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.

Because the Governor and the Legislature of California directed the University of California Office of the President (Office of the President) to meet specific criteria—related to recommendations we made—in order to receive certain funding from the State, we are providing information at-a-glance about the Office of the President's progress in implementing those recommendations. This assessment can be used to inform the Governor's Proposed Budget and the Legislature's deliberations on the state budget. 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 eight of the ten recommendations or 80 percent. Additionally, the Office of the President partially implemented two recommendations. For the recommendations due in April 2019, we determined that the Office of the President fully implemented three of the eleven recommendations or 27 percent. Additionally, the Office of the President partially implemented two recommendations. For April 2020 we determined that 8 percent, or one of twelve recommendations is fully implemented.

Although the Office of the President has made progress on implementing our recommendations and being more transparent when presenting its budget information, it is still difficult for the Governor, the Legislature, and other stakeholders to conclude, based on information that is publicly available, whether the Office of the President has additional funding available to reallocate to campuses. According to its November 2018 budget report to the Regents, the Office of the President had about $321 million in fund balances and reserves as of June 30, 2018. This balance included $208 million in Regents designated funds and $84 million in undesignated funds. The Office of the President informed us that of this amount, it views $9.7 million as potentially available for reallocation. However, we believe that this amount could potentially be higher as the Office of the President and the Regents continue to evaluate their spending decisions related to the $292 million in designated and undesignated funds.

Furthermore, we have concerns that the Office of the President will not present its annual budget by April 2019, as our recommendation number 22 specified. The failure to present the budget by April of each year may hinder the Department of Finance, the Legislature, and the Governor when making decisions regarding the UC's portion of the state budget. This is a critical recommendation that, if successfully implemented, will improve stakeholders' ability to hold the Office of the President accountable.

Overall, the Office of the President fully implemented eight of the 10 recommendations that were due by April 2018 and three of the 11 that are due by April 2019. 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 several key recommendations to successfully address the concerns we identified in our report.


To access all recommendations, responses, and our assessment: