Panel Says UC Risks Loss of Trust : Finances: The university system may lose public support by letting officials live luxuriously while the state has severe money problems, audit committee warns.

By allowing some of its top administrators to live “regally” and “palatially,” the University of California is risking the loss of public confidence and support, members of the Joint Legislative Audit Committee told UC representatives Wednesday.

Committee members questioned UC officials about an auditor general’s report that said administrators used university money for such things as first-class air travel, limousine rentals, personal contributions to charities and entertaining one another lavishly.

The report also questioned the payment of housing allowances of as much as $40,000 a year to retiring UC President David P. Gardner and to other statewide administrators and some campus chancellors.

And it confirmed that Gardner is receiving $452,000 a year in total compensation, and will get a retirement package that has been criticized as being excessively generous.

State Sen. Gary K. Hart (D-Santa Barbara), chairman of the Senate Education Committee and a member of the joint audit panel, said, “The university, in engaging in some of these questionable practices, runs the risk of really losing the confidence of the people of California.”

Hart said Gardner’s salary and benefit package was “extremely generous--neither the President of the United States nor any other elected official I can think of comes close to reaching that level.”

Hart also said it is “inappropriate for the university to be involved in these kinds of housing machinations,” referring to the UC Board of Regents’ agreement to buy the house Gardner owned when he was president of the University of Utah, lend him the money to buy a new home in the East Bay and pay him $48,000 a year for house maintenance.

The Santa Barbara senator also said he was bothered by the auditor general’s finding that UC officials were using thousands of dollars from the university’s Administrative Fund each year to entertain one another.

For instance, the report said that 161 out of 273 events hosted by Ronald W. Brady, senior vice president for administration, took place near the UC statewide headquarters in Oakland and involved only employees of the president’s office.

“I’d like to take my staff out to boost morale, but you just don’t do that,” Hart said.

Assemblyman Robert J. Campbell (D-Martinez), chairman of the audit committee, asked: “How regally or palatially can a public entity (like UC) behave in a time when we have such severe fiscal constraints?”

William B. Baker, UC vice president for budget and university relations, told the committee that the university “takes this report very seriously” and that the findings will be discussed at several Board of Regents meetings beginning next month.

UC officials insisted that the report found no violations of either state law or UC policies, but acting Auditor General Kurt R. Sjoberg said in an interview that it is often difficult to know what UC policies are because they are “vague or they allow for exceptions.”

As often happens when the Legislature tries to deal with University of California management problems, the lawmakers had trouble figuring out what they could do to control spending practices at the constitutionally independent university.

Campbell, the committee chairman, said legislators generally are limited to actions related to UC budget appropriations--about $2 billion this year.

When the hearing ended, UC Vice President Baker said he has been dealing with the Legislature on behalf of UC for 28 years and “this was one of my least enjoyable days.”