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SAN FRANCISCO “”mdash; In a staunch display of support for the
top-tier executives at the University of California, the UC Board
of Regents retroactively approved controversial pay and benefits
packages for dozens of administrators in a series of closed-session
meetings last week.
After a series of newspaper reports revealed that university
officials were receiving lavish benefits packages without approval
of the board, the regents commissioned a series of audits (The UC internal audit, the PricewaterhouseCoopers
audit, and the State audit).
Audits were conducted by the university internal auditor,
PricewaterhouseCoopers, and the state auditor, who called for
“stricter oversight and greater transparency” within
the university.
The audits revealed hundreds of violations of university
compensation policy, including questionable travel and
entertainment expenses as well as robust administrative stipends
““ all without the knowledge of the public and the
regents.
In the middle of failing public support and intense scrutiny,
the regents outlined a 23-point plan to ensure that these errors
never happen again, including the creation of three new
administrative positions within the UC Office of the President.
The new positions include two executive vice presidents ““
a chief financial officer and a business operations officer ““
and a chief compliance and audit officer, who will report directly
to the regents.
In response to the audits and breakdown of university policy,
the regents examined over 100 separate incidents of unapproved
compensation and benefits, retroactively approving all but two.
“This was looked at in the context of what would be fair
and appropriate,” said Regent Chair Gerald Parsky. “As
we looked at the actions taken, we needed to be fair to the
recipients (of the benefits).”
Included among the two administrators that will be required to
repay funds is UC San Diego Chancellor Marye Anne Fox, who received
$248,000 in unused sabbatical pay from her former position as
chancellor of North Carolina State University.
“Had the matter been brought to us, we might not have
approved it at the time,” Parsky said, referring to
Fox’s questionable compensation.
The money will be deducted from pay when Fox takes her next
sabbatical.
But some state policy-makers continue to be critical of the
regents’ actions.
“It’s wrong to affirm all of these exceptions that
drive up cost and force tuition increases,” Sen. Jeff Denham,
R-Merced, said in a statement. “What’s even worse is
when these executives claim to take sabbatical and then don’t
return to their assignments. Instead, the sabbatical pay has been
abused by many as a free year of pay or severance package. If this
type of perk is what the taxpayer is paying for, then maybe
sabbaticals should be done away with all together.”
In one controversial case, the regents approved questionable
funds received by Edward Holmes, dean of the UCSD medical
school.
Under UC policy, certain employees need to give a percentage of
the money they earn from stock options they receive as members of
corporate boards.
Holmes was receiving $5,000 a month from the UC to compensate
him for the money he had to give the university from stock options
he held from an outside board position. But after Holmes had made
all the necessary payments to the university, he still received the
$5,000 per month, which he was told was a pay increase.
Holmes will be allowed to keep the money and the regents
approved the permanent pay increase.
“He was told by the UC that it was a salary increase.
Holmes did not know it needed regent approval,” Regent Judith
Hopkinson said. “He was entitled to (the money).”
Several hundred university employees will be receiving new W-2
tax forms with updated salaries and benefits. They will owe
additional taxes for unreported income.
The state auditor reported that the UC gives $8.9 billion in
regular pay and an additional $334 million in compensation
packages. The auditor also stated that the UC Office of the
President issues exceptions to university pay and compensation
policy too often.
But university officials maintain that the compensation levels
are actually lower than market value, and stand by their decisions
to approve them after the fact.
After comparing high-level administrative positions within the
UC to similar positions at comparable universities, the regents
discovered that senior managers at the UC are paid an average of
16.5 percent less than officials in similar positions, Hopkinson
said.
“We are prepared to defend the compensation levels,”
Parsky added.
Web addresses:
UC internal audit:
http://www.universityofcalifornia.edu/news/compensation/ucaudit0506.pdf
The PricewaterhouseCoopers audit:
http://www.universityofcalifornia.edu/news/compensation/pwcreport.pdf
The state audit:
http://www.bsa.ca.gov/pdfs/reports/2006-103.pdf