California auditors want more oversight of U.C. system's budget

SACRAMENTO, Calif. (KGO) -- A damaging report from the state auditor has lawmakers in Sacramento demanding more oversight of the University of California's finances.

The report found that the office of U.C. President Janet Napolitano kept a secret budget fund and paid higher salaries to top administrators. Earlier this year the U.C.'s regents overwhelmingly approved a moderate tuition hike.

But unbeknownst to students the state auditor was keeping tabs on the University system's budget. "I wished I could say I was shocked," Assemblyman Phil Ting said.

Ting ripped the university system for keeping $175 million in an undisclosed fund.

Those funds were saved because the U.C.'s spent less money than anticipated, yet asked the state for budget increases. It also created a secret budget to spend only some of the reserve funds, and included in that secret fund were $32 million from a campus-wide annual charge.

The audit report says that money should have gone to students. "I'm surprised they could get away with it, I guess, until the auditor found out," Ting said.

No one from the office of the president responded to comment on the allegations.

Instead in a letter dated April 5th, the president stated the true amount of the available and uncommitted reserve is $38 million. The rest is either in restricted funds or has been earmarked to academic programs and other campus commitments.

Other revelations include the discovery that salaries within the office of the president were higher than comparable state employee salaries, and that the office spent $21.6 million over five years on employee benefits which are not typical to the public sector. It was also discovered that staffing levels were higher than at other comparable public universities.

"These are very troubling finding. Freeze the tuition increases immediately and work with the legislature and get to the bottom of this," Representative Catherine Baker said.

The state auditor recommended that significant reforms are necessary to strengthen the public's trust in the office of the president.

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