Campus Free Speech

Audit: University of California Overpaid Administrators, Hid $175 Million Dollars in Secret Fund

UC actually increased tuition last year, citing a lack of funding.

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Napolitano
Gage Skidmore

The University of California's administration kept millions of dollars in a secret fund even as it sought permission from the Board of Regents, and approval from the public, to raise tuition. It also overpaid employees who were already handsomely compensated, and provided them expensive perks.

An information system manager, for instance, could make $258,000 at the university, even though other state agencies would only pay someone $150,000 to do that job.

This is all according to a state audit of UC's finances. UC President Janet Napolitano is prepared to comply with the audit's recommendations, though she disputes the characterization of the $175 million as a secret fund, according to The Los Angeles Times.

Ten staffers in the Office of the President were paid a combined $700,000 more than their counterparts in other state agencies. And that's not all:

On benefits, the Office of the President provided a regular retirement plan but also offered its executives a retirement savings account into which the office contributes up to 5% of the executives' salaries—about $2.5 million over the past five years, the audit found.

"The Office of the President also spent more than $2 million for its staff's business meetings and entertainment expenses over the past five years—a benefit that the State does not offer to its employees except in limited circumstances," the audit said.

The audit also said the Office of the President reimbursed questionable travel expenses, including a ticket for a theater performance and limousine services. One person spent $350 per night on hotel rooms, which is above the allowable standard for other state agencies.

Keep in mind that UC's Board of Regents voted last year to raise tuition 2.5 percent for the first time in six years.

"It's outrageous and unjust to force tuition hikes on students while the UC hides secret funds, and I call for the tuition decision to come back before the Board of Regents for reconsideration and reversal," said California Lt. Gov. Gavin Newsom, who serves as a regent, in a statement.

He's right. A private university can charges as much as it wants and spend all its money on lavish perks for employees if it really wants to, but the UC system is supported by the taxpayers of California. It's ridiculous to ask students to cough up even more dough to attend a public university when the university is secretly ferreting away funds, overpaying its top administrators, and misleading its Board of Regents.

This story is outrageous. It's also a reminder that when universities complain about being starved for cash, they are lying. (Recall that the UC system was unwilling to sell even its palatial, unused chancellor's mansion.) Education is getting more expensive, in California and elsewhere, because of administrative bloat. Universities have made a conscious decision to hire more administrators, and pay them six-figure salaries, even as faculty wages have largely stagnated.

The result is students being bossed around by an ever-growing bevy of bureaucrats—and paying more for the privilege.

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  1. Shocking.

    1. $175 million seemed awfully low to me, too.

  2. Big education is worse than Big Tobacco!

  3. And this is after she dumped California kids in UC Merced so she could sell the valuable UC Berkeley and UCLA spots to out-of-staters.

  4. RE: Audit: University of California Overpaid Administrators, Hid $175 Million Dollars in Secret Fund
    UC actually increased tuition last year, citing a lack of funding.

    Well, so what?
    The little people of this country have too much anyway, so why not give it to one of the most wonderful re-education camps in the country?
    I mean, what else would the little people of this country do with their excess capital? Buy food? Pay rent? Purchase some new clothes?
    Besides, there is no such thing as over-paid state employee.

  5. Stopped clock, blind squirrel, and now, Gavin Newsom. That aside, does someone bother questioning ever-rising tuition on a stand-alone basis? It should be abundantly clear WHY rates are jacked up; address that and HOW it’s done may resolve itself.

  6. Universities have made a conscious decision to hire more administrators, and pay them six-figure salaries…

    It’s becoming a jobs program for bureaucrats?

    1. A jobs program for those not employable in private sector sector. Where else can your gender studies degree earn you $100k ?

  7. I think that’s the first time I have ever seen an audit report subtitled “It Failed to Disclose Tens of Millions in Surplus Funds, and Its Budget Practices Are Misleading”. That looks more like a newspaper headline.

  8. If I had $175,000,000.00, I could guarantee the safety of any speaker you can name!
    I call BS on the whole mess.
    Secede already!

  9. Judge Napolitano has really let himself go.

  10. None of this particularly surprises me anymore. Sometimes I wonder just how corrupt someone/ something would have to be in order to shock me.

  11. Uh, well, yeah of course this happened.

    Does no one remember what Napolitano did before her gig in education? You don’t just suddenly forget about how to create slush funds and keep your hijinks off the books because you change careers.

    1. Any other group would be charged with fraud. Hiding funds from investors and then asking for more money is textbook fraud.

      Oh wait, its government and no investors- so business as usual.

  12. Nothing.
    Left.
    To.
    Cut.

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