Napolitano Deserves Boot Over Latest UC Scandal

Sacramento

The University of California warned Californians early this year that if tuition weren’t significantly raised or public funding increased, education at the 10-campus system — with its staff of 200,000 and $28.5-billion-plus budget — would suffer. “We’re at the point where if we don’t do this, if we don’t invest, the quality of education is going to suffer,” a UC spokesperson told the media. The Board of Regents promptly approved tuition hikes.

I’m the parent of a UC student, but the main reason the deal upset me was that it spotlighted the system’s waste-filled bureaucracy. There’s insufficient oversight of UC’s spending. Instead of cutting back on programs battling “micro-aggressions” and other PC nonsense or trimming obscene levels of pay and benefits for UC employees, officials spend like crazy and then take it out of the hide of students and taxpayers who fund about a quarter of its budget.

As it turns out, conservative critics of the university and its President Janet Napolitano, the scandal-plagued former head of the Department of Homeland Security under President Barack Obama, were just scratching the surface. A report released Monday by the California State Auditor detailed plenty of waste, but also alleges that the Office of the President did not disclose $175 million in reserves.

This scandal should lead to the firing of Napolitano and others at UC who took part in this alleged budget-hiding game. Basically, the state audit argues that UC officials were sitting on a budget that was not disclosed to regents, legislators, or the public. That’s at the same time they were crying poormouth, and hitting up students for an additional $88 million annually to assure that the university could continue to provide the same level of “quality” education.

The auditor claims the office created “an undisclosed budget to spend the reserve funds.” It also accuses the university of spending “significantly less than it budgeted for and asked for increases based on its previous years’ over-estimated budgets rather than its actual expenditures.” Napolitano denies that there were undisclosed funds and says the reserve is much smaller ($38 million) — and is needed for unexpected expenses including protecting against cyber-threats and “efforts to prevent sexual violence and sexual harassment.”

In rebutting the auditor’s call for eliminating programs, UC inadvertently confirmed the superfluous and politically correct nature of some of the office’s spending, such as $25.2 million over three years to fund the Undocumented Students Initiative. “UC’s initiatives advance several of the state’s highest priorities, including providing resources and support for undocumented students; developing groundbreaking climate solutions and mitigating the University’s carbon footprint; advancing health-related research and programs; and strengthening the state’s relationship with Mexico,” the president’s office wrote.

The audit — described in the media as “scathing” — noted the university’s denials, but said it “did not provide evidence that refuted our conclusion.”

The audit found that many administrative salaries are far beyond even the extremely generous compensation packages paid to California’s government employees — and not just in high-end academic, medical and research positions. The Office of the President spent $21.6 million on employee benefits that are atypically generous even in the public sector, the audit reported. The office, it argued, “has failed to satisfactorily justify its spending on system-wide initiatives, and it does not evaluate these programs’ continued priority or cost.”

As I reported for the Spectator in February, UC has a Center for Equitable Growth that prattles about income inequality, yet pays its director $412,000 in total compensation. That type of spending is emblematic of this system, but it’s nice to have the audit suggest that the center is no aberration. Furthermore, the audit alleges that UC officials “intentionally interfered with our audit process.” Even though Napolitano’s office “stated that it intends to implement many of our recommendations … its conduct during this audit … casts doubt on whether it will follow through on its intentions.” The auditor called for reforms “to strengthen the public’s trust in the Office of the President.”

It’s not the auditor’s place to say so, but it’s time for Napolitano to go.

None of this should be a surprise. After Napolitano — who does not have much academic experience — was selected to run the system, she was praised as an “unconventional choice” who can boost the university’s profile. But, as I wrote for the Orange County Register at the time, she was the ultimate status-quo selection: “Based on her tenure in the federal government, she will be an advocate for higher spending, expanded unionization and more of everything that has undermined the university system.” That now reads like an understatement.

In addition, it’s predictable that someone who once led the invasive Transportation Security Administration (TSA) would run a system with a tenuous grasp on civil liberties — as shown by UC Berkeley’s controversy over the now-cancelled speech by Ann Coulter. Officials said they couldn’t find a “safe venue” for her talk until a future date, which is odd for a campus known as the birthplace of the free speech movement. It’s sad when the university system can’t control activists, who even got a lecture from Bernie Sanders about speech rights.

But the best reason to get rid of Napolitano can be found in the details of the 167-page audit, with all its disturbing details. This budget scandal is reminiscent of a scandal at the California parks department, as pointed out in a recent Los Angeles Times article. “In the summer of 2012, Gov. Jerry Brown’s state parks director resigned after revelations that department officials had long maintained an off-the-books accounting system that hid the existence of $54 million in funds,” reported John Myers. That took place as Brown was threatening to close 70 parks because of a lack of funding.

A management shakeup won’t, of course, fix the problems at UC. All bureaucracies function in the same manner. Their goal is not to serve the public or students. The real customers are the administrators and union members who work for them. They spend money in foolish ways, then threaten service cuts, or tax and tuition hikes, when the money runs out. Those who rise to the top are people such as Napolitano, who have mastered the art of keeping funding spigots flowing and limiting oversight and accountability of their spending.

Steven Greenhut
Steven Greenhut
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Steven Greenhut is a senior fellow and Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.
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