http://universityofcalifornia.edu/sites/default/files/Straight-Talk-Report-3-29-16.pdf,
Missing the Boat
What strikes yours truly about the Auditor's report is that - like the governor - in looking for signs of inefficiency, it looks only at ongoing current expenditures. The huge capital expenditures are somehow omitted from scrutiny. Because such expenditures are often said to be financed through gifts (sometimes gifts yet-to-be raised), or from other non-state revenues, they are viewed as having no cost. Since the auditor missed what was in plain sight, UC's semi-response to the audit does not deal with it either.The Auditor talks about the difficulty state residents have in getting into Berkeley and UCLA. But it doesn't ask why those campuses are so desirable. Surely, it is the human capital at those campuses that account for their reputations. A true audit would be asking whether the State of California is properly tending to maintenance of that human capital. It might have asked, for example, whether diddling with the pension system in ways that make it less attractive and less able to retain faculty was a Good Thing for the governor to push for and for the UC president to agree to. And with regard to capital expenditures, it could have asked about our favorite project: Was what UCLA really needed in the aftermath of the Great Recession was a $150+ million Grand Hotel? The Grand Hotel is but a symptom. Costly projects are routinely approved by the Regents who have no independent capacity to review them. Sometimes, as with the hotel, questions are asked. But they are always in the end answered by the proposing campus and the projects are then rubber stamped.
There is lots of blame to go around.
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