UC President Hid $175 Million

University of California President Janet Napolitano hid $175 million in budget reserves from the public, the Legislature and the UC Board of Regents, the state auditor reported April 25.

“Auditing standards prohibited us from drawing conclusions from some of our work because the Office of the President intentionally interfered with our audit process,” the auditor added. “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.”

Among the auditor’s findings:

  • The Office of the President “spent significantly less than it budgeted for and asked for increases based on its previous years’ over-estimated budgets rather than its actual expenditures.”

  • The office 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 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.

“Significant reforms are necessary to strengthen the public’s trust in the Office of the President,” the auditor concluded. (Source: State Audit Report 2016-130, April 25.)

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