The University of California received Tuesday what one state
lawmaker called “another strike.”
“If this was baseball, (UC President Robert Dynes) would
be out,” said Sen. Jeff Denham, R-Merced, referring to an
audit released by the state auditor, the third in a series of
reports which found severe failings in the UC’s compensation
practices over the past several years.
The three rebukes have caused UC officials to repeatedly pledge
their commitment to increasing transparency and public
accountability, as they have admitted that the UC has failed in
some of its compensation practices.
The hearings and audits of the past six months have mirrored a
process that occurred 14 years ago, when the UC dealt with similar
problems and was criticized for failures in its pay policies.
Lawmakers have said some of the problems now should have been fixed
back then.
But officials say the reforms this time are different and the UC
is committed to avoiding the transparency and policy problems that
afflicted it in 1992 and have come up again recently.
In 1992, the university confronted transparency issues when
former UC President David Gardner received a closed-door severance
retirement package worth $1 million.
After the disclosure of Gardner’s compensation package in
1992, the regents also ordered a series of state audits, which
reported that the UC had questionably distributed about $2 million
in compensation packages and stipends, taken from a special
administrative fund.
Later that year, the regents created principles to reinforce
public knowledge of executive compensation decisions. Chief among
these was that all discussions and actions on such matters must
occur in an open session to inform the public and the UC faculty,
staff and students of those decisions.
The state Education Code also requires that regents’
action on compensation proposals involving the president,
chancellors and other top executives be made in public
meetings.
In a report by the independent accounting firm
PricewaterhouseCoopers released last week, the review found that 33
top senior managers had been paid compensation packages that were
decided behind closed doors. These private meetings began 10 years
ago, as far back as the audit examined.
In 1992, the UC was in the middle of budget problems similar to
ones it is facing now. That year, the UC’s budget was cut by
$255 million, 4,000 employees were laid off, and student fees had
increased by 85 percent over the course of three years, according
to an article in The Chronicle of Higher Education in 1992.
Under these circumstances ““ which in some ways parallel
the situation the UC has seen in the past few years ““ UC
Student Association President Anu Joshi said she believes
publicizing large compensation packages would be harmful to the
UC’s image, so officials made the decision to allocate
compensation practices privately.
“This was the only way to protect administrative
compensation” from being affected, she said.
The UC’s failure to fix the problems it was facing in 1992
has created concern for some within the state and the
university.
Joshi said these problems happened because administrators
thought they could make exceptions to university policy and did not
uphold the principles they themselves had instituted.
“We need to make sure that certain people don’t feel
like they’re above the policies,” she said.
But the UC’s response this time around has been more
complete than it was in 1992, said Murray Haberman, executive
director for the California Postsecondary Education Commission,
which analyzes higher education in California.
Haberman said he believes the UC is making progress toward
improving transparency, accountability and regular reporting in
compensation.
“They’re moving in the right direction. I
don’t have a crystal ball. I can’t tell the future, but
I’m confident that the UC won’t be having problems with
compensation in the future,” Haberman said.
UC spokesman Paul Schwartz pointed to several actions the UC has
taken in the past months in order to ensure that the UC does not
encounter the same problems it faced in 1992.
In addition to the audits and reports already released, Schwartz
said the UC is conducting another internal audit that should be
released at the May regents meeting.
“Clearly, we need to do a better job disclosing the kinds
of compensation packages that … (we) offer to be competitive and
to maintain the quality of the kinds of contributions that UC makes
to the state,” Schwartz said.