Tuesday, February 16, 2010

"Too Big To Audit"?! AKA "Too Big to Fail"...

From today's Daily Cal--A request for a state audit of the University of California will be filed Wednesday in response to alleged financial mismanagement by the university administration.

UC officials have denied that funds have been mismanaged, adding that a financial audit of the 10-campus university's approximately $20 billion operating budget would not be plausible.

**"Too Big To Audit"?! AKA "Too Big to Fail"... **

Among the issues cited by Yee as reason for his request is an alleged conflict of interest surrounding UC Regent Paul Wachter's stock investment in a mutual fund management company in which the university has a substantial financial interest.

According to a March 2009 Statement of Economic Interests, Wachter-who is the chair of the Regents' Committee on Investments-owns more than $1 million in stocks in Dimensional Fund Advisors Inc.

Wachter did not respond to a request for comment left at his Santa Monica office Friday.

Gov. Arnold Schwarzenegger-who appointed Wachter, a longtime friend, to the board in 2004-also has invested more than $1 million in the company, according to a March 2009 Statement of Economic Interests.

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According to UC spokesperson Steve Montiel, safeguards are in place to preclude potential conflicts of interest.

"The Regents' role is oversight," he said in an e-mail. "It's up to the Treasurer's Office to make decisions about specific investments, investment managers or investment management firms."

According to board policy, alleged conflicts of interest are referred to the Office of the President's General Counsel, who "shall immediately bring the matter to the attention of the Chair of the Regents' Committee on Investments."

Montiel added that given both the size of the company and the extent of the university's retirement fund investments, there was no reason to suspect undue financial practices on the board.

TO READ THE FULL ARTICLE : http://www.dailycal.org/article/108262/

Source: Daily Californian

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