SACRAMENTO, Calif. (KCRA) —A state audit conducted on the University of California office of the president, which was released Tuesday, revealed the office did not disclose that it had $175 million in budget reserve funds, some of which could have been used on campuses and students.

“(The office) spent significantly less than it budgeted for and asked for increases based on its previous years’ over-estimated budgets rather than its actual expenditures,” according to the audit summary released by the California state auditor.

Click here to read a summary of the state auditor’s report

Of the $175 million, the office of UC President Janet Napolitano’s reserve included $32 million in unspent funds that the office received from an annual charge levied on the campuses.

“This reserve was not disclosed to the public, not disclosed to the legislature and not disclosed to the Board of Regents,” State Auditor Elaine Howle said.

The audit found that the $32 million in unspent funds could have been used on students.

Click here to read the full state auditor’s report

In response to the audit, Napolitano submitted a six-page letter to Howle in which the office argued that the state audit report wrongly stated that the office holds $175 million in reserves.

“The true amount is $38 million, which is roughly 10 percent of (the UC office of the president’s) operating and administrative budget, a prudent and reasonable amount for unexpected expenses such as cybersecurity threat response and emerging issues like increased support for undocumented students and efforts to prevent sexual violence and sexual harassment,” the letter said.

Click here to read the full letter

The audit also showed executive and administrative salaries in Napolitano’s office are significantly higher than comparable state employee salaries.

The office also spent at least $21.6 million on employee benefits over a five-year period, some of which are “atypical to the public sector,” such as supplemental retirement contributions, the report said.

In addition, the report revealed that Napolitano’s office “intentionally interfered with our audit process” by “inappropriately” screening the campuses’ survey responses before the campuses submitted them to Howle.

“Campus statements that were initially critical of the Office of the President had been revised and quality ratings shifted to be more positive,” the report said.

“What we saw is that constructive critical responses from the campuses were actually deleted or changed to a more positive tone,” Howle added.
UC President’s Office spokesperson Claire Doan said it did not interfere with the audit process.

“We wanted to make sure that the individuals who were most informed and best positioned to respond to those questions would be able to and would yield the most accurate information for the auditors,” Doan explained.

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KCRA’s Mike Luery contributed to this story