UC audit: Napolitano’s office to present transparent budget
The University of California regents grilled top UC officials Wednesday about why they missed a critical deadline for complying with the recommendations in a 2017 state audit that uncovered $175 million squirreled away in President Janet Napolitano’s office.
That hidden money — much of it used for university projects but never disclosed to the regents in the UC president’s annual budget presentation — prompted the auditor to prescribe an overhaul of the $813.5 million president’s office that oversees the UC system.
The annual budget presented by the president’s office was typically about seven pages long, and the regents invariably approved it.
“We got used to doing things in a certain way,” Regents Chairman George Kieffer acknowledged Wednesday.
As part of the overhaul to be completed in 2020, 10 steps were due by April 30. Among them were the presentation of a thorough and transparent budget, and establishing a process for reining in salaries in Napolitano’s office. The audit revealed that perks and pay for people working there far exceeded those of similar state employees.
After the audit’s release in April 2017, Gov. Jerry Brown withheld $50 million from UC and said he would let it go only when the president’s budget presentation complied with audit recommendations and other reforms — such as halting lucrative retirement perks for new executives.
“As the regents will see, the budget (to be presented Thursday) is in line with both best practices and the state auditor’s recommendations for its presentation,” Napolitano told the regents Wednesday at their meeting at UC’s Mission Bay campus in San Francisco.
After the regents approve that budget, Brown is expected to tell state lawmakers to let the $50 million go, said H.D. Palmer, spokesman for the state Department of Finance.
But even as UC officials anticipated crossing that threshold, members of the regents’ audit committee asked why they missed the auditor’s
April 30 deadline for completing 10 steps toward total audit compliance in 2020. State Auditor Elaine Howle announced this month that that UC missed four of the steps. Yet just before the deadline, a consultant hired by the regents to oversee compliance, former state auditor Kurt Sjoberg, said UC was in the clear.
“I want to make sure I understand — if you’ve been working with the auditor all along — why have the expectations not been met?” Gareth Elliott, vice chairman of the regent’s audit committee, asked Zoanne Nelson, chief strategy officer in the president’s office, and other UC audit officials.
Nelson said three of the four steps deemed noncompliant involved the president’s budget, which could not be revealed before Thursday. However, she said that in March her team gave state auditors a detailed template of what they planned to present this week — just without the numbers.
As for the remaining out-of-compliance step — the process for reining in salaries — “we thought we were on track” because it was believed to be due in 2019, Nelson said.
Regent Ellen Tauscher asked if the problem was a substantive misunderstanding or a matter of semantics.
Nelson said it was the latter. But she said the team would nevertheless work to comply with the remaining salary issue, and that when the auditor takes another look in October, “we’ll definitely be able to determine the (new salary) ranges by then.”