Editorial: UC requires more state support to improve budget practices

California has one of the world’s best public higher-education systems, but state audits suggest elected officials are more interested in gaining political capital than supporting the University of California.

On April 25, the state auditor reported the University was overpaying some administrators compared to other public sector workers, and had accrued $175 million in secret surplus funds. Public officials decried the University’s practices over the past week, culminating in a legislative hearing Tuesday during which UC President Janet Napolitano promised to implement all the state’s recommendations.

While the audit is useful and reveals how wantonly some administrators are paid, the timing is questionable. The May budget revision is around the corner. The UC has issues, but the state needs to have more productive conversations about them year-round, instead of conveniently releasing an audit while the budget is on the line.

The controversy echoes an audit published in March 2016, which found the UC disadvantaged in-state applicants by holding out-of-state applicants to laxer standards for admission so it could collect more tuition revenue. The University roundly denounced these findings. As a result, though, last year’s state budget included a one-time provision of $18.5 million if the UC implemented a nonresident enrollment cap, which the UC Board of Regents will vote on at its May meeting.

In both instances, the audits turned the focus away from how much money the University should receive from the state, toward issues like whether the $175 million “surplus” is actually a surplus.

It is unclear how this audit will affect the UC’s place in this year’s budget, but Gov. Jerry Brown’s January proposal allocated more than $8.4 billion to the UC. The sum is $146 million more than last year’s budget, but Brown’s plan includes phasing out middle-income scholarships to save the state over $116 million annually. Even with budget increases, the UC is requesting an additional $44 million to address deferred maintenance and support graduate student enrollment.

The University’s new budget also plans to implement a 2.5 percent tuition increase next academic year, ending a six-year tuition freeze. With the audit out, legislators and some University regents are calling for the UC to cancel the fee hike.

The audit creates a narrative of wasteful and inefficient spending on the UC’s part, shifting the blame completely away from the state. However, this ignores how many of the UC’s financial practices are driven by the state’s low investment in the University.

Students started paying more than the state’s general fund toward the UC’s operation during the 2011-12 academic year, at the height of the state’s budget crisis. The state budget has stabilized since then, but students fees and nonresident supplemental tuition still comprise a larger portion of the UC’s revenue than state funds.

While the UC certainly needs increased transparency, the state is not actually helping students by jumping on the report.

No one questions that there are overpaid administrators at the University, nor that the system’s budget is inefficient. However, instead of addressing how these financial practices affect students, the audit’s recommendations center around improving transparency and establishing guidelines for reserve and surplus funds. These measures are necessary, but do not show any real effort to collaborate with the University or improve students’ financial burden.

If the state really is concerned about how the UC’s financial practices affect constituents, it needs to invest more time and money into improving the system, not simply harass the University during budget negotiations.