PD Editorial: State audits give failing grades to UC, CSU

California faces a growing shortage of college-educated workers in the near future.

The most recent warning came in a report issued in January by the Public Policy Institute of California, which projected that the state will fall about 1.1 million college graduates short of workplace needs by 2030.

So what are California’s universities doing to fill the gap?

The University of California is spending excessively on compensation for its top employees, overcharging its nine campuses for administrative expenses and sitting on $175 million of undisclosed reserves, according to a state audit issued Tuesday.

A recently released state audit of California State University concluded that the nation’s largest public university system has added administrators and managers at more than twice the rate of other employees, including front-line faculty members. Moreover, salary increases for those high-level managers “significantly outpaced” pay raises for other CSU employees.

The blistering reports from state Auditor Elaine Howle echo long-standing allegations of administrative bloat at UC and CSU. And they come as both university systems are moving to raise student tuition for the first time in six years.

Fee increases at some point are inevitable. But it will be close to impossible to justify them now in light of Howle’s findings.

The UC audit focuses on the office of President Janet Napolitano. In addition to raising questions about staff compensation and reserve funds, Howle accused UC administrators of interfering with state auditors - an allegation that Napolitano denied.

“When we sought independent perspective from campuses about the quality and cost of the services and programs the Office of the President provides to them, the Office of the President intentionally interfered with our audit process,” Howle wrote in a letter to Gov. Jerry Brown and the state Legislature.

Howle’s audit of CSU involved the office of Chancellor Timothy White and 10 campuses, including Sonoma State University. In addition to executive compensation, auditors identified issues with reimbursement of moving expenses, which in one instance exceeded $100,000, and raised questions about budget oversight in the CSU system.

Howle said new management employees, including campus vice presidents, deans, various supervisors and head coaches for sports programs, generally were hired for worthwhile purposes, such as efforts to improve four-year graduation rates and raise more money for CSU campuses.

“Nevertheless,” she wrote in her report, “campuses were often unable to justify the number of management personnel they hired and consequently could not demonstrate that they are providing these services in the most cost-effective manner.”

Howle’s criticism of UC was unsparing: “Taken as a whole, those problems indicate that significant change is necessary to strengthen the public’s trust in the University of California.” She recommended greater legislative oversight of UC, which would be an enormous - and politically charged - change for the constitutionally independent university.

Howle’s findings should be carefully - and publicly - scrutinized through the legislative oversight process to ensure that university students and taxpayers are getting their money’s worth and that the state is in position to meet the demands of a 21st century workforce.