UC Boosting Fiscal Oversight

In an effort to tighten controls over executive benefits and restore public confidence in the university’s leadership, the UC Board of Regents on Thursday approved the creation of three high-ranking jobs supervising finances.

By launching searches to fill those positions, the regents acknowledged criticism from legislators and independent auditors that too many decisions about executive salaries and perks have been poorly handled and lacked proper oversight.

“Events of the past year have been traumatic for the university,” said Regent Judith L. Hopkinson, who heads the committee on compensation and led the movement for increased oversight.

Two of the new jobs will be executive vice president positions, one for business operations and one as chief financial officer. The third will be a vice president who will act as chief compliance and audit officer, reporting directly to the regents. Salaries for the new positions were not set.

“It’s meant to send a clear signal that the regents were not pleased with the way compliance and audits were handled in the past,” regents board Chairman Gerald L. Parsky said.

In May, several state legislators called for University of California President Robert C. Dynes, a physicist, to resign because of secrecy and lack of controls in controversial decisions over executive pay and benefits. Dynes hung on to his job, but the regents’ action Thursday indicated that they believed he needed more help in running the business side of the 10-campus system.

The regents grappled with the compensation issues in other ways too at their meeting at UC San Francisco. They reviewed detailed audits, which found that many executive contracts had been approved by campuses or system officials without regents’ review or public disclosure.

In most cases, the regents on Thursday retroactively approved the deals for housing allowances, sabbaticals and stipends. They noted that pay for UC administrators generally lags behind that of other major universities, even though some faculty, staff and students have contended that high executive salaries drain funds from the classroom and other services.

The regents agreed with findings that more than 210 university employees had received perks, such as moving expenses, insurance and tuition reimbursement, that had not been reported as taxable income. Those items will now be included on W-2 forms and the employees will have to report their value to the IRS.

The regents also negotiated a change in arrangements for a paid sabbatical for UC San Diego Chancellor Marye Anne Fox. As part of her hiring contract two years ago, UC paid Fox $248,000 for the yearlong sabbatical she had earned as head of North Carolina State University but had to forgo when hired.

UC officials conceded that Fox’s deal was the first time UC had paid in cash for a leave earned at another institution. Now Fox will, in effect, pay that back to UC with 3% annual interest whenever she steps down from the chancellorship. The money will be subtracted from whatever UC sabbatical income she will be eligible for at that time, officials said.

Fox declined to comment.