Audit says CSU system stashed away $1.5 billion

SAN FRANCISCO » The California State University system kept $1.5 billion in discretionary reserves while it raised tuition and lobbied the Legislature for more state funding, according to a report released Thursday by the state auditor.

Auditor Elaine Howle’s report says that CSU accumulated the surplus from 2008 to 2018, primarily from student tuition. During that same time period, it nearly doubled student tuition at its 23 campuses but did not fully inform legislators and students about its surplus.

Tuition at CSU campuses rose from $3,048 in 20082009 to $5,742 in 2017-18.

The audit says the chancellor’s office used the money to cover the cost of instruction and other operating costs. It said CSU kept the money outside of the state treasury and did not disclose the surplus in key documents it provided to legislators and students.

“By failing to disclose this surplus when consulting with students about tuition increases or when projecting CSU’s resources and needs to the Legislature, the Chancellor’s Office has prevented legislators and students from evaluating CSU’s financial needs,” the report said. CSU Chancellor Timothy White said in a statement Thursday the report was misleading and mischaracterized the purpose of reserve funds, which help to deal with state recessions and cover the cost of maintenance or other expenses previously paid for by the state.