Lawmakers OK audit of CSU salary practices
San Francisco Chronicle 4/18/07
The Joint Legislative Audit Committee voted unanimously to explore CSU's spending practices just as it did last year after a pay scandal enveloped the University of California system.
The committee's action Thursday followed an investigative series by The Chronicle last summer that found that as much as $4 million in special perks and extra compensation has been paid to departing CSU officials during the past decade without public disclosure by the chancellor or the Board of Trustees.
"Simply put: Californians need to know how public money is being spent, be it on paychecks or lawsuit payoffs," said Assemblywoman Lori Saldana, D-San Diego, who requested the audit along with Assembly Speaker Fabian Núñez, D-Los Angeles, and Anthony Portantino, D-La Cañada Flintridge (Los Angeles County).
"The public has lost trust in the upper echelons of government at the CSU as a result of these types of abuses," Saldana said. "We need to know the extent of the damage and begin to shed light on some of these compensation practices that were discovered only when the press became curious."
It is projected that the audit of the 23-campus CSU system will take 3,720 hours and will cost $316,200 plus travel expenses. No date was set for the audit's completion.
The audit, which will be conducted by the state auditor's office, will examine CSU's salary and nonsalary compensation during the past five years, looking most closely at the highest-paid employees. The audit will look at how much was paid from state appropriations and student tuition. And it will determine where the compensation was promised in employment contracts or agreements.
The audit will specifically review "special assignments" for executives who have left CSU in the past five years.
Among the findings by The Chronicle were executives who remained on the payroll while taking jobs elsewhere and others who receive hundreds of thousands of dollars in consulting contracts from CSU after their retirement.
At least two executives, Peter Smith of CSU Monterey Bay and CSU Executive Vice Chancellor David Spence, took paid transitional leaves in 2005, continuing to receive most of their six-figure salaries from CSU for a year after they left office and took six-figure jobs elsewhere.
Some executives also got or were promised lifetime tenure faculty jobs even though they had no or little teaching experience.
In addition, the audit will look at CSU's hiring practices and its settlements in employment discrimination claims and will attempt to determine the legal costs for outside counsel or in-house attorneys.
"It is very frustrating for me as a legislator to see student fees raised over and over again by the boards ... when you see these kinds of shenanigans at the top levels," Assemblyman Todd Spitzer, R-Orange, said during the hearing.
John Travis, president of the California Faculty Association, which represents 23,000 instructors on CSU's campuses, said the union strongly supports the audit.
"We are very concerned about the transparency of many of the decisions being made by the CSU Board of Trustees," he said.
The audit will also review CSU's hiring practices and its progress toward its goal of gender and ethnic diversity.
Saldana said the audit is a first step toward shedding light on the compensation at CSU. She said legislation moving through both houses would help institute reforms as well.
State Sen. Leland Yee, D-San Francisco, is pushing a bill through the Senate that aims to compel CSU trustees to meet in public when discussing and deciding executive compensation issues.
In March, Portantino also introduced legislation to bolster state oversight of CSU by adding two legislators or their appointees to the CSU Board of Trustees.
"This is about the public's trust in the public's institution," Portantino said in supporting the audit during Tuesday's hearing.
The state auditor did a similar audit at the University of California last year after a Chronicle series revealed that some employees were secretly paid more than was allowed under university policy and that extra compensation sometimes was not disclosed to the regents or the public.
The audit found that the UC system's compensation practices were rife with problems.