Audits of CSU, UC system finances

We thought last week’s state audit of California State University system finances was quite negative — until we saw Tuesday’s audit of the University of California system.

Now that’s a damning audit.

The highlight — er, lowlight — of State Auditor Elaine Howle’s report on CSU was that over the past eight years the system has hired middle managers at a rate at least twice that of any other employee group, including faculty. And that compensation for managers has grown at three times the rate of faculty pay.

That’s bad enough — the people who actually teach our young people at CSU are more important than those who direct them and shuffle papers, in our view.

But the findings of Howle’s UC audit are fairly explosive.

“The Office of the President accumulated more than $175 million in restricted and discretionary reserves that it failed to disclose to the regents and created undisclosed budgets to spend those reserve funds,” the auditor says in the fact sheet that accompanies the UC audit.

It goes on to say that the Office of the President “received significantly more funds than it needed in each of the four years” reviewed, yet asked for increases in future funding based on bloated budget amounts rather than actual costs.

UC President Janet Napolitano responded that charges of hidden funds were false.

Howle called the Office of the President’s budget practices “misleading” — which we take to be a nicer way of saying “sneaky” and “deceptive.”

Another charge, from Howle’s letter to the governor and legislative leaders: “We found it particularly troublesome that the Office of the President intentionally interfered in our efforts to assess the types and quality of services it provides to campuses” by reviewing campuses’ responses to surveys from the auditor and getting negative responses removed or improved.

Among the other findings in the UC audit:

— The Office of the President paid its executives and administrative staff “significantly” more than their counterparts in public employment. For example, 10 UC execs made $3.7 million in combined salaries in 2015-16, about 19 percent more than their “highest-paid state employee counterparts.”

— Administrative staff salaries are way out of line: An information manager can make $258,000 with UC, compared to $150,000 with other state agencies. That’s 72 percent more.

The auditor’s key recommendations are that “the Legislature should directly appropriate funding for the Office of the President’s operations” to ensure accountability, and that the UC regents should closely monitor the president’s office’s spending plans and its progress toward implementing the auditor’s recommended corrective action plan.

Two regents quickly responded, complaining that having the Legislature approve the UC president’s budget would “threaten the University’s standing as a constitutionally autonomous entity ... . ”

We’re not ready to say legislators should get involved on that level. After all, having the California Legislature tell anyone else how to spend money effectively is reminiscent of the pot’s maligning of the kettle.

But certainly the Legislature should insist that UC leaders — who voted in January to hike student tuition for 2017-18 — clean up their own fiscal house as they seek bigger slices of the state budget.