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Welcome to Essential Education, our daily look at education in California and beyond. Here's the latest:

  • The probe into audit interference, ordered by UC regents, concluded that UC President Janet Napolitano approved a plan that led to the interference.
  • UC regents, meeting in San Francisco, chastised Napolitano for her role in the interference. Napolitano responded by saying she should have shown better judgment. 
  • On Wednesday, they heard about ways to make a UC education more affordable.
Higher EducationUniversity of California

State auditor urges UC regents to boost oversight of central budget practices but says audit found nothing "nefarious"

What a difference a venue makes.

When state Auditor Elaine Howle told a joint legislative committee this month that University of California central administrators had amassed a $175-million undisclosed surplus and interfered in her audit, lawmakers cried foul. One compared UC administrators to corrupt officials in the city of Bell. Others asked whether administrators had committed any crimes and should be subpoenaed. One legislator called for the resignation of UC President Janet Napolitano.

But UC regents struck a markedly different tone when Howle came to talk about the audit at their meeting Thursday in San Francisco. Regents thanked her profusely for her work and said they would implement all 33 of her recommended reforms. Last week, they unanimously approved the hiring of an outside investigator to help uncover facts about the interference of central administrators in confidential surveys sent by auditors to campuses 

Many of the regents rallied around Napolitano, telling Howle the UC president was a leader of vision and integrity.

"It really hurt my heart" to hear people blast Napolitano's character, said Regent Bonnie Reiss "There aren't many people of her quality" willing to step into such high-profile public jobs.

"This is not an audit of the president," Howle said. "I have great respect for her, I'm not here to critique her leadership. This is an audit of the process ... (the president's office ) is not doing a good job." 

Howle said she found nothing criminal or "nefarious," however, about UC's budget practices. Asked by several regents whether she considered the surplus  a "slush fund" — as some critics have called it — Howle said: "You will not find 'slush fund' or 'hidden fund' in my report."

But she said her office also found no evidence that regents had approved Napolitano's decisions on how to budget the extra money. Her initiatives have included aid for climate change research, victims of sexual violence and students in the country without legal authorization. 

Regent Harvey Brody pushed back, saying he and his fellow board members had fully discussed Napolitano's initiatives and were proud of them. 

UC officials told regents they have started working on reforms, such as developing more detailed and transparent budget documents, analyzing appropriate staffing and salary levels, creating a budget reserve policy and reviewing travel and entertainment expenses. 

The regents themselves committed to stronger oversight through more frequent reviews of UC budgets and presidential initiatives, more public meetings about spending decisions and the hiring of an outside consultant to implement a three-year corrective action plan.

But several said they opposed the auditor's recommendation that the state Legislature directly fund the president's office. Currently, the office is funded by campus fees. 

For many regents, a major takeaway of the three-hour discussion was clearing up the confusion and the innuendos of wrongdoing that the audit sparked. 

"There has been no criminal activity. No slush funds. Nobody's integrity has been questioned," said Regent Sherry Lansing. "I feel it's important these distortions have been cleared up."



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