University of California System's Secret Budget

The California State Auditor's office just released a scathing report on UC system-wide finances managed by the system's Office of the President.

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

From the report cover letter addressed to the Governor and Legislature that summarizes its findings:

"The Office of the President intentionally interfered with the audit process."

"The Office of the President has accumulated more than $175 million in undisclosed restricted and discretionary reserves."

"In certain years the Office of the President requested and received approval from the Board of Regents to increase the campus assessment even though it has not spent all the funds it received from campuses in prior years".

"The Office of the President did not disclose the reserves it has accumulated, nor did it inform the Regents of the annual undisclosed budget that it created to spend some of these funds".

And from page 25 of the report: "Most of the spending from the undisclosed budget was for purposes the Regents had not explicitly approved".

 

UC system has been deeply in debt for a long time now and there have been some controversial polices enacted.

University of California debt soars to $17 billion; regents consider new borrowing policy

This news comes as no surprise.

 

I think this is typically referred to as a "slush fund," no?

 

Yeah, that's what I'd call it. A big one. A lot probably depends on how the secret-budget money was spent. Even sitting on it when in-state student tuition has doubled since 2006-7 is unconscionable.

Maybe one advantage of publicly-traded for-profits over state universities, at least those that have become poorly supervised behemoths like UC, is that the for-profits are required to be a lot more financially transparent.

 

update

Gov. Jerry Brown's budget holds back $50 million from UC to 'hold their feet to the fire' on reform - LA Times

 

It will be interesting to see how this breaks down between the 10 campuses. Even if the larger, more well-known campuses take on lion's share, I doubt that this will have much of an effect on a $2.35B budget.

http://cfo.berkeley.edu/sites/default/files/2013-14%20UC%20Berkeley%20Budget%20Plan%20-%20Final%20(9-5-13).pdf

 

More from the University of California front as reported in the Sunday May 28 San Francisco Chronicle (p.1):

On the evening before they voted to raise UC tuition on Jan 26, the UC Regents held a dinner party at the Intercontinental Hotel in San Francisco for 65 people and they billed UC $17, 600 for the expense.

And on May 17, after a Regents meeting at which students loudly protested the tuition increase, the Regents retired to another 59 person dinner party at the Palace Hotel in San Francisco, billing UC $15, 199 for that one.

Those are just two examples of many times they've done this. It seems to be their normal practice.

Admittedly it's just a drop in the bucket of UC's massive budget, but it just looks bad. Students are told to just bite-the-bullet and suffer, while frugality seems to be an alien concept in the Regents' own lives.

I guess that Californians are lucky that they aren't a for-profit.

 

Here's where the UC Regents met (at $15k university expense) for their May 17 dinner party:



It's reassuring to know that as a non-profit, all their actions are for the public good.

 

Chintz Palace.

 

I don't blame 'em. At Cal, It's just so much more stress-free to go off-campus for these types of events.