The UC has been facing strong media criticism for how it compensates high-ranking executives, and how this information is disclosed.
Starting in early November 2005, the university was criticized for supplementing salaries with undisclosed additional compensation in the form of administrative stipends, relocation packages and bonuses, while student fees continued to increase dramatically.
In an attempt to improve the UC’s compensation practices, the Joint Legislative Audit Committee requested that the Bureau of State Audits present an audit report of UC expenditures.
This report was released to the public on May 2, and is available in its entirety on the UC Web site.
The findings show vagueness and troubling inconsistencies in the UC Office of the President’s Corporate Personnel System. Although these inconsistencies made it difficult to verify some of the data, State Auditor Elaine Howle suggested that overall the ‘CPS is the most detailed and complete centrally maintained source of information in fiscal year 2004-2005. It reflects that university employees earned approximately $9.3 billion, comprised of $8.9 billion in regular pay and $334 million in additional compensation.’
A review of 100 of the highest-salaried UC employees found that several university compensation policies were violated or disregarded.
‘[These] exceptions to university compensation policy by the president’s office may weaken the credibility of the compensation policies it issues and create a culture of noncompliance,’ Howle said.
These findings concluded that various university campuses overcompensated certain employees, even increasing retirement-covered compensation and thereby violating UC policy.
‘The university did not consistently disclose its officers’ non-salary compensation, such as housing allowances, to the Board of Regents as required by policy,’ Howle said.
In an instance involving an employee at UC San Diego, a president’s office representative proposed a pay arrangement that, because of San Diego’s inconsistent monitoring of the arrangement, resulted in an overpayment of $130,000 to the employee between November 2001 and January 2006.
UCSD, which was among the campuses with the most frequent incidents of overcompensation, also inappropriately released a stipend and an automobile allowance to the vice chancellor. Despite being on sabbatical for much of the 2004-2005 fiscal year, the vice chancellor continued to receive a $68,100 administrative stipend and an $8,900 auto allowance for a position she had already vacated. According to university policy, sabbatical compensation is to be based solely on their administrative salary, which would not include a stipend or an auto allowance.
The findings of the report also suggest that UCLA advanced a law professor more than $75,000 for summer compensation and proceeded to classify this payment as a housing allowance in the campus payroll system.
UC President Robert Dynes responded to Howle’s findings, suggesting that the UC fully ‘accept[s] the premises underlying the recommendations contained in the audit report.’
Dynes said that he continues to be ‘concerned about elements of compensation that have been mischaracterized in the media as bonuses or hidden compensation, when in fact many of the elements are viewed within the university as regular pay for teaching and research, including summer or while on a sabbatical, carrying out the core mission of the university in compliance with compensation practices common to higher education.’
Dynes, who said that he remains committed to UC policy, said that the Bureau of State Audits will ‘find that the [actions taken by the UC], whether or not they implement the recommendations precisely as stated in the report, will be fully responsive to the spirit and principle behind … [the] … recommendations.’
Three Senate Education Committee members are calling for Dynes’ firing or resignation. They say his leadership is not trustworthy as he either allowed secret compensation deals or was completely unaware of his key staff’s actions. Dynes was included in the top management benefits unreported to the Internal Revenue Service through W-2 forms.
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