Tuesday, May 9, 2017

To 33 or not to 33? And the UC Regents part in UCOP Extravagances, updates

See :

"UC audit reveals president’s office has extravagant taste"



"Financial records obtained by The Chronicle through the state auditor’s office Monday give some insight into spending habits in the UC president’s office, but the auditor’s office warned that the records it received from the university are incomplete. Auditors who examined the finances of Napolitano’s office said they were blocked from accessing many documents they say would have shed light on how some of the $175 million was spent.

The itemized records that were produced show that Napolitano’s office spent generously on employee retirement parties — including more than $4,200 on a retirement party in 2015 for Laine Farley, who was then the director of the UC’s California Digital Library. The Chronicle identified 20 parties for departing employees that cost more than $500 between 2014 and 2016. Ten of those were more than $1,000.

Also included in the itemized spending was a dinner tab worth more than a year of tuition. The president’s office paid $13,000 for dinner and security at the Palace Hotel in San Francisco for 86 people in January 2016 to honor two departing members of the Board of Regents, Fred Ruiz and Paul Wachter. Dianne Klein, a spokeswoman for Napolitano, said the regents dinners are paid for through a private endowment, not state funds.

The January 2016 dinner was one of many the president’s office hosted for governing board members and guests, which were usually tied to regents meetings, Klein said. From November 2015 to May 2016, for example, the president’s office paid $36,400 to host the regents dinners, as they are called in the itemized records.

Other spending highlighted in the audit was $862,000 spent on Napolitano’s Oakland apartment over the past four years. That cost includes the $11,500 monthly rent for the 3,400-square-foot apartment, which is also paid through endowment funds. Klein said Napolitano, as part of her employment, is required to live in a university-owned or -leased home, and that the apartment is used for official university business.

Among the documents the auditor says UC never fully produced were those detailing foreign and out-of-state travel, catering, airfare and entertainment expenses. UC said auditors failed to ask for the right budget codes in making their request. The records that were turned over to auditors show that the president’s office paid for employees to attend meetings and conferences in Bermuda, Iceland, Germany, China, India, Australia, France, Italy, Mexico and many other destinations.

Auditors said that even when they did receive financial records, vague information on other spending left them unable to determine the appropriateness, such as at least $2 million spent on cell phones and iPads over four years.

The number of cell phones and other devices issued by the president’s office increased 29 percent from 2012 to 2016 . During the same period, under orders from Gov. Jerry Brown — who was working to decrease state costs — the state was drastically cutting the number of cell phones issued to state workers by an estimated 30 percent.

“This is really a punch in the gut,” Assemblyman Dante Acosta, R-Santa Clarita (Los Angeles County), said on Monday. “We need to ensure money is being managed correctly.”

Acosta and other GOP lawmakers sent a letter to legislative leaders urging them to subpoena financial records from Napolitano’s office. Assembly Speaker Anthony Rendon, D-Paramount (Los Angeles County), declined their first request. On Monday night, the Republican lawmakers sent a second letter asking Rendon to reconsider in light of The Chronicle’s story that raised questions about the accuracy of Napolitano’s testimony to state lawmakers.

State Auditor Elaine Howle charged that the president’s office interfered with the audit and tampered with surveys intended to provide independent opinions from the 10 campuses.

“In my 17 years as state auditor, we have never had a situation like this,” Howle told lawmakers during a 4½-hour hearing last week in the state Legislature to go over the findings.

Napolitano said campuses asked her office for help with the survey and apologized that the actions were seen as obstruction. However, emails released by the auditor’s office, including a new batch of emails released Friday to The Chronicle, show that Napolitano’s office went far beyond offering guidance, instead editing surveys and emailing campuses that they expected to see the final draft before surveys were sent to auditors.

“The only way we will get candor is if there is a legal order in terms of subpoena,” said Assemblywoman Catharine Baker, R-San Ramon, who sent the first request to Rendon. “That’s the most thoughtful and disciplined way to get to the bottom of this.”

Monica Lozano, chairwoman of the Board of Regents, said a third party will review the possible tampering.

Ting and Assemblyman Al Muratsuchi, D-Torrance (Los Angeles County), plan to introduce a bill that would make it a crime to intentionally interfere with an audit in California.

“There appears to be a culture of arrogance and the need for frugality in spending state dollars,” Muratsuchi said.

The audit’s findings come as UC will raise annual student charges beginning this summer by $336, or nearly 3 percent, to $12,630. That includes tuition and a student services fee, which are expected to generate $143 million next year for the UC system.

Critics of the UC administration say it’s tone-deaf to ask students and their parents to pay more when spending in the president’s office has been steadily rising in recent years. Auditors said administrative spending in the president’s office increased by 28 percent, or $80 million, from fiscal years 2012-13 to 2015-16.

“Tone-deaf is a good way of describing it,” said Assemblyman Jose Medina, D-Riverside.

Napolitano’s office has 60 days to provide written documentation to the auditor’s office on how it is implementing recommendations from the audit. Napolitano said her office will accept all 33 recommendations from the state auditor on improved accountability and efficiency."

See the full article here.

--some thoughts, at first thought maybe the retirement party was for the chief compliance and audit officer at UCOP, ya know the one who announced she was leaving apparently in the middle of the same time frame of the audit survey and survey recall was going on and CSA was fighting with gen counsel and OP over those mangmnt directives access, but -no it was for a party for someone else - the November UC Regents said the chief compliance and audit officer was leaving at the end of December 2016, but the page is still up, yet she has provided no comment on the findings or come up in the coverage or even mention of her or her replacement accompanying Lozano and Napolitano to that Sacramento hearing etc.etc..??!!... But both she and CFO come up in the report itself and the CFO came up in the hearing regarding instances of changes to UCLA audit responses (that happened in q and a -Howle said something about it in response to question)

-- coverage continues to say that UC accepts all 33 recommendations -but other various coverage states Napolitano as 1-pushing back on the salary range narrowing,

And -2they still do not accept UCOP being funded by leg separately:

that part: "Yet when Howle included 33 recommendations in her audit for how UC should reform the troubled financial practices of its president’s office — including “adjusting” the range of executive salaries and benefits — Napolitano said in her written response that most were “reasonable” but that she expected to analyze the impact of “narrowing our salary ranges before committing to doing so.”

Lozano, the regents chair, gave a slightly different answer when faced with state lawmakers in person last week. She said the president’s office “will be adopting all of the state recommendations.”

The state Constitution says it’s the regents’ choice."


"stating that her office will be accepting all of the recommendations in the audit, with the exception of one.

“The exception is the recommendation that the legislature directly appropriate the budget of the Office of the President,” Napolitano said. “The Regents have filed a separate response contesting that recommendation on the grounds that it interferes with the constitutional autonomy of the University, and that they as Regents are better positioned to ensure that we are implementing the audit’s recommendations.”


--and then the complicated ways UCOP transacts for UC regents expenses to consider ...

The regents books mixed in with UCOP books...

--and how is that "third party" to assess UCOP and going to contract with UC as the client but provide full findings to the CSA or CA Leg ?? Or anyone else?...

PS and according to other unrelated coverage to audit-a kind of tabloids type story not pointing to here- there may even be a third(?)home for the UC president...(of course remember Blake House is number 1, and Oakland number 2.

A final thing: the audit said that there are statements from UC that full audits of individual components of UC would be cost prohibitive in several instances --but no one gave an estimated number and guess no one asked for those estimates...

Rendon said the hearing went "two plus hours" in this interview, maybe he didn't catch the second half?

Update, now it seems that Dem Leadership is placing slot of weight, onus, stakes on a getting answers from UC through a closed session of the UC Regents meeting next week ,see:
California AG punts on probe over allegations against UC President Napolitano

Includes reference to UC Regents closed session agenda on the matter and :

"source within the Republican caucus of the California Legislature told Fox News that while they’d like to say Becerra’s decision was a “cop out,” the proper channel for further investigation is through Speaker Rendon.

On Monday, Republican members of the Assembly sent a letter to Rendon calling for a subpoena of documents relating to the audit.

“We believe this is not a partisan or political issue, but an issue of trust in our institutions,” the letter reads.

“We should not fear the truth, in fact I believe it is one of our key roles on behalf of our constituents to seek it out zealously," Republican Assemblyman Dante Acosta told Fox News. "The legislature has the power to issue a subpoena, and my Republican colleagues and I are urging the Speaker to take this necessary step to bring transparency to the UC Office of the President. California’s students, parents, and taxpayers deserve answers.”

Rendon's office pushed back, however, making clear they will not grant the request at this stage.

"The legislature does have the power to subpoena various agencies but that’s only done in cases where there is criminal malfeasance. But in this case, the speaker hasn’t seen that. At this point, he will not be asking for a subpoena,” a Rendon spokesperson told Fox News"

And now see from Republican leadership in CA Leg writes:

UC president’s budget scandal should not be swept under the rug

Read more here: http://www.sacbee.com/opinion/op-ed/soapbox/article149549204.html

"Some people may characterize recent actions by the University of California Office of the President as a “misimpression,” but in reality, the only appropriate word Republicans and Democrats agree on is “scandalous” (“Watching the Capitol go Benghazi on UC’s Napolitano”; Insight, Shawn Hubler, May 4).

To sum things up, the UC Office of the President used misleading budgeting to amass an undisclosed $175 million slush fund that it spent on things such as administrator bonuses and renovating the homes of campus chancellors. When people started asking questions, UC President Janet Napolitano’s staff worked overtime to interfere with the audit. These are not my words, this is how the state auditor portrayed their behavior. Were this a criminal investigation, Napolitano’s staff wouldn’t be able to just apologize for interfering; they would be charged with obstruction of justice.

At the request of Napolitano’s staff, UC chancellors sent auditor surveys to her office for review and censorship instead of directly to the auditor, despite specific instructions not to do so. This broke the chain of custody required to keep whistleblowers protected. The edited surveys made it impossible for the auditor to find out what chancellors actually thought.

Even after the cover-up had been exposed, the apparent lying continued. At an oversight hearing, Napolitano claimed her office attempted to edit surveys at the request of individual campuses. Newly published emails prove that to be false.

This pattern of deception is why we need a subpoena and forensic audit of UC Office of the President’s records. We simply cannot trust the word of Napolitano or her staff. Calls for the UC regents to review the situation are woefully inadequate. This scandal happened and it is the duty of the Legislature to determine the truth.

California students were hit with a tuition increase shortly before the slush fund was made public. They deserve to know their money is being well spent. Calls to give the UC benefit of the doubt do students and parents a disservice. Napolitano’s office violated their trust, and as a result we’ve seen bloated administrator salaries, budget trickery and resistance to oversight. If the Legislature won’t look out for students and demand accountability, who will?"
There's also:


Napolitano’s Emails Complicate State Audit Investigation

Students Demand to Rollback, Redistribute and Restructure the UC After Audit


At Cal there is what reads like finals exhaustion, a distance from direct grappling with all the facts , mixed with deep disillusionment, see: on the UC audit.. 'grandstanding' etc


After UC probe, interfering with state auditor could soon be a crime

Read more here: http://www.sacbee.com/news/politics-government/capitol-alert/article149578954.html

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