishments of those methods.” Within the framework of these two provisions, exploitation of the innovative educational methods was brought under close scrutiny under the Council. Some degree schools found shortcomings in the new law and complained that several provisions were unreasonable. They felt that their programs were being “over-regulated” or “double-jeopardized.” The complaints came out of two types 134 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of degree schools: the for-profit schools accredited by WASC offering certificate programs, and the schools accredited by the California Bar Association. Under Section 94303(a)(G) and (H), only an institution which exclusively confers degrees upon the completion of a course of study of two or more years, or a WASC-accredited institution (incorporated as a non-profit corporation) would be exempt from the regulation of the “1989 Act.” If a ‘for-profit’ WASC-accredited school offered both degree and certificate programs, its certificate programs would have to be regulated by both the WASC and CPPVE. The school was required to pay fees to both agencies. The schools were displeased that they had to also fulfill the requirements set forth by CPPVE since WASC-accreditation was an institutional accreditation: all the school’s programs, degree and certificate, were under the strict regulations of WASC. This was considered a “double-jeopardy” by these for-profit institutions. There were only a handful of schools under the scrutiny of this provision. The legislators, who encoded Section 94310(c), stated that “The council may, at its discretion, delegate the responsibilities for regulation and oversight of accredited degree-granting law schools to the California Committee of Bar examiners, and that accreditation may be accepted by the council in lieu of state approval.” However, CPPVE chose not to delegate these regulatory responsibilities. Because the requirements for accreditation by the California Bar Examiners were so strict, these schools contended that they should not be concurrently regulated by another state agency. In addition, these schools were 135 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. required to pay licensing fees to both state regulatory agencies. Thus, institutions accredited by the California Bar Examiners were subjected to a “double-jeopardy” as declared by these law schools. There were about ten schools under this provision of the law.5 Vocational schools In the late 1980s, fly-by-night trade schools were exploiting California students for their money. Former state Assemblywoman Maxine Waters described firsthand the abuses of the diploma mills. Many unskilled young students, in South Central Los Angeles district and statewide across California, were defaulting on their student loans; thus, costing taxpayers millions of dollars. To remedy the problem, Assemblywoman Waters convinced the state Legislature to enact the Maxine Waters School Reform and Student Protection Act, a series of laws forcing vocational schools to be more accountable. The Waters Act was among the most stringent consumer protection laws in the country, and it later became a model for federal laws. The new Act did help streamline the volume of diploma mills. 5 Although the California Bar Examiners is legally considered an accrediting agency for the law schools in California, this agency is not listed as one of the accrediting agencies recognized by the US Department of Education. The US Department of Education considers the American Bar Association (ABA) as the recognized accrediting agency for American law schools. Students in a law school accredited only by the California Bar Examiners are not qualified to participate in Federally guaranteed loan programs. Many states accepts only graduates of ABA accredited schools to take their Bar examinations; graduation from a school accredited by the California Bar Examiners itself is not acceptable for fulfilling the education requirement to take the legal profession test. Some of these schools are San Francisco School o f Law, and Lincoln School o f Law in Sacramento and in San Jose (each is independently administered). 136 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Despite its intention to protect the student-consumer, sentiment regarding the new law was mixed. Many school owners found the new law too restrictive and unreasonable and it compromised the flexibility that a propriety school could benefit from. Council staff found it much too time consuming to execute with the budget funded towards its enforcement. Finally, consumer advocates found that the new law was not comprehensive enough and still contained loopholes that could be exercised by unethical school owners. Schools' reaction The section that drew the most criticism was the section outlining refund policies. Schools that were subject to Article 2.5 Maxine Waters Provisions (Section 94318.5) were required to have a 100 percent pro rata refund policy and registration fees were to be less than $100. Schools that were not subject to Article 2.5 would be required to have a pro rata refund policy for students who had completed 60 percent of a program pursuant to Section 94312(d). Schools found that many students quit their education program not because the school had a poor quality program, but because the students did not have the perseverance and endurance to complete the program. For example, prior to the passage of the Welfare Reform Act in late 1990's, some students in welfare programs had little incentive to find a steady job. They were referred to these vocational schools by funding agencies to enroll in a program; however, many students lacked the determination to complete it. Others left the training programs because they found 137 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. that the income from public assistance was the same or more than the income they could earn from a job they obtained after completion of the program. Schools contended that even after a student left, prior to completion of the program, the school would still have many expenses to incur, such as the instructor’s salary and overhead expenses. Since a majority of the state-approved vocational institutions were proprietors, the refund policy for these schools could not be stricter than those for WASC-accredited, non-profit institutions. Most WASC-accredited vocational schools could not refund any tuition and related fees until after the sixth week of a semester. It would be more reasonable for state-approved schools to have a refund policy that reimbursed 25 percent of the fees if the student quit the program after attending 25-50 percent of the classes. Another section of the 1989 Act that many vocational school disagreed with involved the requirements for program completion and job placement. Section 94316.5 required that schools maintain a 60 percent completion rate and 70 percent employment rate for each program. Many schools found this provision cast restrictions on their academic freedom to introduce new programs. In an economic boom, a student may find ajob prior to completion of the program. In an economic recession, the student may complete the entire program, but may be unable to find a job within the time frame provided by this 1989 provision. To be cautious, some reputable schools in the industry did not offer any new programs. Schools contended that other means of evaluation would better demonstrate the quality of their program, i.e., student evaluations of the program, disclosure of program 138 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. completion rate, job placement rate of students after completion of the program, just to name a few. Another criticism surfaced from the vocational schools due to the increase and overload of the amount of paperwork required. Compared to the 1984 Act, the paper work required by the new law had markedly increased. The application package for the new approval or renewal of a program was a prime example of the extraneous paperwork that was required. This package contained approximately 20 questions. However, the total sub-questions and other attachment requirements that needed to be addressed increased the application to more than 30 pages. A school was required to not only answer questions relating to their program objectives, curricula, and course outlines, but programs were also required to prepare other student consumer protection information, such as a comprehensive management plan, a description of their future financial stability, a program curriculum that was acceptable to prospective employers, to just name a few. A completed application would average 60-80 pages of answers and narratives. After a school began operation, it was required to keep many records that were subject to review, such as the completion and placement records, a complaint log, and an annual report data. Another example of the additional documentation that the 1989 law required was the school catalog. A school catalog is expensive to produce. Regulation Section 73750 required each school to include in its catalog comprehensive detailed information. It also required schools to update their catalogs annually. The 139 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. reaction from private vocational schools could be summarized by the comments of one of the school owners: “The 1989 Act was not user-friendly.” Council staff comments A common observation made by the Council’s professional staff was that “the work was too overwhelming.” Since the 1980s, all state agencies were required to do more work but with less funding. California Postsecondary Education Commission (CPEC) identified this “doing more with less funding" situation in one of its 1993 reports: In the current climate, no State programs are going to receive even the minimal amount they need from government resources to function optimally. Clearly, every, every component of state- supported operations - including education - will have to find more productive and efficient ways of serving the State (CPEC Report # 93-10, page 5). Although the Council was a fee-supported agency, it received the same consideration from elected officials when funding was allocated. In June 1996, the CPPVE commissioned California State University, Sacramento to conduct an independent study of its program staffing needs.6 The findings concluded that the 6 In June 1996, the Council for Private Postsecondary and Vocational Education commissioned the Trustees of the California State University and the CSU Foundation to conduct an independent study of its program staffing needs. The study was lead by Dr. Dennis H. Tootelian, Professor o f Business Administration, School of Business Administration. The report of the study was issued in October 1996. Specific issues addressed in this study included: • How much time was spent evaluating degree granting and non-degree granting schools under the purview of the CPPVE? • How much time was spent on support activities that were essential to conducting evaluations of degree granting and non-degree granting (vocational) schools? • How many program staffers were needed, given that individuals were to work 1,778 hours per year? 140 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Council was severely understaffed in the programs of degree, vocational school, consumer protection, and legal services. According to the study analysis, the Council would need a total of 69 positions, instead of the currently allocated 33 positions to perform its mandated duties in these programs. Although the regulatory agency was understaffed and remained severely understaffed in the Council days, the volume of new duties added as a result of the rigorous student consumer provisions became onerous. In order to survive the overwhelming volume of work, the school review process evolved into a paper review process. An example of this transition was the process of curriculum review. Since the professional staffers were not experts in every vocational subject, the Council required the prospective employers to review their school program's curriculum. A school was required to find three prospective employers (hiring authorities, not employment counselors) in the school’s vicinity to review its new program curriculum. Each prospective employer was required to prepare a letter of recommendation or endorsement after having individually reviewed the program contents, noting those that they would utilize to hire someone who had completed such a curriculum. This letter of recommendation or endorsement was required to be submitted as part of the application package. This requirement was a highly • Did the time associated with performing duties associated with conducting evaluations and providing support services appear reasonable? The study concluded that the Council would need a total o f about 69 positions (full time equivalents), instead of the currently allocated 33 positions to perform its mandated duties in the degree, vocational school, student/consumer protection and legal services programs. 141 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. regarded because it served several purposes. First, prospective employers can be considered the best evaluators of a program’s contents and curriculum. Second, since the school was required to meet the placement provisions, it would be logical to assume that they would network with and obtain support from local employers. Finding three employers to review the school program curricula would not have been difficult. It could be assumed that if the school was not able to find local employers to review the program curricula, the school would not be successful in helping students find ajob after graduation. In theory, this requirement was a sensible concept. However, in practice, few professional staff could verify the authenticity and validity of each employer’s endorsement letter due to time restraints. Another important issue arose regarding the balance between the educational services and the consumer protection that the professional staff member was to provide. A professional staff member had to wear many official hats when executing the provisions of the 1989 Act. He/she needed to serve as an educator, an investigator, a compliance enforcer, an instructor’s credential reviewer, a consumer protector, a technical service provider, a school license fees calculator, a student refunds calculation reviewer, and a mediator of complex complaints, just to name a few. With such an overwhelming volume of work and a variety of job duties, a professional staff member could only accomplish as best as they could. Some staff members found that they spent more time enforcing student consumer 142 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. provisions rather than providing constructive technical services to schools on education. Many felt that the school approval process placed a greater emphasis on the paper review rather than the review of the educational quality of the program, as had been intended by the legislature with the passage of the 1989 Act. Student advocate’s experience Although the new law brought greater protection to students enrolled in private vocational schools, there was still a subset of students and student advocates who felt frustrated with several provisions stated in the new law. The main criticism was that the new law did not effectively protect students who attended a school that was unexpectedly shut down. Many unscrupulous school owners or substandard school owners were not able to or had little intention of complying with the new law. They would require students to pay many unusual fees before their application review process was complete. Later, they either moved their operation to another state that had less stringent regulatory requirements or they dissolved the school and operated another school under a new name. One example was the Zenzi Beauty College. In the early 1990s, several Zenzi students filed a class action lawsuit against the Beauty College. The students demanded a refund of their tuition and other fees, claiming that Zenzi lied to them about the educational services that they would receive. Students said that scheduled class time was spent either watching movies and soap operas, or taking naps. The teaching staff was also apathetic towards the students and students felt that the school had a greater 143 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. concern for the number of students enrolled rather than the quality of education. In 1997, The Zenzi Beauty College was shut down because the school failed to comply with the Council’s recommendations pursuant to the new law. In the interim, the students won the class lawsuit. A Superior Court judge ordered Zenzi to pay students approximately $650,000 who filed the class action lawsuit in refunds, interest, and penalties for breaking state laws governing vocational schools. By the conclusion of this research (in 2000), the court-ordered payment had not yet been settled. Instead of paying the students, the operators of Zenzi simply continued their business by establishing a new corporation and enlisting the owner’s son as the new school license applicant. Students and student advocates were unhappy because the 1989 Act still contained loopholes. Unethical schools could still choose to move their operations out of state, delay court proceedings by legal manners, or set up new corporations using a relative as the new operator. Even though there was clear evidence that students were being ripped off, the law could not get into the owner’s deep pocket. Structural Frame Analysis During the Period of Cleaning-up, there were approximately 300 degree granting institutions and 2,500 vocational institutions under the jurisdiction of the Council for Private Postsecondary and Vocational Education. 144 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Organizational Structure The Council for Private Postsecondary and Vocational Education, in effect, was comprised of the policy-making Council (a board of voting members) and the Council Administration. The membership of the Council Board was very similar to that of the Council for Private Postsecondary Educational Institutions in the Department of Education. The Council Administration was responsible for executing the admini strati ve functions of licensing and overseeing of the state- approved schools. The Council (Policy-formulating Board) The Council Board consisted of 15 voting members and 5 non-voting members (Section 94303). The 15 voting members were comprised of: (i) two representatives from state-approved vocational schools; (ii) two from accredited postsecondary schools; (iii) two from the California Student Aid Commission - one nominated by the Commissioner and one appointed by the governor; (iv) one each from the Superintendent of Public Instruction and the Secretary of the Consumer Affairs Services; and (v) six members from the public. In general, the Governor was vested with the authority to appoint six of the 15 voting members. The Senate Rules Committee was vested with the authority to appoint three of the 15 voting members. The speaker of the Assembly was vested with the authority to appoint three of the 15 voting members. With this Council 145 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. composition, the decisions of the board would be independent of any one interest group, including the Governor’s Office. The functions of the Board included: • Recruiting the Executive Director of the Council; • Establishing the policies and regulations for the administration of the 1989 Act; • Establishing the minimum criteria for the approval of state approved schools; and • Preparing the annual operations budget. One major new role of the Council was to validate and approve the degree institutions and their programs as proposed by the Executive Director. After receiving the findings of the on-site review committee, the Council staff would prepare a decision recommendation based on the findings. The Director reviewed the recommendations and if needed, would revise or integrate his ideas into the recommendation. The final collective recommendations would be presented to the Council (Board) for final evaluation. With respect to the vocational school applications, the Council delegated the decision authority to the agency administration. Unless a vocational school had requested an appeal after its application was denied, the Council (Board) did not review the agency’s decision regarding the vocational school's application. Because there was high regard for the Executive Director in his role as an administrator and for his abilities to maintain excellent working relationships with 146 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the majority of the Council members, the Council (Board) generally accepted the recommendations of the administration. The Council Administration (Licensing and Regulating Agency) The Council administration followed the same organizational structure as the Division of Private Postsecondary Education Division in the California Department of Education (See Appendix E). The Executive Director, who was the chief executive officer of CPPVE, reported to the Council Board. The agency maintained its headquarters in Sacramento and an office in Los Angeles. The Executive Director was assisted by a Deputy Director and an Assistant Director. The Deputy Director performed the duties of a chief operating officer and the Assistant Director was delegated to manage the administration branch (See Appendix F). Operations Branch The Council’s operations branch had an organizational structure similar to that of the Division of Private Postsecondary Education in the Department of Education. There were three main units in this branch, each which were managed by three Education Administrators. An Education Administrator was assigned to manage the degree-granting unit and the other two were each assigned to the two non-degree units. The professional positions in the Degree Unit were filled with 147 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Senior Education Specialists. The Senior Education Specialists, all based in Sacramento, were not assigned jurisdiction of a specific geographic zone. The two non-degree units consisted of professional staff members, who had classifications as Education Specialists. Until 1994, the Education Specialists had been assigned to regulate the vocational schools under the Private Postsecondary and Vocational Education Reform Act of 1989 and to approve programs for veteran students under the Federal Title 38 regulations. Individual Education Specialists were assigned jurisdiction of a geographic zone encompassing approximately 250 to 300 institutions. The Council maintained the Southern California Office in Los Angeles. The staff in the Los Angeles Office primarily handled the approval of the vocational schools and the veterans' programs in Southern California. There was no physical manager on-site in the Los Angeles Office. The workers in the Los Angeles Office reported to the Administrators in Sacramento. Religious exempt institutions For religious exemption institutions, the provisions in the 1989 Act did not differ much from the 1984 Act. Flowever, the Council made a diligent effort to improve the paper review of each institution’s qualifications. For example, non profit incorporation documents were required to be part of the application package for the religious exempt institutions. In addition, the degree programs offered by these schools were more carefully reviewed. Institutions offering degrees beyond 148 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the scope of a church-related faith, such as a Bachelor of Science Degree or a Master of Science Degree, were subject to denial of exemption. Unless the religious school was accredited by an accreditation association recognized by the U.S. Department of Education, the programs offered by the school under Section 94302(w)(5) of the 1989 Reform Act were not considered to meet the educational, vocational, or professional program objectives. These objectives were approved for veterans who receive educational benefits under the Title 38 Program. Other programs in the council Other programs in the agency such as the Student Tuition Recovery Fund (STRF), Certificates of Authorization, Consumer Complaints, School Violators, and Private School Agents Permit, continued to function under the new law after the Council’s establishment. Title 38 - Veterans Program The “State Approving Agency” for the approval of schools for the enrollment of veteran students for educational benefits was transferred to the Council under the Reform Act of 1989. Both public and private institutions in California who participated in this federal program continued to obtain approval from this regulatory agency. The contract remained similar to that with the Department of Education. The funding and performance activities were reviewed 149 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. annually by contract negotiation with the Federal Department of Veterans Administration. Professional classifications of the council Since the 1980s, most state agencies were required to do more work with less funding. During the transition period where the Department of Education developed into the independent Council, the regulatory agency inherited a sizable backlog. With the added job duties incurred with the new 1989 Act and the carried- over backlog, the new administration had to develop innovative ways to resolve this problem. One of the innovative changes was to establish a new series of professional classification for the new agency: the “Senior Private Postsecondary Education Specialist (commonly referred to as the Senior Education Specialist) and the Private Postsecondary Education Specialist (commonly referred to as the Education Specialist). In the Department of Education, the journey-level professional staff members held the classifications of Education Consultants. The entry-level professional staff members were classifies as Education Program Assistants (Range A and Range B). Following the professional reclassification, civil service employee classifications were designated as Associate Government Program Analysts and Staff Services Analysts. After the introduction of the new series of professional classifications, the Council administration considered the Education Specialist, Range A, as the entry-level professional classification and the Education Specialist, Range B as the journey-level professional workers. The 150 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Senior Education Specialists were used as lead persons and assigned more complex and highly technical job duties. However, the salary scale of the Senior Education Specialist was equivalent to that of the Education Consultant and the salary scale of the Education Specialist was equivalent to that of the Education Program Assistant. In a practical sense, the new agency was using a lower salary classification, compared to the Department of Education, while expecting the Specialist to perform similar professional work (See Appendix G). Whether the bureaucrat's decision was sensible or not, the ruling would have a direct positive or negative impact on the welfare of the involved parties. Even if the Council Administration had made an equitable decision regarding the classification scale, the ruling would still be considered “off balance” and found less favorable by some. In this instance, the sentiment amongst the Council staff about the classification change was mixed. Some staffers, especially the administrative staff, were in favor of this change. Some arguments in favor of the change were: 1. The Council was a new agency. The new classifications would better reflect the job duties of private postsecondary and vocational education, as compared to similar classifications used in other state agencies, such as the California Department of Education, the Postsecondary Education Commission, the California Community Colleges, and the California Teacher Credentialing Commission. 151 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 2. It was fair that the salary classifications of the former CDE employees were not affected. The new Council employees would have to undergo the civil service recruitment process that required reviewing the job descriptions and the salary scales in the Job Announcement before accepting a new position with the Council. 3. The Council professional workers were not required to possess professional teacher credentials. Without requiring the teacher credential, the job duties of the Education Specialists were considered less “complex” and did not require as high professional skills when compared with those duties in California Department of Education. 4. With a lower salary scale, the new agency was able to hire more professional workers to alleviate the ever-increasing heavy workload. Contrary to the administrative staff, many Council workers, especially the professional staff (Education Specialists), provided arguments to oppose the changes. These included: 1. The job responsibilities of the Council professional staff were similar to those in the Department of Education. In fact, with the passage of the1989 Act, there were added duties to every job area. The opposing staff contended that not all professional workers in the Department of Education possessed teacher credentials. A graduate degree was considered equivalent to a teacher credential, and even after the transition, all of the professional staffers employed by the Council possessed graduate degrees. 152 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 2. In addition, some workers felt that it was unfair to rank and file employees since the establishment of the Council did not change the salary range of the administrators. If the skill level of the professional workers in the Council was thought to be inferior to those possessed by staff in the Department of Education, the salary of administrators should be lowered accordingly. 3. The professional staff was allocated more work responsibilities as a result of the 1989 Act. Despite the increase in work responsibilities, they were paid on a lower salary scale. The majority of the professional staff in the Council were in the classification of Education Specialist. The pay scale of this classification was equivalent to the Education Program Assistant in the Department of Education. 4. The professional staff members had more barriers to face when they opted to transfer out of the Council because their skill level were not considered comparable to similar positions in other agencies, which used classifications related to education, e.g., Department of Education, Commission on Teacher Credentials, and California Community Colleges. Some professional employees were very adamant about job transferability, especially during the Council’s sunset. At the time of the Council’s sunset, the Department of Education received increased funding for new Education Consultants. As a result of the different classifications and the salary scales between the Council and the Department of Education, Education Specialists were not “qualified” to apply for any positions in the classification of 153 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Education Consultants when the professional workers were put on the State Restriction of Appointments (SROA) list. 5. It was a long and tedious process to receive approval for a new series of state job classifications. The approval process included the application that outlined the justifications for the new classification, and the review and the approval by both the State Personnel Board (SPB) and Department of Personnel Administration (DPA). The original application submitted for approval of the new classifications did not receive full endorsement from the reviewing agencies. Multiple submissions were required by the Council administration to validate the application. Additional duty statements, performance data, and other related documents were needed to justify the formation of these new classifications. It was not until the summer of 1994 that the DP A and SPB approved the new classifications. From the establishment of the Council in 1991 to the time that the new classification was requested in late 1992, the agency had been using or “borrowing” classifications from other state agencies for the professional employees. The SROA list is a preferential hiring status given to California civil service employees who face possible layoff. Department o f Personnel Administration (DPA) is authorized by GC Section 19998.1 to assist surplus employees in finding jobs. Employees designated as such, are added to an "State Restriction o f Appointments” (SROA) list. Hiring departments are required to utilize the SROA lists when hiring new employees. Placement on a SROA list is for 120 days, and, under special circumstances, a 120-day extension may be granted. An employee on a SROA list may waive an unlimited number o f jobs, but if he/she does not respond to a written or telephone contact or does not appear for an interview, his/her name would be removed from the SROA list by the hiring department. 154 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. employees who transferred from the Department of Education maintained their classifications as Education Consultants or Education Program Assistants until the new classifications were approved. The newly recruited employees were appointed with classifications obtained from SPB lists, which were comparable to the Education Consultants and the Education Program Assistants. For example, a professional employee was hired as a Community College Program Assistant II to work in the non-degree unit because he was on the eligibility list of that classification. After the request for the change in classification was submitted to SPB and DP A, the professional workers were appointed to the classifications of Senior Education Specialists or Education Specialists. Because the new classifications had not been officially approved by the SPB and DP A, all professional workers, excluding the former Department of Education employees, were put on a limited- term status and/or by temporary authorization appointment (TAU). 8 A state employee on limited term (LTA) or temporary authorization appointments (TAU) does not have full civil service protection of employment in a practical sense. These appointments can last up to two years. These kinds of employment are established for an interim purpose. They are widely used by California state agencies to hire an interim worker when an employee is on extended leave such as a maternity leave, when an agency needs temporary help to clean an accumulation of work backlog, or when an agency has created a new position/classification pending the approval from appropriate agencies, such as the Department of Finance, the State Personnel Board and/or the Department of Personnel Administration. The agency can hire someone from another state agency or from outside the state government. The on-going practice o f the California Department of Education to hire visiting scholars as Education Consultants is a good example. The agency can hire the person as a lateral transfer or as a promotion. Either the hiring agency or the interim employee can terminate this employment at any time during the term. A permanent state civil service employee whose employment is terminated during the limited term and/or the temporary authorization has the reinstatement rights to his/her former employment. However, a person who was recruited to this interim position from a sector that does not have reinstatement rights would have to find his/her own employment after being terminated. 155 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The classifications of the employees could be divided into two distinguished categories: specialists and generalists. The specialist classifications, a series only found in the Council, were Private Postsecondary Education Administrators (commonly referred to as Education Administrators), Private Postsecondary Education Senior Specialists Administrators (commonly referred to as Senior Education Specialists) and Private Postsecondary Education Specialist (commonly referred to as Education Specialists). The generalist series were the classifications commonly used and found in other state agencies. Examples of generalist classifications included Career Executive Appointments (CEA), Staff Services Managers, Associate Information Systems Analysts, Office Technician, and other clerical and IT classifications. The State Personnel Board established the minimum educational and work-experience qualifications required for recruitment of these generalists. Their transferability from one state department to another was much easier comparing to that of the specialists. The minimum educational qualification for the specialists was quite broad. The minimum education requirement for a specialist was a bachelor’s degree; however, it was preferable for the specialist to have a supplementary graduate degree. The professional staff of Kenneth Miller’s administration showed that his hiring practice had met the legislator’s intent “to establish an administrative agency staffed by individuals who were knowledgeable about private academic and vocational education” (Section 943Oli, 1989 Act). An educational profile of the 156 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. professional staff in the Council, generated in 1994, showed that all of them possessed a graduate degree, and more than 40 percent of the staff held doctorate degrees. Kenneth Miller stated that his hiring philosophy was to place the right person in the right position, regardless of the educational background. However, he also said that it would not be prudent for a professional staff member, who did not hold a graduate degree, to provide educational and technical advice to a school on graduate programs. This philosophy was also shared with John Peterson, the former chief of the Private Postsecondary Education Division. Funding State programs The private sector of postsecondary education in California - with more than 350 degree-granting colleges and universities and 1800 non-degree granting vocational institutions - was undoubtedly the largest compared to any state in the country. Private postsecondary education was second only to the California Community Colleges in student enrollment annually. Despite its considerable size, limited State resources were devoted to maintaining and promoting the quality of private postsecondary education. No public funds were allocated by the State to support the supervisory responsibilities of CPPVE. 157 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Federal Title 38 - Veterans Program The VA contract contributed more than 40 percent of the Council’s total operational budget. The Council’s budget for staffing, overhead costs, and expenses for the Southern California office was linked to federal funding. The federal program was funded every year through annual contract negotiation, which was based on the current workload. Activities issues From the introduction of the Council to 1995, the area Education Specialists in the non-degree units were assigned to oversee two major programs: the vocational schools and the veterans program. With the ever-increasing backlog of state vocational school approvals, some Education Specialists felt pressured to spend more time working on the state program instead of the specified 50 percent split for each program, which had been specified in the federal contract. Because the vocational school work was infringing of the Title 38 program time, the federal Department of Veteran Affairs (DVA) proposed a new way of contract funding in 1995. DVA proposed that either the Council keep detailed Title 38 expense records and the Council would be reimbursed only for the expenses to oversee the Veterans program, or the Council assign Education Specialists to work exclusively on the federal program. The Council chose to split up the dual functions of the non-degree units and establish two independent units, one responsible for the Title 38-Veterans Program and one responsible for the Vocational School Program. 