State auditors released their analysis of the University of California’s pay practices on May 2, documenting numerous instances in which the university breached its own policies, including an unusual exception that allowed a UCSD vice chancellor to pocket stock options he received for outside work.
The audit showed that Edward W. Holmes, head of the UCSD health sciences department, was overpaid $130,000 because of a deal that allowed him to keep stock for serving on a scientific advisory board, an action that sidestepped university policy.
Associate Vice Chancellor of University Communications Stacie Spector said that the deal was arranged through Dynes’ office and that there were no plans to force Holmes to return the money.
“That has not been determined or suggested,” she said.
The 137-page report has come after months of growing outrage over the University of California’s compensation practices, triggered by newspaper reports of millions of dollars in undisclosed bonuses.Auditors found that the UC Office of the President, under the discretion of President Robert C. Dynes, appeared “to regularly grant exceptions to university compensation policy.”
The audit stated that policy lapses resulted in questionable payments, and that UC administrators failed to disclose employees’ full compensation to the UC Board of Regents, the university’s governing body.
The state’s findings highlighted more specific problems than the general criticisms offered in an audit commissioned by the university and released last month.
Assemblyman Pedro Nava (D-Santa Barbara), who sits on the state Legislature’s joint legislative audit committee, called the audit a successful look into blatant campus-by-campus violations.
“There were too many to count,” he said. “That’s what’s so disturbing.”
Auditors recommended that the university take several steps to make compensation practices more transparent, including requiring campuses to classify compensation into standard categories, restricting the number of policy exceptions granted by the UC Office of the President, reporting all forms of employee pay to the regents and tallying the number of unauthorized exceptions to policy.
The report also suggested forcing employees to repay the university any funds they may have received that were in violation of university rules.
In a university statement, Dynes accepted the results of the audit and promised to reform the university’s pay system.
“This report illustrates our need for stricter oversight and greater transparency in compensation matters,” he stated.
Assembly Speaker and ex-officio Regent Fabian Nuñez (D-Los Angeles), who requested the audit, emphasized the need for major changes but recognized that the process would not be easy.
“This audit should be the final nail in the coffin of the University of California’s outrageous compensation practices,” Nuñez stated in a press release. “It’s outrageous. … I encourage all those responsible for this lapse to get to work in fixing this problem.”
