In an official response to a Bureau of State Audits (BSA) report released on July 28, University of California President Mark G. Yudof wrote: “We are proud of the fact that we have come through this review with validation of so many of our procedures and policies…. But, at what cost?”

Yudof urged the Legislative Audit Committee “to require those who seek to use the limited audit resources of the state to provide more evidence of malfeasance than innuendo and presupposition behind their requests.”

The 15-month audit was requested in February 2010 by state Sen. Leland Yee. In a news release announcing his request, Yee said a comprehensive state audit would help “uncover the extent of the waste, fraud, and abuse within the UC, and finally hold university executives accountable.” The exhaustive audit found no evidence of waste, fraud or abuse.

Because of the complexity of the UC system – 10 major campuses, world-class research facilities, five medical centers and a division of agriculture and natural resources – the University opens its books routinely for a myriad of federal, state and local regulatory agencies, as many as 80 times a year, including more than 40 audits. Financial and programmatic data are made available and accessible, not only for these reviewers, but also for the public through regular web postings.

This state audit examined five fiscal years of UC’s financial, budgetary and other operational data. State auditors visited campuses and the systemwide headquarters and met and communicated with large numbers of UC staff over the 15-month period. The BSA findings validated university procedures in the distribution and use of resources, use of student tuition funds, subsidies for auxiliary enterprises, tracking of non-salary expenditures and the use of federal grant funds.

Moreover, the report noted that the university’s publicly available financial statements and schedules presented a significant amount of information based on detailed financial records. It deemed as reasonable the university’s classification of restricted funds in its corporate financial system and said the university did not inappropriately use state funds to guarantee debt for capital projects or use tuition revenues for debt payments.

Among other key findings, the BSA audit showed that UC has protected its core mission during the ongoing financial crisis; university expenses remain concentrated in instruction and research. Despite recent tuition increases to maintain academic quality, however, the audit confirmed that this new revenue only partially offsets the loss of state funding. The report affirmed that state cutbacks impede the university’s ability to maintain the quality of its educational programs.

For the full story, go to the UC Newsroom website. The full BSA report is available on-line at: http://www.bsa.ca.gov/pdfs/reports/2010-105.pdf

For more information on UC financial information, please see: http://www.universityofcalifornia.edu/reportingtransparency/

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