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State auditor finds financial transparency recommendations for UC remain incomplete

The University of California Office of the President said it has fully implemented 16 of the 33 recommendations for increased transparency from an audit from 2017. However, the California State Auditor’s office said the UC has only completed 12 of the recommendations. (Kristie-Valerie Hoang/Daily Bruin senior staff)

By Vito Emanuel

February 18, 2019 11:36 pm

The University of California has not implemented recommendations for increased transparency from a 2017 state audit, according to a new report from a state auditor in January.

California State Auditor Elaine Howle detailed 33 recommendations for the UC to increase budget transparency in April 2017 after she found the UC Office of the President had failed to disclose $175 million in reserves.

Claire Doan, a UC spokesperson, said in an email statement that UCOP fully implemented 16 of the 33 recommendations made by Howle, including all 10 due April 2018. The remaining recommendations are due by April 2019 and April 2020. However, Doan said the CSA’s office disagreed with the UCOP report, saying that only 12 recommendations were fully implemented.

Of the 10 recommendations UCOP said were completed for April 2018’s due date, only eight were fully implemented, according to a report from a UC Board of Regents meeting in January.

The two recommendations that remain partially implemented address budgetary transparency and reserve policies. The recommendations were originally proposed to determine the amount of money the UC could reallocate to campuses.

Only three of the 10 recommendations due April 2019 have been implemented, and only one of the recommendations due in April 2020 has been implemented, according to the report from the UC regents.

Doan added that UCOP recommended in May the UC system reallocates $40 million to campuses in its 2019-2020 budget, two years earlier than the CSA recommendation suggested.

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

[Related: State auditor finds UC failed to complete 2017 budget audit recommendations]

Aidan Arasasingham, the director of legislative affairs in the Undergraduate Students Association Council External Vice President office, said he thinks UCOP is making a good effort to implement the reforms despite delays.

Arasasingham, a second-year global studies and economics student, said the audit has the potential to hurt student programs if state funding changes as a result.

“Funding toward student programs is being withheld by the state because of things like this audit,” Arasasingham said.

He added he thinks the debate should focus more on the steady decline in state funding for the UC than UCOP’s transparency.

“While we can always push for more transparency and accountability, we need to be more cognizant of the larger trend,” he said.

Ozan Jaquette, an assistant professor of higher education, said financial transparency creates a framework for holding the UC accountable.

“It’s a good thing for students and parents to know what is being spent on,” Jaquette said. “They should be able to raise concerns and then the system and campuses have to make their case.”

He added public universities across the country have been increasing budgetary transparency, such as the University of Alabama, which has made all of its transactions open to the public.

Jaquette said there are conflicting incentives for the UC to increase transparency. He added that the UC might have been nontransparent in an effort to drive up declining higher education funding from the state.

“The UC system wants more money from the state, and state funding has declined dramatically,” Jaquette said. “(It) leads to higher tuition prices and the need for the UC system to make money through other means.”

He added there is a political incentive for the UC system to not disclose reserves, as the state is less likely to increase funding if they know the UC system has large amounts of money already in reserve.

“Having this money in reserve weakens their case for asking for more state appropriations and support for higher education,” Jaquette said.

A report by the CSA’s office said the governor and California legislature directed UCOP to meet the proposed recommendations in order for the UC system to receive certain funding from the state.

Former Gov. Jerry Brown held $50 million from the UC’s budget in May 2017 until he deemed that they had implemented the CSA’s recommendations in a satisfactory manner. The money was later returned to the UC.

Jaquette added he believes California should increase funding for the UC if it wants to exercise control over UC policies.

“If California wants to tell the (UC) what to do, then California needs to pay for the (UC),” Jaquette said. “Otherwise, you’re just going to be putting your finger over 100 holes in a dam.”

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