CSU Didn’t Reveal $1.5 Billion Surplus, Auditor Says

The California State University (CSU) Chancellor’s Office “did not fully inform legislators and students about CSU’s $1.5 billion surplus,” the state auditor reported June 20.

“As of June 30, 2018, CSU had accumulated a surplus of more than $1.5 billion, primarily from student tuition, that it can use at its discretion to cover the costs of instruction or other operations,” the auditor wrote. “During the period when CSU accumulated much of this surplus from fiscal years 2008-09 through 2017-18, it nearly doubled the cost of student tuition. Further, state funding for CSU also increased significantly after 2012, when California voters approved additional taxes to support education. Although the Chancellor’s Office considers the surplus to be critical for supporting CSU’s operational needs, it did not disclose the surplus to students when consulting with them about raising tuition costs, thus undermining the opportunity state law affords the students to provide input and ask questions about the need for tuition increases. The Chancellor’s Office also did not disclose the surplus to the Legislature when it provided information about CSU’s available financial resources. As a result, legislators were unable to evaluate whether CSU’s accumulation of surplus funds was reasonable and to consider whether that surplus should be used to fund certain portions of CSU’s budget requests rather than the State’s General Fund appropriations.”

Additionally, the auditor found that the Chancellor’s Office failed to ensure that campuses consistently plan for alternatives to costly parking facilities. The audit elaborated:

“From fiscal years 2008-09 through 2017-18, the four campuses we visited raised student parking permit prices to as high as $236 per semester, largely to pay for the millions of dollars in annual debt payments they took on to finance the construction of new parking facilities. However, these costly new parking facilities have had a minimal impact on parking capacity. Moreover, the Chancellor’s Office has not ensured that campuses have consistently planned for or implemented options for alternate methods of transportation – such as shuttles, carpools, and bicycles – before requesting to build new parking facilities, as CSU policy requires.”

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