State audit finds UC execs got millions in extra compensation
BERKELEY (AP) – A state audit found University of California administrators skirted their own pay rules, giving senior managers millions more in bonuses, relocation packages and other perks than their publicly reported salaries.
The report, released Tuesday, is the latest in a series of probes highlighting irregularities in how the 10-campus system rewards its leaders.
The revelations, first reported by the San Francisco Chronicle, have been an embarrassment for the prestigious system, particularly since they cover a period when UC officials raised student fees substantially in response to state funding cuts.
The audit drew sharp responses from legislators, with state Sen. Jackie Speier, D-San Francisco, issuing a statement declaring the report was “more damning proof that UC leaders have flunked as guardians of the public trust.”
Assembly Speaker Fabian Nunez, D-Los Angeles, said the findings “should be the final nail in the coffin of the University of California’s outrageous compensation practices.”
Nunez, who is also a regent because of his office, said UC should have a chance to fix problems, but “we must see immediate and marked improvement in their failed system.”
UC President Robert C. Dynes, who has made some reforms to the system and promised more, issued a short statement saying the report illustrates the need for better oversight and promised “where there has been misconduct, misjudgments or mistakes, I will take appropriate action.”
UC administrators have noted their executives generally make less than their peers at similar institutions nationwide and say they have to be able to compete for top talent. Still, they’ve acknowledged the need to do a better job of spelling out policies.
“This audit, like the other reviews, makes clear the kinds of compensation packages we’ve had to offer to maintain UC’s level of competitiveness and quality,” said UC spokesman Paul Schwartz. “At the same time, it also makes clear our need to clean up our approval and disclosure processes.”
The audit noted that a survey of comparable institutions indicated they generally disclose no more than UC.
The report from State Auditor Elaine Howle looked at 2004-05 compensation and found that stipends, housing allowances and other perks accounted for $334 million out of a $9.3 billion total.
The data indicate that the 4,071 employees making more than $168,000 accounted for about 10 percent of regular compensation but received about 26 percent of the extra compensation.
Auditors also reviewed 100 highly paid employees and found that 17 benefited from policy exceptions granted by the UC president’s office.
The new report confirmed findings by a recent independent audit that administrators didn’t consistently get the required approval from regents for extra compensation.
For instance, when regents approved a salary for an incoming provost of $380,000, an increase from the incumbent’s pay, they didn’t know the new provost was getting a $125,000 housing allowance.
Information on all compensation was disclosed to regents in an annual report, but those reports weren’t always accurate and were late the last two years, the audit found.
The issue of disclosing more information to the public came up in a separate issue this week. The legal adviser to the state Legislature issued an opinion saying regents’ committees should meet in public when taking action on proposals involving the president, chancellors and some other top executives.
UC lawyers counter that the full board takes final action on executive compensation in public. They say committees can legally meet in closed-door sessions to protect employees’ privacy.
Recommendations in the state audit include overhauling UC’s pay tracking system, limiting policy exceptions and keeping a closer eye on campus compliance. UC should also disclose all forms of compensation for the highest paid employees, the report said.
Auditors also suggested that UC should look into seeking repayment where appropriate.
Regents are expected to discuss the pay issue when they meet later this month. Board chairman Gerald Parsky said in a statement that regents “stand ready to take strong action in regard both to individual cases and adoption of improvements to our compensation programs.”
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