The University of California president’s office approved exceptions to university compensation policy in recent years that resulted in extra pay and benefits for 17 of the system’s 100 highest-paid officials, according to a state audit released last week.
The audit, the second ordered by the state Legislature, also found that some of the university’s 10 campuses broke the rules by including inappropriate and often unreported earnings in administrators’ sabbatical and retirement pay.
Lawmakers ordered the audit, which built on a critical audit released in April by the accounting firm PricewaterhouseCoopers, after the San Francisco Chronicle last fall published a series of articles about the system’s failure to disclose nonsalary compensation. Both audits found that university officials had regularly failed to inform the Board of Regents about key decisions on executive compensation (The Chronicle, April 25).
Gerald L. Parsky, the board’s chairman, said in a written statement that the board was “ready to take strong action in regard both to individual cases and adoption of improvements to our compensation programs.” He said the regents would act on the findings of the two audits and a forthcoming internal audit at their next meeting, scheduled for May 17 and 18.
A report on the latest audit said state auditors had scrutinized the compensation received by the 662 university employees who earned more than $168,000 in total compensation during 2004-5. Those officials earned 10 percent of the system’s total regular pay, but 26 percent of the additional compensation paid by the university.
The 137-page report includes an appendix detailing the compensation of the university’s 100 highest-paid officials.
The audit lists many examples of compensation violations and exceptions that are likely to prove embarrassing to the university. They include:
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Exceptions on housing allowances. A dean on the Riverside campus was paid more than three times the annual housing-allowance limit of $53,300, receiving $187,500 because of an exception granted by the president’s office. A dean on the Los Angeles campus received a $270,000 housing allowance.
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Miscalculated retirement pay. Some of the university’s branches included the value of benefits, such as housing and automobile allowances, in calculating retirement pay, a violation of policy. On the Riverside campus, retirement pay for two officials was based on compensation that included $53,300 in housing allowances.
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Undisclosed extra compensation. The university approved a $125,000 housing allowance for a newly hired provost, M.R.C. Greenwood, that was not disclosed to the regents. The regents subsequently raised her annual salary to $380,000, a $100,000 increase from the pay of her predecessor.
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Overpayment. The University of California at San Diego erroneously overpaid $130,000 over four years to Edward W. Holmes, vice chancellor for health sciences and dean of the School of Medicine.
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Miscalculated sabbatical pay. Marsha A. Chandler, a vice chancellor at San Diego, received a $68,100 stipend for a position she had vacated and an $8,900 auto allowance while she was on sabbatical. Senior officials are supposed to earn sabbatical pay based solely on their administrative salaries.
The report’s recommendations include a call for the president’s office to limit exceptions to compensation policy, to improve oversight of campus pay practices, and to determine whether to require repayment in instances where employees received compensation in violation of policies. The president’s office should also provide accurate and timely reports to the regents of the full compensation packages for top employees, the report says.
The state audit will give additional ammunition to the university’s critics, particularly among California lawmakers. In a written statement released last week, State Sen. Jackie Speier, a Democrat, blasted the university’s leaders over the audit’s findings. She said the “stagnated wages” earned by members of the faculty and staff “threaten to make UC the Wal-Mart of higher education.”
http://chronicle.com Section: Money & Management Volume 52, Issue 36, Page A35