State Audit Reveals UCOP Withheld $175 Million

UC President Janet Napolitano's office has once again come under fire. (Image Courtesy of Wikimedia)

Chelsea Viola
National Beat Reporter

A California state audit released last Tuesday reported that the University of California administration withheld $175 million in budget reserve funds, a controversial discovery in light of recent moves by the UC to raise tuition.

The unaccounted millions of dollars comes from the Office of the President’s budget from the 2015-16 fiscal year. The UCOP had up to $830 million of funds available, but only presented a budget totaling $655 million to the UC Regents.

The audit also reported $32 million in unspent funds received from an annual charge levied on the 10 UC campuses, “funds that campuses could have spent on students.”

“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,” State Auditor Elaine Howle wrote to Gov. Jerry Brown and the California state legislature.

Upon further scrutiny, the UCOP’s budget faced sharp criticism, stating that it has failed to manage its budget in a “fiscally prudent or transparent way.” Student advocates echoed the audit’s concerns,

It was also found that salaries of employees in the president’s office are higher than the comparable positions in other state government jobs. For example, an information system manager employed with the UC can make $258,000, whereas the same position at a state agency pays $150,000.

UC President Janet Napolitano denied the report’s charges of hidden funds, claiming that the audit “unfairly mischaracterizes UCOP’s budget processes and practices in a way that does not accurately capture our current operations nor our efforts and plans for continued improvement,” Napolitano wrote.

However, Napolitano accepted many of the recommendations made by the state audit.

“The recommendations to UCOP are helpful,” Napolitano wrote to Howle in a public letter. “We welcome this constructive input, which aligns with our proactive efforts to continually improve UCOP’s operations, and UCOP intends to implement the recommendations.”

Two members of the UC Board of Regents, Monica Lozano and Charlene Zettel, formally rejected certain suggestions made by the audit, claiming that those suggestions impedes on the UC’s constitutional powers.

“As written, we believe these recommendations threaten the University’s standing as a constitutionally autonomous entity, and the Board of Regents itself,” according to the board’s combined statement. “Since its inception, UC’s constitutional autonomy … has allowed UC to grow into a world renowned system of 10 flagship quality research institutions. The scale and scope of this achievement distinguishes UC from other public university systems across the country.”

In a press release, Lt. Gov. Gavin Newsom issued a statement calling for the Board of Regents to rescind tuition hikes in response to the report. Despite supporting the UC’s autonomy, Newsom said he supported “the spirit and intent” of the solutions proposed.

“The audit must serve as a wake-up call for the Board of Regents, as a catalyst for serious soul-searching within the UC’s administration, and demands a reboot of the relationship between the system and its governing body,” Newsom said.

The Bottom Line’s request to speak with Napolitano was denied on account of her schedule. A future audit report on the UC’s contract policies is expected to be released in June.