California state auditor slams UC for lack of financial transparency

A woman sits at desk and passionately addresses an unpictured subject through the use of facial and hand expressions.
Rachael Garner /File

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In a report released Feb. 12, California State Auditor, or CSA, Elaine Howle said that although the UC Office of the President, or UCOP, has made strides in implementing financial transparency reforms, its current state still allows the UCOP to maintain “virtually an unlimited amount” of money.

Howle’s most recent report was released after the results of her 2017 audit on the UCOP in which she discovered an accumulation of unaccounted funds, including $175 million that was hidden from the UC Board of Regents. In response to the 2017 findings, Howle requested that the UCOP implement transparency reforms by 2018.

The new report highlights a need for “corrective action” — Howle said in the report that California could have saved $3.5 million with the implementation of Howle’s reforms 
“by reducing costs, increasing revenues, or avoiding wasteful spending.”

Of the 42 recommendations Howle provided the UCOP in 2017, only 16 have been implemented, the new report found. Nine recommendations have been partially implemented, and 17 are still listed as “pending.”

“The university will continue working diligently and collaboratively with CSA to implement its recommendations,” said UC spokesperson Claire Doan in an email.

A critical point of contention regarding UC President Janet Napolitano’s alleged lack of adherence to the audit is the question of whether the UCOP interfered in surveys sent to every UC campus by Howle to solicit feedback on the UCOP. A 2017 investigation revealed that a UC official phoned various UC campus officials to review the survey responses before they were finalized.

“We find that members of the President’s Executive Office engaged in actions that interfered with the preparation and submission of survey responses from the ten individual campuses to the State Auditor,” the report said.

Two UC executives who interfered with the survey resigned in response to the investigation’s findings.

Recent updates regarding adherence to the 2017 audit include information posted on the UCOP website. In its January update, the UCOP stated that the Compliance and Audit Committee received an update from the UCOP regarding progress on the transparency reforms. In addition, the website alleged that documentation regarding the changes was provided to Sjoberg Evashenk Consulting, the company tasked with evaluating the implementation of the reforms.

Doan said in an email that by March, the UCOP will have appeared before the Board of Regents 34 times regarding the requested transparency reforms. She added that the UCOP also recommended in its 2019-20 budget presentation in May 2018 to reallocate $40 million toward the UC campuses, two years earlier than in Howle’s timeline, demonstrating the administration’s “significant” commitment to implementing that particular change.

“By the end of this February, these funds will have been distributed to campuses,” Doan said in an email.

Contact Sasha Langholz at [email protected] and follow her on Twitter at @LangholzSasha‏.

Correction(s):
A previous version of the photo credit accompanying this article misspelled Rachael Garner’s last name.