158 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Major issues facing the school approval process included the ever- decreasing state funding, the personnel shortage, and the work backlog. In the early 1990s, California was undergoing many revenue deficits as a result of the military base closures, the lenient rules governing Workers’ Compensation Insurance for claims and rewards, the water drought affecting the revenue-generating agriculture industry, the heavy disbursement of public assistance funds, and the nationwide economic recession. These economic shortcomings affected the California state budget and in turn affected the funding of state operations. Although the new Council had inherited a sizable work backlog, then-Govemor Pete Wilson and the California legislators were very conservative in funding the new agency. There were several key issues facing the staff in the agency, especially in the school approval units. Many employees in the newly created agency did not have a deep sense of belonging and loyalty. Even in the California Department of Education, personnel in the Private Postsecondary Education Division transferred to other programs because their training and background had focused mainly on grades K- 12 programs. Specialists who transferred into the Council had a greater tendency to return to DCE, partly because they did not think a small agency like the Council could provide them with career advancement, and partly because they did not like the working environment of the new organization. Most importantly, all Council employees felt distressed with the pressures of the heavy work backlog. This situation created a number of unfilled job openings in the new agency, especially in 159 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the three school approval units. This shortage of personnel continued to affect the school approval operations during the Period of Cleaning-up. Information Technology Information technology was a key issue throughout the Period of Cleaning- up and this issue continued into the Period of Searching Effective Identity. When the Council became an independent agency, the new administration did not have the support of a comprehensive database system as it had had in the Department of Education. In response to the lack of a database, CPPVE hired a computer consultant to develop its own system called the Private Postsecondary Data System (PPDS). PPDS was a mini mainframe stand-alone system, with a network designed in Novell. It had a Paradox database system and the computer language for the system was written in Paradox for DOS application. CPPVE considered linking its database system with the mainframe computer at the Teale Data Center. Although this idea was admirable, it could be supported by the allotted expense budget for the database. Linkage between the CPPVE mainframe and the Teale Data Center was not financially feasible because Teale processing costs were significant, telecommunication links required adding expensive hardware, additional staff were needed to coordinate with Teale Data Center, and a significant budget would be required for initial and on-going training for IT personnel. 160 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The data base system kept financial data for internal use, provided staff with required information, and recorded statistical data for published reports and for legislative hearings. The life of the agency depended on the well functioning of the data base system. Unfortunately, most of the time the Council did not have an integrated, flexible, and responsive system for supportive and administrative services. A common theme reiterated by interviewed employees was that PPDS was labor intensive, prone to errors and inconsistencies, incapable of producing information quickly when needed, subject to frequent downtime, and occasionally inputted data when the system malfunctioned. Incidences where frustration was felt by Council staff were: • During the course of a typical business day, Council staff received many, if not hundreds of telephone inquiries from school officials and members of the public. School officials often called to seek specific information about their own school, such as the status of their application and the formula to pay fees. The public often called to seek consumer protection and/or to inquire about a specific school's integrity. Under the PPDS, the staff member (either clerical or professional) who answered the telephone call checked the automated database or looked up the information in a roster or other type of paper document. Retrieving information utilizing this method was both time-consuming and unreliable. Because the system was designed in the DOS-based applications, the staff members frequently were required to exit the word processing software and enter the database manager. Once in the database, navigating through 161 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. several screens may have been needed to find the information. This process was cumbersome and it created a customer service problem for Council staff. Because the caller was kept waiting on the telephone while the information was being researched, callers often became impatient, especially if they were calling long distance, as many were. The alternative, which staff frequently did, was to take the caller’s name and phone number and return their call when the information had been retrieved. This consumed further time and cost the Council money in long distance fees. • The staff in the Los Angeles Office accessed the PPDS by a dial-up line and modem on one main computer that was shared by everyone in the office. Even when the information was found, its accuracy was subject to question because there was difficulty maintaining the database system and often, contradictory information was found to coexist within the database. This situation was further complicated by the fact that approximately 40 percent of the state- approved schools were located in the Los Angeles area. School officials and members of the public in the Los Angeles area were instructed to direct their phone inquiries to the Southern California Office. However, no extra resources were funded to ease these telephone and database issues that resulted from the inefficient computer system. • Remote access to the system was not available outside of the main office. A significant portion of the work Education Specialists were involved with involved on-site visits to schools. During these visits, Specialists might need to 162 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. obtain information within the database. The only recourse, in such cases, was for the Specialist to telephone the Council office and ask a staff member to assess the information. Direct dial, modem access was not supported by the system. While a few laptops were available for field use, they could not be used to access central database information. • The Education Specialist had to take into consideration many factors during the review process before an approval decision was made. Issues that had be verified included complaints filed against the school, student refund issues, audit or investigation issues, etc. The system did not alert the specialist to these issues and any other potential concerns that might impact the school application under consideration. Rather, a specialist needed to manually verify and confirm many issues that could potentially impact the analysis. • Most transactions relating to an application required payment from the requesting school prior the issuance of a final decision. After payment was received, a hard copy report was generated by the Key Entry Operator and forwarded to Process Control staff. Process Control would check if the school had unpaid fees or unsettled student refunds and posted the information to the system. The hard copy report was then forwarded to an Education Specialist. It typically took seven to ten days for the paper file to get to the assigned specialist after it was received in Accounting. If the Specialist was out of the office conducting site visits, it would take more days before the payment information 163 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. was received. This affected Specialists by prohibiting them from completing an application in a timely manner. • The system did not adequately track the progress of the payment transactions; the system did not alert specialists and management to statutory deadlines. Due to the high turnover rate of Key Entry Operators and Process Control staff, payment reports were frequently misplaced or forwarded to the wrong specialists. In many cases, specialists and management were made aware of misplaced or overdue transactions only after a school complaint was made. • The process of posting payment transactions was not an automated process and the posting of payments was time consuming. To prevent delays in the approval process, some schools sent a duplicate payment (usually in thousand of dollars) directly to the specialists; this was done so that an application could be approved sooner than waiting for the payment information to be processed through the system. Refunds would then be requested and reimbursement of the duplicate refunds would take several months. Because this entire process needed to be done to expedite the approval process, many schools spawned a bad image of the Council. IT problems and deficiencies As noted by the IT personnel interviewed, the IT problems and deficiencies were not the fault of one person. The problems and deficiencies were an accumulation of a long period of delinquency. The computer problems resulted 164 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. primarily from the administrators’ lack of knowledge relating to information technology (IT), the limited funding for IT, the high turnover rate of IT personnel, and the fast growth of the IT world. Prior to the arrival of Stuart Lott in 1995, the Council administration was not computer-literate. Although the administrators had a working knowledge of the computer system and its applications, they were not computer experts. They relied heavily on the IT staff in the development and modification of the DDPS. Because the Council was mainly occupied with regulating state-approved schools, they did not foresee the importance of information technology and its significant role in improving efficiency of the Council. The Council Administration did not, at the beginning, allocate additional funding for the IT application. For the first couple of years, the PPDS system was working without major problems. As time progressed, more people began to utilize the system and the amount of data had increased. This overwhelmed the system and it began to function poorly. The independent Council had received funding for two professional IT staff until 1995 - one at the Associate level and one at the Assistant level. When the system had problems or needed any modifications, modifications were haphazardly done without much long-term planning. Although employment for the IT sector was increasing in an exponential manner, the turnover rate of the IT professional staff was very high. Compared to other state agencies, training for IT personnel in the Council was limited to a low budget. The professional staff stayed with the Council for a year, on average, before moving to work for other agencies. A former staff member was interviewed and an example 165 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. was given where one person left the Council, was rehired by the Council in 1994 with a promotion to the classification of an Associate Program Analyst, and he remained employed with the Council for about three months before transferring to another state agency. With such a high IT staff turnover rate, no one stayed long enough to become familiar with the system and, worst of all, no one had time to record logical documentation of the modifications to the system. With time, one programmer would come in to fix one problem by adding one piece of programming to the system, and another person would come in to add another programming section to make it work whenever the PPDS was not functioning. All the modifications were not integrated into the system. The more people worked on the system, the more problems began to surface. By 1995, the DDPS system contained many added-on programming modifications without any easily understandable documentation. Thus, the system was extremely slow and frequently had downtime. In addition, the data had to be backed-up daily by tapes after regular working hours. However, between the two back-up periods, data that was loss as a result of a system failure was a permanent loss. System failure When Stuart Lott was employed, one of his major assignments was to find a way to minimize the problems within the PPDS system. Thus, Lott was wearing two hats: the manager of the Vocational School Unit, and the manager of the information technology team. As noted by one of his subordinates, Lott was a very 166 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. intelligent and capable person. He was able to learn the regulations and the operations of vocational school approvals in a short time period of time. He was able to carry out his multiple duties competently. Stuart Lott discovered that the DDPS system had developed into a colossal entity that contained lots of added-on programming without proper documentation; it was virtually beyond repair. In 1995, the world of computer technology had made many progressive developments. Computer experts did not view a DOS system that used Novell and Paradox as the preferred application. Lott decided to redesign the system by using a Microsoft network, a SQL server for the system database, and Fox Pro, a system offered by Microsoft Company as the application language. However, the two systems, the old one in Novell and Paradox, and the new one in Microsoft and Fox Pro were not compatible. The Administration was now convinced that a steady and dependent team of information technology personnel was very important to the welfare of the agency. Therefore, a position, in the classification of Staff Programming Analyst, was created and added to the information technology team. The newly created Staff Programming Analyst reported to Stuart Lott. Hai Nguyen, the new Staff Programming Analyst, was specifically employed to write a feasibility study report (FSR) for the new system. He was also appointed to lead the IT team, to design the new DDPS system, to write the application language, and to convert the data in the old system to the new system. The other members of the IT personnel were expected to assist Hai Nguyen. Because the other two IT analysts were more familiar with the Paradox 167 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. application and less familiar with the Fox Pro language, there was resistance to the design of the new system. Within a few months after Lott’s appointment, the two IT analysts left the Council. Although a new Associate Analyst was employed to replace the departed IT analysts, it took time for the new person to become familiar with the DDPS system. As a result, Nguyen was required to not only maintain the old system but, to design and program the new system. Although former Governor Pete Wilson had vetoed the abolishment of the Council, by October 1996, the Council ceased to hire new personnel. Many Council employees began to seek employment in other agencies in anticipation of Council's sunset. Stuart Lott left the agency soon after the veto, as did the newly hired Associate Programmer Analyst, who had remained with the Council only for a few months after hiring. Nguyen remained employed with the Council until he found a job in another state agency. However, he did later return to the Council to help out prior to and after its sunset. During the later part of the Council months, the agency was using contracted IT personnel to keep the system working. At the time of the Council’s sunset, the new system was neither fully designed nor adequately tested. Some data had been converted from the old system to the new system and some new data had concurrently and progressively been entered into the new system. The Council staff members were using the two systems to retrieve information: the old deficient DDPS system and the new system that had not been fully designed and tested. Thus, the data was often fragmented 168 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and inaccurate, especially information concerning the history of a state-approved school. Communication During the Period of Cleaning up, the Council for Private Postsecondary and Vocational Education had very basic communication channels. This was very similar to those channels within the Department of Education. Information regarding the Council’s proposed operational objectives and other changes were obtained through formal and informal communication. Within the council Internally, Council employees obtained official information through three organization systems — downward communication, upward communication, and horizontal communication, based on the Hersey and Blanchard (1993) organization model. Formal communication within the agency was transmitted through job descriptions, memorandums, directives, policy statements, performance feedback and reports. Informal communication took place via the “grapevine” (Bernard, 1938; Keith Davis, 1953) and staff networks (P.V. Lewis, 1987). According to staff members, unit meetings were held periodically, usually every month. These monthly meetings were often a day long and held in a borrowed meeting room in another building outside of the office. These staff meetings sometimes served as 169 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. training sessions for the professional employees in which operation procedures and work assignments were discussed. All-staff meetings were held three to four times a year, and as needed. The all-staff meetings were usually held in the meeting room of the agency. In the all staff meetings, new Council policies and agency-wide information were announced to the workers. Staff from the Los Angeles Office would travel to Sacramento to attend both the unit and all-staff meetings. Employees from the Los Angles Office relied more on the rumor mill to obtain information regarding the Council’s proposed operational objectives and other changes since distance separated their office from the center of authority and their counterparts in Sacramento. External communication The Council maintained multiple external communication channels to deliver program-related information to the public. These multiple external communication channels included the Council’s membership in the Private Postsecondary Education Commission (CPEC), the linkage of the Council Board members, the training sessions held in Sacramento and Los Angeles, and newsletters. The objectives of CPEC were to coordinate the efforts between California’s colleges and universities in both the private and the public sectors and to provide policy analysis recommendations to the governor and the legislature. During the Period of Cleaning-up, these goals were maintained within the same organizational 170 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. structure and administrative functions as during the Period of the Diploma Mills. As one of the 15 Commission members, the Council was able to work closer with and coordinate policies with the other members of this advisory and planning body of higher education. The Council was also given the opportunity to participate in CEPC studies and debates. In addition, the Council’s positions on proposed legislation could be expressed. After the enactment of the 1989 Act, the Council’s function changed from that of an advisory body to a board of directors. The Council’s members were composed of representatives from the state-approved school industry and state agencies who were affiliated with the Council’s programs. For example, the California Student Aids Commission, a voting member of the Council, often made loan decisions that affected students in state-approved schools that may have been affiliated with STRF, a program of the Council. Another example was the Employment Development Department, one of non-voting ex-officio members of the Council. EDD was the regulatory agency for JTPA funding in California and the leading agency for the State Training Coordination Council. A large number of the state-approved schools enrolled students with JTPA funding and with State Training Coordination Council subsidies. Multiple interviewees observed that Council members were given opportunities to discuss official matters in a casual, friendly and “family” atmosphere (some members considered the Council as a big family in the industry) before the official Council meetings. These casual contacts 171 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. helped the Council to maintain a closer working relationship and better coordination in the agency’s matters with other significant figures in the industry. Office presence in Los Angeles In addition to maintaining periodic communication with members of CPEC and the Council’s members at agency meetings, CPPVE continued to operate its branch office in the City of Los Angeles. In addition to clerical support, approximately half of the professional staff in the Vocation School Unit and the Title 38 Veteran unit were assigned in the Los Angeles Office. The number of private postsecondary institutions in southern California comprised more than 60 percent of the total number of the Council’s schools in the State. By maintaining the Los Angeles office, the Council provided an easier method of direct communication for schools, students, and the general public in southern California. Several school owners stated that the applications for new school approval and re approval were very complex. It was much easier for a school representative to have a question clearly explained in person than to get the answer by telephone. Students in Southern California who wanted to contact the Council also found the presence of the Los Angles Office much more desirable. It was much more convenient for students to go to the Los Angeles office in person, instead of traveling to Sacramento to have their questions answered. Because the majority of students were located within the Los Angeles area and telephone inquiries were more likely to be local charges, students could spend more time explaining their 172 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. problems with questionable schools and obtain more comprehensive answers without being worried about high telephone bills. Scheduled training sessions and newsletters The applications for new school approval and re-approval were very complex. It was especially difficult for a new school owner. In order to assist the state-approved institutions understand the approval process and to help with submission of a meeting-requirement application, training sessions for vocational school applications were scheduled monthly in both the Sacramento and Los Angeles offices. Each Education Specialist in the Vocational School Unit and the Title 38-Veteran Unit would rotate as the instructor. A training session usually lasted five hours and participants were given a general introduction of the approval process. The instructor would discuss all the questions in the application package with the school representatives and answer their general questions. The school representatives were also given the name and telephone number of the assigned Education Specialist in their area. Participants were advised to refer any specific questions concerning their own schools to their individual area Education Specialists. Each participating school was charged a minimal fee ($20 per session) for the training. Each school was allowed to send more than one representative to the training session; however, the school was charged with only one fee. This training fee could be used to offset a portion of the school’s application filing fees. 173 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The training sessions were usually scheduled at the beginning of the year and the schedule was distributed to the school with the application package. The Degree Unit did not hold monthly training sessions because an insufficient number of schools were seeking approval and re-approval every month to justify a monthly training schedule. Therefore, the Degree Unit scheduled training for degree schools as needed. During the Period of Cleaning-up, the Council published a quarterly newsletter. The newsletter contained articles that interpreted the 1989 Act and explained the agency’s regulations. It also published answers to questions from schools that were beneficial to all schools. It served as a means to communicate between the state-approved schools and the Council. Human Resources Frame Analysis In 1992, Kenneth Miller was appointed to the position of the new Executive Director for the regulatory agency. The Council Board selected Miller from a sizable pool of applicants after a nationwide search. Miller, who did not have any administrative experience in the public sector, was the President of a private liberal College in the East Coast prior to his appointment as Executive Director of the Council. From the beginning of the Reform Act in 1998 to the arrival of Miller, the Council was headed by three different individuals, who each served as the interim Executive Director. When Miller arrived, the agency was faced with instability and confusion due to the lack of consistent leadership. Miller was faced with the 174 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ominous task of re-building the new agency from its fragmented pieces. Significant problems were found in the school approval operations, in the information technology system, and in the Council Board. Many of these problems arose from the ongoing political conflicts between the student advocates and the school owners. The other divisions in the new agency, such as the Student Tuition Recovery Fund (STRF) and the complaints, enforcement, and the school financial audit divisions, were functioning without much complaint; however, further improvements may have been needed. As noted by people interviewed, Kenneth Miller was an excellent administrator. He was able to apply his management skills and experience he obtained while working in the private sector to the new organization. Soon after his arrival, he was able to develop a good professional working relationship with the Council Board, and through his efforts, he was also able to obtain strong support and confidence from many Councils Members. Most importantly, he was also able to lead the agency into much smoother operations. Key administrators in CPPVE With the arrival of Kenneth Miller, the Council was able to hire key players in the Council administration. A notable practice of Kenneth Miller was that he did not employ any close associates from his personal circle to become his lieutenants in the agency. Also, he had a hiring practice that was based on the person’s qualifications for the job and the person’s knowledge of the program. His first 175 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. administrative decision was the promotion of Sheila Hawkins to an Education Administrator and later to the position of the Deputy Director. George Blue and Lee Stalling were appointed as Education Administrators for the non-degree units on limited terms until the new classifications were approved. Hawkins, Blue, and Stalling were all Education Consultants in DCE and had transferred to the new agency. However, all three did not have previous experience in managing a program in the education field. Although they did not have management experience prior to their new promotions, they were able to provide necessary guidance and support to their respective infrastructures in the agency because they had extensive working experience in education. The Degree Unit was supervised by an Education Administrator who had transferred from the DCE. Soon after Miller's arrival, the same Education Administrator opted for an early retirement. After the Degree Unit Administrator’s position was vacated, Betty Sunberg, a former associate dean of San Jose State University, was appointed to act as the crew-leader of the degree unit. Sunberg maintained her classification as a Senior Education Specialist in the Degree Unit until she was appointed as an Education Administrator in 1995. In October 1994, James Johnson was hired as the Assistant Director and he was to report to the Deputy Director and the Executive Director. He was primarily responsible for the Council’s administration activities and the information technology system. Johnson, a senior administrator with the Labor Market Information Division, State Employment Development Department (EDD), served 176 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. as a non-voting member of the Council Board by representing EDD at the time. He had many years of experience working with and supervising technical training- related activities offered by EDD. His public management experience and technical knowledge of the information technology system significantly enhanced the strength of the management team. When Lee Stalling retired in 1995, Stuart Lott was recruited to manage the Vocational School Unit. Stuart had been a senior administrator with other state agencies prior to his arrival to CPPVE. Because he was very knowledgeable with computers, his arrival had further enhanced the strength of the management team, especially in the area of the management information system. The management team also included two Staff Services Manager I positions — one was delegated to supervise personnel matters and information technology activities while the other supervised the administrative services. In 1995, another Staff Services Manager I was hired to supervise the financial audits and activities related to student protection. This group of administrators worked as a coordinated team under the leadership of Kenneth Miller and Sheila Hawkins. They succeeded in “cleaning up” a large number of schools that were not able to meet the stringent requirements of the 1989 Reform Act. Sheila Hawkins was essentially the chief operating officer of the agency. She was the principal architect responsible for building the new agency. Because there were many gray areas within the 1989 Act with respect to administrative regulations, her contributions to the “street-level" bureaucracy functions, as 177 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. described by Lispky, were enormous. Individuals who were interviewed noted that although Hawkins was very straightforward in expressing her ideas, her straightforward style of communication, at times, was not well received by some school owners and subordinating employees. Although she tried to achieve balance between the school1 s interests and student protection, Hawkins’ rulings were noted for heavy inclination towards student protection. She was quoted in a news article to be “the center of controversy” regarding the sunset of the agency. The tendency for a strong preference for consumer protection and lack of interpersonal relationships eventually became a political liability for her. Nonetheless, Hawkins was respected by her peers and subordinates as very intelligent and knowledgeable in postsecondary educational programs. She played a key role in formulating the infrastructure of the new agency and in establishing operations procedures for the administration. Whenever she was consulted on an agency matter, she was able to provide a quick and sensible response; however, her decision might not have always been favorable to one side of the interest group on the balance beam. Throughout the Period of Cleaning-up, George Ritter was the Council’s legal counsel. Ritter primarily provided the agency’s legal opinions regarding the interpretation of the 1989 Act and the court services relating to the Council’s cases. At the end of this period, an additional legal counsel was employed to work on the cumulated school cases. The structure of the legal unit was very different from that of the California Department of Education. In the CDE, the attorney who was assigned to work on the private postsecondary education cases came from a large 178 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. pool of legal counsels. If needed, additional help from legal staff was available. The legal counsel of CPPVE did not have the support staff that the CDE legal counsel had; he had to face all the legal work by himself. George Ritter, a very competent legal counselor, single-handedly accomplished the large volume of legal work assigned to him by the Council. However, multiple interviewees noted (agency employees and school representatives) that Ritter could be a challenging person to work with. He showed impatience and would often abruptly cut someone off during official meetings if the other party continued to argue after he had explained the legal issues. Throughout the Period of Cleaning-up, under the leadership of Ken Miller and his management team, the Council was able to provide timely, responsive, and relatively consistent policies regarding the execution of the 1989 Act. Organizational culture and management style The overall management styles of the new agency were a mixture of the laissez-faire work culture of the CDE and the more autocrat work culture of the private sector. Overall, the organizational culture of CPPVE could be categorized as a mid-area between theory X and theory Y as described by Douglas McGregor’s (1960). Based on the interviews, the general conclusion was that the administrators who originated from the CDE treated the Specialists as professionals and gave them autonomous authority in their own territories. This free-hand culture reflected the management style of Kenneth Miller. He had confidence and trusted his 179 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. employees. Because of his confidence in his staff, he delegated them the authority to sign Council documents, such as vocational school approval documents, routine correspondence, letters of denial, and Title 38 approvals. His working philosophy was that each responsible Specialist or Analyst was a working professional and should know what he/she was doing. Miller did not need to know the minute details of operation. Control over work progress and job performance was relatively tighter than that in the CDE. Education Specialists were not only required to attend periodical meetings, which often served as training sessions, but in addition, specialists were required to submit monthly production reports. The private state-approved schools program was an extremely politically sensitive program. Continuous political conflicts occurred between the school owners and the student consumer advocates. The driving force behind the passage of the 1989 Reform Act resulted from California's experience with the diploma mills. The philosophy of the agency truly reflected the spirit of the new law: to have tighter oversight of the state-approved schools. As a result of the new Act, the decisions of the Council administration often showed a substantial lean towards favoring the student consumers. One interviewee remembered that the persons invited to conduct the training sessions of the 1989 Reform Act for the professional workers were all student consumer advocates. The attitude of the Education Specialists was highly affected by this “clean-up” philosophy, which was inevitably received negatively by the schools. 180 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Some interviewees even stated that it was likely that Miller's blind trust and support of his staff caused the ultimate sunset of the agency. This would be discussed in another section in this chapter. Morale The establishment of the new classifications affected the morale of the Council and turnover rate of the professional workers. Interviewees, who had worked in multiple periods in the Council, emphasized that a series of events affected the morale of the staff during the “Period of Cleaning up.” Major reasons and circumstances that affected office morale included the emotional impact resulting from the transfer to the new agency, the establishment of the new job classifications, the heavy workload, the high staff turnover rate, the staff shortage due to budget constraints, and the sunset of the Council. At the beginning of the “Period of Cleaning-up”, the transfer process was a highly emotional one for all participants. The “old” workers, who had transferred from the Department of Education, had to leave a working environment where they had been accustomed for a long period of time. The sense of departure and the uncertainty of their future brought anxiety to all and many felt high emotions. A number of the staff members were perturbed with the transfer because they felt that their upward career mobility was severely hindered by working in a new agency. They perceived that working for the Council, with a smaller number of positions as 181 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. compared to those available in the Department of Education, would not allow for upward career mobility. With the arrival of the new executive director, Kenneth Miller, discontent amongst the "old" workers grew progressively. As explained by Allison (1980), Guilick and Urwicks (1937), Wilson (1989), and others, although there are common similarities between the administrative policies of a public and a private manager, most importantly, there are major differences between public and private management styles. Miller was a product of the private industry. His administrative philosophy reflected a management position that leaned heavily towards the private sector of the balance beam. He showed many characteristics of an administrator in the private sector: efficiency-oriented, resource conservation, and a philosophy of achieving quality work or employees were encouraged to exit the organization. Some “old” workers, who were accustomed to the public management environment, were not comfortable with the new working environment, especially with the promotional practice. Within the Department of Education, the classifications of the Education Consultants were a “deep class.” Most of the professional units in the Department of Education were inundated with employees with the classification of the Education Consultants. The Education Assistant was an entry-level classification below the Consultants. Traditionally, the Assistants would be promoted to a higher classification after they had acquired the required education and the technical experience because they were in a “deep class” position. However, this promotional tradition was not preferred by the new 182 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. administration. Among the discontented, one was particularly adamant about the promotional practice in addition to other aspects of the new management style. This same person occasionally openly criticized the new administration, and his vocal expression emotionally affected the morale of the office. At the beginning days of the Council, many “old” workers were able to find other jobs within the Department of Education and quickly exited the new agency. The aforementioned vociferous person was not able to transfer back into the Department of Education until after the Council’s sunset. The reclassification of the professional workers affected the morale of the “old” as well as the new employees of the Council. In general, many professional workers felt that their potential for career advancement had been minimized. The Council used the Education Specialist classification in the non-degree units and the salary scale of this classification was equivalent to that of the Program Assistant in the Department of Education. Many professional workers felt that their professional skills were marginalized, although they found themselves doing more work when compared to their previous responsibilities in the Department of Education. The morale worsened during the sunset of the Council. At that time, the Department of Education was receiving abundant funds from the Governor and the Legislators to improve the Grade K-12 schools. The Education Specialists, on the SROA list, were not able to transfer to professional positions in the Department of Education even though the Department was heavily recruiting Education Consultants. The Department of Education would only consider Senior Education 183 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Specialists for the Education Consultant positions because of the salary difference. In fact, four of the six Senior Education Specialists secured employment with the Department of Education independent of the SROA list. However, none of the Education Specialists could find jobs with the Department of Education before the Council’s sunset. To some of the professional staff in the Council, the effect of the new classifications was even more enormous. In the process of securing the new classifications, the Council could only employ workers in a non-permanent capacity. The Council issued the applications for the new classifications of Education Specialists and Senior Education Specialists in 1992. The new classifications were approved by the state in late 1994. Some Education Specialists recruited in 1992, and who were still working there in 1994, were required to take the exam for the new classifications. After the exam, they still needed to be ranked on the employment eligibility list before being appointed to the new classification. In the meantime, they were working out of other comparable classifications on a limited term basis. These Specialists were then required to go through the full probation period for the new classification. What upset them the most was that they had to spend more than four years with the Council before they could secure a permanent position with the agency. There were provisions in state personnel regulations where the Council could have waived the probation requirement. The Specialists contended that if their work was not satisfactory, they should not have been allowed to stay on for more than three years doing the same work. They felt 184 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. that they were not appointed a permanent position sooner because the management, especially Sheila Hawkins, the Deputy Director, wanted to yield a higher level of control. Since the Education Specialist was not appointed yet to a permanent position, the agency had the greater ability to dismiss that person by the terminating the limited term employment. In addition, the Education Specialists were Group 4C employees who could not be compensated for overtime work. As noted by multiple interviewees, some Education Specialists had to work an average of 60 to 80 hours a week to keep themselves afloat with their workload. Linda Tyler noted that: “The Education Specialists in the Council were very professional in general. They often returned telephone calls within a reasonable time. Although they often provided me with valuable information, they seemed to be in a rush in their conversations. When further explanation was required for a more complex question, a couple of the Education Specialists would take a deep breath or a sigh before continued the conversation. Although their tone was courteous, I could feel that they were under extreme pressure at times.” High turnover The entire Council was affected in one way or another by the high staff turnover rate. Since the first day of inception of the Council, many former Department of Education employees did not feel that the Council served as their permanent base and tried to return to their former “home” whenever they had the chance. With the new working environment assimilating the private sector, more 185 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. employees of the Council transferred to other state agencies. For some months, several units, especially the clerical support, the Information Technology, and the professional staff, were working at a capacity of 60 percent to 70 percent of their allocated staffing level. The continual departures of the staff and the ever- increasing workload cast a dim overcast in the morale of the agency. Backlogged work The classifications of the professional staff in the California Education Department and the independent Council belonged to Work Group 4-C. Employees in Work Group 4-C were paid a fixed monthly salary based on their assigned workload. Work Group 4-C employees were not compensated for any overtime work. There was a two-fold reason why the Specialists were included in the Work Group 4-C. First, the classifications of the Education Specialists and the Senior Specialists were considered professional classifications by the State. The top salary scale for the Specialists was 4-5 percent more than that for the Staff Services Manager I position, and the top salary for the Seniors was 3 - 4 percent more than that for the Staff Services Manager II position. With this relative high salary scale without any responsibilities relating to employee supervision, the Education specialists were expected to carry a high workload without any overtime work compensation. Secondly, the workload of the Education Specialists was highly unpredictable. There were approximately 2,500 vocational schools in the State. 186 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The state-approved vocational schools were given an approval period of up to three years. In one year, the Council would receive an average of 835 re-approval applications. Some schools would submit their renewal applications within the 60 days of their license expiration. However, some schools would rush in their renewal applications after they had received a reminder notice from the Council. The workload of the Education Specialists were also complicated by the unpredictable inflow of applications sent by new schools and applications for change-of-status, such as adding programs to the curriculum, changing of course length, adding sites, to just to name a few. The 1989 Act provided a specific timeframe for the Specialists to follow in the process of approving an application. With the highly unpredictable work inflow and the relative high salary scale, the Specialists were considered a better fit in the Work Group 4-C category. After 1995, the Education Specialists in the vocational unit found themselves in a much deeper dilemma. Prior to the splitting up of the non-degree units, Education Specialists were able to “encroach” upon federal time to work on the state vocational school cases. Even with the "extra" federal time, some Specialists still needed to work 60-70 hours in order to meet the mandated deadlines. Because of the 1989 Act, the vocational school specialists were required to work exclusively on state-approved vocational schools. By the end of 1996, most vocational school Specialists had accumulated so much backlog that they were at least six months behind the state-mandated completion dates and worse yet, a couple Specialists were close to two years behind. The backlog in work 187 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. compounded the negativity already being felt in the office and further affected the mental health of conscientious employees. Political Frame Analysis By reviewing and understanding the sunset process that the Council for Private Postsecondary and Vocational Education underwent, one could learn a tremendous amount about American politics as defined by theories of interest groups and public choice. Chronological Events of The Council’s Sunset Legislation enacted in 1989 to reform the licensure process for private postsecondary state-approved institutions (Senate Bill 190, Morgan; Assembly Bill 1402, Maxine Waters) also provided a duration clause (Section 94350) for the continuance of the Council. Section 94345 of the 1989 Act was also enacted to direct the Postsecondary Education Commission to review and evaluate the effectiveness of the 1989 Act and this law was to be implemented by the independent Council. The Commission’s report was to be completed prior to September 1, 1995, since the entire Private Postsecondary and Vocational Education Reform Act of 1989 was scheduled to become inoperative on June 30, 1996, and repealed on January 1, 1997, unless a later statute was enacted. In 1996, Assemblyman Brooke Firestone, Chair of the Assembly Higher Education Committee, introduced AB2960 that aimed to extend the life of the independent 188 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Council to the year 2002. When the bill came to the floor vote in the Assembly and the Senate, it received overwhelming support in both houses, with only one dissenting vote. September .30,-1.9-96 On September 30th 1996, Governor Pete Wilson vetoed AB2960. In his veto statement, Gov. Wilson stated that school owners had criticized the agency's staff for “a pattern of reprisals and vindictiveness.” Gov. Wilson said that he would be willing to sign a measure extending the agency’s life if it included a fee reduction for schools and “more assurance that we are not making it impossible or unreasonably difficult for many small businesses to operate” (See Appendix H). The Council could only survive if emergency legislation was approved by two-thirds of both the State Assembly and Senate and signed into law by Gov. Wilson before July 1, 1997. This was thought to be a difficult task, in part because both legislative bodies were expected to have an influx of new members when the Legislative session commenced on July 1 st. Without bipartisan support to achieve the two-thirds vote needed for emergency legislation, the Council would shut down on June 30. Among those opposing the Council was the California Association of Private Postsecondary Schools (CAPPS), a group who obtained their support from school owners. They complained that the 1989 Act was not fair, especially with respect to the completion, the placement rates, and the refund requirements that 189 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. vocational schools had to comply to. Some schools said that the Council was inflexible, oppressively strict, and generally had gone too far in their process of weeding out the bad schools. Among those backing the Council were the student advocates. The student advocates felt that the industry was still plagued with unscrupulous trade schools who were stripping vulnerable students of their own money and money obtained from federal government loans. They also felt that the Council should not be dismantled and thus, allowing for these corrupt schools to proliferate. Since Governor’s veto of AB2960, the future of private postsecondary institutions was tangled between the political maneuverings amongst the interest groups. The Democrat legislators, who were swayed by the student advocates, preferred that the current regulatory requirements for the schools be completely preserved, with nothing no new additions. Republicans, after heavy lobbying from the school industry, were convinced that the regulating requirements become more lenient and that fees to the schools should be reduced. Gov. Wilson preferred to abolish this independent regulatory agency completely and transfer it to the State Department of Consumer Affairs where the Governor’s Office would have more direct control of the institutions. October 23... 1996 On October 23rd 1996, the Assembly Committee on Higher Education conducted a hearing regarding private postsecondary and vocational education in 190 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. California. The hearing was chaired by Assemblyman Firestone, and was attended by representatives from the schools, the student advocacy groups, the Council, and the California Postsecondary Education Commission (CPEC). The transcript of the hearing was published in a package on December 13, 1996. The transcript provided testimony from school owners that detailed their experiences and difficulties in complying with the state law or in dealing with Council staff. The transcript also provided testimony from consumer advocates who strongly felt that the 1989 Act had protected students and that the Council should be allowed to remain operational to protect the interests of the students. December 23, 19.9.6 On December 23rd 1996, Council employees were officially informed that they were placed on a “surplus status” as a result of the agency’s upcoming abolishment. The staff was placed on the SROA list on February 15, 1997. By December 23 rd, nearly half of the Council’s permanent employees had left. With the issuance of the “surplus status” notice, the morale of the employees was severely affected. Many employees, who had vowed loyalty to the Council, were concerned with finding a new job. The administrators were very flexible with each employee's request to leave. In addition, the agency was not allowed to recruit permanent employees. The vacated positions after December 23rd remained either unfilled or filled with temporary staff members. This situation significantly 191 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. affected the agency’s ability to process school applications, student refunds, and other enforcement duties. May 15. 1997 On May 17th 1997, AB71, Assemblyman Rod Wright, D-Los Angeles, introduced AB71 as a last ditch effort to preserve the independent Council. Because it contained an urgency clause allowing the bill to take effect on July 1st, 1997, the bill required 54 votes for passage. Although AB71 was defeated in the Assembly, it won the support of 43 assembly members. This Assembly vote contrasted sharply with the reaction the legislators gave to AB2960 when it was introduced in the previous legislative session by Assemblyman Firestone. In order to revive the bill, Assemblyman Wright re-introduced the bill by removing the requirement that the bill would take effect on July 1 st, 1997, thus, requiring only 41 votes for passage. On May 22nd 1997, the Assembly passed AB71, which had been introduced by Assemblyman Rod Wright, D-Los Angeles, to preserve the Council. However, this bill would not take effect until January 1st, 1998, leaving the state-approved schools unregulated for six months. Although the bill was passed, its enactment was uncertain because Governor Pete Wilson preferred to abolish the independent Council and school would be regulated the schools through the State Department of Consumer Affairs. At the same time, Senator Charles Calderon, D-Whittier, 192 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. introduced bill SB 1286 in the Senate that would significantly weaken the regulation requirements of the state-approved schools. Senator Calderon’s bill had the overwhelming support from the school operators. In order to fill the time gap, Assemblyman Wright subsequently introduced AB1164, which would take effect with AB 71. AB 1164 would provide continuous oversight of the state-approved schools from July 1, 1997 to January 1,1998. Welfare reform legislation passed by the Congress and signed by President Clinton in 1996 mandated that California overhaul a welfare system that would directly affect several millions of Californian recipients. The state was under federal mandate to move thousands of recipients into gainful jobs or job training within a few years. Capitol politicians, including Republican and Democrat lawmakers, and the Governor contended that the private vocational schools would play a significant role in helping the welfare recipients obtain employment. Regulation of the private postsecondary schools became important after welfare reform legislation was passed. Employment and job training requirements would spark a big jump in private vocational school enrollment and many new schools would mushroom to capitalize on the new demand. The state was also expected to allocate large sums of money into job training. Without proper oversight, California could regain its previous reputation as a haven for diploma mills - schools that would rip-off students’ money and issue seemingly impressive degrees and certificates but fail to deliver quality education. 193 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. On June 24th 1997, six calendar days before the official sunset of the Council, California lawmakers still could not come up with a bill that preserved the regulatory agency and contained provisions for operation that was acceptable to all special interest groups. Key Assembly members and Senators were observed arguing in the Capitol Hallway (Dan Waters, June 25, 1997). State-approved schools did not want the regulatory agency totally dismantled, but they wanted a major overhaul of the regulatory system. These schools contended that that the current Council had not been friendly to the industry. Consumer groups, on the other side, raised the issue that the sunset of the regulatory agency would allow fly- by-night schools to take advantage of students as Californians had experienced in the years prior to the passage of the 1989 Act. Representatives from both competing sides had been trying to compromise for the nine months since AB2960. Wright (D-Los Angeles) and Calderon (D-Whittier) were observed in the Capitol hallway persuading Lempert, a fellow Democrat and Chair of the Assembly Higher Education Committee, to quickly approve the extension of the Council until July 18, 1997. On July 18th, the legislature was supposed to leave the Capitol for a month-long summer recess. However, Lempert (D-Redwood City) was demanding a three-month extension of the Council. Lempert feared that Wright, whose AB71 originally extended the Council’s existence with minimal changes, had ceded too much ground to the school industry. As it had already stood, the governor preferred that the Council enter its sunset phase and that regulatory duties be delegated to the 194 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Department of Consumer Affairs. Lempert felt that an 18-day extension would not give consumer groups and supporters of the regulation enough time “to let some sunshine in.” Gov. Wilson, in the meantime, would not agree to anything longer than an 18-day extension. With Lempert’s refusal to the 18-day extension, time was essentially running out. The Higher Education Committee meeting broke up on Tuesday and the deadline moved one day closer to its sunset without action. Thursday, lime 26. 1997 On June 26th 1997, legislators agreed to grant the Council for Private Postsecondary and Vocational Education an 18-day extension temporarily to avoid Monday4 s scheduled demise of the agency. Both opposing sides stated that the extension would hopefully allow more time for a bill to be proposed which would be acceptable to all parties involved. After the 18-day extension won overwhelming approval in the Senate and Assembly, Gov. Wilson’s spokesman said that the governor would sign the measure before midnight Monday, June 30. Friday, June 27, 1 .9 .9 7 . On June 27th 1997, Council employees were officially given the “pink slip," an official layoff notice, because the legislators could not reach a compromise that would be agreeable to all interest groups. Since it seemed that everyone who was involved conceded, a bill would surely not pass if an agreement could not be made between the state-approved schools, the student consumer groups, the Wilson administration, and the legislative leaders. With the July 1st deadline approaching, 195 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. negotiations and political maneuvering became frantic but unproductive. A political tug of war developed, with most Democrats favoring a revival of the current regulatory system and most Republicans siding with the school owners. State-approved schools, student advocates, and the governor’s office had been locked in marathon talks for weeks over some key issues. Schools acknowledged that the 1989 Act had helped weed out unscrupulous operators, but contended that some of the regulations were too harsh and too rigidly enforced. They sought broader changes to the 1989 Act than those listed in Governor Wilson’s veto message. Anticipating the Council's demise, employees had boxed their personal belongs and were ready to exit before June 27th. On the “pink-slip” day, employees turned in official items such as office keys, phone cards, credit cards, and computers. They were bidding farewell to one another on June 27th. They were notified that June 27th was their last day with the Council and all would receive an administrative day off on June 30th, the official shut down day of the independent Council. Although legislators passed the 18-day extension on June 27th, Gov. Wilson had not notified the Council Administration that he had signed the extension bill. Council employees were told to telephone the Council on Monday, June 30th, to find out the situation of the agency and the fate of their employment. 196 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Friday, ...Inly 18. 1997 On July 18th 1997, legislators passed AB 71 and AB 1164, after more than nine months of heavy lobbying and negotiation. All interested parties reluctantly agreed to the revised terms stated in AB71. If both bills were not passed, California state-approved schools would be left without regulations. The final vote was cast on July 18th, the very last day of the current legislative session, and was signed into law by the Governor on the same day. Several significant provisions were passed: • The Independent Council for Private Postsecondary and Vocational Education would become the Bureau for Private Postsecondary and Vocational Education, a unit of the Department of Consumer Affairs. This was primarily a firm stance of the Governor. • The school representatives agreed to the bill because the new Act was more business-friendly. A key provision of the bill allowed state-approved schools to follow less restrictive tuition refund rules if they remained violation-free and graduation and placement rates were high. • The student advocates agreed to the bill because the new Act would keep the Maxine Waters Student Protection Provisions, although there were significant exceptions in the new law. After passage o f the bill in both houses, Rod W right who authored AB 71, said: “No one party got all that they wanted, but I think w e’re maintaining the basic (consumer) protections. It is absolutely the best 197 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. compromise were going to get” (Dan Smith, Sacramento Bee, July 18, 1997). The passage o f AB 71 was a clear compromise and filled with trade offs as expressed by public choice theorists, namely Niskanen( 1971), Buchanan and Tullock (1962) and Aharoni (1981). Confusion and Turmoil From the time that the bill was vetoed until the end of 1997, progressive confusion plagued the industry. All but 11 individual Council staff members left the CPPVE by September 1997. Council ancillary staff, especially the clerical support and the Information Technology personnel, were hired from temporary agencies and contractors. Receptionists answering telephone calls from the public received very minimal training and supervision. Reception staff implied to callers that the school approval was extended, pending a site visit, and student should not be enrolled until the visit was conducted. Many schools were upset until the Council Administration clarified this issue. On May 30th 1997, the Council sent out a letter informing school directors that the Council would be returning their recently submitted applications and any related fees. The letter explained that because the extension of the 1989 Act had been vetoed and the legislature failed to pass the urgency legislation required to maintain the Council, the agency was scheduled to shut down operations on June 30, 1997. The letter also urged schools to call the Council or contact the 198 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Governor’s office at the start of July 1997 to see if there was an operational law in place (See Appendix I). Surprise to Many By 1996, the public had the impression that the Council had successfully accomplished its role of regulating the State private post-secondary institutions and of cleaning up California’s image as a haven for diploma mills. The following individual and/or agencies perceived that the Council was doing a significant job and supported an indefinite extension of the Council’s life: • In a report published in 1995 by CPEC, the staff wrote in The Effectiveness o f California’ s Oversight o f Private Postsecondary and Vocational Education (Report #95-13): Because the Reform Act has been effective in improving the integrity of degrees and diplomas and because its rigorous consumer provisions have been protecting students from misrepresentation and unfair practices, the Commissions recommend that the Act be continued indefinitely and that the California Postsecondary Education Commission review the implementation of the law on a periodic basis (Recommendation 1, page 10). While still in the process of fully developing some of its programs, California Private Postsecondary and Vocational Education (CPPVE) and administrative staff have made significant headway in the past four years in fulfilling the mission of the Reform Act. It has several significant accomplishments during its four years of operation.... (Recommendation 13, page 19). • A Sacramento Bee article mentioned that a UC Berkeley graduate student (Alisa Tanaka) was commissioned in 1995 by Assemblyman Brooks Firestone, 199 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. R-Los Olivas and Chair of the Assembly Higher Education Committee, to research the performance of the CPPVE. In the report, Tanaka wrote that: Council members and school owners alike share a generally positive view of the current council staff as professional, knowledgeable, flexible and fair to both schools and students (Leslie Cochren, Sacramento Bee, Metro Final, June 22, 1997). • Author Henry A. Spille, who co-wrote the book titled “California, Diploma Mills: Degrees of Fraud,” wrote to the Council in February 1996, commending its efforts. Spille wrote that “the state had made “tremendous progress.. .with institutional qualitative review and assessment” (Pamela Burdman, San Francisco Chronicle, September 27, 1996). • AB2960, which was authored by Assemblyman Brooks Firestone, to extend the life of the Council to a permanent status, received nearly unanimous support in both the Senate and Assembly, with just one elected official voting against it. • When AB2960 was introduced in 1996, the Republican Party held majority seats in the State Assembly and a Republican Governor (Pete Wilson) was in office. It was an unusual practice that a governor veto a bill introduced by a legislator of his own party during an election year, especially for a bill receiving nearly unanimous support in both the Senate and the Assembly. When the Governor Wilson vetoed AB AB2960, the industry was dismayed. This action came as a surprise to many legislators, Council members, student 200 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. advocates, and especially to the Council administration. In a news article, Dan Sackheim, legislative analyst of the Council, was quoted to say: We met with Wilson’s top-level representatives in early September and were led to believe there was no problem with the bill, no indication of a veto, no issues to resolve (Sacramento Bee, October 2, 1996, Page Dl). Analysis of the Council’s Sunset: What happened? To explain the reasons for the veto, the political balance beam had to be looked at. While AB2960 was going through legislation, school owners and CAPPS were behind-the-scenes persuading Wilson to veto the bill. Some disgruntled school owners wanted the Council to be dissolved. Among this unhappy group, one particular school, ITT Education Services, which operated many schools under the name of ITT Technical Institute in California and nationwide, was especially proactive. The schools offered associate and bachelors degrees in technology fields. In 1995, ITT was facing a lawsuit in San Diego Superior Court that had been initiated by some graduates of the associate of applied science degree program in “hospitality management” at the ITT San Diego campus. The students alleged that ITT had defrauded them by misleading recruitment tactics and materials. They claimed that ITT had lied to them, among other things, about the high placement rate of past graduates. The AAS Degree Program in Hospitality Management was originally approved as an 18-month course and inadvertently approved without the mentioning compliance of Article 2.5. ITT 201 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. contended that since the program was offered as an associate degree program and the Council did not require the program to comply with the Maxine Waters provisions originally, the information relating to the placement rate should not be considered misleading. During the trial, the exemption of Article 2.5 appeared to be an important legal point. Sheila Hawkins testified that the 18-month AAS degree Program should be subject to Article 2.5 provisions (Case No. 689376, Superior Court, San Diego. File date: 06/08/95). Hawkins’ testimony might have contributed to the court’s ruling. The jury awarded the students more than $213,00 in compensatory damages, another $2.6 million in punitive damages, and an additional $900,000 in court costs - a total of $3.8 million dollars. Subsequently, the attorney representing the students at the San Diego Campus filed a class action lawsuit on behalf of all students at all ITT California campuses. That lawsuit put ITT at risk for hundred of millions of dollars. ITT considered the testimony (or ruling) as “off-balanced” and was very unhappy with the judgment. With the jury’s award, the Council, especially Hawkins, became the primary target of ITT political attacks. People in the industry believed that ITT contributed resources to dismantle the Council (Cochren, Sacramento Bee, June 22, 1997). Among those urging Wilson to veto the bill, were at least three of his own appointees to the Council’s board. All three had supported Wilson with campaign 202 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. contributions. Two of them had recently run afoul of state or federal rules while operating their own trade schools.9 At certain times, for example in April 1997, Governor Wilson expressed support for a bill that would continue the state regulation of private postsecondary and vocational schools, while his fellow Republicans were opposed to the bill. Republican legislators traditionally sided with businesses. Many of them supported the school owners who urged for the removal of some of the requirements that were considered unfriendly to the schools. A majority of the interest groups in the industry felt that a regulating agency should exist for the private postsecondary and vocational schools, including the governor’s office. The disputes and the maneuvering undermined the authority of the agency. Welfare reform, which would require hundreds of thousands of California recipients to find gainful employment in the following years, would spawn a number of new vocational schools and swell the number of existing schools. Governor Pete Wilson did not want to have the agency completely dismantled. Some schools pushed for deregulation of the industry and wanted the Council to be eliminated completely. One of the more proactive speakers representing this group was a board member appointed by former Assembly 9 In an article in the Metro Final o f the Sacramento Bee dated March 9, 1997, Dan Smith reported that Michael Dawson, Lance Vollmer and Ali Bayrami, Council members appointed by Governor Pete Wilson persuaded Wilson to veto AB2960. All three appointees had supported Wilson with campaign contributions. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Speaker Curt Pringle to the Council who owned a horseshoeing school in Sacramento. Not all board members agreed with their colleague’s ideas of dismantling the agency. Many supported the agency’s extension. However, they also had backed substantive, school-friendly changes to the law as proposed by the California Association of Private Postsecondary Schools. The potential for conflict between the agency that regulated the state- approved schools and the appointed board that regulated this industry was inadvertently written into the law. The 1989 Act established a board with 15 voting members, six of them were appointed from vocational schools. The Governor and the departments of the executive branch he controlled could appoint eight of the voting members, the Assembly and the Senate appointed three each, and the superintendent of public instruction one. As a result, some critics viewed the Council board had become dominated by those it was legislated to regulate. Furthermore, the executive branch in effect did not have a direct control of the Council’s policy making. While supporters of the Council were seeking emergency legislation to keep the Council in business, opponents continued to either push for the agency’s elimination or for changes that could be made that would weaken the agency’s ability to police bad schools. 204 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Soft money Soft money played.an ..important role.im .tlhe veto process: Three of Wilson’s appointees to the Council persuaded Wilson to veto AB2960. All three had supported Wilson with campaign money (Dan Smith, Sacramento Bee, March 9, 1997). Two of these Council members were school operators whose schools had been under regulatory scrutiny at the time of the bill veto. Wilson’s own position had been unclear. The Department of Consumer Affairs appeared to be reluctant to take over the oversight responsibilities. The upper management of the administration had been more recalcitrant. Many suspected that Wilson’s inner circle was being influenced by Kevin Sloat, who had recently left his job as one of Wilson’s senior staffers to set up a private lobbying practice with the state-approved schools being one of his first clients. Technically, Sloat was not supposed to lobby his old colleagues in the governor’s administration, but the Fair Political Practices Commission, who at that time was headed by a former Wilson insider, had issued a very liberal interpretation that allowed Sloat to do almost anything (Dan Walters, Sacramento Bee, June 19, 1997). Apparently not all Council members agreed with some of their colleagues to eliminate the Council. As noted by Kenneth Miller and Nina R. Bouley, Council members who supported the Council were not heavy contributors and thus had less 205 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. influence. Bouley recalled that the Chair of the Council was not able to secure an official appointment with the senior staff members of the Wilson administration to discuss the veto of the extension bill. Governor Wilson chose to veto AB2960 on late Monday, September 30, 1996. Many legislators had already left the Capitol for legislative recession and some for election campaigning. There were not enough votes for a veto over-ride even if and when one was initiated. Coalitions With the veto of AB2960, opposing interest groups had formed coalitions or alliances to maximize their common interests. The collective action that encompassed these coalitions reflected Mancur Olson’s core theory of collective action, which stated that self-interested behavior was best expressed in groups. Using Olson’s definition of special interest groups, the coalition of school owners and the coalition of student advocates could be referred to as special interest groups and essentially, as lobbying organizations. School owners, represented by CAPPS, rallied support to push for the regulatory agency’s elimination or make changes that would ease regulation requirements. Another noted coalition was formed by Dan Smith, who headed a group of small vocational schools with 25 or fewer employees. His coalition was aimed with the same objectives of the CAPPS (Hallye Jordan, San Jose Mercury News, June 18, 1997). Some smaller schools, for one reason or the other, did not 206 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. actively participate in the coalition. They behaved as free riders, content to let others bear the costs of the group’s transactions. On the opposition, the consumer advocates also formed a coalition working to support the regulatory agency and to maintain the Maxine Waters provisions that protected students. The Council for survival reasons, sided with consumer organizations and worked collectively to convince the public, the legislators, and the Governor that maintaining the regulatory agency was important. These supporters were listed as Friends of Private Postsecondary Education Support AB71 (Wright) (See Appendix J). Sheila Hawkins, Deputy Director of the Council, actively solicited support from school directors, consumer advocates, and other state agencies who were urged to send supporting letters to legislators and the governor’s office. A letter urging to keep the regulatory agency and to support the passage of AB 71 was sent to the parties involved on May 9, 1997. This letter was signed by Dr. David Levine, Chair of CPPVE, Dr. Charles A. Ratliff, Deputy Director of CPEC, and Dr. Kenneth A. Miller, Executive Director of the Council (See Appendix L). The individual and collective actions to obtain support or opposition to the regulation of the schools were consistent with the expectations of public choice, as first introduced in Chapter 3. Schools, as entrepreneurs, focused on staying in business and making a profit within a marketplace free from governmental intrusion, either regulatory and/or mandated. Any interference with the market place would be perceived as a threat to the entrepreneur’s success. They 207 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. contributed financial resources, wrote to their elected officials, and participated in coalitions in their trade associations. Students, represented by consumer advocates, also focused on their self-interests. Collectively schools and consumer advocates used their respective group associations to increase their effectiveness as supporters or opponents of State policies. This was consistent with Coase’s (1937) idea of public choice. The Theory of Public states that rational utility-maximizing politicians achieve their quest for votes in order to get elected or re-elected. This is achieved by theory of public choice satisfying the needs and desires of their electorate and of the special interests groups. In return, the elected officials receive contributions of money or support, and, most importantly, votes at election time. Getting votes and money makes it important for politicians to listen to the opinions of their sources of votes and money. During the debate of AB 71, the politicians reacted as public choice would have predicted. The sunset of the individual Council reflected that politicians did just that - be guided by their sources of support, monetary- and vote- wise. Legislative term limit Legislative term limit and party control in the legislature were important elements contributing to the sunset of the Council. There are always two opposing sides in political decision-making. This can also be true with the voters of legislative term limits. Proposition 140 was recognized by California voters as one 208 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of the most popular political reforms of the early 1990s. With FBI investigators and federal indictments of legislators, staff, and lobbyist during the late 1980’s and early 1990’s, proponents of the initiative felt that the legislative branch had become more and more corrupt. They felt that career legislators did not make better public policies. Extensive tenure entitled legislators with a sense of ownership over governmental programs and institutions. A prime example is Willie Brown, who occupied the Speaker position continuously for many years. Voters for the initiative believed that term limits would create new openings and increase access for women and minorities to win offices. Opponents to Proposition 140 believed that experienced legislative leaders were necessary. Otherwise, legislative staff, lobbyists, bureaucrats, and the governor would have an authoritarian control. In their campaign literature, they promoted, amongst others, that: • Reliance on special interest money would increase. • Inexperienced lawmakers, short of protection from lobbyists and special interest groups, would cost taxpayers dollars. Tax breaks for the rich and powerful, special interest loopholes, and the inability to say no to powerful interest groups could end up costing taxpayers. • The legislature would suffer a much higher turnover, compared to the previous 20 years. • The initiative would diminish the quality of elected officials. Experience would be lacking in the Sacramento legislative branch. 209 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. • Term limits were considered to be undemocratic because the limits would take away the people’s right to choose their own representatives. One of the most useful references dealing with term limits is the book, Limiting Legislative Terms (Benjamin and Malbin, 1992). It contains a variety of essays that cover a wide range of interests about legislative term limits. These essays are relevant to both state and congressional limits. As Benjamin and Malbin point out, the most important effects of term limits upon state legislatures are two fold: effects on individual legislators and effects upon the legislatures as institutions. The comparatively short careers of the state legislators affect, among other things: how they learn about the legislature as an institution; how they observe legislative norms; and how and when members exit the House. Because the legislature is ultimately influenced by its members, changes in individual behavior governed by term limits will also lead to changes in the legislature as a whole. Term limits, therefore, served as a conduit to changes in the role of the political parties, to evolving adherence to norms, to differences in the quality and nature of leadership, and to changes in member turnover patterns. The key debate over term limitations rested on how limits on service would alter the partisan and professional composition of legislatures. Some writers argued that a new class of amateurs would move into public office (Everson, 1992; Will 1992) while others rejected the idea that professionals would disappear so easily (Rosenthal, 1992; Garrett, 1996). 210 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Some of what has been written about the United States Congress can analogously be applied to California. One of the most applicable studies can be found in Hibbing’s Congressional Careers (1991). In chapter five, Hibbing discussed the issue of political experience of the congressional members. By examining the number of bills sponsored, number of bills reported out of committees, number of floor amendments offered, and amount of floor speaking, Hibbing found that senior members do accomplish more compared to their junior counterparts. His data suggested that freshman legislators are consistently the least active members of Congress in terms of legislation. Senior members were more specialized and legislatively more efficient than their less-senior colleagues, with respect to getting bills out of the committees and passed. He concluded that senior members are the heart and soul of the legislative side of congressional service. On an individual basis, the impact of Proposition 140 was felt within the strong and effective leadership of the Assembly. The Assembly Speaker’s role evolved into more of a management role than a leadership role. Freshman Assembly members were often assigned as committee chairs. Many of them were getting on-the-job training as the chair of a committee. When a freshman was in a primary position, that chairperson had to depend on staff. In many cases, the staffers of the Assembly members were making critical decisions. If the staffers members were new and not experienced, chaos evolved. In a newspaper article, Lesher (1997) pointed out that Speaker Cruz Bustamante and the class of 32 freshman Assembly members were accused inside and outside the Democratic Party 211 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of being inexperienced and lacking solid leadership. Most legislators did not find Bustamante, the 1997 Speaker, a strong leader. Institutionally, inexperience was prevalent in chamber and committee leadership positions and amongst legislative staffers of California legislature. Party control is most significant in terms of how and what legislative business is conducted in any State capitol. If a party controls the majority of the house, a bill is much easily passed through the chambers, the committees, and the floor. Much of the turmoil in the California legislature during the 1995-1996 term was attributed to leadership inexperience and the change in the majority party control. In 1995, the Republicans held a one-seat majority. In 1997, the Democrats regained control of the majority. This shift in the majority of the legislature could be reflective of the situation in the California legislature between 1996 and 1997 when Proposition 140 took effect. With the passage of Proposition 140 in November 1990, California limited Assembly members to three two-year terms and state Senators to two four-year terms. Proposition 140 imposed a lifetime ban on legislative members who served the specified number of terms. It not only limited terms, but also included provisions to limit state-financed staff and support services, and to eliminate the state legislators’ retirement/pension plan. As a result of this initiative, the state Assembly was greatly affected. The California Assembly had 80 members. In 1997, 31 members were in their first term, 33 members in their second term, and 16 members in their third and final term. Sixty-four Assembly members had less than 212 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. four years of experience serving the legislature. Five of these Assembly members had served the legislature prior to the enactment of the term limits. Many former Assembly members had been elected to the state Senate. Since term limits did not substantially affect the upper house until 1998, many Senators had served in the legislature since the 1960s and 1970s. California legislative behavior changed as a result of term limits; this change is particular evident in the Assembly. (Karen Spencer 1998) The impact of Proposition 140 had a great influence on many legislative bills. However, the passage of Proposition 140 did not fare well for proponents who supported the bill extending the life of the Council. Dan Walters, in his article (1997), “Chicken Game On School Bill”, provided a vivid illustration of the turmoil and the maneuvering amongst the inexperienced state legislators representing individual interest groups who were concerned with the future of the agency regulating the state-approved schools. The three state legislators stood in a Capitol hallway, haggling over what is clearly one of the major issues of the day, whether to continue state regulation of private trade schools. Lobbyists and reporters politely eavesdropped as Assemblyman Rod Wright and state Senator Charles Calderon, authors of two rival trade school bills, and the chairman of the Assembly Higher Education Committee, Ted Lempert, argued. Members of Lempert’s committee cooled their heels in a nearby hearing room. A veteran legislative staffer wandered by, saw what was happening and opined that such public negotiations would have never happened when Willie Brown 213 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. commanded the Assembly. “Willie would have had them all in his office and done a deal which gave everyone something,” the staffer said. It was an accurate observation. What happened - or actually didn’t happen - in that Capitol hallway Tuesday afternoon underscores the semi-chaos that marks the Assembly in this era of term limits, partisan turmoil, indecisive leadership and factional power plays. It is a game of chicken and no one knows who will blink first. It is also a test - and by no means the only one - of whether a Legislature preoccupied with term limits, 1998 election strategy and other purely political matters and a governor facing the end of his political career can come to grips with any important issue. So far, they’re all failing” (Dan Walters, Page A3, Sacramento Bee, June 25, 1997). Threat to a multimillion dollar industry Postsecondary education in California was comprised of three sectors. It consisted of a tax-supported sector (the University of California, the California State University and the Community College system), an independent sector (primarily non-profit degree granting institutions accredited by WASC), and a private propriety sector (the vocational and degree granting schools that required state approval to operate under current state law). In terms of the range of activities and the number of institutions, the private propriety sector was considered the largest and most diverse of the three sectors. Thousands of individual schools offered educational programs, from short-term instruction in highly technical fields to doctoral degrees in academic and professional subjects. According to a study on 214 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the economic effect of the propriety schools on the state’s economy (MGT of America, Inc.,1 0 the private propriety sector had a tremendous contribution to the economy of California as an industry. According to the study, the institutions in this sector collected $1.34 billion tuition in 1992 and had statewide industry expenditures of $1.21 billion. With the passage of the 1989 Act, the public frequently read in newspapers that private propriety schools had closed down during the period of Cleaning-up. Some people worried that this multi-million-dollar industry was gradually being driven out of the state and choices for alternative methods of postsecondary education for California college students was being gradually minimized. It was believed that Gov. Wilson shared similar concerns that the multi- million-dollar industry was progressively being eroded away by regulation and driven out of his state. In his veto message of AB2960, his final note states: “The Council appears to have greatly impacted the operations of many fly-by-night schools, and should be commended for doing so. However, the goal is not to shut down as many schools as possible. Rather, it is the responsibility of the Council to protect students from potential scams, but to make sure there are as many options as possible available to students. There comes a point when we must be careful that we are not reducing supply for the point of reducing supply.” 10 MGT of America was the consulting firm operated by a business professor of California State University, Sacramento. 215 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Symbolic Frame Analysis Bolman and Deal in the chapter entitled “The Organization as Theatre,” suggest that one way to achieve a public agencies’ organizational legitimacy is to maintain an appearance that conforms to the way society thinks they should look. Politically, regulatory agencies are often imprisoned by those whom they are supposed to regulate. One key image prevailed during the Period of Cleaning-up: the Council rigidly applied the law to clean up diploma mills and as a result, the agency had taken action to close down a sizable number of state-approved schools. The prevailing culture of the independent Council was as an arduous protective agent for student consumers. Did this image truly reflect the reality? Image and the Reality Although the Council had taken a more active role in enforcing the Postsecondary Act, compared to the actions taken by the Department of Education, the Council’s stance was to be a protective advocate for students. The Council's actions were the primary reason for school closures during the Period of Cleaning- up. As noted by multiple interviewees, less than a handful of school applications for new approval and re-approval were denied by the Council. During the entire regulatory period of the Council, there were no records that Education denied any school applications. The primary contributing factor to school closure was that some degree institutions moved out of California and into other states to continue their operations where there were considerably less regulatory requirements. A 216 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. good example was Century University. After its operating license expired under the Private Postsecondary Education Act of 1977, Century University moved its operations to New Mexico. Other degree institutions closed their operations before the Council took any legal actions. California suffered economic setbacks in the 1990s. In a Sacramento Bee Article, Dan Walters wrote that: “It is (California) now in the fifth year of the most severe recession in a half century” (November 8, 1994, Page A3). Vocational schools were required to achieve 60 percent student completion rate and show that 70 percent of their graduates find employment in jobs related to their training. Many vocational schools were unable to comply with the graduation and placement rates as required by Article 2.5 of the Maxine Waters Student Protection provisions. Changes in the state law to control Workman’s Compensation claims also affected school closures. Effective January 1st, 1994, workers injured in California would have a $16,000 cap for rehab training. This cap included the cost of training, the stipend for the student, student expenses and the rehabilitation fee of $4,500 to the counselor that designed the rehab plan. As part of the new law, once the worker was released by the doctor, the amount of money that had been paid to the rehab clients as a stipend, would count against this cap, even if they did not have a retraining plan. This further reduced the amount of funds available to retrain these students with. Many schools received requests from rehab counselors asking for discounts, shorter programs, etc. Many vocational programs that were approved by the Council for 15 weeks or more did not have sufficient money to last the entire 217 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. program. Schools that were not involved in Title IV funding and were able to award a Pell Grant to go with the rehab fund would be in serious trouble if they offered the standard 20-30 week programs. Some schools with rehab programs saw their flow of students diminish rapidly. Since the Council had accumulated a sizable amount of work backlog, approving the change in course length took months. Many schools, depending on rehab funding, were found to be caught between a rock and a hard place. They were not able to obtain an expedited course length change so that the affected students could graduate in time for the available rehab funding. In 1992, Congress passed the Higher Education Act to regulate student loan defaulting and to minimize student loan fraud and abuse. Subsequently, USDE tightened policies on schools that had a high default rate. In a Sacramento Bee article, Moy (1994) reported that about 340 colleges, university and vocational schools across California had received letters warning them that they might lose federal student-aid funding. Nearly half of the state’s institutions of higher education were on a list of schools to be referred to the California Student Aids Commission, for review in an attempt to halt an annual drain of billions of dollars in bad student loans. California suffered repeated economic recessions in the 1900s. Students, who went through their educational programs with financial aid, had a hard time securing gainful employment. In turn, schools with Title IV federal student loan programs suddenly found themselves in deep water. 218 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Kenneth Miller’s Vision For the Agency Before the Governor’s veto of AB2960 in the summer of 1995, Kenneth Miller, the Executive Director of CPPVE, had a vision for the direction of the agency. He believed that because the number of fly-by-night schools in California had significantly decreased, the time was right for the agency to provide assistance to existing decent schools and to help them survive. In his 1995 statement where he addressed the agency at the all-staff meeting (this was also later sent out to program services staff in the form of a memo), he stated: “My primary goal is to make certain that we have a private higher education sector that offers quality education and training and awards diplomas and degrees having integrity. We do our job by enforcing the Act and our regulations. In addition to regulating institutions, we want to make certain that the Act and the regulations do not become so burden some that schools decide it is not worth doing business in California.” When statute and regulations are written, it is impossible to ensure that every school to be regulated will comfortably fit within the guidelines. This is one of the reasons we have a professional series of specialists working with the schools. I expect staff to exercise judgements when working with schools. What does this mean? Naturally, we cannot have twelve different people deciding what regulations to enforce and what regulations to waive. This would put the agency in a difficult predicament. However, there are situations, for a 219 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. particular school or category of schools, when flexibility is needed in administering the Act or the regulations.” Kenneth Miller explained in detail what he expected of the Education Specialists in his memo. Flexibility, professional judgment, and responsive customer service were emphasized throughout his speech. Kenneth Smith had the vision that the Council should function not only as an enforcement agency but as an agency who helped honorable schools survive in difficult times. However, his vision was a little too late in implementation. The interest groups had decided to take this opportunity to pursue their objectives and interests. AB AB2960, the bill that would extend the existence of the CPPVE, was eventually vetoed. Summary Following years of political embarrassment and public outcry over the condition of the private postsecondary institutions in California, the State Legislature began to take stronger action. The main goals were to protect the state from fraudulent and substandard learning institutions, to improve the educational programs offered by private postsecondary establishments of higher learning, to recognize the diversity of California’s educational enterprises and to offer the state’s students some degree of consumer protection. This resulted in the passing of the Private Postsecondary and Vocational Education Reform Act in 1989. 220 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In any situation of disarray it is often the nature of politics to combat the problem with more stringent rules. This was definitely the case with the new law. Student advocate groups applauded the new law mainly due to the Maxine Waters Article that provided students with relatively stringent consumer protections. For the first time in the history of private postsecondary education in California, students in non-accredited proprietary schools received the right to withdraw from enrollment without any penalty if they informed the school before the end of the fifth business day after the beginning of classes. Schools were required to follow a strict refund policy should a student withdraw from a course during the term. The schools were mandated to enter into an enrollment agreement that detailed specific information about the course of study, course requirements, fees and the student’s right to withdraw. In essence, private postsecondary and vocational institutions were being held accountable for meeting their responsibilities to their customers i.e., California’s students in private state-approved schools. However, student protection in relation to school closures was still inadequate. Several of the private postsecondary and vocational schools were not pleased with the new law; they found it too restrictive and unreasonable. Under the new law, for example, schools were required to maintain a 60 percent completion rate for each program they offered and a 70 percent employment rate. Under these guidelines, how could a school introduce a new program? In situations where the percentages were not high enough, the school would have to discontinue the program even if other elements such as an economic recession were at fault. 221 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reputable schools that did not want to risk their reputation opted to let their curriculum stagnate. The new law, however, brought integrity to the schools that complied. The Reform Act established an independent government agency to enforce the program, and the Council for Private Postsecondary and Vocational Education was created. This agency, like its predecessor, suffered from insufficient funding. The Council operated with only half the staff necessary to adequately fulfill its duties required by the new law. This resulted in a hurried, frazzled, sometimes impatient, staff. Typical workweeks for any given Education Specialist were 60 to 80 hours; and for those who did not work long hours, their work was often backlogged up to two years behind mandated deadlines. The morale was understandably very low causing the agency to struggle due to high employee turn over rates and piecemealed work processes as seen with the Information Technology struggle to maintain the Council’s technology needs and growing data base. Despite the shortcomings of the Reform Act and the Council for Private Postsecondary’s internal challenges, the number of diploma mills in California was significantly lowered by the end of 1997. The disappearance of many diploma mills was a result of school closures or relocations outside California because many schools were not able to comply with the stringent consumer protection provisions of the law. Even though the CPPVE was living up to its mandated obligation to regulate private state-approved schools by eliminating a good number of diploma 222 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. mills, its decisions were considered unreasonable and “off-balanced” because the schools’ interests were affected. With heavy political lobbying, the schools were able to sunset the CPPVE. The New Private Postsecondary and Vocational Education Reform Act of 1998, a compromise-based code of law, was passed after long maneuvering negotiations between the interest groups. 223 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER 6 THE PERIOD OF SEARCHING FOR EFFECTIVE IDENTITY Introduction The Period of Searching for Effective Identity occurred from 1998 to 2000. This period was characterized by the administration’s focus on rebuilding the agency, expanding the administrative infrastructure within the Bureau, searching for operations directions, developing new evaluation procedures for application approval, continuous strategic planning, and searching for its identity as an organization. This development resembled the “muddling through” process described by Linblom (1959). This period was also marked by continuous low employee morale, high staff turnover rate, accumulation of work backlogs, employee grievances, power maneuvering, and conflicts. During the Period of Searching for Effective Identity, no one in the agency knew the exact number of private postsecondary institutions licensed by BPPVE. This was due to the Bureau’s sizable backlog and the lack of a reliable database system. In general, there were approximately 250 degree granting institutions and 2,500 vocational institutions under the jurisdiction of the Bureau for Private Postsecondary and Vocational Education. 224 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The New Private Postsecondary and Vocational Education Reform Act, 1998 From 1998 to 2000, the Bureau of Private Postsecondary and Vocational Education (BPPVE), a unit within the California Department of Consumer Affairs, was delegated with the regulatory authority under The New Private Postsecondary and Vocational Education Reform Act, 1998. This Act was passed and chaptered in 1997 and became effective on January 1,1998 (Assembly Bill 71, Assembly Bill 287; Senate Bill 819). The New Reform Act of 1998 was essentially a modified or amended version of the Reform Act of 1989. The minimum standards for instructional quality, institutional stability, and student protection remained in effect with the new law. The new Act provided a six-month transitional period from July 1 to December 31, 1997, which would end with the Council’s sunset. During these six months, the agency’s administration remained under the direction of Kenneth Miller and the other Council’s administrators. The new law had several distinctive provisions that were different from the 1989 Act. Highlights of the New Reform Act of 1998 1. The Council for Private Postsecondary Educational Institutions (CPPVE) was eliminated. In its place, the Bureau for Private Postsecondary Educational Institutions (BPPVE) was established as a regulatory board within the 225 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Department of Consumer Affairs (DC A). The administration of the BPPVE program was under the leadership of the Director of DC A, who could assign and delegate the administrative duties to a program administrator (Section 94771). The position of BPPVE program administrator is appointed by the Governor and confirmed by the Senate, and is exempt from the State Civil Service Act. 2. The policy formulating functions of the Council was transferred to the state legislature. The DC A Director would appoint an advisory committee to advise the Bureau concerning the agency’s administration, licensing, and enforcing functions under the new law. This committee would consist of representatives from educational institutions, student advocates, and employers who hire the students. The committee would be balanced to ensure that institutions and student advocates have equal representation. Thus, the new law changed the Council’s status as an independent policy formulation board to an advisory committee, similar to the one that formerly existed in the Department of Education. It should be noted that the new law did not state that representation from some relevant state agencies used to be members in the two former Councils: (i) the Advisory Council in the Department of Education; and (ii) the policy formulating Independent Council. The new law did not mention the representation from the California Postsecondary Education Commission (CPEC), the California Student Aid Commission, the 226 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Department of Education, State Attorney General, California Community Colleges, and California Employment Development Department. 3. A state-recognized professional licensing body, such as the State Bar of California, that licenses individuals in a particular profession or trade job category were considered exempt from regulation under the new law (Section 94739(b)(5)(B)). 4. Non-profit institutions would receive a less regulation by the agency compared to the other state-approved institutions. However, these non-profit institutions must be accredited by a recognized nationally accreditation agency and they need to meet specific criteria (Section 94750). 5. For the purpose of supervision, the Bureau was given additional powers and authority, specifically, a. Establish a regular inspection program that included unannounced inspections. b. Issue an order prohibiting the enrollment of new students. c. Issue an administrative citation and impose an administrative fine. d. Initiate proceedings to revoke or suspend the school’s approval to operate. e. Notify the telephone company to disconnect the school’s telephone. (Section 94764.5) 6. Institutions that collected seven hundred fifty thousand dollars or more in total student charges in its preceding fiscal year were required to file financial 227 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. reports that need to be audited or reviewed by an independent Certified Public Accountant (Section 94806(b)(1)). Institutions that collected less than seven hundred fifty thousand dollars in total student charges in its preceding fiscal year were required to file financial reports prepared in accordance with the general accepted accounting principles established by the American Institute of Certified Public Accountant. These financial reports could be prepared by individuals with sufficient training. 7. The school would provide a catalog or brochure to students. What should be included in the school catalog or brochure was outlined in Section 94814. 8. In addition to disclosing the completion rate and graduation rate as described in the Maxine Waters Act, Section 94816 required relevant schools to disclose: a. The student’s passing rate on any licensure or certificate examination required by the state for employment. b. The average annual starting salary of graduates of the school’s programs. 9. Renewal applications were required to contain a description of any changes made by the school since its last application was reviewed by the agency. Fees for processing the renewal applications would be based on the number and types of changes it contained. 10. The Bureau was allowed to order a school to post a bond in accordance with Section 94878 and Section 94879. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 11. The Bureau was required to make available to the public, upon request, the nature and disposition of all complaints on file against a school with the agency as provided in Section 94779. 12. When the new Act became effective on January 1,1998, it included some new stipulations regarding administrative fees and budgets (Article 10): a. A minimum of 50 percent of the funds appropriated to the Bureau was required for use to cover the costs of enforcement and mediation. b. Fees for the approval of schools should not exceed the actual costs of approving or renewing the approval. c. Application fees for school approvals and re-approvals and annual fees, that were in effect on December 31, 1997, would be reduced: • By 5 percent for schools whose annual gross revenues or projected gross revenues were one million dollars or more, • By 10 percent for schools whose annual gross revenues or projected gross revenues were one hundred thousand dollars or more but less than one million dollars, • By 15 percent for schools whose annual gross revenues or projected gross revenues were less than one hundred thousand dollars. Degree schools (Article 8) 1. The application of a degree school would be approved, denied, or conditionally approved after the school’s application had been reviewed and the visiting 229 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. committee had conducted an on-site inspection and determined that the school was in compliance with the requirements specified in Article 8. 2. If the school had not operated within three years before filing of the application, the Bureau would grant a full approval to operate not to exceed five years. 3. Conditional approval would not exceed two years. If the application was for the renewal of an existing approval, the school was required to only submit information necessary to document any changes made since the time the previous application was filed with the Council. Fees for the renewal applications would be based on the actual costs involved in the administrative review process. 4. With the sunset of the Council, the final decision of a degree school’s approval was no longer required to be reviewed and approved by any committee similar to the Council. The Bureau would make approval decisions based on the recommendations of the on-site visiting committee. In real practice, the degree unit would convene a full on-site panel to visit the school and review the application. For re-approval applications, the Bureau would essentially conduct a paper review. The compliance review might include a simple on-site visit by a Bureau staff member if the Bureau found that an on-site inspection was necessary. 5. The Bureau could waive or modify the on-site inspection for schools offering home study or correspondence courses. 230 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Vocational schools (Article 9) 1. The review and approval process for a vocational school essentially did not change. An agency representative would review the application for its completeness and conduct an on-site visit. After the on-site visit, the agency staff was to approve, deny or conditionally approve the application based on the staffs findings pursuant to the requirements specified in Article 9. The new law specified that the Bureau is allowed to use a qualified visiting committee which should include employers with expertise related to the program being reviewed. 2. If the school had not operated within three years before filing of the application, the Bureau would grant a full approval to operate not to exceed four years. 3. Conditional approval would not exceed two years. 4. If the application was for renewal of an existing approval, the school was required only to submit information necessary to document any changes made since the time its previous application was filed with the Council. Fees for the renewal applications would be based on the actual costs involved in the administrative review process. 5. The Bureau could waive or modify the on-site inspection for schools offering home study or correspondence courses. 231 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Registered institutions (Article 9.5) Article 9.5 was added to the 1989 Act as a compromise pursuant to the schools’ interests. This Article would allow some schools to offer educational programs as “Registered Institutions” with a lesser degree of state regulation. 1. An institution approved to offer degree and or vocational programs could also offer registered programs. 2. The educational services that qualified for registration status were limited to: a. Intensive English language program, b. Short-term career training, c. Examination for licensure, and, d. Continuing education. 4. Schools qualified to operate under the Registered Institution status were restricted to advertise as “registered” and were not allowed to use words like “approved school,” and “licensed to operate.” However, “short-term” seminar training could be identified as being “authorized” by the State of California. 5. The application and review process for Registered Institutions was much concise and less cumbersome, compared to that for the approved schools. Instructors' licensure and on-site visits were not required. The program curriculum was reviewed to the extent that it met the definition of a “registered program,” such as intensive English language program, short-term career training, continuing education, etc. Also, “Registered Institutions” were only subject to partial application of the Maxine Waters Act. 232 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Maxine Waters Student Protection Act (Article 7) The New 1998 Law provided exemptions from application of the Maxine Waters Act to some state-approved schools: 1. Limited application of the Maxine Waters Act was given to schools that offered instruction for civil service examinations pursuant to Section 94787. 2. The Maxine Waters would be inapplicable to some specified educational services pursuant to Section 94790, namely: a. Degree programs scheduled to be completed in no less than 17 months, or degrees, such as masters or doctorate degrees in a graduate course of study of one or more years. b. Education services offered as continuing education. c. Education services exclusively to assist students to prepare for an examination for licensure in a recognized profession, such as medicine, dentistry, accounting, or law. d. Education services offered as training in the fine arts or performing arts. e. Education services scheduled to be more than 30 months in length, and the total charge for the service was payable by the student in equal monthly installments over the entire length of the course. Advance payment exceeding one month was not allowed. f. Education services for all students enrolled were entirely and exclusively pursuant to a contract between the school and a community college, high school, or an employer who has the responsibility for applicable costs. 233 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 3. The Maxine Waters Act was inapplicable to small institutions and nonprofit religious institutions pursuant to Section 94785, and Section 94786, namely: a. Schools with enrollment of 100 or fewer students and no portion of the charge for any educational services were to be paid from the funds of a loan obtained from a government student financial aid program. b. Non-profit institutions that operated under the religious exemption provision. c. Education services with fees of $1000 or less and no portion of the charge paid came from a loan obtained from a government student financial aid program. The Transitional Period When AB 71 and its related bills transferred the regulation of the state- approved institutions to the Department of Consumer Affairs, the legislature had intended for a smooth transition. The provision, which extended the 1989 Act and the Independent Council from July 1, 1997 to December 31, 1997, was thought to provide a smooth transitional period. This intention was good, but the extension later proved to be a period of operational flaw. During the six-month transitional period, neither the old (Council) administration nor the new administration (the Bureau under the Department of Consumer Affairs) was able to accomplish much. Both agencies were not able to place new employees in vacant positions. The Independent Council had been 234 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. working with a skeleton crew. Only 12 regular (or permanent) employees (including administrators) remained employed in the agency. The remaining Council staff who had vast experience and knowledge of the private postsecondary education program, were not in a position to define the requirements of the new law regulating the schools. DCA, the new administration, did not have the knowledge nor the authority to act on any case. The Council’s Executive Director and the Director of Department of Consumer Affairs instructed the remaining council staff members not to make any interpretations of the new law nor answer any questions. The DCA was not ready to make any interpretations or answer questions about the new law. As noted by multiple interviewees, trust did not exist between the old administration and the new one. At times, the Council administrators and employees made some suggestions to the new administration concerning the operations of the program, but found that their recommendations were not taken seriously. On occasion, the Director of the DCA tried to implement some procedural changes. Although the new administration was in the majority, these changes could not be implemented because the Council was still the legal agency for the program. The program was in a state of turmoil and confusion. Work backlog kept piling up. It affected all phases of the program, included recruitment of new employees, training of employees, processing of applications (new applications, renewal applications, applications for request to change course length, names, course addition, sites addition), and enforcement activities. 235 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The following statement by Stevens (1996) gave a vivid description of the transition period: In the public sector, where mergers and consolidations are frequently mandated by governing bodies outside the organizations involved, the resultant uncertainty and anxiety are further magnified by a sense of powerless (p. 57). Structural Frame Analysis The passage of SB 819 and AB 71 created the new Bureau for Private Postsecondary and Vocational Education (BPPVE) in the Department of Consumer Affairs. The new organizational structure of the BPPVE went back to a system similar to the one that used to exist in California Department of Education. BPPVE became a unit of the DCA - a department as sizable as the CDE. The DCA reported to the Governor through the State and Consumer Services Agency. In 1998, DCA was comprised of 27 regulatory boards and 10 bureaus and programs. Regulatory boards were semi-autonomous and a board’s structure was similar to that of the former Independent Council. The entire board appoints the executive officer of the board. DCA had numerous oversight responsibilities over the boards. DCA bureaus and programs reported to the Director of DCA. The governor has the responsibility to appoint bureau and programs chiefs. With respect to the BPPVE, the Bureau chiefs position also required confirmation by the State Senate. The financial budget of the BPPVE had the autonomy like each individual board in DCA. 236 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Broadbanding Pilot Project During the period where the private postsecondary education regulatory program was being transferred to the DCA, the Department was practicing “broadbanding.” In 1993, Governor Wilson felt that the traditional budget process was “seriously dysfunctional.” He proposed a pilot project in performance budgeting commonly known as “broadbanding” in an attempt to determine whether a program was achieving its goals by focusing on outcomes rather than processes or inputs. DCA was one of the four original departments in the Executive Branch selected to participate in the pilot project, which was to effective for the fiscal year 1993/94. DCA received approval for flexibility and exemptions from rules and laws with regards to purchasing, space, information systems technology, classification and pay, examination procedures, etc. These exemptions were obtained from the Department of General Services, State Office of Information Technology, State Personnel Board (SPB), and Department of Personnel Administration (DPA). During this pilot project, DCA was using broadbanding of “Team” classes.1 1 1 1 The “Team” classifications were used for civil service positions in place o f the traditional state government classifications during the Broadbanding pilot project in Department of Consumer Affairs (DCA). The salary level of a Team Coordinator, Range A, was equivalent to that of a Staff Services Manger II (SSMII), Team Coordinator, Range B, equivalent to SSM III. A Team Leader, Range A, was equivalent to a SSM I, and Team Leader, Range B equivalent to SSM I. A promotion from Range A to Range B did not require the formal testing process of as in the cases for the traditional classifications. More commonly used team classifications in DCA and their equivalencies were: Team Associate I/II: Associate Government Program Analyst/Staff Services Analyst. Team Technician I/II: Office Assistant/Office Technician/ Office Services Ranges A, B, C, D Supervisor I (OSS I), OSS II, Executive Secretary. 237 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Organizational Structure of the Bureau With the passage of AB 71, DCA formed a transition team led by Cindy Thompson. She was assigned to the position of Chief Operating and Administrative Officer of the Bureau, a CEA III position. Cindy Thompson and the transitional team members were central policy makers and key administrators while the DCA was practicing the pilot broad banding project. The Bureau Chiefs position was vacated at the time of the Council’s sunset. Kenneth Miller, the former Executive Director, automatically resigned at the Council's sunset. Cindy Thompson had the primary responsibility for the day-to- day management of the transition, the development of operation plans, and the hiring of new Bureau staff. She directly reported to the Director of DCA until the Bureau Chief was recruited. The organization of the Bureau’s administration was similar to that of the former Independent Council. However, some functional units, such as the Registered School Unit and the Enforcement Unit, were added or expanded. There were five professional units in the Bureau: (i) the Degree Unit; (ii) two Non-degree (vocational school) units; (iii) the Title 38-Veterans Units; and (iv) the Registered School Unit. A Team Coordinator managed the Degree, the Non-degree, and the Title 3 8-Veterans units; a Team Leader managed the Registered School Unit. The new professional staff in the fees-generated programs (degree, non-degree and Registered school) were recruited and appointed with the 238 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. classification of Team Specialists. All the former Council professional staff members, except one, were assigned to the Title 3 8-Veterans Unit. The rest of the positions in the Bureau were filled with staff members with a “team” classification, such as “Team Associate” and “Team Technicians” (See Appendices L and M). The Bureau closed the Southern California Office in Los Angeles. The Southern California staffers, formerly Council Education Specialists, were all assigned to the Title 38-Veterans program and were allowed to work home-based. Thus, there was no physical presence of the BPPVE in areas outside of Sacramento. The Education Specialists in the Title 3 8-Veterans Program continued to assume the jurisdiction over a geographic zone and caseload for each zone was estimated to approximately 200 schools. However, the Team Specialists in other approval units, such as vocational schools and registered schools, were not assigned any responsibility of a geographic zone or a specific caseload number. During the entire Period of Searching Identity, the Non-degree and Registered units were continually developing an equitable method to calculate performance standards for the Team Specialists. As the Bureau did not have any quantitative standards for performance and the Bureau’s computer system was under development, the Title 38-Veterans Program statistics became the primary reporting items for the Bureau. Organizational Culture The culture of the DCA was at times dictated by the current administration. The leaders of the DCA were appointed and directed by the governor. If the 239 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. governor possessed the philosophy of the Republican Party, the culture of the Department would be directed more in favor of the private entrepreneur. In an administration with a Democrat governor, the administration of the DCA leaned towards promoting the broad welfare of the common consumers. For the past 40 years, California governors had been re-elected for a second term. The culture of the DCA would not drastically change during the governor’s tenure, usually for a period of at least eight years. Executive officers of the DCA constantly had to struggle to achieve a balance between the interests of the consumers and those of the business industry. In general, the DCA had its own distinctive culture - one of consumer protection. The operations of the DCA were consumer oriented. Its mission was to provide product and service information to help guide consumers to make smarter choices. Although the former Council (later the Bureau) shared some common values of the DCA’s organizational culture of consumer protection, the two were different because of their functions. DCA had the focus on providing information, and considered enforcement as the ultimate resort; the Bureau’s primary operational focus was on enforcement and providing information was secondary to its primary goal. As put forth by Bolman and Deal (1991), leaders of an organization need to develop its myth, rituals, pride, values, image, history, and other phenomena so that the culture of the organization would help the effectiveness of its operations. In the 240 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. case of the Bureau, it was a small organization, wherein the former independent Council merged into a larger organization, the DCA. Classifications of the Professional Staff From January 1998 to June 30, 1998, the Bureau had three classifications for its professional staff: the Education Specialists, the Team classifications, and the Intermittent Education Specialists. The classification of the Education Specialists was what the Bureau inherited from the former Council. From the beginning, Cindy Thompson, the lead of the transitional team, wanted to downgrade the salary level of the Education Specialist to that of an Analyst. Although, all the former Council professional staff members, except for one, did not have any work experience in the Veterans program, they were assigned to the Title 38-Veterans Program. The entire funding formula of the federal program was based at large on the salary budget of the Education Specialists. Decreasing the budget for the Education Specialists would significantly affect the funding of the federal contract, which contributed more than 40 percent of the entire Bureau’s budget. After consulting with the liaison person at the Federal Department of Veteran Affairs, the Bureau decided to leave the classification of the former Council professional staff unchanged. The Team classification was the series that the DCA began to use since the inception of the broadbanding project. The employees with this classification 241 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. enjoyed the flexibility with recruitment practice, upward mobility, and qualification requirements that the broadbanding pilot project provided. For example, management positions previously held by Education Administrators, whose salary level was higher than that of Staff Services Manager III, could be filled with transfer-in employees from other state departments with the classification of Staff Services Manager II. These managers (Team Coordinators) were all elevated to a higher salary level (equivalent to Staff Services Manager III) without a formal testing process as other managers had underwent, as required by the State Personnel Board. Another example was staff members in the professional units who possessed an analyst’s classification and when they were recruited and hired by the Bureau, they were assigned to a relatively higher position of the Team Specialist. However, the Bureau only assigned the Team classifications to the new professional employees. Even though a former Council professional staff member would be working in the vocational school unit and performing the same duties as his new colleagues, he did not have his old classification as Education Specialist converted to the new classification. For a period of time, this former Council staff member had grave concern about his position being downgraded. In addition to the Team Specialists, the “Part-time Education Specialist” was a second classification set up by the new Bureau administration. The part-time employees were recruited in local areas to work on-call workers. Their primary assignment was to conduct on-site visits to vocational school applicants. When the 242 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Bureau concurrently used these two classifications, the Part-time Education Specialists and the Team Specialists, it raised the concern of the staff from the State Personnel Board (SPB) and the Department of Personnel Administration (DPA). The SPB and DPA determine the salary level of a civil service classification based on the skill level related to that job. The SPB and the DPA considered, among other things, that site review for an application approval required the skill level of a professional staff member. In addition, they questioned whether the paper review before and after the site visits, which were processed by the Team Specialists in Sacramento, would require a level of a professional staff or the work of an analyst. The bureau used the classification of Team Specialists until June 1998. By that time the broadbanding pilot project was called off, and so were the Team classifications. Information Technology Information technology continued to be a key issue throughout the Period of Searching Identity. As the IT staff, one by one, left for other state agencies in anticipation of the Council’s sunset, an IT consulting company (R Systems, El Dorado Hills, California) was hired to keep the computer system running. However, little enhancement work was done to the system by the consulting firm. When the contract with R System was up for renewal in early 1998, the new administration decided not to continue with their services. During the first couple 243 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of years of the Bureau, the staff continued to use both systems — PPDS, and the fragmentally developed system. Because both systems were disjointed, the data were often fragmented and not accurate for any reporting purposes. A few months before the Council’s sunset, the Bureau hired a consulting company, Ryno Consulting, Inc., Benicia, California, to look for alternatives to its current IT operations and to redesign its IT system. While the Bureau was waiting for a more efficient and dependable database system to be developed, Ryno Consulting, Inc. declared bankruptcy in the early months of 1999. The Bureau’s hope of having a more efficient and dependable database system went with the bankruptcy of the consulting company. The Bureau had considered linking its database system with DCA’s main computer system. This idea was not feasible partly because DCA was going through with its revamping process of its own IT system at the time of the Council’s sunset, and partly because the Department’s IT resources were 12 significantly directed to preparing for the upcoming Y2K transition. Funded resources previously allocated to both agencies would not permit such a switchover. However, the Lotus Notes e-mail system was incorporated into the DCA system. 1 2 Y2k: The Y2K transition, also referred to as the “millennium bug,” was a programming defect concealed in millions of computer programs worldwide. Early computer programmers traditionally recorded the annual dates using only two digits; 1999, for example, was programmed as “99”. The first two digits were assumed to be “19.” Unless those programs were corrected, when the millennium year changed to January 1, computers would misread their codes as referring to the year 1900 rather than 2000. This could cause computers to produce erroneous information, corrupt linkage, or even system shut down. 244 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. During the first one and one half years of the Bureau, the staff level of the IT unit was relatively limited. The Bureau funded three IT positions. However, the majority of the IT support in the Bureau was carried out solely by John Situ. John Situ was a student assistant at DCA before he was recruited by Cindy Thompson to work at the Bureau with the classification of Programmer I. The other two funded IT positions were based out of the DCA and under a different capacity. To carry out his assigned duties, Situ was assisted by a student assistant. Situ essentially ran a one-man show. He was required to maintain the two systems in the Bureau, provide technical assistance to current and newly recruited employees, recommend IT purchases for the Bureau, complete preparation work for Y2K for the Bureau’s main systems and all their personal computers, and coordinate activities with DCA- IT Division. He was very knowledgeable in information technology and was able to keep the two computer systems working without much downtime and he was able to competently perform the overwhelming duties that were assigned to him. He eventually left the Bureau and was recruited to work for the DCA in early 1999. In August 1999, the Bureau recruited Jason Piccione, another key player in the Bureau’s IT unit. By that time, the Bureau’s management finally recognized the importance of IT support. Piccione was recruited at a classification much higher than that of John Situ’s. Piccione’s IT work experience derived from the private sector. He, like John Situ, was very competent, responsive, and friendly. Because he was personable and knowledgeable, he was able to interact with managers and staff and from his interactions, he was able to understand the needs of the agency 245 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and incorporate those needs into the design of the new system for the Bureau. In April 2000, Piccione began working on the design of a new database system called SAIL (Schools Automated Information Link). SAIL was an added-on system, with the design at first beginning with one segment of the database and then adding onto other segments when the database was functioning. In October 2000, SAIL was on line and successfully storing data for the Enforcement Unit’s use. By the end of the Period of Searching Identity, IT staff in the Bureau, especially Jason Piccione, continues to work to diligently program the other segments of the SAIL system. Communication During the Period of Cleaning up, the channels of communication for the Bureau for Private Postsecondary and Vocational Education were significantly different from those of the Department of Education and the Independent Council. E-mail and website information had played a significant role in transmitting information within the Bureau and to the public. Information regarding the Bureau’s proposed operational objectives and other changes were obtained through e-mail and website communication. Within the Bureau and DCA Internally, formal communication within the DCA and the Bureau was transmitted through the Lotus Notes e-mail system. Although routine meetings were held for employees of individual units, all-staff meetings, such as intra- 246 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. departmental and/or intra-agency (BPPVE) meetings, were not held as frequently. Bureau employees often obtained more information through the organization's "grapevine" as defined in the work of Bernard and Simon (1959) and other theorists in organization communication. The “grapevine” refers to the informal communication network in an organization. In many instances, Bureau employees learned through the "grapevine" network what decisions had been made prior to their formal announcement. The “grapevine” channel also indoctrinated and informed newcomers to the Bureau’s unannounced goals, norms, and the traditional methods by which applications were processed. Here was where the unspoken rules and unwritten regulations became transmitted and learned. External communication The Bureau did not have as many external means to provide effective communication as its two predecessors had. Communication serves to exchange ideas, convey information, and correspond a person's feeling (Presthus, 1978; Selznick, 1984; Bolman & Deal, 1991; Gudykunst, 1994). At various levels, communication is a two-way process involving a receptive-expressive language function. With the advent of the Council’s sunset, the agency’s membership in the Private Postsecondary Education Commission (CPEC) was nullified. Without being a Commission member, the Bureau was not able to maintain close and more periodical coordination with the other members of this advisory and planning body in higher education. Without CPEC’s membership, communication with other 247 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. involved government agencies such as the California Student Aids Commission, occurred through official channels. Casual discussion of matters before official meetings ceased. As a result, the Bureau lacked the family-like working relationship when it came to coordinating program matters. After the enactment of the New Reform Act of 1998, the Bureau established advisory and technical committees. These committees were primarily comprised of industry representatives as stipulated in AB71. There were areas where these new advisory committees differed from the other two previous ones: one was the composition of its members and the other was the budget approving responsibilities. The primary function of the advisory committees was to provide technical advice to the Bureau chief and the Director of the DCA. One major complaint by the members was that the Bureau administration did not take the advice from these advisory committees seriously. In every meeting, the question ’’When will the backlogged work be eliminated?” was often asked. In subsequent meetings, the Bureau failed the committee members’ expectations again and again. Soon the enthusiasm shown by committee members and Bureau administrators eroded. The number of private postsecondary institutions in southern California comprised more than 60 percent of the total number of the agency’s schools in the State. The closing of the Southern California Office increased barriers between the Bureau, the schools, and the students. Thus, the schools and the students had to rely on telephone calls for their inquiries. For many months, the Bureau relegated 248 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. professional staff to not take any telephone calls because there were too many backlogged cases and the volume of calls had reached an unmanageable level. The Bureau relied on training sessions and Newsletter publications as their primary communication channel with the public. The training sessions often were considered by trainers to be disasters rather than successes. The trainers were new employees and in most cases, they were not completely familiar with the New Act. The training they provided and their answers to the school representatives’ questions often lead to more frustration and more questions. The information provided in the training sessions were often perceived as evasive because the administration had not made definite decisions on major issues and trainers often did not know the correct answers. The newsletter served as a good method for transmitting information to schools in the days of the Independent Council. However, its effectiveness was somewhat affected by its format. At the beginning, the Bureau sent out the Newsletter in a hard copy (or paper) format. After several publications, it was made available on the DCA Website. After the Bureau had developed its own website, the Newsletter was issued through the Web. Schools often did not have proper IT tools and thus, would not have access to the Newsletter. The Bureau published the Newsletters more frequently in 1997 and 1998. However, due to the high staff turnover, the Bureau Newsletter was published only once in November 1999 and discontinued after the 1999 issue. 249 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Human Resources Frame Analysis By the end of the transition period on January 1, 1998, eleven regular staffers remained employed. With the establishment of the new administrative agency, these staff members transferred to the new Bureau as stated by Section 19050.9 of the Government code. With the governor’s veto message, which stated that “(schools) have described a pattern of reprisals and vindictiveness in dealing with the Council staff,” looming in the minds of many people, the former council employees were viewed as “bad guys” by the new administration. Most causality resulted as a consequence of the Council's sunset. The Deputy Director (Sheila Hawkins) lost her Career Executive Appointment II (CEA II) and she was placed in a non-Bureau-related unit in the DCA. However, she did maintain her classification as an Education Administrator. Because she was assigned to an office physically away from the Bureau, Hawkins was practically “in exile” from the Bureau. In addition, she was given little supervisory work and charged with little authority. The Assistant Director, a CEA I appointment, returned to his former managerial position in the Employment Development Department, a position he held prior to joining the CPPVE administration. The Administrator for the Non-degree (vocational school) Unit left the Council prior to its sunset. The Administrator for the Degree Unit resigned with the sunset of the Council. Only the Administrator for the Title 38-Veterans Unit remained with the bureau for several months as the DCA took charge of the agency. The Council’s staff legal counsel transferred to the DCA’s legal office after the sunset. His work 250 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. assignments were comparatively light in the DCA’s legal office during this research period. Rather than accept a position within the Bureau administration, all senior managers, except Sheila Hawkins, resigned. It had been hinted to them that a condition of each new administrator's appointment was to find a way to dismiss former Council staff. The dissolution of the Council for Private Postsecondary and Vocational Education required that its regulated programs and staff members be transferred to the Department of Consumer Affairs. This in practice was a merger of two organizations. As Millett (1976) points out, the emotional impact of merger is enormous. Millett explained that there is no such thing as a painless merger of two organizations (p. 26). In the case of the former Council staff, they perceived “subordination in role relationships and developed a stepchild mentality.” The Council staff was already in an atmosphere filled with uncertainty and anxiety; the merger further magnified their sense of powerlessness. Key Players of the Bureau In February 1998, Governor Pete Wilson appointed John V. Griffin to be Chief of the BPPVE. Griffin had been an educational consultant in Nevada prior to his appointment and previously served as an administrator with the Nevada Commission on Postsecondary Education from 1981 to 1989. Griffin had been one of the top candidates when the former Council was recruiting for its chief executive officer. He was considered to be a pro-industry educator. However, he was not 251 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. able to make any major changes or any long-term plans for the agency because the State Senate had not confirmed his appointment. Before he could develop an effective working relationship with the DCA’s administration, he was promptly dismissed when Gray Davis became the governor in January 1999. During his tenure as the Bureau Chief, Griffin did not get much accomplished. Governor Davis appointed Douglas Laue as the Bureau’s interim director. However, Laue had no experience in education. He had spent ten years as deputy chief of the Bureau of Automotive Repair. To make matters worse, Laue had to divide his time between overseeing the Bureau and acting as the deputy chief of the California Medical Board. Consequently, all major policies of the Bureau were formulated and executed under the direction of Cindy Thompson until her quiet departure from the Bureau in April 1999. Transition management team of the bureau When Cindy Thompson and her transitional team took office, DCA was implementing the Broadbanding project. The transition team enjoyed the flexibility, such as recruitment practice, upward mobility, and qualification requirements, provided by this pilot project. Cindy Thompson recruited the management team of the Bureau. Her team included: Nancy Stockman as the Team Coordinator for Degree Program; Olivia Cortez as the Team Coordinator for Non-degree Program that was subject to Article 7; Patty Wohl as the Team Coordinator for Non-degree Program that was not 252 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. subject to Article 7; Bill Young as the Team Coordinator for Title 38-Veterans Program; Kathy Calonder (last name later changed to Ailer) as the Team Leader for Registered School Program; and Terry Zanchi as Team Leader for STRF Claims and Closed School Programs. The Team Coordinators (Program administrators) were recruited outside the DCA. They had very strong state finance and budgeting knowledge comparing to their knowledge in educational programs. Because the new Bureau was facing budget uncertainties, Cindy Thompson recruited this group of managers in hope that they would use their finance background to help the agency pass its budget proposal. For the first twelve months of the Bureau, the administrative staff focused their efforts and time on two projects: the development of a new fee schedule; and the “digging up” of registered schools specified in Article 9.5. Both projects were means to increase revenues for the new agency but were later found to be fruitless. In the literature on public policy making, public choice is a subject of interest because many theorists have written important works on the behaviors of bureaucrats. They include Downs (1967), Niskanen (1971, 1975, 1987), Hood (1987), Chubb and Moe (1988:1065-1087), Eisner and Meier (1990:269-287), Wood and Waterman (1991:801-828, and 1993:497-528), Brennan and Buchannan (1980 and 1985), just to name a few. Perhaps, William Niskanen could explain the behaviors of the new Bureau administration. 253 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Niskanen argues (1971, 1973) that the intentions of a bureaucrat resemble those of a neoclassical economist in which managers and owners of private firms seek to maximize profits. The objective of profit maximization can be explained in terms of two kinds of motivation - rationality and survival. First, the higher the level of profits within a firm, the larger the rewards that the managers and owners receive. Secondly, the higher the level of a firm’s profits, the better the position of its survival in an environment of competition. With respect to public organizations, the bureaucrats also possess a rationality motivation and survival motivation. The greater the success of an agency, the greater the rewards for the utility function of that agency, i.e., as success grows, the agency is put into a better position to obtain funding. Niskanen further argues that a bureaucrat is an individual who essentially is motivated to maximize profits. A bureaucrat has a private utility function whose independent variables are salary, power, and prestige. This utility function underlies the behavior of a bureaucrat. Arguments or independent variables of this function are positively related to the size of the departmental budget; in other words, the larger the size of a department’s budget, the greater the salary earnings, power, and prestige of the bureaucrats of that agency. He further argues that bureaucrats have a survival motivation as well. Hence, motivated by their private utility functions, bureaucrats seek to maximize the size of the departmental budget. By August 31, 1998, the Bureau increased its staff positions from less than seventy to over one hundred and twenty five positions (See Appendix M). 254 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Management Style Cindy Thompson’s management style was quite different from that of Kenneth Miller. Her administrative behaviors reflected the elements of Theory X as described by McGregor (1960). McGregor argues that managers with Theory X beliefs may find it difficult to utilize organizational practices that rely on trust and confidence in subordinates. Theory X assumptions lead to authoritarian management. Managers believe in close direction and control of subordinates since people, in general, are viewed as inherently lazy, lacking in ambition and desire to assume responsibility, self-centered with a tendency to act contrary to organizational needs, and are resistant to change. The manner by which Cindy Thompson delegated authority did not demonstrate that she had firm trust and confidence in her staff. In most situations, she would personally make decisions on Bureau policies. All school applications and documents could not be signed off unless she had reviewed and approved them. In general, it took more than two days for an experienced professional staff member to thoroughly review a vocational school application. It took even more time to review a degree institution application. Since Thompson was not completely familiar with and was still in the learning stages of the law, it took her even more time to review an application. As noted by multiple interviewees, her office was often piled high with school folders. For many months, the progress of a case was halted because Thompson had not yet signed off on the case. Although the New 1998 Act provided time frames for school application completion, the Bureau had 255 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. inherited so much backlogged work that it did not appear to the new administration that further delays would matter. Besides, further work backlog would not directly impact the revenues received from school applications. The approval process for Title 38-Veterans program cases was much better because the federal contract stipulated specific time frames for program activities. Any delay in work progress would result in compliance referrals and ultimately affect federal funding. When the federal cases accumulated to the point where compliance issues would be generated, Cindy Thompson ceased the routing of federal cases to her and delegated the signing-off authority to the Bill Young, Team Coordinator (manager) for Title 38-Veterans Program. The activities of the Bureau (and to some degree, the program managers), except Title 3 8-Veterans Program, were significantly affected by Thompson’s management style since she wanted to firm control in management decisions and policy formulation in the Bureau. Cal-CSEA’s Report on Broadbanding In 1998, California State Employees Association (Cal-CSEA), the major union for California state workers, conducted a survey to assess the effects of Broadbanding. This inquiry was a result of the numerous complaints received from Cal-CSEA members. A written report was published in July 1998. In the report, CAL-CSEA provided information from DCA employees concerning abuses of the Broadbanding system. Reported abuses included: 256 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. • Working Out-of-Class Broadbanding allowed DCA employees to work outside their area of expertise. Specifically, the education prerequisites were waived. • Low Employee Morale DCA had been plagued with continuous employee morale issues as a result of unfair salary practices, leave restrictions practices, and work assignment inequities. Employees were often denied a salary increase without advanced notice. Some mangers led employees to believe that under the pilot project, there was no recourse to denial of Merit Salary Adjustments and/or range changes. Often, employees were placed on leave restrictions (e.g., having to provide physician verification for any sick leave, scheduled breaks, and lunch breaks. Leave restrictions was used as a method to deny promotions or pay increases even though these were unjustly imposed and were without merit. The U.S. Department of Labor found the DCA to be in violation of Family Medical Leave, thereby, requiring that DCA rescind most of the leave control placed on employees. • Favoritism/Nepotism Numerous cases of favoritism and nepotism took precedence over performance in promoting employees. 257 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. • Misallocation of the Team Classifications The broadbanding system was not only used to recognize and compensate employees for their hard work, but to compensate those employees who were appointed to the teams for streamlining and re-engineering many new processes. However, the report found, for the most part, that the DCA failed to do so. Employees, who had questioned the management’s directions, became “targeted employees.” The report further stated that some handpicked employees were misallocated into inappropriate classifications and ranges, and “targeted employees” were left in traditional classes. • Obstruction of Right-to-take Examinations Numerous tactics were used to keep the “non-handpicked” employees from taking examinations. Some managers verbally advised “not-favored” employees of their intentions to fail the employee, to rate the employee low, and that the applicant's qualifications would be misrepresented to the promotion review committee. « Violations of Project MOU: DCA continuously and knowingly violated agreements made in the pilot project MOU between DCA and DPA with respect to flexibility and exemptions granted. One violation, among others, was to coerce a personnel analyst to upgrade positions even though the analyst expressed concern that these were inappropriate appointments. After refusal by several personnel staffers to so, a personnel staff reluctantly key-in the appointments. Once the inappropriate 258 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. appointments were discovered, management instructed the personnel staff to lie to the DPA and to claim that the appointments were found in a subordinate staff s in-basket and that they were innocently keyed-in. Occasionally, management dishonestly stated to the DPA that contacts were made and a promotional list was cleared in order to appoint the handpicked employees. However, after the DPA contacted employees off the list which the DCA had claimed they cleared, they discovered that these individuals were not contacted for clearance by DCA. • High Turnovers DCA was constantly experiencing large turnovers in staffing because of inequities and low morale. As a result of the Cal-CSEA report and subsequent audit by proper authorities, the Broadbanding pilot project was not renewed by the Legislature and it expired on June 30, 1998. The State Personnel Board notified DCA that all Team classifications were required to transition into comparable traditional government classifications effective July 1, 1998. Waves of Staff Departures The new employees of the Bureau were recruited by the administration under the Broadbanding culture. They were recruited with the flexibility provided by this pilot project, such as recruitment practice, upward mobility, and qualification requirements. During the period of Searching for Effective Identity, 259 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. none of the Bureau staff possessed a doctorate degree. Less than 50 percent of the new professional staff had earned a graduate degree. Some Team Specialists (primarily professional staff) and Team Leaders (equivalent to Staff Services Manger I and II), including Cindy Thompson, did not have a four-year college degree. Many new Bureau’s employees were considered to be “hand-picked” and they got in because of “whom they knew” instead of “what they knew” as described in the Cal-CSEA’s Report on Broadbanding issued in July 1998. When these new employees were employed, they were placed in temporary positions (limited-term, training and development assignments) pending position and classification approval. Since the Broadbanding pilot project was not re authorized by the Legislature and expired on June 30, 1998, the Team” classifications were abolished. The DCA had made an effort to see what options were available to continue the Team series. However, in October 1998, the SPB determined that all the DCA’s staff members, including the Bureau’s employees within the Team classifications, were required to be transitioned into comparable civil service classes retroactive to July 1,1998. Many new employees left the Bureau because their designated comparable classifications were not appropriate for the positions they currently held. The staffers that were affected most were the Team Specialists. With waves of staff departure, the work in the Bureau, except the Title 38-Veterans Program’s, continued to accumulate. 260 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Another Waves of Staff Departures On November 5,1999, Governor Davis appointed Michael Abbott as the Bureau Chief. The new chief had more than 20 years experience working on consumer and education policy issues. He had served as Chief Consultant for the Assembly Committee on Consumer Protection, Government Efficiency, and Economic Department prior to this new appointment. He earned a master of arts degree and a teaching Credential from San Jose State University. He also taught political science at De Anza College and Chabot Community Colleges. With his education and work experience, the State Senate overwhelmingly confirmed his appointment. Cindy Thompson, Chief Operating and Administrative Officer of the Bureau, was re-assigned in Spring 1999 to a new management position in the Enforcement Section of the DCA’s Bureau of Automotive Repair. She retired from the state after a short service with the Bureau of Automotive Repair. Her position in the BPPVE was briefly filled by the Chief Deputy of the DCA, who occupied both the DCA and Bureau positions concurrently. By that time, all parties involved in this industry were very frustrated with the Bureau4 s inability to eliminate the backlogged applications and to process the new applications in a timely manner. They believed that the Bureau needed a person knowledgeable in educational programs to help out the new chief. Sheila Hawkins had proven herself to be capable and knowledgeable in educational programs while she was the Deputy Director for the former Council. It would be prudent to use her again to lead the disrupted agency. In the Spring of 1999, 261 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Hawkins was transferred back to the Bureau as an Education Administrator. Her beginning assignment in the Bureau was to manage the Degree Unit. Nancy Stockman, the former Degree Unit Administrator, was reassigned to lead the Enforcement and Policy Unit. Stockman was later on-loan to work as an interim Deputy Director for the DCA’s legislative unit, a position she had held until her retirement from state service several months later. Sheila Hawkin’s return triggered another waves of staff departures. Shortly after his appointment as the Bureau Chief, Michael Abbott assigned Hawkins the lead responsibility for all approval/re-approval functions in January 2000. She was assigned as the lead in program operations, including degree, non-degree, registered, and exemptions. Title 38-Veterans program would work under her lead to the extent that the federal funding status would permit. At that time Olivia Cortez, Patty Wohl, and Kathy Ailor continued their management roles in the Bureau. The former two had transitioned from Team Coordinators to Education Administrators, holding the same classification as Hawkins. Ailor had transitioned from Team Leader to Staff Services Manager II. Terry Zanchi, manager of the STRF unit, left during the first wave of staff departures that coincided with the expiration of the Broadbanding pilot project. Essentially, Sheila Hawkins acted as the Deputy Chief of the Bureau, although she had not been officially assigned this title. Although Hawkins was intelligent, capable and knowledgeable in educational programs, her communication and management style was very abrupt 262 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and straightforward. If she had an idea, she was not afraid to voice her opinion and if she had personal issues with someone, she would honestly tell the person directly. Since the private postsecondary education program was a very political program, and anything an administrator said could be sensitive, her directness, honesty, and communication style became her political liabilities. On one instance, she was noted to be in a conversation with an Education Specialist in the receptionist area - an area where many other people are around. In the same conversation, Hawkins told the Specialist that the Bureau might have to cut down the number of Education Specialists in the vocational school units and if she were in the same position as the Specialist, she would start looking for another position. On other occasions, Hawkins would not sign the timesheets of several program employees because they did not appear to meet workload expectations and to her, she did not feel they had earned their wages for that month. These employees were routed to the personnel manager of the Bureau to see if the personnel manager would sign their time sheets. Although Sheila Hawkins might have had her own workload expectations, these employees felt that they were harassed without good cause because work standards had not been established for professional staff. Employees learned through the grapevine that Sheila Hawkins and other administrators did not agree on many of the Bureau policies. Employees often observed administrators coming out of management meetings with frustration on their faces. Eventually, Olivia Cortez, Patty Wohl, and Kathy Ailor left the Bureau. 263 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Cortez and Wohl both found promotional positions with other agencies (CEA III, and CEA II, respectively). Ailor transferred out laterally to another office in DCA. Many program employees privately complained that they were not happy because the administrators did not view things eye-to-eye. Employees did not know whose instructions they should follow, their immediate supervisor’s or those of the lead administrator. In April 2000, the DCA appointed a management consulting company to conduct a study of the Bureau’s personnel and operational issues. The findings of this study showed that the employee morale was horrifically low. Low morale coupled with the departure of some administrators’ drove nearly all the professional staff members in the vocational school unit to vacate their positions in the Bureau. The Bureau spent a lot of time addressing issues plaguing the unhappy employees; issues relating to re-classifications, transfers, morale, and expiration of temporary appointments of employment. During this period, some unhappy employees reported their frustrations to their bargaining representatives (unions) while others filed grievances with the DPA and SPB or sought legal actions in court against the Bureau and the DCA. Appointment of the Deputy Bureau Chief With Michael Abbot’s appointment as the Bureau Chief, the Bureau was ready to appoint his chief deputy. The Chief Operating and Administrative Officer of the Bureau, a CEA III position formerly held by Cindy Thompson, had been 264 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. approved and the position was now referred to as the Deputy Chief of the Bureau, a CEA II position. It appeared that the top contenders for this position were Sheila Hawkins and Bill Young. The DCA and Michael Abbot contemplated whether they should appoint a person who was knowledgeable in education programs (Hawkins) or appoint a person with excellent communication skills. Finally, Bill Young was appointed to the position of the Deputy Chief of the Bureau in June 2000. Bill Young worked as a budget manager with the State Department of Finance prior to coming to the Bureau. As noted by multiple interviewees, Bill Young was considered a “problem solver” and had excellent people’s skills. His oral and written communication skills were effective and eloquent. He could present ideas and information with subtle manner. Although he had a stronger background in state finance and state budgeting issues, his lack of in-depth knowledge of education programs did not hinder him in his leadership role. He proved to be an effective budget manager at the Department of Finance and a successful administrator of the Title 38-Veterans Program. When he was employed by the Bureau to lead the Title 3 8-Veterans Program, all the former Council Educational Specialists except one person, did not have Title 3 8-Veterans Program experience and they were subsequently re-assigned to the federal program. Bill Young did not consider and treat former Council employees as “bad apples” as some of his counterparts did. His everyday motto was “I am here to serve.” He treated his subordinates as professionals and provided a harmonious working atmosphere in the Title 3 8-Veterans Unit. In effect, he acted 265 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. as a buffer between the former Council workers and the new Bureau administration; he kept the turmoil that the formation of a new agency created to a minimal level. Before he made any major rules to the Title 38-Veterans Program, he would consult his employees before making a final decision. Young had an excellent working relationship with his federal counter-part, who also was the funding reviewer. In a private conversation, the chief liaison person expressed satisfaction with the excellent relationship with Young and felt thankful that Young had helped him out in several budget situations. With Bill Young’s leadership, the production of the Title 38-Veterans Program progressively increased. The management approach of Bill Young reflected the elements of theory Z as argued in the work by William Ochi (1981). Theory Z assumes that any worker’s life is a whole and not a Jekyll-Hyde personality (half machine during work hours and half human in the hours preceding and following). Theory Z suggests that humanized working conditions not only increases productivity and profits to the company but also the self-esteem for employees. Theory Z put heavy emphasis on close, harmonious working relations. Overall, the most effective managers tend to be high on both consideration and structure. Ochi argues that “employee-centered” managers are more effective in the long run than “task- centered” laissez-faire managers. 266 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Political Frame Analysis The fight went on During the final negotiations of AB71, parties involved were not completely happy with all the provisions of AB 71. In order to maintain an agency to oversee the private postsecondary institutions, all interested advocates agreed to stay at the negotiation table to iron out the not-yet-agreed items. With the passage of AB 71 and the related bills, the DC A diligently drafted a re-organization and rewrite the New Reform Act. Apparently, the rewrite was done without much consultation with the consumer advocates. When the proposed draft was presented to the interested parties after one year of hard work, the sought enactment did not receive favorable support from consumer advocates and their supporting legislators. In August 1997, consumer advocates informed the DC A in writing that they would not support the DCA's new proposal because the new draft was a drastic departure from the language and organization of AB 71. The re drafting of the Act was put on hold, as a result of unwillingness by consumer advocates to support the proposed changes. The DCA was not able to generate sufficient support to make changes to AB71 by the end of this research period. Without the AB71 rewrite, the Bureau had to devote a substantial amount of time to the interpretation of AB71. The 1989 Act provided the Council (Board) to make emergency regulations in areas where the law was unclear. However, AB71 did not have this provision to make emergency regulations. Introduction of any 267 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. regulations had to go through review by the state’s Office of Administrative Law (OAL). OAL was known to be notoriously backlogged. A Sacramento Bee article (Stephen Green, June 6, 1998, page A l) reported that in 1990, OAL was asked to review a hearing procedure used by the Council for Private Postsecondary and Vocational Education. OAL issued a response in late 1997 - two months after the Council went out of existence. The backlog situation of the OAL severely hampered the implementation of AB71. Proposed Fees Schedule Retracted Due to Interest Groups The Bureau’s cancellation of the proposed fees schedule was a perfect example of the role of interest groups. The New Reform Act of 1998 stipulated that the Bureau’s fees for the approval of schools would not exceed the actual costs of approving or renewing the application in pursuant to Article 10. The 1998 New Act further required the Bureau to reduce the application fees for school approvals, re-approvals, and annual fees as stipulated in Article 10. The proposed fees schedule was published in the November 1999 Bureau’s News. CAPPS stated their opposition in the November 1999 Special Edition Newsletter to its members. The proposed annual fees by the Bureau increased from a maximum of $4,700 per year to a maximum of $20,000 per year, based on the size of the institution. Based on CAPPS’ analysis, the proposed schedule included a new series of individual transaction fees, which would have raised the cost of doing business with the Bureau for all schools. The Bureau’s rationale for this increase was that the agency 268 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. needed an additional $1.9 million to continue its current staffing level for clearing the backlogged work. With CAPPS’s lead and coordinated effort, a number of schools wrote, phoned, faxed, and e-mailed policy makers to oppose the new fee schedule. Affected schools acted individually and collectively in a coalition. As a result of this coalition, many legislative representatives supported CAPP’s position, as public choice would have predicted. The Bureau subsequently withdrew its new fee proposal. The Legal Approach In his article “Public Administrative Theory and the Separation of Powers” (1983), David H. Rosenbloom provides a lens by which to view the three government functions of an administrative state: the managerial player, the political player, and the legal player. Players under the legal approach embraced values very different than those of the other two approaches. The legal approach often militates against efficiency, economy managerial effectiveness, representativeness, responsiveness, and political accountability. In view of the individual, the legal approach values the legal rights of a person. The court cases of STRF and Columbia Pacific University were excellent examples. 269 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. STRF court case As argued by Rosenbloom (1983), the Student Tuition Relief Fund (STRF) was a perfect example where the legal branch played an administrative position. STRF was created under the 1989 Act as a quasi-insurance fund to protect students who were injured financially when a “bad” school closed. State-approved schools paid into the STRF via regular quarterly assessments predicted by the amount of tuition paid in advance by students. To avoid assessments, schools had the choice under the law to not collect the tuition up front, or to demonstrate to the Bureau that they have resources set aside to cover their potential liability. The law (under Section 94945 of the New Act of 1998) authorized the Bureau to levy a special assessment when the regular STRF assessment did not cover the student claims. In 1994, Mary Catherine Wirth, an attorney with a San Francisco-based law firm, filed a suit against Career West College, a state-approved institution, on behalf of its former students. Wirth and several of her colleagues offered their services free of charge after hearing horror stories about Career West, a medical vocational school in Chico. The school had convinced young students from the poorest neighborhoods in Chico to take out loans for as much as $21,000, promised training with modem, high-tech equipment and, reported a job placement rate over 85 percent. However, in reality, the school used paper cutouts in lieu of real instruments, and no respectable hospital wanted to hire its graduates. When the graduates from the surgical assistant program failed to find gainful employment related to their training, many graduates ended up employed at fast food restaurants, 270 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and their student loans were given up. With Wirth’s help, they won a class-action lawsuit against Career West, but the school declared bankruptcy as soon the judge ruled against it in 1997. By that time, the state’s Student Aid Commission were attaching liens on the students’ tax refunds and garnishing their wages from fast food restaurants. So, Wirth advised them to file claims with the STRF. The Bureau was not able to provide prompt responses to the claims, partly because the agency’s STRF fund nearly went bankrupt from the many claims that resulted from the class actions against the “bad schools,” and partly because the new Bureau management was in the process of learning what to do. After months of delay, Wirth took the agency to court and won. In March 2000, a San Francisco Superior Court judge ordered the Bureau levy a special assessment on schools to pay the tuition claims of the affected students. The total tuition claims amounted to approximately $2 million. Schools across the state were required to pay as much as $500 to $16,000 each. In September 2000, CAPPS filed suit against the Bureau and successfully obtained an injunction from the State Superior Court in Sacramento to stop collections by the Bureau on the STRF special assessment. The irony was that while one superior Court required the Bureau to levy a special assessment to pay the students, another court ordered the Bureau to stop the collection from schools. By the end of this period, the lawsuits were under review by the appellate court. In the meantime, the Bureau was working with the Legislature to enact new laws to resolve this issue. 271 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Revoking Columbia Pacific University’s license Columbia Pacific University (CPU), the 21-year old university in Novato, was a private institution offering distance-learning degree programs from the bachelor through doctorate level. With the passage of the Reform Act of 1989, CPU was given a “grandfather” status as an approved, degree-granting institution. The Council conducted a routine review of the institution when CPU submitted an application for re-approval. In 1995, the Council’s review committee found numerous problems with CPU with respect to the quality of education. Records showed that: CPU’s curriculum had no substance; the faculty was virtually non-existent; course work was a hoax; and degree requirements were routinely ignored. In one case, the candidate for a master’s degree was given three units of humanities credit so that he could continue to take dance lessons and watch demonstrations to improve his skills as a country-western dancer for his own enjoyment and for use in classroom teaching. In another case, four of the five members of a committee approved a student's Spanish- language doctoral dissertation even though the student could not speak Spanish. Records also showed that most faculty members who sat on student doctoral committees did not have degrees related to the field of research. In December 1996, the Council denied CPU’s application for a license renewal. However, CPU continued to operate by taking advantage of the court system. CPU first filed an appeal with an independent administrative law judge. When the administrative law judge affirmed the Council’s decision, CPU petitioned to the Alameda Superior Court for a writ of mandamus vacating the Council’s decision to deny the CPU approval to 272 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. operate. The legal fight went on to the First Appellate District and ultimately all the way to the California Supreme Court. It was not until December 1, 1999 that CPU license to operate was finally revoked (See Appendix M). Symbolic Frame Analysis Many theorists in the study of public administration agree that culture influences the organization’s performance (E.L. Baker, 1980; Peters and Waterman, 1982; Deal and Kennedy, 1982; Denison, 1990; Schein, 1990; Bolman and Deal, 1991; C. Martin, 1992; J. Fernandez, 1993; Ouchi, 1981). Although definitions of organizational culture vary from one work to another (T. Davis, 1986; S. Sacmann, 1991; J. Martin, 1992; Kilmann, Saxton and Serpa, 1992), Edgar Schein (1990) in his work provides distinctive elements for the definition of culture: (a) A pattern of basic assumptions; (b) invented, discovered, or developed by a given group; (c) as it learns to cope with its problems of external adaptation and internal integration; (d) that has worked well enough to be considered valid and, therefore; (e) is to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (p. 111). Schein further asserts that the strength and degree of internal consistency within a culture is a function of the stability of the group, the length of time the group has existed, the intensity of the group's learning experiences, the mechanisms by which the learning has taken place, and the strength and clarity of the assumptions held by the founders and leaders of the group. 273 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. An organization may have multiple cultures (T. Davis, 1986; McGregor, 1960; J. Martin, 1982; Schein, 1990). There are cultures at the top and cultures at the bottom of an organization. An organization with multiple products or services can face different markets (or service group) and may be required to maintain different cultures for its various operational units, divisions, and departments. Edgar Schein (1990) points out that within a given organization, a variety of cultures can be found and these cultures are based on functions, geography, rank, project teams, etc. Martin and Siehl make the distinction between an organization’s dominant culture and the various subcultures that might coexist within it. From the point of view of the total organization, this variety of cultures may be considered subcultures. In the case of the Bureau, it was a small organization, the former independent Council, which merged into a larger organization, the DCA. Rebuilding the Agency’s Culture from Ground Zero Leaders can create an organizational culture that includes myth, history, vision, customs, rituals, ceremonies, stories, metaphors, folklore, heroes, logos and other symbolic modes of expression to instill inspiration from its employees. The leadership’s behavior often helps to mold the culture and atmosphere of the organization. In the case of a mandated consolidation, the new administration had the choice to re-invent the operations of the old or build up the operations from ground zero. The early leaders of BPPYE chose to set up the organization from ground 274 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. zero. During the three years of the Period of Searching for Effective Identity, leaders of the Bureau had not developed its distinctive culture, as defined by Edgar Schein, in efforts to enhance the effectiveness of the agency. The primary reason for this failure might have been due to the high turnover rate of the administrators. Image and the Reality March and Olsen (1979) argued that leadership is often paired with formal and informal communication as a means to convince people, project visions, instill inspiration, and motivate others toward the required courses of action needed to perform a task.. When people discuss communication rules, they tend to focus on the written or oral directives. The non-verbal communication rules are also very important in the process of transmitting a message. The non-verbal components include gestures, facial expressions, body movement, and postures; this is what is commonly referred to as body language. It is important for leaders to understand that the symbolic and communicative aspects of their actions, decisions, or policies can affect their workforce. Messages addressing their culturally diverse labor force can reflect the values and orientations of the firm. One key image that prevailed in the first two years of the Bureau was that all the formal Council staffers were “bad apples.” On the first day that the DCA staff officially took control of the agency, one “hand-picked” employee (a clerical staff) was observed demonstrating dancing gestures and saying to Cindy Thompson “We can now kick butts! We can now kick butts!” Cindy Thompson nodded and 275 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. smiled. Were the former Council employees “bad apples?” Did this image truly reflect the reality? Based on multiple interviewees, school operators were happy with the performance of the hardworking staff members in the former Council. School operators and student advocates felt that most Council staffers were knowledgeable, diligent and courteous. According to Bouley, Nathanson, and Pang, school operators were always able to get timely inquiry responses from professional staffers. School operators had no problems with these worker bees. Title 38- Veterans Unit staff members, whose staff was composed of all the former Council employees, made headline news for their performance. The unit won national recognition for outstanding Service to California’s Veterans. In a letter from the Department of Veterans Affairs in Washington, D.C. dated December 23, 1999, the national Joint Peer Review Group (JRPG) commended the California SAA for the significant improvements over the past year (10/01/98-09/30/99) and for the service provided to veterans. The outstanding rating was bestowed by members of the JRPG representing veterans, national/state federal officials, and other peer state approval agency representatives. This was the first national recognition in the history of California State Approving Agency for services to veterans (See Appendix N). 276 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Backlogged Work More Accumulated: What Happened? A common aspiring objective existed between the two opposing interest groups (students and school operators) in private postsecondary and vocational education. Both wanted proper regulation of the state-approved institutions. The public, elected officials, and practitioners in the education field all had high hopes for the Bureau’s performance. After three years of the Bureau’s operations, backlogged work had not been eliminated. In the case of the vocational schools, the backlogged work situation mounted. What happened? Reformulating processing rules and procedures Instead of revising the processing rule and procedures for school applications, the new administration decided to set up a new way of processing rules and regulations. The new administration felt that processing school applications, relieving the work backlog, and enforcement would begin when the new operations procedures, new Bureau employees, and new law and strategic plans were in place. At the time, the DCA administration thought that managing the Bureau would be very similar to managing the Medical Board, the Dental Board, or a similar professional oversight program. However, the Private Postsecondary Education program was far too complex in breadth and depth than any of the programs that the DCA had managed. For example, the professional staff of the Medical Board did not have the same responsibilities that the Bureau professional staff members were required to do, such as approving sites, curricula, 277 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. qualifications of instructors of professional and vocational institutions (osteopathic, chiropractic, law, engineering, psychology, etc.). The decision to rebuild the organization from ground zero was a detrimental decision in terms of the easing of the backlogged work. The development of the new Bureau included recruiting and hiring new staff; establishing procedures to process applications, consumer complaints, STRF and closed school’s claims; and training the new staff. As stated by Kenneth Miller during the public hearing in 1996, it would take at least 18 months for new employees to be familiar with the private postsecondary education program. The process of recruiting and hiring new employees took more than six months. After hiring, work procedures had to be developed and staff had to be trained. Time passed quickly. By the time a year had elapsed, there was still debate between administrators in the new Bureau regarding which path to take. Nothing concrete and usable was in place in the areas of application processing procedures. In the mean time, the backlogged work kept piling higher and higher. Central filing system Misplaced folders were considered a nuisance during all three periods of this research. In order to minimize the problem, the Independent Council set up separate folders for each program such as degree granting, vocation, and Title 38- Veterans. The office also set up separate areas for storage and each folder was also color-coded for identification. Each program folder contained all necessary 278 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. documents for the program work. In most cases, disappeared folders were especially problematic in the vocational school program and the Title 38-Veterans program. Degree programs did not receive high numbers of applications each year, and thus encompassed very few misplaced folders. When a folder disappeared, the clerical staff could recover it one way or another after a brief search. The misplaced folder usually could be found on the desk of the area specialist. As a result of backlogged work, many new and renewal vocational school applications were placed in boxes. In many instances, irate school administrators and/or legislative staff needed to call on behalf of schools and they would insist that they talk to Cindy Thompson to find out the status of an application. The subject folder could not be found in most cases. Because she lacked program knowledge, Cindy Thompson approved the creation of a centralized filing system. The individual program storage area was eliminated and a separate area was designated as the Central Filing Area. All the documents in the individual program folders (Degree Granting, Vocational School, and Title 38-Veterans) were consolidated into one big folder. When copies of the same documents were found in individual program folders, the Bureau administration gave permission to the Central Filing Unit to dispose duplicate copies. The color-coded stickers identifying different programs were also removed. The staff in the Central Filing Unit consisted of permanent clerical staff, seasonal clerks, and student assistants - none of them having private postsecondary education work experience or any college education to understand what was going on. They were under extreme 279 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. pressure to complete this project in a timely matter because Bureau staff was unable to pull specific records during this time. At peak periods, clerical staff in other units who did not have much training was recruited to work overtime to finish this project. When they had to purge records of more than five thousand active folders (Each school may have more than one folder. There were 250 to 300 degree schools, 2500 to 3000 vocational schools and more than 800 Title 38 schools), it was inevitable that mistakes be made. Many pertinent records were inadvertently purged. After the Central Filing System was established, professional staff had to submit a request to pull a folder, very similar to the loaning operation in a library. Because some of the workers in the Central filing were seasonal workers and student assistants, they were not readily available to work on the requests. In addition, the consolidated school folders were not readily available to workers currently needed the folder. For example, one person might have been working on a location change, while another was working on the course length change. Another example would be where a Title 3 8-Veterans Program Specialist was performing her evaluation of a school, while the vocational school and/or the degree staff was also working on the same school. These barriers significantly affected the accessibility of these folders to employees who needed to work on the school applications in a timely manner. Even after the central filing system was established, the misplacement of folders did not improve much. This was a result of misfiling by the clerical staff, 280 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and in many cases, the Specialists pulled the folders themselves without submitting a request when a clerical staff member was not available. After a while, even some program managers found this central filing system a nuisance. The Central Filing System was dissolved after it was in place for several months. The filing system reverted back to its previous method. Overtime hours were again approved to separate the file records and place them in separate program folders. Again, many important records to a particular program were misplaced in this process. In many instances, a program specialist was not able to process an application until the school had resubmitted a duplicate application. A sizable amount of the budget was used to fund this project, including the overtime hours of the office staff and the materials purchased for this project, such as folders and filing cabinets. At the time that the new administration was contemplating the idea of a new centralized filing system, some experienced former Council employees presented their constructive suggestions opposing the setting up this new centralized filing system. The situation further illustrated the statement by Stevens (1996) that in the public sector, where two agencies are consolidated by mandate, trust sometime does not exist, and the employees of the merged agency often came across as anxiety and a sense of powerless. 281 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Duplication of work Chaos in processing applications There were no assigned work areas for vocational schools and degree schools. The office support person (Team Technician) or analysts (Team Associate) were responsible to designate work cases. Work assignments were application-based, not school-based. Some school might have submitted separate applications at different times for different requests, such as expiring license renewal, adding programs, course length change, relocation, adding sites, new catalogs, etc. One Specialist might be assigned to work on a course length change while another was working on course. In effect, each was doing a piece of a school’s work and communication did not exist among Specialists. However, Specialists was often required to know the background of the school before making any decisions on each specific application. Often, more than one Specialist was working concurrently on different applications from the same school. Some school administrators were confused when two, and sometimes three, Team Specialists called the school at different times. With each inquiry, the school had to respond with the same school background information in writing and/or by telephone to individual Specialists. Schools often complained of approval inconsistency during this period. School administrators were often provided with one set of rules by one Specialist; a different set of rules by another. School administrators were often frustrated to find 282 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. that they had to live up with different sets of rales because they were instructed by different workers. P a r t - t im e education specialists The new Bureau developed and used a new classification of Part-time Education Specialists to work on an on-call basis in their geographic area throughout the state. These employees’ primary assignment was to conduct site visits for vocational school applications. The use of on-call staff to conduct site visits was a good idea because the local educators had good knowledge of then- geographic area, could save the Bureau some traveling expenses, and provide flexibility in high work seasons. However, it had two flaws: duplication of work and time-consumption. As noted by many professional staff members, complete review of an application for a new school or for a renewal application required two days or more. It would take months if the Bureau needed to clarify some information. After an application had been reviewed and determined to be “complete,” the action was documented. Analysts who were responsible for scheduling site visits would contact a local Part-time Specialist. The analysts would select pertinent materials, such as the application and the catalog, and mail them to the local educator. It was time-consuming to handle the site visit schedules. In order to be familiar with the Team Specialist’s denoted requirements, the local educator needed to review the application all over again. After the local 283 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. educator had conducted the site visit and completed a site visit report, the package was mailed back to Sacramento for further action. The Schedule analysts would assign the case to an available Team Specialist. However, the entire application required another thorough review because the subsequent person’ report for reviewing the site visit might not be the same person who conducted the first review. The situation would be more complicated if the local educator’s visit report contained new issues that had not been addressed during the paper review in Sacramento. The Team Specialist in Sacramento then had to send out a clarification letter to the school. The process would continue and the backlogged work kept exponentially growing. The Part-time Education Specialists were utilized from August 1998 to Spring 1999. The Bureau employed these Part-time Education Specialists through the normal civil service examination channels. Although they have not been called to duty since Spring 1999, they could become activated to work if the Bureau decided to do so. Attempt to file applications on-line The new Bureau had some innovative ideas to make the oversight operations work more effectively and more efficiently. One of them was to allow schools to file on-line applications. Filing applications on-line would create a paperless working environment for the Bureau. If the on-line system was successful, it would practically resolve the misplaced folder problems and the 284 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. issues created by utilizing the part-time Education Specialists. Anyone working on a school could go to the online data file and document the end result. With the passage of AB71, the transitional team contracted with Ryno Consulting, Inc., Benicia, California, explored the possibility of having schools file their applications on-line. Numerous staff hours were spent to assist Ryno develop this system. Leadership meetings (comprised of managers and/or key workers in a functional unit) were frequently conducted for this purpose. When Ryno Consulting went into bankruptcy, the Bureau administration was very disappointed. As a result, some staff members involved in the project volunteered to salvage the project. Some schools actually began to file their applications on-line and later found the untested system completely nonfunctional. Factors leading to the on-line system’s failure included insufficient IT staff for support, too much data for the IT system, computer capacity limitation, the current telephone system was not supportive of the telecommunications links, and lack of technical knowledge in many mom-and-pa schools. The administration for a school, for example, complained that it took too much to file their application online. For a small school, entering all required information to file an application would tie up a telephone line continuously for a day or two and the school catalog was yet to be sent. Another issue contributing to the failure of online filing related to the school catalogs. A majority of the private postsecondary institutions were not able to file their catalogs on-line. Even though some schools that had catalogs and were 285 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Internet-ready for submission, the Bureau did not have the database capacity to take so many school catalogs. Application data filed on-line was sometimes lost completely. Schools had to re-submit hard copy applications as a backup. Specialists and Administrators were overwhelmed with responding to school inquiries when the application automation system was initialized, and many staff hours were spent advising schools after the on-line system was cancelled. Program knowledge of new Bureau employees Very few of the new administrative and professional staff members had direct work experience in private postsecondary educational programs. Section 94705(i), Article 1 of the New Reform Act of 1998 stated in part: “Establishing an administrative agency staffed by individuals who are knowledgeable about private academic and vocational education, and charged with the responsibility of developing policies and procedures for the oversight and approval of private postsecondary education...” The education and the work experience of the new professional employees and administrators did not appear to meet the legislative intent of the legislator as specified in this section of the Education Code. The learning curves for these new Bureau employees were extended due to their prior work experience and their education. Major policies formulated for the Bureau reflected the decision-makers lack of in-depth private postsecondary educational program knowledge. Some of the Bureau’s new policies, such as Part- 286 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. time Education Specialist, central filing system, new fee schedules, just to name a few, appeared to be impairing the effectiveness and efficiencies of its operations. Summary In the Period of Searching for Effective Identity, the Bureau for Private Postsecondary and Vocational Education came across many challenges. Specific programs were criticized by the Legislators and involved parties. Backlogged work in the Bureau continued to cumulate. Employee morale was low. Grievances were filed against the Bureau’s administration with the State Personnel Board as a result of the reclassifications. Legal cases were filed against the BPPVE because the schools were not happy with the decisions and policies of this agency. The Bureau reflected more shortcomings than successes in this period. Employees who had had a clear pathway for promotion within the agency were now faced with ambiguous upward employment mobility. The California State Employees Association’s survey on the effects of Broadbanding brought attention to the Bureau and the DCA. Issues such as nepotism, misallocation of the Team classifications, obstruction of an employee’s right to apply for and take an examination for promotion and the problems of high turn over began to be addressed. Although the Broadbanding project was abandoned, there was a considerable disruption for the agency as a result. Employees were threatened with down grades. Administrators who attempted to reorganize and direct the Bureau lacked not only the necessary experience with the subject matter but also the 287 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. education to back them. This was true for most of the staff as well. Far too much emphasis had been placed on dismantling and practically obliterating the former Council that the goals of the Private Postsecondary and Vocational Education Reform Act of 1998 were severely neglected. The new administration of the Bureau had to face numerous challenges. They were taking over a governmental agency that was incredibly sensitive politically. Unfortunately, the new administration approached the project without considering the necessary fields of expertise employees should possess. Instead of hiring staff with appropriate backgrounds as educators, they waived the requirement. Instead of appointing administrators who had worked in the field of education, they appointed individuals with backgrounds as diverse as the California Medical Board, automotive repair and state budgeting. Licensing a private postsecondary school required an individual to have obtained at least a four-year degree. How could an Education Specialist (or Team Specialist, if you will) evaluate a Ph.D. program when he/she had not even earned a four-year college degree? At the beginning, it was in a situation close to the blind leading the blind. The administration attempted to clear backlogged work by distributing the work piece-meal. With such a procedure, any given school would have several Bureau employees as contacts. If the school’s license is about to expire, the school would contact one person. If the school wanted to add programs to its curriculum, it had to contact a different person. If the school was relocating, it had to inform yet a third person. Such a division of labor proved to be cumbersome, duplicative 288 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and chaotic. The only unit within the Bureau that functioned smoothly was the Title 38-Veterans Program. The unit even enjoyed national recognition for its efforts and efficiency. The majority of the former Council’s employees who were educated and well versed in the work demands of approving educational programs comprised the staff. The unit was lead by a manager who valued his staff’s input, reflecting a work culture of Theory Z as discussed in this chapter. It truly would have behooved the new administration to learn from the example of the Title 38- Veterans unit rather than ostracizing it. In this period, the Bureau’s decisions were once again considered unreasonable and off-balanced because the involved parties were not happy with its decisions. Some examples were staff reclassifications, new fee schedules, and STRF assessment. Re-classifications, hiring and training new staff, legal court cases, and significant number of litigation cases took many valuable hours of the Bureau’s administrators. All these problems had repercussions for the very students and schools to whom the Bureau was responsible. As a result, the agency was horribly backlogged. By the end of the Period of Searching for Effective Identity, the Bureau for Private Postsecondary and Vocational Education was still in the process of searching for its identity. The Bureau did not have its distinctive cultures. The agency was still in the searching stage because of the frequent turnover of its leaders. The agency lacked cultural values such as pride, image, history, stories and other symbolic behaviors for its employees to follow and to look up to. 289 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER 7 SUMMARY AND CONCLUSIONS Introduction California has maintained a laissez-faire attitude toward the private postsecondary education (or private state-approved) schools. The origin of this approach, which allowed for these alternative means of higher education, can be traced back to California’s early Constitution, which proclaimed the importance of academic freedom. This fostered an environment that favored some unethical school owners, who sought to find loopholes and to take advantage of these opportunities for profit. As a result, many students enrolled in such schools, and, although they anticipated quality job-oriented training, they ended up with enormous student loans and diplomas that would provide them with only minimum wage futures. During the past few decades, many attempts have been made by elected officials to remedy the recognized faults in these private for-profit schools. However, the state agency that regulates private postsecondary education institutions experienced more shortcomings than successes, and specific programs in this regulatory agency were continually under criticism and laden with complaints. The historic events of private postsecondary and vocational education in California from 1978 to 2000 are re-examined in this multi-framing case study. 290 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The primary focus is to learn from historical events and to formulate potential applications for future policies for this industry. Research Design A rigorous retrospective case study research methodology and multi-framing inquiry were used to profile, compare, and analyze the historical events of the private postsecondary education industry. Three distinct periods of activity are identified and mapped covering a span of twenty-two years. The first time frame, the Period of Diploma Mills, as distinguished by its name, was characterized by many fly-by-night schools and defaulted student loans. This period provides vital information about regulation problems in the industry, and further explains the origins or causes of the research period setting. The second period, the Period of Cleaning-up, was characterized by a diminishing number of private state-approved institutions. Many such schools closed primarily because they did not meet the stringent requirements of the Reform Act of 1989. The third and last period, the Period of Searching for Effective Identity, characterizes the course of this agency within recent years. This period provides specific information on the repeated challenges that this agency has faced and explains why it is still in the process of searching for its identity. Public choice, interest group theory and specific public administration theories were used to compare and analyze the events in the respective three periods. This researcher, a participant-observer held the role of participant and/or observer from 1994 to 2000. In this research, data were collected through formal interviews, 291 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. anecdotal interviews, personal observation, and a thorough review of public records and internal memoranda. Major Findings and Conclusions In considering the premises identified earlier in this dissertation, a summary of the final conclusions is presented below. Self-interest programs Historically, events of the private state-approved schools industry has validate that these programs can be defined as a “self-interest” programs. In a “self- interest” program, there are always two or more parties competing for their own self-interests while the bureaucrat acts as an arbitrator between both parties and sustains the laws and regulations relating to the case. The laws passed for these programs are not often clearly designed for execution. Whenever the bureaucrat implements a decision, it has a direct positive or negative impact on the interests of the involved parties. Inevitably, whatever the bureaucrat’s decision may be, one party or the other will not be content with the ruling. Interest groups on the opposite sides of the “self-interest” program tend to maximize their interests through political lobbying. In this case, the Private Postsecondary and Vocational Education Program has proven to be a utility- maximizer for opposing sides. On one side, school owners seek less regulation in the industry and more flexibility in their operations while on the other side, students 292 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and student advocates demand stricter regulation and greater student protection in the industry. Through political lobbying, both schools and students seek to change the law to obtain optimum self-benefits. The regulatory agency is often caught between the interested parties, the schools, students, and sometimes elected-officials. Even though the agency has made its best effort to interpret the never-perfect education law to approve or disapprove private postsecondary institutions and their programs, its decisions are often considered “off-balanced.” This study demonstrates that there were more shortcomings than successes during the three research periods. Shortcomings, such as the accumulation of backlogged work in the regulatory agency, are low, while employee morale remained low. In addition, the BPPVE faced many challenges that were yet resolved by the end of this research. Examples include these: (i) grievances being filed by employees against the Bureau’ s administration with the State Personnel Board; (ii) legal cases filed against the Bureau because the schools were not happy with the decisions and policies of this agency; and (iii) students happy because they felt that the BPPVE had not effectively regulated these proprietary schools. The primary actions that could be considered as successes were the enactment of the Reform Act of 1989 and the New Reform Act of 1998. With the passage of the Reform Act of 1989, California somewhat reduced its reputation as the “diploma mill of the country.” However, the Reform Act of 1989 was not universally praised by all parties, primarily because the schools claimed that the 293 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. requirements under this Act were too stringent. Since the passage of the New Reform Act of 1998, the regulatory requirements have been considered more reasonable and practical by the schools. However, the student advocates believe that the new law is not stringent enough to provide consumer protection to students in this industry. Funding and legal mandates One of the conclusions of this study is that the administration of this regulatory agency will have to face two on-going issues: (i) do more with less; and (ii) legal mandates. "Do more with less" is a phrase that haunts many officials in the public sector. Legislators and elected officials often choose to impress the public (voters) by requiring public agencies to do more with less. Adding to this dilemma, the fluctuating U.S. and state economies have both impacted agency funding. With the “do more with less” funding philosophy, the agency can expect to face a continuous trend of inadequate funding for its mandated services. Legal mandates have increasingly become a more critical societal issue. The legal mandate requirements concern all three branches of government, e.g., required agency performance reports, reports required by legislators, and judicial reports required as a result of court actions. The New Reform Act of 1998 mandated many consumer protection activities, and, at the same time, it required the oversight agency to develop a new schedule of fees to be tailored to the needs of 294 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. different schools, especially the license fees of smaller schools. The new fee schedules would produce 10 to 20 percent less than the revenues received under the Reform Act of 1989. Importance of staff experience and working environment This case study has further validated that staff experience and education play a significant role in the success of an organization. A new professional staff member, with related education and work experience, requires a minimum 18- month training period in order to become a j oumeyman-level person in private state-approved school programs. On one notable occasion, Title 38-Veterans unit’s performance received national recognition during the Period of Searching for Effective Identity while other units were criticized for backlogged work. The unit’s outstanding performance was accredited to good leadership and qualified staff. The leader of this unit treated the workers fairly, provided an employee-centered working relationship, and instituted a close, harmonious working atmosphere. These humanized working conditions, as reflected in the work of Ouchi (1981), not only increased unit productivity but also increased employee self-esteem. Multiframing analysis The research also demonstrates that the Multi-framing methodology is a very useful style of inquiry for case study analysis. By applying Bolman and Deal’s Multi-framing analysis, this researcher was able to profile and compare the events of the three distinctive periods of research under the various frames, the structural, 295 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. human resources, political, and symbolic frames. By using these multiple lens, the fragmented historical events of the state-approved program from 1978 to 2000 could be viewed with these separate lenses and be analyzed as a whole picture. Without this multi-framing style of inquiry, this study would be fragmented and unconnected. Implications for Theory Lens Theory Complex issues of the state-approved school reform cannot be explained by using only one type of theory. What is applicable at one point in time may not be useful at another point in time. One example was that the stringent regulatory requirements of the Reform Act of 1989 would not have passed had not California been suffering from the evil deeds of “diploma mills.” What is true today from one perspective may not be true the following day. One example was the effects of term limits and their important role with the sun setting of the independent Council for Private Postsecondary and Vocational Education. Private state-approved school reform has to be viewed and understood in the context of a network of many influences taking place in a dynamic and constantly changing environment. Multi-frame analysis proved to be a useful methodology for case study inquiry. It offered a rich descriptive lens for viewing the various elements within all three periods of research. Although juggling Bolman and 296 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Deal’s multi-frame style of inquiry was a challenge, the final result conveys a total picture. Without using the multi-frame lens of viewing, the complexity of what happened could not be vividly revealed. Interest group theory Although an interest group may at times affect policy formulation in organizations, society cannot live without public representation in a democratic society. James March and Robert Dahl proposed that in a democratic government, administration should represent all people. Without group representation, true equity would not exist. In reality, interest groups can have positive and negative effects on policy formulation and the operation of an organization. James Wilson, in Bureaucracy, has illustrated how interest groups can be helpful in one situation and harmful in another. Implications for Practice Organizational culture Sonja Sackmann (1991) asserts that organizational culture can be linked with the success or failure of an agency. Douglas North, in Institutions, Institutional Change, and Institutional Efficiency, argues that an organization's success can be directly linked to good leadership. Leadership behaviors can influence subordinate values by reshaping their vision to become more in line with 297 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. organizational values, and by working to create an organization culture through transformational leadership. Leaders of an organization need to develop its myths, rituals, history and other phenomena so that the effectiveness of its operations can facilitated by the culture. Leaders of the Bureau need to institutionalize the agency and permeate it with cultural message through various means, including pride, values, image and other symbolic behaviors so that employees will have sufficient guidance. Dealing with conflicts Although interest groups may at times affect policy formulation, California’s democratic society cannot live without public representation. In reality, interest groups can have both positive and negative effects on policy formulation and operations within an organization. James Wilson in “Bureaucracy” illustrates how interest groups can be helpful in one situation and harmful in another. The administrators of the regulatory agency for state-approved schools faced many barriers and issues that may not have been previously encountered because laws were not and will never be passed with a clear enough design for execution. Rosenbloom (1983) argues that traditional management theories can be applied to the executive branch, political theories to the legislative branch, and legal theories to the judicial branch. The Bureau administrators and its staff will find that they have to assume all three roles when formulating policies or making decisions on 298 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. applications. Inevitably, conflicts arise between the agency and the parties involved (i.e., schools, student consumer advocates, legislators, Governor’s staff). Although it may appear that Mary Follett's “law of the situation,” published in 1940, is outdated, her ideas are still useful to solve the Bureau’s issues. Her three ways to resolve conflicts are: 1) domination; 2) compromise; and 3) integration. She argued that integration is the best way to resolve conflicts. By using a domination style, other parties feel "powered over.” Although compromise is widely used by people to resolve conflicts, it is not a win-win situation for either party. Compromise implies that one party or all parties must compromise something to resolve the conflict. Integration as a style involves re-evaluation of the situation and participatory problem solving. All parties must be involved and a solution must emerge that is agreeable to all parties. It does not matter who assumes the lead, whether it be the agency, schools, or consumer advocates. The most important aspect lies in the integration and implementation of the best solution. It is the means to a win-win method of resolving conflicts. Reasonableness In terms of public administration concepts of reasonableness in philosophy and law, as explained by such authorities as Carl Friedrich and Benjamin Cardozo, are basic. One of the ideas expressed in their writings is “to search for reasonableness within the legal limit.” This concept is a crucial insight that the 299 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Bureau administrators and staff need have in mind in formulating policies and making decisions on applications. It is not possible to define universally what is reasonable and legal. This is because what is considered reasonable and legal for one party may not mean the same thing to the other party. However, Bureau administrators and staff can ask the question: “What would a prudently reasonable person do under these circumstances when making a decision?” Implications for Future Research This study provides a building block for further research on the Private Postsecondary and Vocational Education Program. The effectiveness and the efficiencies of the program can be impacted in many ways. Due to the cut-off time for this study, data collection for this project ended at the end of year 2000. As a result, this study focused on the historic events of a segment of the private state- approved education program. It will be interesting to research subsequent developments in the program using a multi-frame approach. Due to time and resource constraints, many issues related to this program have not been discussed. Some of these areas include the Student Tuition Recovery Relief Fund (STRF), violation enforcement, information technology in small agencies, and the emotional impacts of mergers on organizations. Further research focusing on these particular subjects would lead to a greater breadth and depth of practical and theoretical knowledge of proprietary schools. 300 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Innovative ideas can also help improve the efficiencies and effectiveness of the private postsecondary education program. Some good ideas surfaced during the Period of Searching for Effective Identity; however, at that time, they were not considered practical. These innovative ideas include: online filing of applications, part-time education specialists, and local employer curriculum evaluation. Innovative ideas should be explored to see when and how they could be useful at the right time, in the proper situation, and with the appropriate support services. Closing Thoughts Hopefully, this research has contributed to understanding of the Private Postsecondary and Vocational Education Program. Using real names and actual events in this study hopefully has evoked a clearer understanding by readers of what happened, and a more realistic depiction for analysis. There was no intent to embarrass anyone. If any person has been offended because of this study, the writer sincerely apologizes. 301 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. BIBLIOGRAPHY Aharoni, Y. (1981). The No-Risk Society. Chatham, NJ: Chatham House Publishers, Inc. Allison, G.T. (1971). 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Yates, D. (1982). Bureaucratic Democracy. Cambridge, MA: Harvard University Press. 312 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Yin, R.K. (1994). Case Study Research. Thousand Oaks, CA: Sage Publications. 313 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDICES 314 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX A LIST OF INTERVIEWEES Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1. Elena Ackel (Telephone Interview) Ms. Ackel is a Senior Attorney with Legal Aid Foundation, San Francisco, California. Legal Aid Foundation is a non-profit organization helping people with low incomes. Its funding includes contributions from the federal and state governments, State Bar Association, the United Way and private donations. Ms. Ackel was a former CPPVE (Board) member. She was one of the active student advocates who made important contributions to the passage of the Private Postsecondary and Vocational Education Act of 1989. 2. Leslie I. Axelrod After performing various duties in the California Department of Education (CDE), Mr. Axelrod transferred to the Private Post Secondary Education Division in 1988. He left with the rest of the staff in the Division in 1990 to work as a Senior Education Specialist in the then newly formed Council for Private Postsecondary and Vocational Education. In June 1997, Mr. Axelrod returned to Department of Education. He is currently an Education Consultant in the Testing and Measurement Unit in the Department of Education. Mr. Axelrod had worked in the Degree Unit and the Non-degree Unit while he was with the Council. He was also elected as an Employee Union Representative while he was employed with the Council. 316 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 3. George Blue Mr. George Blue began his civil service career with the Private Post Secondary Education Division, California Department of Education in November 1977. He transferred to the then newly-formed Council to work as a Senior Education Specialist with the rest of the staff in the Division in 1990. Subsequently, he was promoted to Education Administrator. He retired in April 1998 after the Council’s sunset in January 1998. He is now working as a retired annuitant in the Bureau for Private Postsecondary and Vocational Education, Department of Consumer Affairs. Mr. Blue is one of the few state-approved school program employees who have gone through all three periods of this research project. 4. Nina R. Bouley Ms. Bouley had been a schoolteacher and student counselor until the opening up of her vocational school, Automotive Training Corporation of American (ATCOA) in 1985. She closed her school and retired in 1997. Ms. Bouley was appointed by then Assembly Speaker Willie Brown to be a Council Member from 1992 to 1996. 5. Larry Bowler Mr. Bowler, a Republican, was elected to the State Assembly in 1992. He was a member of the Assembly Education Committee when the former Governor 317 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Pete Wilson vetoed the Assembly bill (AB2960-Firestone) proposing to extend the life of the Council. Mr. Bowler retired from the Assembly in 1998 because of the state’s term limit law. Mr. Bowler is currently a professor and the Chairman of the Board of Regents of Liberty University of California. 6. Carol L. Gochanour Ms. Gochanour began her state civil service career in 1961 with the California Department of Education. Through out the majority of her career, she was the key personnel handling the account receivable of private postsecondary school fees. Ms. Gochanour is currently an Office Technician in the Administrative Unit of the Bureau. She is one of the few program employees who have witnessed the success and shortcomings of all three periods of this research project. 7. David L. Houtrouw Mr. Houtrouw began working as a Community College Specialist (equivalent to an Education Consultant) with the California Community Colleges in 1980. He laterally transferred to the former Council to work in the Degree Unit in 1994. He transferred to the California Department of Education in March 1997 before the Council’s sunset. 318 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Mr. Houtrouw is an Education Consultant in the Child Development Division of the CDE. 8. Patrick Johnson Mr. Johnson (D-Stockton) was elected to the State Senate in 1992. He was re-elected to the Senate seat (District 5 Sacramento-Stockton) in November 1996. He was a member of Senate Education Committee when the former Governor Pete Wilson vetoed the Assembly Bill (AB2960-Firestone). Mr. Johnson left the State Senate in 1998 and did not re-run for a senate seat because of the state’s term limit law. Mr. Johnson has been an adjunct faculty with the University of California, Berkeley, and California State University, Sacramento, since his departure with the state legislature. 9. Robert W. Johnson Mr. Johnson is a licensed attorney in the State of California. He is currently the Executive Director of California Association of Private Postsecondary Schools (CAPPS), a proactive organization of the private postsecondary schools. 10. Rick Mejia Mr. Mejia was one of the Department of Education staff transferred to CPPVE when the 1989 Act became effective. He had worked as an Educational 319 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Specialist in the vocational and Title 38-Veterans units until 1998 when he secured a position with the California Department of Education. Mr. Mejia is currently an Education Consultant with the California Department of Education. 11. Linda McKinney Ms. McKinney is a budget consultant in the State Assembly Republican Caucus. 12. Kenneth Miller, Ed.D Dr. Miller was the Executive Director of CPPVE from 1992 to 1997. Before taking on this position, he was the President of a liberal college in the East Coast. Dr. Miller is the Vice-President of Education for Heald College, a technical college accredited by the Western Association of Schools and Colleges. Heald College offers baccalaureate degree, associate degree, and certificate programs 13. Richard and Bobbi Nathanson Mr. and Mrs. Nathanson are the co-owners of Western Career College. Started as a state-approved vocational school in 1983, Western Career College has offered Associate degree and certificate programs since 1996. The College maintains branches in San Leandro, Pleasant Hill and Sacramento. Western Career College is now a WASC-accredited institution. 320 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 14. Nancy Pang, Ed.D. Dr. Pang was an administrator with Automotive Training Corporation of American (ATCOA), a vocational school approved under the Private Postsecondary Education Law from 1988 to 1997. She was the Executive Director when this school closed its operations in 1997. Dr. Pang is the District Technology Coordinator for the Alum Rock Union Elementary School District in Santa Clara County. 15. John Peterson Before joining CDE, Mr. Peterson was the Assistant Superintendent for Castro Valley School District. Mr. Peterson had held various administrator positions during his tenure with the California Department of Education, one of which was the chief of the Private Postsecondary Education Division. Mr. Peterson is the executive of JP Etc., an education and training consulting company. He is also Board member of MTI. 16. Jason Piccione Mr. Piccione joined the Information Technology Unit of BPPVE in August 1999. He had had four years of work experience in the private sector not relating to education. Mr. Piccione is a Staff Information System Analyst in charge of the BPPVE’s IT Unit. 321 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 17. Robert Plant Mr. Plant has had many years of experience in vocational education. After retirement in 1982 form a teaching career with Yuba College, California, he began his administrator’s career in the private postsecondary education sector. Mr. Plant is the Director of Bryman College in San Francisco. 18. Kerri Ruzicka Ms. Ruzicka is an Education Consultant in the State Assembly Republican Caucus. 19. John Y. Szeto Mr. Szeto began his state civil service career when he was employed by BPPVE to work in the Information Technology Unit. He transferred to the Office of Information Services of Department of Consumer Affairs in May 1999. Mr. Szeto, an Associate System Analyst, is a LAN Administrator in the Office of Information Services, Department of Consumer Affairs 20. Linda Tyler Ms. Tyler has more than 20 years of administrator’s experience in the private postsecondary education industry. She had held various administrator positions, including 6 years as member of the management committee, 3 years of Director of Admission, and 8 years of Financial Aids, during her tenure with MTI. Subsequently, Master Institute, San Jose, recruited her to work as the Director of 322 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Financial Aids. At the time of her resignation in 1999, Ms. Tyler was the school director of Master Institute. Ms. Tyler is currently working as the Administrator for Special Projects at MTI. 21. Charles Williams Mr. Williams began his civil service career with the Private Post Secondary Education Division, California Department of Education in November 1978. He transferred to the then newly-formed Council with the rest of the staff in the Division in 1990. Mr. William has been a professional staff since his days with the Department of Education. He is a Senior Education Specialist in the Title 38- Veterans Program and has worked in various professional capacities through out his career in the private postsecondary education program. He is one of the few state- approved school program employees who have gone through all three periods of this research project. 22. Myra Young Before joining CPPVE, Ms. Young had had many years of services with the Labor Market Information Division of State Employment Development Department (EDD). She was a Section Chief (Research Manager II) at the time she was recruited to work as a Senior Education Specialist in the Council. She was in 323 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. charge of maintaining the official statistics and preparing related reports during her tenure with the Council. She left the Council and secured a position with the California Department of Education when the Council’s employees were put on the SROA (surplus employee) list. Ms. Young is an Education Consultant with the California Department of Education 324 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX B ORGANIZATION AND STAFF OF THE PRIVATE POSTSECONDARY EDUCATION DIVISION, JULY 1988 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced w ith permission o f th e copyright owner. Further reproduction prohibited without permission. DISPLAY 7 Organization and Staff o f the Private Postsecondary Education Division, July 1988 Note: A ll consultants in this D ivision are classified as “School Approvals Consultants” Vacant OSS I Executive Secretary I Veronica Pennington Stenographer to A dvisor Dianne R ussell (0.5) Vacant, Special Advisor Consultant Ann. A lvin, O A II V eronica B aluyot, O A II VIOLATORS Irvine A. Purdy, Consultant A SST. DIRECTOR Roy W. Steeves Ed. Adm in. I Los A ngeles ASST. DIECTOR W illiam K. N oble Ed. Admin. I Sacramento Secretary to the A ssistant Director Joan Hansen, Sr. Steno RELIGIOUS EXEM PTIO NS/ GEOGRAPHIC ZONE Charles S. W illiam s, Consultant GEOGRAPHIC ZONE M ilton H. H ood, Consultant Karl E. Kramer, Consultant STU D EN T TUITION RECO VERY FU N D / COM PUTER SYSTEM S Lorraine Tripp, SSA ________ N E W OCCUPATIONAL SCHOO LS/ CAREER RELATED EDUCATION _________ Jennie L. Gordon, SSA GEOGRAPHIC ZONE VETERANS ADM IN. LIAISON George Blue, Consultant Private Postsecondary Education D ivision Joseph P. Barankin, Director Assistant Superintendent ADM INISTRATIVE SUPPORT Kimberly Canevari, SSA COM PLAINTS R ick M ejia, AGPA OUT-OF-STATE A CCREDITED DEGREES Morris L. Krear, Consultant DEGREE COORDINATION Elaine Anderson, S S A Carol Gochanour, O ffice Tech Vacant, O ffice Tech. Martha Esm ael, Steno. R osalind D ouglas, OA II Linda Gray, O A II Gail M acBride, O A II (G) Vacant, O A II Vacant, O A II GEOGRAPHIC ZONE Particia G. Brown, Consultant Robert Buckerenmeyer, Consultant Charles A. M anning, Consultant Kathryn M iller, Consultant Richard W. Peterson, Consultant Lee H. Stallings, Consultant to Source: Honig, 1988, Section 1100 O N APPENDIX C SOURCE OF FUNDS, 1982-1987 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. DISPLAY 8 Expenditures by the Private Postsecondary Education Division, Fiscal Years 1982 -1987, by Source o f Funds (Dollars in Thousands) SOURCE OF FUNDS Veterans Administration Fiscal Year Amount Percent 1982 $ 1,402 82 1983 940 57 1984 991 56 1985 1,035 53 1986 882 38 1987 1,028 46 Total $ 6,278 Average $ 1,046 54 Institutional and Total Individual Fees________________________ Amount Percent Amount Percent $ 299 18 $ 1,701 100 715 43 1,655 100 763 44 1,754 100 936 47 1,971 100 1,463 62 2,345 100 1,189 54 2,217 100 $ 5,365 $11,643 $ 894 46 $ 1.941 100 Source: Private Postsecondary Education D ivision, California State Department o f Education. 328 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX D APPROVAL BY OTHER STATE AGENCIES Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPROVAL BY OTHER STATE AGENCIES In addition to being approved by the Council for Private Postsecondary and Vocational Education (Council), and institution may offer educational services that also require approval by other state agencies. The following is a list of such courses with the agencies name, address and phone number NOTE: This list is NOT comprehensive. The institution is responsible for ensuring courses received approval by all other government agencies concurrently or prior to obtaining Council approval. PROGRAMS DEPARTMENT Barbering Cosmetology Electrology Registered Dental Hygienists Registered Dental Hygienists Extended Functions Registered Dental Assistants Registered Dental Assistants Extended Functions SMOG & SMOG Retraining (Clean Air Course) Real Estate Salesperson License Preparation *Real Estate Principles Real Estate Broker License Preparation *Real Estate Practice, Legal Aspects, Finance, Appraisal, Economics, General Accounting, Principles, Business Law, Property Management, Office Administration, Escrows, Advanced: Legal Aspects, Finance, & Appraisal ‘ Prelicensing Education California Dept, of Consumer Affairs, Board of Barbering and Cosmetology (BBC) 400 R Street, Suite 4080 Sacramento, CA 95184 (916) 445-7061 California Dept, of Consumer Affairs, Committee on Dental Auxiliaries (COMDA) 1428 Howe Avenue, Suite 85-B Sacramento, CA 95825-3235 (916) 263-2595 California Dept, of Consumer Affairs, Bureau of Automotive Repair (BAR) 10240 Systems Parkway Sacramento, CA 95827 (916) 366-5023 California Dept, of Real Estate (DRE) Office of the Commissioner P.O. Box 187000 Sacramento, CA 95818-7000 (916) 277-0782 California Dept, of Insurance (DOI) 300 Capitol Mall, 15th floor Sacramento, CA 927-4357 •ALL D RE an d DOI PR ELIC E N SIN G C O U R S E S R EQ U IR E A PPR O V A L BY TH E COUNCIL. PU R S U A N T TO TH E M EM ORANDUM S O F U N D ERSTA N D IN G (MOUI) B ETW EEN TH E COUNCIL AND D RE/D O I, CONTINUING EDUCATION C O U R S E S DO N O T R E Q U IR E CO UN CIL A PPRO V A L: TH IS POLICY IS ONLY IN E F F E C T F O R TH E PER IO D S PE C IF IE D BY TH E MOU. 330 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. PROGRAMS Certified Nurse Assistant Registered Nursing Education Vocational Nursing Psychiatric Technician Respiratory Care Practitioner Lead-Related Construction Training Registered Veterinary Technology Federal Aviation Regulations (FAR) ** including Part 61 Pilot Training Aviation Maintenance Technicians Flight Simulator Training DEPARTMENT California Dept, of Health Services (DHS) 601 North 7th Street Sacramento, CA 95814 (916) 322-2073 California Dept, of Consumer Affairs Board Registered Nursing (BRN) 400 R Street, Suite 4030 Sacramento, CA 95814 (916) 322-3350 California Dept, of Consumer Affairs Board of Vocational Nurse & Psychiatric Technician Examiners 1414 K Street, Suite 103 Sacramento, CA 95814 (916) 445-0793 California Dept, of Consumer Affairs Respiratory Care Board (RGB) 1426 Howe Avenue, Suite 48 Sacramento, CA 95828-3234 (916) 263-2626 California Dept, of Health Services (DHS) - Childhood Lead Poisoning Prevention Branch 601 North 7th Street Sacramento, CA 95814 (916) 322-2073 California Dept, of Consumer Affairs Board of Veterinary Medicine 1420 Howe Avenue, Suite 6 Sacramento, CA 95828-3228 (916) 263-2610 United States Dept, of Transportation Federal Aviation Administration (FAA) 800 Independence Avenue, SW Washington, DC 20591 (800) 322-7873 ** PU R SU A N T TO TH E M OU BETW EEN T H E CO UN CIL AND TH E U S D EPA RTM EN T O F TR A N SPO R TA TIO N , FED ERA L AVIATION ADM INISTRATION, PA R T S 141 AND 147 O F TH E FED ERA L AVIATION REG U LA TIO N S A R E EX EM PT FROM FILING WITH TH E COUNCIL. TH IS POLICY IS ONLY IN E F F E C T F O R TH E PE R IO D S P E C IF IE D BY TH E MOU. 331 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX E ORGANIZATION AND STAFF OF THE COUNCIL FOR PRIVATE POSTSECONDARY AND VOCATIONAL EDUCATION (CPPVE), SEPTEMBER 1993 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced w ith permission o f th e copyright owner. Further reproduction prohibited without permission. COUNCIL FOR PRIVATE POSTSECONDARY AND VOCATIONAL EDUCATION Kenneth A . M iller Executive Director Sheila Hawkins Lee R ook Deputy Director (C E A Level 2) Executive Secretary I Paullette Lathan Sr. Typist Legal Vacant, O ffice Serv. Supervisor — Carole Gochanour, OFT (I) Rem y R osario, Acct. Clrk n — Ronald Thompson, O A (I) Vacant, OT (I) Susan O ’Shara, O A (I) — John A lien, O A (G) - A ssoc Info System s Analysts V acant N aviot Khaka — Vacant, A ssoc G ov’t Prog Analyst A1 Hays, Staff Services Analyst Vacant A ssoc. Budget Analyst Vacant, Personnel Serv. Spec. I Vacant Info System s Technician Charles Wannamaker M gmt. Services Technician Administrative Services Policy Planning& Research Legal Services Program Services D ivision Christine S. Oliver Beverlee W ickstrom G eorge Ritter George Blue Vacant Student Protection Staff Services M anager I A ssoc. Govt. Prog. Analyst S taff Counsel Education Administrator I Education A dm inist. I Closed Schools . Les Cochren General Aud. Ill School Approval Consultants - Vacant Charles W illiam s R ick M ejia, Educ. Prog. Asst. _ Com m . Coll. Prgrm Assistants B ette D ow Carlos Hernandez [level II] Gary N akashim a [level I] James Vanderbilt [level I] Title 38 Schools M onica Harney O ffice Technician (I) O ffice Assistants (I) V eronica B aluyot Susan Salvador 94310/94311 Schools Sr. A ssoc. Postsec. Eds Betty Sundberg V ick i Warner Lee Stallings School Approvals Cons. Jana M ontoya O ffice A ssistant (I) Special Consultants Ralph Alvarez N ancy W olfe Cuba M iller Robert W yman Linda Taylor Les Axelrod Educ. Prgms Cons. O J OJ o - > Education Prgms Assts Jerry Hardenburg Eulalia Y oung Com m . Coll. Prgm Assts n Barry N oonan Anqunett Fanner D avid D avis H elene Spencer • O lga Uribe< EPA -C olleen Thayer, AG PA -Jesus Jaime, SSA ‘ Teresa Gutierrez, OT(I) - O ffice Assistants (I) Rachel V asquez [h alf t] Ma. Aurora Takikawa N oum anh Khounboulom A nna C ox [half tim e] -S ta ff Services Analysts Vacant D am ielle Chin — O ffice Technicans (I) A nna C ox [half tim e] Betty Forbes • B ales Parino, O ff A sst (I) -E lizabeth Imholz Special Consultant -General Auditors II Vacant Vacant Vacant Vacant — Vacant, Special Invest. - Vacant M gmt. Serv. Tech. APPENDIX F ORGANIZATION AND STAFF OF THE COUNCIL FOR PRIVATE POSTSECONDARY AND VOCATIONAL EDUCATION, SEPTEMBER 1996 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Council for Private Postsecondary and Vocational Education Executive Office Kenneth A Miller Executive Director 172-147-7317-001 Laura Eljaiek Executive Assistant 172-148-1728-001 Office of Legal Services Program Services Support Vacant Stafff Counsel 172-147-5778-0 George Ritter Staff Counsel 172-147-5778-00 — Kathryn Antoine Legal Assistant 172-147-1820-00 Administrative Services Division James Johnson Asst. Director (CEA Level 1) 172-147-7500-02 — Legislation Policy Development — Media, Public Relations Publications — Personnel Management Services — Labor Relations — Management Information Services — Office o f Fiscal Services — Business and Support Services Program Services Division Sheila Hawkins Deputy Director (CEA Level 2) Program 172-147-7500-001 - Title 38 and Non-Degree Institutions — License Exam Prep Schools — Cosmotology Schools * — Los Angeles Field Office - Degree-Granting Institutions ~ Consumer and Student Protection — Audits — Investigation — Closed Schools — Instructor Certifications — V iolators/Complaints Student Tuition Recovery Fund Terry Wilson-Manown Assoc. Governmental Analyst 172-147-5393-001 Research and Planning A1 Hays, Personnel Officer Administrative Services Division 335 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced w ith permission o f th e copyright owner. Further reproduction prohibited without permission. Council for Private Postsecondary and Vocational Education Program Services Division Sheila H awkins Deputy Director (CEA II) Derik Criswell O ffice A ssistant (I) (1/2 tim e) George B lue Private Postsecondary Education Administrator PPES Gary Nakashim a *James Vanderbilt *Eulalia Young Colleen Thayer Valta Adger Carlos Hernandez D aniel Lamb - Traci Rupp Staff Services Analyst(G) -M on ica Harney O ffice Technician (I) -O ffice Assistants (I) ^Victoria Isaacs Ronald Thompson Stuart Lott Private Postsecondary Education Administrator -*C harles W illiam s, PPESS 'P P E S *D avid D avis R ick M ejia Jerry Hernandez Barry N oonan Jesus Jaime * Gregory B enson - S taff Services Analysts (G) Jana R isley Christine C ollopy -A m y Burns M anagem ent Services Technician -O ffice Technicians (I) Aurora Takikawa Sheryn Chinn *Tresa L ewis Pam ela W ilson Title 38 Schools N on-D egree Granting Schools Degree Granting Schools Consumer and Student Tuition Student Protection R ecovery Fund -B etty Sundberg Private Postsecondary Education Senior Administrator -Private Postsecondary Education Senior Specialists [PPESS] D avid H outrow Vacant Les Axelrod - A nna C ox O ffice Technician (I) Les Cochlren Staff Services M anager I - W illiam Rotas General Auditor III (Ret.) - James H enthom e, G A RE ■ General Auditors II Beverly Crane Christopher W allace "Vacant Sr. Special Investigator - Leo W afford Special Investigator I — D am ielle Chin Staff Services A nalyst (G) -B etty Forbes M gt. Services Technician ' Marina Lavato O ffice A ssistant (I) ■ Deborah Godfrey Staff Services A nalyst (G) ■ Paul W ong M gt. Serv. T echnician • Susan Porter O ffice Technician (I) GO GO Os (*) Position located in Los A ngeles A1 Hays, Personnel O fficer Administrative Serv. D ivision COUNCIL FOR PRIVATE POSTSECONDARY AND VOACATIONAL EDUCATION ADMINISTRATIVE SERVICES DIVISION James Johnson Assistant Director (C E A I) 172-147-7500-002 Julie Renteria O ffice Technician (Typing) 172-147-1139-007 Vacant S taff Services M anager I 172-147-4800-02 M anagem ent Information Services — Vacant S taff Programmer Analyst ■ Patrick Perry A ssoc. Info System s Analyst — Vacant A sst. Info System s Analyst -Donald D uB oise K ey Data Operator Donna Haworth O ffice A ssistant (Typing) O ffice o f Fiscal Services — Janet Thomas A ssoc. B udget A nalyst — Toni Cerniglia A ssounting O ffice (Specialist) Carol Gochenour O ffice Technician (Typing) Rem y Rosario A ccount Clerk II Legislation Policy Department M edia Publications Public Relations Personnel Services D aniel Sackheim Private Postsecondary Education Specialist 172-147-2742-009 Vacant - O ffice Technician (Typing) 172-147-1139-006 O ffice Support and Business Services Julie Sust O ffice Assistant (Typing) 172-147-1379-012 Cindy Rumenapp O ffice Assistant (Typing) 172-147-1379-013 B obby Shelling O ffice Assistant (General) 172-147-1441-001 Research and Planning Labor Relations T M yra Y oung Private Postsecondary Education Senior Specialist 172-147-2743-006 A1 Hays A ssociate Personnel A nalyst 172-147-5142-002 A lice Adam s Personnel Services Specialist n 172-147-1743-001 Certifications Unit I Maty Seavy O ffice A ssistant (Typing 'A tim e) A1 Hays, Personnel Officer Administrative Services Division 337 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX G CPPVE CLASS & SALARY CHART Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CPPVE CLASS & SALARY CHART (1994) CODE CLASSIFICATION(AR) MONTHLY SALARY PROB WWG MCR BU FOOTNOTE________________ RANGES 1733 ACCOUNT CLERK II (AR040) A 1826-2221 (SISA) 06 2 1 R04 4546 ACCOUNTING OFFICER (SPEC) (AR285) (19) A 2996-3602 06 2 1 R01 1479 ASST INFORMATION SYSTEMS ANALYST (AR278-285) (19) A 2423-2611 B 2499-2853 C 2996-3602 12 2 1 R01 5284 ASSOCIATE BUDGET ANALYST (AR285-322) (19) A 3430-4139 06 2 1 R01/ U01 5393 ASSOC. GOVERNMENTAL PROGRAM ANALYST (AR285) (19) A 3430-4139 06 2 1 R01 1470 ASSOC. INFORMATION SYSTEMS ANALYST (SPEC) (AR285) (10) A 3602-4346 06 2 1 R01 5142 ASSOC. PERSONNEL ANALYST (AR285) (19) A3430-4139 L 3430-4139 06 2 1 R01 7500 CEA (ARCEA) 1 5541-6109 2 6090-6715 3 6698-7384 4 7027-7747 06 4C NONE M01 7317 EXECUTIVE DIRECTOR, PRIVATE POSTSECOND ARY & VOC ED 7936 NONE 4C II E99 1728 EXECUTIVE ASSISTANT 2538-4085 06 2 I/IR R04 4287 GENERAL AUDITOR II (19) 2996-3602 06 2 I R01 4285 GENERAL AUDITOR III (AR285) (19) 3602-4346 06 2 I R01 1360 INFORMATION SYSTEMS TECHNICIAN (AR280-285) A 1934-2094 B 2011-2379 C 2284-2725 12 2 I R01 339 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CODE CLASSIFICATION(AR) MONTHLY SALARY PROB WWG MCR BU __________ FOOTNOTE________________RANGES________________________________ 1419 1820 5278 1441 1379 1139 1743 2743 2742 8550 4660 8553 5778 5157 KEY DATA OPERATOR (AR081) LEGAL ASSISTANT (AR085) (19) MANAGEMENT SERVICES TECH (AR023-285) (19) OFFICE ASSISTANT (GENERAL) (AR282) OFFICE ASSISTANT (TYPING) (AR064) OFFICE TECHNICIAN (TYPING) (AR005) PERSONNEL SERVICES SPECIALIST ii (19) PRIVATE POSTSECOND ARY ED SENIOR SPECIALIST A 1663-1834 (SISA) B 1891-2298 (SISA) A 2515-3027 A 1946-2291 B 2197-2611 A 1602-1946 (SISA) B1760-2138 (SISA) A 2038-2477 B 1760-2138 (SISA) A 2038-2477 2485-3021 4464-5424 06 2 12 2 12 2 06 2 06 2 06 2 12 2 12 4C I R04 R01 I R01 I R04 I R04 I R04 I R01 II R21 PRIVATE POSTSECOND ARY ED SPECIALIST (AR349) SENIOR SPECIAL INVESTIGATOR (19) SPECIAL CONSULTANT (19) SPECIAL INVESTIGATOR (AR156) STAFF COUNSEL (AR217) (19) A 3364-4087 B 4063-4936 3308-3984 0.00-9999.99 A 2698-3095 B 3012-3631 A 3200-3513 B 3684-4045 C 4441-5369 D 4998-6043 12 4C 06 2 NONE 4C 12 2 12 4C II R21 I R07 NONE SOI I R07 I R02 STAFF SERVICES ANALYST (GEN) (AR069) (19) A 2197-2611 B 2379-2853 C 2853-3430 12 2 1 R01 340 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CODE C LA SSIFICA TIO N ^) MONTHLY SALARY PROB WWG MCR BU __________ FOOTNOTE RANGES________________________________ 1581 4800 STAFF PROGRAMMER ANALYST (19) 3770-4547 06 4A IR/II R01 STAFF SERVICES MANAGER I 3958-4775 12 4C II SOI 341 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX H AB 2960 LEGISLATORS’ VOTING RECORDS AND GOVERNOR PETE WILSON’S VETO MESSAGE Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. VOTES - ROLL CALL MEASURE: AB 2960 AUTHOR: Firestone TOPIC: Postsecondary Education: Private Postsecondary DATE: 08/30/96 LOCATION: ASM. FLOOR MOTION: AB 2960 FIRESTONE CONCURRENCE (AYES 78 / NOES 0) (PASS) AYES Ackerman Aguilar Archie-Hudson Baca Battin Baugh Bowen Bowler Brulte Burton Campbell Cannella Cunneen Davis Figueroa Firestone Gallegos Goldsmith Harvey Hauser House Isenberg Knight Knowles Kuykendal Lee Martinez Mazzoni Miller Morrissey Willard Murray Napolitano Rainey Richter Speier Sweeney Tucker Vasconcellos Woods Pringle Alby Alpert Baldwin Bates Boland Bordonaro Brewer Brown Bustamante Caldera Conroy Cortese Ducheny Escutia Friedman Frusetta Granlund Hannigan Hawkins Hoge Kaloogian Katz Knox Kuehl Machado Margett McPherson Migden Morrow Kevin Murray Olberg Poochigian Rogan Setencich Takasugi Thompso Villaraigosa Weggeland NOES ABSENT. ABSTAINING. OR NOT VOTING Vacancy Vacancy Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. VOTES - ROLL CALL MEASURE: AUTHOR: TOPIC: DATE: LOCATION: MOTION: AB 2960 Firestone Postsecondary Education: Private Postsecondary 08/14/96 SEN. FLOOR ASSEMBLY THIRD READING AB 2960 FIRESTONE BY GREENE (AYES 23 / NOES 1) (PASS) AYES Alquist Ayala Boatwright Costa Dills Greene Hayden Hurtt Johannessen Johnson Kelley Killea Kop Leonard Lockyer Mello Montheith O’Connell Rosenthal Russell Solis Thompson Watson NOES Mountjoy ABSENT. ABSTAINING. OR NOT VOTING Beverly Calderon Craven Haynes Hughes Johnston Leslie Lewis Maddy Marks Peace Petris Polanco Rogers Sher Wright Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. BILL NUMBER: AB 2960 VETOED DATE: 09/30/96 To the Members of the California Assembly: I am returning Assembly Bill No. 2960 without my signature. This bill would extend the sunset date for the Private Postsecondary and Vocational Education Reform Act by five years, from June 30,1997 to June 30, 2002. This program is at a critical stage of its overall development. The Council has done much to rid California of its prior “diploma mill” status. However, the Council is now at a point of determining some fundamental issues with respect to its overall purpose. Many of the bad operators have left the state or gone out of business. Who are the agencies still operating that are concerned about their livelihood? Quite a few, to judge by the mail to me regarding this legislation. However, and I think importantly, there has been little or no suggestion made in the correspondence to date that the Council should be eliminated. Most of the concern has dealt with two issues: (a) the level of the fees required for compliance and being able to stay in business, and (b) the manner in which the staff of the Council carry out their responsibilities. With respect to the first, the larger, more capitalized schools do not have the same problem as the smaller schools that operate on a much smaller margin. We should do all we can to have many schools for the competition they provide. I would request that this issue be addressed either in the hearings on the Council that the author has committed to hold, or in subsequent legislation sent to me next spring to extend the life of the Council. Secondly, I am concerned about the number of schools, all of whom are still operating, that have described a pattern of reprisals and vindictiveness in dealing with the Council staff. They are told that their only recourse is to take their questions and objections to court. Surely, the Council itself should provide some admini strative appeal process short of litigation. There has been concern expressed about the message that vetoing this bill would send. The statutes do not expire until June 30, 19971. The author has committed to hold extensive hearings this fall regarding the need for program reforms. Until that has occurred, it would be premature to extend the life of the program for such an extensive period of time. A bill can be introduced in January that would reach me before June 30, 1997. 345 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. AB 2960 Page 2 A final note. The Council appears to have greatly impacted the operations of many fly-by-night schools, and should be commended for doing so. However, the goal is not to shut down as many schools as possible. Rather, it is the responsibility of the Council to protect students from potential scams, but to make sure there are as many options as possible available to students. There comes a point when we must be careful that we are not reducing supply for the point of reducing supply. I would like to have more assurances that we are not making it impossible or unreasonably difficult for many small businesses to operate before I extend the life of the Council. Cordially, PETE WILSON 346 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX I LETTER OF APPLICATION RETURN, MAY 30,1997 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. STATE OF CALIFORNIA PETE WILSON, Governor COUNCIL FOR PRIVATE POSTSECONDARY AND VOCATIONAL EDUCATION 1027 Tenth Street, Fourth Floor Sacramento, CA 95814-3517 Phone: (916) 445-3427 FAX: (916) 323-6571 May 30, 1997 TO: School Directors SUBJECT: Application Return As a result of the veto of the extension o f the Private Postsecondary and Vocational Education Reform Act (Act) by the Governor, and the failure o f the legislature to pass the urgency legislation required to maintain the Council, the Act and the agency are scheduled to shut down operations on June 30, 1997. As a result, the majority of the staff have left the agency and it is not longer possible to continue processing applications. We are returning your application and any related fees. I regret we are unable to accommodate your need at this time. I suggest you call the Council at (916) 445-3427 at the beginning of July to see if there is an operational law regulating private postsecondary educational institutions and if the Council is responsible for its implementation. If you get no response at the Council, I suggest you contact the Governor’s Office at (916) 445-1455 to learn if there is another agency responsible for handling approvals or if you will be free to provide educational services in California in the absence o f any minimum standards or regulation. Again, I apologize for this inconvenience, however, at this point the Legislature and the Governor need to decide the public policy issues with respect to Private Postsecondary Education for California. Sincerely, Kenneth A. Miller Executive Director 348 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX J FRIENDS OF PRIVATE POSTSECONDARY EDUCATION SUPPORT AB 71 (WRIGHT) Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. FRIENDS OF PRIVATE POSTSECONDARY EDUCATION SUPORT AB 71 (WRIGHT) We support balanced regulations for proprietary degree-granting and vocational schools. Fair standards support quality schools and provide educational opportunities while protecting students from diploma mills and fraudulent operators. Government/Consumer Organization California Postsecondary Education Commission Consumers Union Mexican American Legal Defense and Educational Fund Latino Issues Forum University of California Congresswoman Maxine Waters Oregon Office o f Educational Policy and Planning Council for Private Postsecondary and Vocational Education, David Levine, Chair Board o f Vocational Nurse and Psychiatric Technician Examiners Jericho Friends Committee on Legislation Traditional Values Coalition, Reverend Sheldon California State Employees Association Law and Public Law Interests Public Counsel Los Angeles Center for Law and Justice Bet Tzedek Legal Services Legal Services ofNorthem California Proskauer, Rose, Goetz & Mendelsohn, LLP Beck, De Corso, Daly, Barrera and Oh Jones, Day, Reavis and Pogue Katten, Muchin & Zavis The Sturdevant Law Firm Majors & Fox Law Firm William O’Hare, attorney Others Pacific Bell/CWA Horizons Dr. David Auccolotto, Clint Eastwood Youth Program, Community Hospital of Monterey Saint Irenaeus Church Peko Home Health Catalina Home Health Synergy Health Partners Tri West Insurance Services R. Gonzalez Management Peninsula Communications Workers of America, Local 9411 Dr. Rita Laws Jerry Wells, Oxnard, CA Ellen Brooks Frank Crandall, graduate student Nicole Hoffman, student Jeannette Dalena, former student, closed sch. Gerald Bailio, parent of student, closed school Nancy Nolan Orchard, Solvang Muriel Mahrer, Saratoga Tracie Radford, school instructor Beverly Andrade, school instructor Nanci and John Burton, Santa Rosa Frederick Lai, Glendale Christopher Brumfield, West Hollywood Joseph Hanzlik, Long Beach Mark Gordon, Los Angeles Lisa Stowell, Los Angeles Glen Unger, Los Angeles Nadia Mehrin, Sherman Oaks Dov Abitbol, Los Angeles Tyna Inniss, Torrance Diane Hovet-Fingerle, Van Nuys Flormel Agzuile Phu Nguyen, San Diego Dirk Hansem, Fair Oaks Kimberly Hadynksi, Sacramento Stacey Moser, Napa Mary Arnold, Rocklin Kathryn Hamilton, Sacramento Charles Munyon, Acampo Gina Rosas, Whittier Comfort Care 350 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX K MY PHILOSOPHY, MY EXPECTATIONS Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. To: Professional Staff Program Services Division From: Kenneth Miller Executive Director Date: 2/21/95 Re: My Philosophy, My Expectations Some of you are relatively new and it has been some time since I expressed my philosophy and vision for the agency. Recent comments from Council Members and schools suggest, once again, it is time to explain my goals. My primary goal is to make certain that we have a private higher education sector that offers quality education and training and awards diplomas and degrees having integrity. We do our job by enforcing the Act and our regulations. In addition to regulating institutions, we want to make certain that the Act and the regulations do not become so burdensome that schools decide it is not worth doing business in California. When statute and regulations are written, it is impossible to ensure that every school to be regulated will comfortably fit within the guidelines. This is one of the reasons we have a professional series of specialists working with the schools. I expect staff to exercise judgement when working with schools. What does this mean? Naturally, we cannot have twelve different people deciding what regulations to enforce and what regulations to waive. This would put the agency in a difficult predicament. However, there are situations, when, for a particular school or category of schools, flexibility is needed in administering the Act or the regulations. What do I expect of you in those situations? Do I expect you to tell the school there is nothing that can be done except for them to complain to a legislator? No. Do I expect you suggest the school request to be heard before the Council to complain about the problem? No. Do I expect the school to be told to call Sheila or Me? No. I expect the specialist to write an explanation of the problem to management, suggesting ways to solve the problem which might include statutory and/or regulatory change. I expect the specialist to tell the school, “I understand your position. Let me see what I can do about your problem and I will get back to you.” 352 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. If you feel the school needs immediate relief, I expect you to speak with your supervisor stating there is a problem brewing and provide suggestions for a temporary solution. Furthermore, you should recommend that the problem be analyzed and discussed by staff. That is the role of a professional. Some schools feel staff turn a deaf ear, giving the impression that “this is not our problem.” Telling the school to enlighten the Council, or the Legislature about changing the Act is not helpful to the Council or to the school. School owners have neither the time, nor the expertise for protracted battles. We, the professionals must be their champions. At some point the only alternative ay be the legislature or the Council, but it should come at the end of the process, not at the beginning. I hear schools complain that they do not understand what the specialist is asking them to do. They want to solve the problem but the letter they received describing the steps is not clear. We must write clearly, succinctly and with as little jargon as possible. It is always a good idea to refer the school to the appropriate section of the code or regulations, but we must also help with an explanation. Basically we should say, “Here is the problem, here is what you must do, here is the date by which you must complete the action and here is how we will verify the action had completed.” When your letters are returned by a supervisor requesting more clarity, view it as a learning experience. I have been told by friends that I am starting to write more like a bureaucrat. This is not a skill I am trying to acquire. I usually ask someone to read my letters before I send them outside the agency. I do not want to write confusing letters. I read so much poorly written correspondence from other government agencies, there is an unwanted influence on my writing. I fight against it. When a Council member writes to me and says, “Thank you for finally writing a letter than I can understand,” I am pleased I have succeeded. I am concerned, however, that I needed to interpret staff letters to the Council members. I expect you to learn how to make the judgements that are consistent with management philosophy. Everything cannot be written into policy. If it could, the job would not require professionals. The best way to learn how to make judgements consistent with the management philosophy is to test out ideas. Describe a situation to your supervisor and detail the reason you are recommending the alternative you have selected. Through these discussions you will learn to make judgements considered “appropriate” by your managers. If you are not certain about your leeway in making decisions, test them. For example, all of you have been told not to discuss fees with schools and not to waive fees. Clearly, this is not a judgement you are being permitted to make. Does this 353 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. mean you cannot bring a request for a fee waiver to your supervisor? No. The decision to waive fees, however, is not yours to make. I expect the staff to follow directions. For example, on several occasions, both Sheila and I have informed staff not to have a school call us directly. If you need help solving a problem, you should handle the situation as follows: (1) tell the school you will get back to them, (2) collect all of the information, (3) present it to the supervisor with a recommendation, and (4) jointly work out a solution with the supervisor. When a school calls directly, the supervisor has to make them restate the problem and typically can’t help without researching the answer. This frustrates both the school and the supervisor. We can do better than that. I have talked about customer service before. Our customers include the schools, the students, the general public, the legislature and each other. The schools pay our fees. We must be responsive. Being responsive means learning how businesses operate and how our action or lack of action can cause them financial harm. While we typically process work in the order in which it arrives, sometimes providing good customer service requires judgement. If a business is going to lose a contract unless something is processed by a certain date, even if the Act gives us more time to process the document, we should try to accommodate. If you cannot possibly make the accommodation, give your supervisor the chance to solve the problem. Perception is also important. If something we do, leads people to believe that we are not being thorough or taking our work seriously, then we need to change the way we do business. When direction is given by management on how to handle a task, it is for a reason and must be followed. Can you question why? Yes. Can you ignore the direction? No. Several Council members and schools have stated they believe that some staff overstep their authority. Schools complain they are asked to complete forms that are not official forms. We must use standard forms. Some of our forms are approved through the regulatory process. Schools complain that they are not given ample notice for a visit especially when their application has been sitting for months. Good customer service means understanding a school’s problems and perspective. We cannot ask for information unless we are supported by statute or regulation. We must be precise when citing compliance violations or asking schools to comply. We must make certain our requests are supportable by statute and regulation. At this point, you might be feeling confused. Are you supposed to be flexible, concerned about the school and use judgement to operate or are you supposed to 354 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. follow the law chapter, line and verse? The answer is yes to both. In some sitations, when you are going to take action against the school you must be exact. On the other hand, if you see a need to help a school in a manner that seems prohibited by the statute, you need to make a recommendation to management so we can find a way to help solve the problem if possible. In this way, exceptions are made by the same group for consistency purposed and we can defend an action if questions arise. The exceptions could lead to necessary amendments to the Act. The judgement you need to make is to decide when to bring a problem with possible solutions to a supervisor and when to vary a procedure or practice because good customer service demands it. I think it would be a good idea for everyone to read the section on the future in the annual report. It was quoted several times at the last Council meeting. I wrote it and I believe it. Our job, if we are responsible, is to find the best balance between enough regulation for consumer protection without the regulation smothering innovation and entrepreneurship. The task is difficult. I believe we are up to it. Finally, I recognize everyone is working hard. Working hard is not good enough if we are not accomplishing our mission, meeting our deadlines and demonstrating to our customers that we are doing our best. As you know, individuals in the community are monitoring our work and looking for problems and weaknesses. I defend our organization, but believe that while we have come a long way, we still have a way to go. I will be attending one of your next staff meetings to discuss this memo. I want to wait until our new managers have joined us so they can take part in this discussion. I will be holding them accountable for implementing my philosophy. 355 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX L ORGANIZATION AND STAFF OF THE BUREAU FOR PRIVATE POSTSECONDARY AND VOCATIONAL EDUCATION, FEBRUARY 1998 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. « S t “ # r e 2 h- ex t a -« © rr — * STRF Central R ecords R eceptionist Terry Zanchi T eam Leader llilllliilji immv R egistered institutions 5 £ « c is 1 1 k O O -i |5 X 4 ) t— 3 2 * 2! n ! i | - 2 « u £ £ « H ® c > f e > - . > . e © s > j»5 « E o C c ® s 5 » £ | ° i ~ “ g K K K Non-Degree G ranting P rogram s Patty W ohi T eam C oordinator LT Judy B urns T eam S pecialist Corky Mau T eam Specialist- LT Vince M oreno T eam Assoc II V acant T eam Assoc il-LT Francis Rivera T eam Assoc l-LT V acant T eam Tech I/ll V acant V) £ s s JS c E 3 8 * (0 O | as U S3 H * m 2 - u iS 3 < 1 a e to 5 f c * £ u u » 0 K b | iree-Grantin Programs ! | i h ® — ss =0 - j c = S | | 8 - 8 | w S g s S S S f s S * S ® »*■ 0 < £ ® J5 JS t" » e | I > 1 r e 1 1 8* I I K S<8,2 £ 2 I S ® 0 2 ® 1 - « •- s o a E l l l l s . 5 2 3 ®3S3 13 I 1 5 | a i f i f i i i f i f ^ 1 w K ^ w 2 5 , 5 s w » * * « s llll* ls ls lllllll • s 357 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX M NEWS RELEASE - COLUMBIA PACIFIC UNIVERSITY ORDERED TO CLOSE PERMANENTLY Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. la^aphaeirtQf Qm w w <Wia»a TW O Ot#y " ' " " 40(3 R Street" ' - ffO ) W2-S210 (916)322-1700 Sacramento, C A 95814 or (B16) 445-1254 News Release COLUMBIA PACIFIC UNIVERSITY ORDERED TO CLOSE PERMANENTLY Date: January 13,2000 Media Contact: Paula David (916)323-5178 SACRAMENTO— The Bureau for Private Postsecondary and Vocational Education today announced that a final judgement has been issued by Marin County Superior Court, ordering Columbia Pacific University (CPU) o f Novato to permanently cease operations and pay refunds to all students who have attended since June 25, 1997. CPU is a private institution offering distance-learning degree programs from the bachelor's through the doctorate level, and has been operating without required state approval since that date. "When an institution issues a degree to a student who has not received adequate training, knowledge, and skill, the student, employers, and the general public are harmed." said bureau Chief Michael Abbott. "Private postsecondary institutions are regulated by the state in order to help assure students, employers, and the public that the institutions meet the standards established by law. Before a student enrolls in an institution, and before an employer relies on a degree listed in a resume, he or she should check to assure that the institution subject to the bureau's jurisdiction holds an approval from the bureau." The Marin County Superior Court specifically ordered that CPU issue full refunds to all students requesting such refunds who attended CPU on or after June 25. 1997. CPU must send a written notice to all affected students, and must issue the refunds within 30 days of its receipt of a student's refund request. The bureau estimates that hundreds o f students will be eligible for a refund. Students should contact CPU to request a refund. But if they have submitted the request and do not receive their refund within the 30-day period, they may file a complaint with the Bureau for Private Postsecondary and Vocational Education. Students may also file a complaint if there is a dispute over the amount owed. In addition, students with CPU degrees granted on or after June 25. 1997 that were used for licensing examination eligibility should contact their licensing authority with questions about the validity of their license. Most licensing boards require that exam-takers have degrees from state approved schools. However, students who received degrees or credentials from CPU prior to June 25. 1997 should not be affected as the school had legal approval to operate until that date. Private postsecondarv and vocational schools are regulated by the bureau, which approves schools to operate in California. The bureau's predecessor agency, the Council for Private Postsecondary' and Vocational Education (see timeframe attached), conducted a qualitative review and assessment of CPU's degree-granting programs and denied its application for licensure. The council's denial was upheld by an independent administrative law judge on June 10. 1997. Among other items, the judge found that CPU. • awarded excessive credit for prior experiential learning to many students; 359 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. • failed to employ duly qualified faculty; and • failed to meet various requirements for issuing Ph.D. degrees. Since the Council's adoption of the administrative law judge's decision. CPU has continued to operate without legal approval. The Marin Count}' Superior Court preliminarily enjoined CPI' from operations in California, finding it did not have the legally required approval from the bureau. In March 1999, the Alameda Superior Court denied CPU's request that the court overturn the Council's adoption of the 1997 decision denying CPU's application for approval to operate, but CPU has appealed that decision. CPU also appealed the Marin County Superior Court's preliminary injunction, and on the day set for trial on the permanent injunction in May 1999, CPU filed for bankruptcy. However, CPU has since withdrawn its petition for bankruptcy. Students or former students may contact CPU directly with their refund requests at 105 Digital Drive, Novato, CA 94949, (415) 884-7878. Students who do not receive timely refunds, dispute the amount, or have other issues they are unable to resolve directly with CPU. should write to the Bureau for Private Postsecondary and Vocational Education at 1027 10th Street, 4th Floor, Sacramento, CA 95814-3517, call them at (916) 445-3427, or send faxes to (916) 323-6571. Complaint forms can also be found on the bureau's web site at www.dca.ca.gov/bppve. California currently has more than 2,000 private postsecondary schools under the bureau's jurisdiction. The bureau is a part of the Department of Consumer Affairs, California's consumer advocate in state government, which establishes standards of competency for more than 200 professions/occupations and administers the regulatory functions of licensing, examination and enforcement for those professions. To check on the approval status of a private postsecondary school under the bureau's jusisdiction, please call or fax the bureau at the numbers listed above. ### Note to reporters: Timeframe of events included below. TIMEFRAME OF EVENTS: December 1999 • The initial Private Postsecondarv and Vocational Education Reform Act of 1989 went into effect in 1991. Columbia Pacific University was given "grandfather" status as an approved, degree-granting institution. • CPU subsequently submitted its first application for approval to the Council for Private Postsecondarv and Vocational Education, the predecessor agency of the Bureau for Private Postsecondarv and Vocational Education. • After a comprehensive review and assessment, the council denied CPU's application on numerous grounds on December 15, 1996. CPU appealed that denial. During the pendency of the appeal. CPU was legally permitted to continue its operations • Following an evidentiary' administrative hearing, an independent administrative law judge upheld the council's denial. A final decision and order of denial was issued by the council on or about June 25. 1997. • CPU petitioned the Alameda County Superior Court for a writ of mandamus vacating the council's order and decision denying CPU approval to operate. CPU also sought a temporary stay of the council's decision pending the outcome of the writ petition. • The court denied CPU's request for a stay of the council's decision. Therefore, as of June 25. 1997. CPU has not possessed an approval to operate as a postsecondary institution in the state of California. CPU did not further pursue its writ action at that time, but continued to operate. • In late 1997 the council initiated a civil action in Marin County Superior Court to enjoin CPU’ s illegal operations. 360 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. On January 1,1998, the bureau succeeded to all the rights and powers of the council. The bureau continued to pursue the action against CPU initiated by the council. On February 10,1998, the bureau's motion for a preliminary' injunction against CPt' was denied by the Marin Superior Court on procedural grounds. The bureau appealed that denial. On October 1, 1998, the First Appellate District reversed the trial court's denial of the bureau's motion for a preliminary injunction. CPU then petitioned the California Supreme Court for review of the appellate court decision. On December 16,1998, the California Supreme Court denied CPU's petition for review. Therefore, the case was remanded to the trial court for reconsideration of the bureau's motion. On January 26,1999, the bureau's motion for a preliminary injunction was reconsidered and granted. The case was set for trial in May 1999. CPU appealed that decision. As a result of the Marin County Superior Court's decision at the trial, that appeal is moot. Following the California Supreme Court's denial o f CPU's petition for review in the Marin County action, CPU renewed its writ action in Alameda Superior Court. The Alameda County Superior Court denied CPU's request for a writ of mandamus. CPU appealed that decision, and the appeal is currently pending. On the date of the trial in the injunction action, CPU served notice that it had filed bankruptcy the previous day. The Marin County Superior Court stayed the action. The bureau sought, and on July 23,1999, obtained, relief in bankruptcy court from the automatic stay of the injunction action. The injunction action proceeded to trial on December 1 and 2. 1999, at the conclusion of which the judge issued her decision. ### OCA Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX N NEWS RELEASE - DEPARTMENT OF CONSUMER AFFAIRS WINS NATIONAL RECOGNITION FOR OUTSTANDING SERVICE TO CALIFORNIA VETERANS 362 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. va [News Release, Department of Consumer Affairs] News Release Department of Consumer Affairs Wins National Recognition for Outstanding Service to California’s Veterans April 7,2000 Media Contact: Kim Hunter (916) 327-4529 SACRAMENTO—The Department of Consumer Affairs (DCA) today announced that DCA’s Bureau for Private Postsecondary & Vocational Education (BPPVE) has been awarded the nation’s highest approval rating for educational programs for veterans. In keeping with Governor Davis’ commitment to provide efficient and easily accessible programs for California’s veterans, The BPPVE’s Title 38 program has increased the choices and services for those using their Gi Bill benefits. According to the national Joint Peer Review Group (JPRG) and federal Department of Veterans Affairs (VA) officials responsible for nationals ratings, the BPPVE was commented for its significant improvements over the past year and received “superior” ratings in all performance standard categories. Among its achievements, the BPPVE increased the number of approved educational and vocational programs available to veterans in California, along with the number of school visits it conducts to ensure compliance with laws and veteran student protections. It also provided technical support to veteran students and schools at nearly four times its previous rate, greatly increasing person-to-person customer assistance. In addition, the BPPVE implemented innovative procedures that save taxpayers’ money, such as a paperless process to expedite school approvals. These new ideas developed in California are now being incorporated on a nationwide basis by other state agencies and the federal government. Page 1 363 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. DCA News Release 4/7/00 The VA contracts with BPPVE’s Veterans Service Program to approve educational programs offered to veterans at California’s public and private postsecondary vocational and degree-granting institutions. The BPPVE has approved approximately 850 institutions with an estimated enrollment of over 25,000 California veterans receiving GI Bill benefits. For more information on BPPVE’s educational services for veterans, please contact Bill Young, BPPVE’s Veterans Service Program Administrator at (961) 445-3427 (Ext. 3009). California currently has more than 2,000 private postsecondary schools under the Bureau’s jurisdiction. The Bureau is part of the Department of Consumer Affairs, California’s consumer advocate in state government, which establishes standards of competency for more than 200 professions/occupations and administers the regulatory functions of licensing, examination and enforcement for those professions. To check on the approval status of a private postsecondary school under the Bureau’s jurisdiction, please call of fax the Bureau at the numbers listed. BBPVE Phone: (916) 445-3427 BBPVE Fax: (916) 323-6571 ### [from DCA Home Page] Page 2 364 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

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Asset Metadata

Creator Lamb, Daniel Yiukwong (author)

Core Title Educational reform for private state -approved schools in California

School School of Policy, Planning and Development

Degree Doctor of Public Administration

Degree Program Public Administration

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag Education, administration,OAI-PMH Harvest,Political Science, public administration

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Newland, Chester (committee chair), Clayton, Ross (committee member), Noonan, A. Barry (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c16-545101

Unique identifier UC11334587

Identifier 3094351.pdf (filename),usctheses-c16-545101 (legacy record id)

Legacy Identifier 3094351.pdf

Dmrecord 545101

Document Type Dissertation

Rights Lamb, Daniel Yiukwong

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA