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.


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.