State Auditor Slams UC For Secrecy in Spending

President Yudof disagrees but vows to improve transparency –

A report from the state auditor has criticized the University of California, in part for a lack of transparency in the ability to explain the differences in funding levels per pupil from university to university within the system.

The president responded that, while he disagreed with the audtor’s findings, he supported the efforts to improve transparency in the University of California

In the most critical finding, auditors found for the year 2009-10 the amount of per pupil spending ranged from $12,309 at the Santa Barbara campus to $55,186 at the San Francisco campus.

Although removing the largely medical schools at UCSF leads to a still concerning but more realistic picture, where the tuition ranges from UCSB’s, to just over $19,000 at UCLA.  UC Davis ranks second behind UCLA in state assistance.

The chief problem is not necessarily the differences across campuses, but the inability of the President to explain those differences.  Writes the auditor, “Although we understand that differences in funding among the campuses can exist because the Office of the President does not distribute all funding to campuses on a per‑student basis (for example, it provides funding to certain campuses for specific research or public service programs), we would expect that the university would be able to identify the reasons for any differences and be able to quantify them.”

Continues the auditor, “While we found no evidence that the Office of the President considered the racial or ethnic makeup of the student populations at the campuses as part of its budget process, we noted that the four campuses with a higher than average percentage of students from underrepresented racial or ethnic groups all received less funding than they would have received if each campus received the same amount per student.”

“This disparity highlights the importance of being able to quantify and explain the differences in the level of per‑student funding at the campuses,” the auditor says pointedly.

The auditor notes, “The Office of the President further stated that it is a goal of the university that all campuses achieve the level of excellence in teaching, research, and public service achieved by the Berkeley and Los Angeles campuses, although each in its own unique areas, and that while other campuses receive a lower amount of funding per student due to the factors discussed previously, without a significant increase in investment from the State, it would be problematic to equalize funding.”

“Although the explanations it provided for the variances in per‑student amounts appear reasonable, the Office of the President has not been able to fully quantify the differences in the per‑student allocation,” they write.

They add, “Because the university has not quantified the differences in the base budget provided per student among the campuses and does not have an agreed‑upon methodology for comparing per‑student calculations, stakeholders cannot be assured that the state funding that is the primary component of the base budget is being equitably distributed to the various campuses. “

The university told the auditors that it does not wish to jeopardize the achievements of the Berkeley and Los Angeles campuses by shifting funds away to other campuses in an effort to provide an equal amount of the general funds and tuition budget per student.

According to a release from the University of California’s Office of the President, Senator Leland Yee urged the Legislative Audit Committee “to require those who seek to use the limited audit resources of the state to provide more evidence of malfeasance than innuendo and presupposition behind their requests.”

The 15-month audit was requested in February 2010 by state Sen. Leland Yee. In a news release announcing his request, Senator Yee said a comprehensive state audit would help “uncover the extent of the waste, fraud, and abuse within the UC, and finally hold university executives accountable.”

“The exhaustive audit found no evidence of waste, fraud or abuse,” the statement from the Office of the President read.

On that basis, President Yudof responded in a letter to State Auditor Elaine Howle, agreeing to make some changes suggested by the Bureau of State Audits, disagreeing with others and detailing suggested improvements that were already under way, such as replacing UC’s current budget and planning manual with a new set of budget guidelines.

He strongly objected, however, to auditors’ “unwarranted and inflammatory” attempt to portray unequal funding among UC campuses as evidence of racial or ethnic bias.  The BSA reported that during fiscal year 2009-10, the amount of UC funding per-student ranged from $12,309 at UC Santa Barbara, a campus with no health sciences programs and only a ten-percent graduate-student enrollment, to $55,186 at UC San Francisco, a medical sciences campus with no undergraduates. “While the university’s budget process does not consider the racial or ethnic makeup of the campuses, we noted that the four campuses with a higher than average percentage of students from underrepresented ethnicities all received less funding than would be received under an even per student distribution,” the BSA report said.

“The University adamantly disagrees with the BSA’s analysis and comments inferring an inequitable distribution of funding across campuses,” Mr. Yudof wrote.

“There is absolutely no basis – statistically, historically, or ethically – for drawing such a connection. Furthermore, the BSA makes no investigation into or observation of disproportionate or inequitable treatment or outcomes for students at different campuses.”

The university also disputed the BSA’s contention that it inappropriately used revenue from student fees generated by a referendum on the Los Angeles campus, the so-called SPARC fee. A student-majority advisory board approved the use of the fees to fund two UCLA capital projects not specifically named in the referendum, a decision also approved by the UC Board of Regents and, contrary to the BSA’s assertion, not addressed by any legal ruling.

While Senator Yee was oddly quiet on Thursday, a number of other stakeholders issued a number of pointed statements about the lack of accountability and transparency at UC California.

Lakesha Harrison, President of AFSCME (American Federation of State, County and Municipal Employees) Local 3299 said in a statement, “It is time California taxpayers started to get some answers about what is really going on with the University of California’s finances. While the middle class are being pushed out of the dream of a higher education and low-wage UC workers are being forced back into poverty, UC’s executives continue to prosper and do business with little transparency.”

UC Santa Cruz student body president Claudia Magana added, “University of California students are excited to finally see where our tuition and fee dollars are going. Mandatory tuition and fees for UC students have steadily risen over the past decade and this year alone we will be facing a 19% hike in tuition. The University has not been fully transparent with its budget and fiscal policies, while making students pay more to only receive less. UCSC hopes that this audit is the first step of a regular open process, which holds the Regents and President Yudof accountable to UC students and working families throughout California.”

Meanwhile, Bob Samuels who is the President of UC’s AFT (American Federation of Teachers) noted, “In the past seventeen months, the University of California Regents hiked tuition an additional 17.6% on the backs of California’s middle class families; forced increases to class sizes and cuts to class availability; subjected faculty and staff to layoffs, furloughs, and hikes in healthcare costs; and withheld promised wage increases for some front-line staff. “

He added, “This audit is only a first step towards more transparency at the University of California.  California’s middle class and working class families are counting on the University and the legislature to never allow UC’s finances to go back into a black box of secrecy again. The University of California is our University and must be held accountable to all of us.”

Finally UPTE-CWA (University Professional and Technical Employees-Communication Workers of America) Local 9199 President Jelger Kabnyn said, “UC has been working overtime to blame its flagging popularity on Sacramento, when much of what’s wrong with UC has to do with its flawed priorities – bonuses and buildings over UC’s core mission.  California’s taxpayers deserve better and we hope that the legislature continues to keep watchful eye on keeping UC’s priorities straight.”

While President Yudof and the Office of the President clearly disagree with some of the conclusions, they claim to support the effort to improve transparency.

President Mark Yudof concluded, “While we disagree strongly with certain conclusions and commentary in the BSA’s report, we fully support what we believe was the intent of this audit – to continue to enhance the transparency of the University’s performance, with the end goal of improving the public’s understanding of our operations and facilitate accountability to our stakeholders.”

—David M. Greenwald reporting