Report 2016-130 - UC Office of the President: Status of Actions Taken

Auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them.

To inform discussions about the Governor's Proposed Budget and the Legislature's deliberations on the state budget we are providing information at-a-glance about the University of California Office of the President's (Office of the President) progress in implementing those recommendations. Outlined below are the 33 recommendations which we made to the Office of the President in our report, The University of California Office of the President: It Failed to Disclose Tens of Millions in Surplus Funds, and Its Budget Practices Are Misleading (Report 2016-130: April 2017).

Overall Assessment

This graphic provides an overall assessment for the status of the Office of the President's implementation of our recommendations which are due in April 2018, April 2019, and April 2020. For the recommendations due in April 2018, we determined that the Office of the President fully implemented nine of the ten recommendations or 90 percent. The Office of the President partially implemented the other recommendation. For the recommendations due in April 2019, we determined that the Office of the President fully implemented nine of the eleven recommendations or 82 percent. The Office of the President partially implemented the other two recommendations. For April 2020 we determined that 67 percent, or eight of twelve recommendations is fully implemented. Four recommendations are partially implemented.

We continue to have concerns that the Office of the President does not present its annual budget by April of each year, as specified by our recommendations. The failure to present the budget by April may hinder the Department of Finance, the Legislature, and the Governor when making decisions regarding the UC's portion of the state budget. In May 2020 the Regents did not approve the Office of the Presidentís proposed budget and directed it to submit a balanced budget that includes the appropriate level of reductions at the July 2020 Regentís meeting. However in June 2020, the Governor approved the Budget Act of 2020 which reduced the Office of the Presidentís funding by $27 million. Because the Office of the President has not changed its budget process to align with the state budget process, the Legislature and the Governor had to make funding decisions without key information that would have been included in an approved budget, such as spending priorities and available fund balances. This is a critical recommendation that, if successfully implemented, will improve stakeholders' ability to hold the Office of the President accountable.

Additionally, we have concerns related to the Office of the President's implementation of our salary recommendations. In our 2017 report, we noted that opportunities existed for the Office of the President to reduce its salary costs by giving a greater weight to public sector positions when it set its salaries. However, the Office of the President applied an 8 percent market adjustment to its salary ranges that negated the effects of its new weighting methodology. Because of the 8 percent salary range increase, the Office of the President asserts it did not realize any salary savings from implementing this recommendation. Thus, we believe the Office of the President's implementation of our recommendation falls short.

Overall, the Office of the President fully implemented nine of the 10 recommendations that were due by April 2018, nine of the 11 that were due by April 2019, and eight of the 12 that are due by April 2020. We recognize the Office of the President's resource investment and progress made thus far in implementing our recommendations by improving its fiscal, staffing, and systemwide initiative processes. However, the Office of the President still needs to fully implement key recommendations to successfully address the concerns we identified in our report.


To access all recommendations, responses, and our assessment: