Audit finds unreported funds in UC system

By Dorany Pineda 

A state audit report released April 25 revealed hidden funds and excessive administrative salaries in the University of California system amid tuition hikes.

According to the California State Auditor’s Office report, the University of California administration failed to make known to the public and the Board of Regents that it had $175 million in budget reserve funds.

The Office of the President has denied hiding those funds, but has yet to provide evidence to refute the accusations.

The audit also found that administrative staff of the Office of the President received salaries that were much higher than state employees who did the same work.

Auditors discovered, for example, that the senior vice president of government relations received $130,000 more than each of the top three highest-paid state workers in similar jobs.

The Office of the President defended those salaries, stating that employment in the higher education world demanded higher salaries.

Although the state audit established that to be true, it was only for certain executive positions and not for administrative staff.

In a letter written to Gov. Jerry Brown and the Legislature by state auditor Elaine Howle, she wrote: “Our report concludes that the Office of the President has amassed substantial reserve funds, used misleading budgeting practices, provided its employees with generous salaries and atypical benefits, and failed to satisfactorily justify its spending on system-wide initiatives.”

Howle also wrote that the president’s office purposely interfered with the audit process when the auditors contacted individual campuses “about the quality and cost of the services and programs the Office of the President provides to them.”

Campus survey statements that were critical of the office were changed to be more positive, as were the quality ratings. Auditors suggested to the Board of Regents that they contract an independent third party to help them implement and monitor a corrective three-year plan.

The design would focus on accountability and transparency within the Office of the President.

In January, the UC presented a proposal to increase tuition by 2.5 percent after a six-year pause.

Leaders in the UC system, along with the California State University institutions, told the Los Angeles Times in November that they “were pressed to find more money to preserve the vaunted.”

Lt. Gov. Gavin Newsom responded to the auditor’s finds and the UC’s tuition increase, saying that “it is outrageous and unjust to force tuition hikes on students while the UC hides secret funds.”

Newsom called for a reconsideration and reversal of the tuition hikes by the Board of Regents.

President of the UC Student Association Ralph Washington Jr. hopes that the reserve money found goes to helping the student population.

He proposed lowering tuition or helping homeless or starving students.

Assembly members Kevin McCarty, Jose Medina and Al Muratsuchi held a joint hearing yesterday to review the audit finds.

The hearing was titled “The University of California Office of the President: It Failed to Disclose Tens of Millions in Surplus Funds, and Its Budget Practices are Misleading.”

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