March 18, 2020
Ms. Elaine Howle
California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, California 95814
Dear Ms. Howle:
The California State University (CSU) welcomes the opportunity to respond to the draft audit report related to campus-based student fees. The CSU takes seriously its fiduciary responsibility and has a strong record of prudently managing resources. As part of that responsibility, the CSU makes every effort to keep student costs to a minimum as we are keenly aware of the financial and other challenges faced by our students. Toward that end, and as noted in the report, our current policy requires campuses to engage in appropriate and meaningful consultation with students prior to adjusting any campus-based fee and before requesting establishment of a new fee. In addition, the CSU continues to work with other state and federal institutions and entities on financial aid solutions that help students reach their education goals, in particular by addressing the total cost of attendance.
We are pleased that the audit findings affirmed that fee revenues were spent in accordance with federal and state law, as well as with CSU policy. We intend to implement recommendations included in the audit report that would improve our policies and practices.
Recommendations in the report directed to the legislature would, if implemented, significantly undermine the current statutory authority of the Board of Trustees provided in the California Education Code. The proposed changes in authority of the Board of Trustees to govern the CSU warrant careful consideration and discussion with the appropriate legislative committees.
Timothy P. White
CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM THE CALIFORNIA STATE UNIVERSITY
To provide clarity and perspective, we are commenting on CSU's response to our audit. The numbers below correspond to the numbers we have placed in the margin of CSU's response.
Although the Chancellor's Office states that the CSU makes every effort to keep student costs to a minimum, as we explain earlier, the four campuses we reviewed have not always sufficiently justified the proposed dollar amounts of the mandatory fees they have established or increased, and the Chancellor's Office has not ensured fee amounts are justified. In addition, as we discuss, the Chancellor's Office fee policy does not require campuses to demonstrate that they do not have any alternative ways to obtain funds to address their specified needs. Therefore, as we conclude, the fee policy does not require campuses to demonstrate that proposed fee amounts meet a campus's need at the lowest cost to students nor that other funding is inadequate.
The Chancellor's Office's characterization of our report text about its fee policy is incomplete. As we note, although the fee policy states that it is critical that consultation be "appropriate and meaningful" and outlines requirements for such consultation, these requirements are so vague that they do little to ensure campuses obtain adequate and meaningful student feedback. Further, our review identified several instances in which campuses' processes for alternative consultation and student votes directly violated the policy and, as we explain, the Chancellor's Office did not intervene to enforce policy requirements in any of these cases.
The Chancellor's Office overstates our conclusions. Although our review did not identify instances where campuses' use of mandatory fee revenue violated state law, it is important to note that state law broadly defines certain mandatory fees, if at all. For these three fee types—instructionally related activity fees; student success fees; and materials, services, and facilities fees—state law generally places no limits on how campuses can use revenue from them, as we explain in the Introduction. These three fee types also have broadly defined purposes as categorized by the Chancellor's Office. As such, the Chancellor's Office's statement about the results of our review also overlooks the significance of our conclusion that campuses use mandatory fees for broad and sometimes overlapping purposes, including to support the CSU's core functions.
The Chancellor's Office's statement that our recommendations would undermine the trustees' statutory authority mischaracterizes the effect those recommendations would have if implemented. As we discuss in the Introduction, the trustees have already delegated the authority to implement new mandatory fees and adjust existing mandatory fees to the chancellor. Further, the chancellor gives campus presidents the authority to adjust the amounts of existing fees without obtaining the chancellor's approval. Our recommendations to the Legislature would simply ensure that all funding that students and the Legislature provide to the CSU system to pay for its core functions are subject to the same oversight—namely, discussions between the Legislature and the CSU as part of the annual state budget process. To the extent that campuses charge mandatory fees for other functions, our recommendation to the Legislature to require binding student votes would ensure that students have a strong voice regarding the mandatory fees they must pay. This would in no way restrict the CSU's ability to fund services through other revenues to the extent necessary.