Auditor Says UC Santa Barbara Blew $750,000

The state auditor says the University of California, Santa Barbara, and its foundation inappropriately spent or lost more than $750,000 by poor fiscal management.

He said additional thousands could have been lost by failure to seek competitive bids and by splitting projects into small contracts that fell below the level requiring competitive bids.

The auditor said the university has taken some corrective action, but he recommended a series of fiscal reforms.

The former chancellor of the Santa Barbara campus, Robert Huttenback, resigned and has been charged with embezzlement, tax fraud and defrauding an insurance company and fraudulently appropriating university property. His arraignment is pending.

In a response to the report, UC President David Gardner said the university “is in general agreement with the thrust of the recommendations” and has taken action to implement many of them. But he did not agree with some specifics of the auditor’s report, and promised a more detailed response within 60 days.

The auditor said the university:

- Inappropriately spent at least $271,240 to repair and maintain the former chancellor’s residence. The auditor said Huttenback repaid $80,000 and issued a promissory note for $94,090.

- Accused the former facilities manager, Holger Ferdinandson, of embezzling $250,000--partly in kickbacks for work on the chancellor’s residence. He pleaded no contest last month and agreed to pay the university $100,000, plus interest, within 120 days of his release from prison.

- Paid inflated prices for construction and maintenance projects and for work not performed.

- Paid salaries to two employees while they conducted private business at three other campuses.

- Paid $70,000 for consulting contracts at the chancellor’s office, with no evidence that the work was performed.

The auditor said the university foundation, a nonprofit corporation formed to raise private funds to support the university:

- Lost over $100,000 by lending money without proper security, sometimes not charging interest, and not pursuing delinquent borrowers.

- Inappropriately spent up to $130,200 of restricted and endowment funds for loans and $20,000 for a political contribution to Proposition 56, the successful education bond proposal on last November’s ballot.

Gardner said he is not in full agreement that the restricted and endowment funds were improperly spent.