Another Critical Report by the State Auditor

The California State Auditor has released another critical report of UC, actually UCOP specifically. The headline element in the report is a $175 million reserve:

HIGHLIGHTS: Our audit of the University of California Office of the President’s budget and staffing processes revealed the following:

• The Office of the President did not disclose to the University of California Board of Regents, the Legislature, and the public $175 million in budget reserve funds.
• It spent significantly less than it budgeted for and asked for increases based on its previous years’ over‑estimated budgets rather than its actual expenditures.
• It created an undisclosed budget to spend the reserve funds; the budget ranged from $77 million to $114 million during a four-year period.
• The reserve included $32 million in unspent funds it received from an annual charge levied on the campuses—funds that campuses could have spent on students.
• The Office of the President’s executive and administrative salaries are significantly higher than comparable state employee salaries.
• During a five-year period, the Office of the President spent at least $21.6 million on employee benefits some of which are atypical to the public sector, such as supplemental retirement contributions.
• The Office of the President has failed to satisfactorily justify its spending on systemwide initiatives, and it does not evaluate these programs’ continued priority or cost.
• Both Office of the President and campus administrative spending increased and annual budget and staffing levels for the Office of the President are higher than administrations at other comparable public universities.
• Auditing standards prohibited us from drawing conclusions from some of our work because the Office of the President intentionally interfered with our audit process.
• It inappropriately screened the campuses’ survey responses before campuses submitted the surveys to us.
• Campus statements that were initially critical of the Office of the President had been revised and quality ratings shifted to be more positive.
• Significant reforms are necessary to strengthen the public’s trust in the Office of the President.

Source: http://www.auditor.ca.gov/reports/2016-130/summary.html

Full report - including UC's response - is at:

http://www.auditor.ca.gov/pdfs/reports/2016-130.pdf

The reserve appears to result from campus assessments that go to UCOP and various programs that in a given year spent less than allocated. Some of the reserves are earmarked for use by such programs, i.e., they are carryover funds.

There is also a response to the UC response in the report. At least some of the responses on both sides remind one of Monty Python:


Here is a news report:

The University of California’s headquarters hid $175 million from the public and lawmakers in a secret reserve fund while the Office of the President was asking the state for more money, according to a report released Tuesday by state Auditor Elaine Howell...

Full story at http://www.sfgate.com/news/article/Auditor-rips-UC-for-keeping-millions-in-secret-11097470.php