Regents Specify Pay Reforms

Amid allegations that the University of California Board of Regents frequently circumvent their own financial practices in compensating executives, UC President Robert C. Dynes announced that reforms to increase the transparency and openness of the financial process will soon be implemented universitywide to protect against future controversy.

UC officials have been under fire for several months after independent studies and audits alleged that millions of dollars of university money had been improperly spent and undisclosed by top-ranking officials. The UC Compensation, Accountability and Transparency task force called the integrity of the regents’ disclosure program into question, claiming that the current UC policy is “outdated” and “wholly unacceptable.” According to the studies, top administrators were frequently given perks which were not divulged to the public, such as housing benefits and large bonuses.

In a Sept. 20 press release, Dynes stated that procedural inadequacies is the key issue fueling the debate, but denied any intentional misconduct.

“While none of the reviews indicated excessive compensation levels, they all pointed to a variety of operational shortcomings in the way senior management compensation, benefits and related matters are approved, monitored and reported,” Dynes said. “These reforms are aimed at swiftly and permanently correcting those problems so they never happen again.”

In February, Dynes enacted an interim policy that would oblige him, in consultation with the regents, to approve any changes to employment-related policies for senior management. This will remain in effect until the completion of a “comprehensive policy review,” UC Office of the President spokesman Paul Schwartz said.

Along with the task force, PricewaterhouseCoopers, the Bureau of State Audits and the University Auditor also externally audited the regents, according to the press release.

Dynes’ new procedural alterations came in the form of a seven-point list, tailored to tighten restrictions on those who may receive exceptions to the financial policy’s guidelines and how such exceptions must be documented, among other things.

The reforms, Dynes said, reflect the university’s continuing commitment to “public accountability” and the reviews stumbled across nothing more than “administrative deficiencies.”

One of Dynes’ new policies states that any exceptions made to traditional UC funding policy must be documented, explained and presented to the vice president/chief compliance and audit officer. These financial transactions, except when their disclosure may constitute “an unwarranted invasion of personal privacy,” will be matters of public record.

Among the information to be made publicly available are any employee’s job description, base salary, stipends, bonuses, benefits packages, insurance and severance/retirement agreements.

The university will also provide an electronic annual report that details the compensation for all UC employees, including executives, Dynes said. Similarly, official press releases regarding regent-approved appointments will now include a summary of the recipient’s total compensation.

In May, the regents requested an external consultant in order to help develop a comprehensive and detailed framework for reviewing and revising policies related to compensation and benefits. According to Schwartz, UCOP is completing a “competitive bidding war” in order to obtain the consultant’s services.

The consultant’s primary duties would involve limiting the number of externally compensated positions and other board positions for senior managers, as well as analyzing current policies for administrative and sabbatical leave.

Along with the other proposed changes, Dynes is also pushing to have a clause added to a 1993 compensation policy that would state the consequences of a serious violation of UC pay rules.

“The regents recognize the University of California’s unique public trust,” Board of Regents Chairman Gerald L. Parsky said in a press release. “While UC must maintain its ability to compete with top universities across the nation for outstanding researchers, teachers and administrators, we must do so in ways that are transparent and understandable to the public.”

Readers can contact Matt L’Heureux at [email protected].