Capitol Alert

‘I am sorry that we did it this way,’ UC’s Napolitano tells lawmakers after audit

Janet Napolitano explains her involvement in audit of UC: ‘We could have handled this better’

University of California President Janet Napolitano on May 2, 2017 told a legislative committee that her office should not have taken actions that made it appear it was interfering in an audit. Video courtesy of the California Channel.
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University of California President Janet Napolitano on May 2, 2017 told a legislative committee that her office should not have taken actions that made it appear it was interfering in an audit. Video courtesy of the California Channel.

University of California President Janet Napolitano apologized Tuesday for creating the “wrong impression” that she had improperly interfered in a critical state audit of her office released last week.

At a legislative hearing to review the audit findings, Napolitano acknowledged that she and her staff communicated with campus leaders about a survey meant to independently assess the value of her office’s operations.

“While we believe we did things appropriately, it is clear in retrospect that we could have handled this better,” she said. “I am sorry that we did it this way, because it has created the wrong impression and detracted from the important fact that we accept the recommendations in the audit report.”

Napolitano defended her actions as merely an effort to ensure that campuses understood the purpose of the audit and that the auditor received correct information in completing her report.

“I discussed with the chancellors that they should be aware of the surveys and be sure that their responses were accurate and reflected the perspective of campus leadership,” Napolitano said. “I wasn’t involved in the day-to-day back-and-forth on surveys.”

But she added that, in future audits, the university would direct any questions or concerns from campuses through the official auditing process.

Monica Lozano, chair of UC’s governing Board of Regents, joined Napolitano in testifying. She said that she would form a small group of regents to conduct a review of what happened.

Auditor Elaine Howle has asserted that the UC Office of the President interfered with her work by reviewing surveys sent independently to campus leaders and requesting changes that reflected more positively on its operations before they were submitted.

“In my 17 years as state auditor, we have never had a situation like this,” she said Tuesday.

That sensational claim most captivated lawmakers at the 4  1/2 -hour hearing, which was called last week following the release of the massive audit slamming UC’s central administration as bloated, overpaid and dishonest.

Howle also concluded that the UC Office of the President had systematically overcharged campuses to fund its operations, spent excessively on employee compensation and was sitting on $175 million in secret reserves when the university’s governing board voted to raise tuition earlier this year.

Several legislators questioned whether UC had done something illegal. Assemblyman Miguel Santiago, D-Los Angeles, said the university’s actions reminded him of the “chaos” in Bell seven years ago when that small Southern California city erupted in a massive public corruption scandal.

“When I look at this, I kind of think, ‘Holy cow manure, I can’t believe this is happening,’ ” he said.

The university, while promising to implement many of the audit’s recommendations, defensively rejected its most stinging criticisms as a misrepresentation of the administration’s budgeting practices. Napolitano on Tuesday maintained that most of the money identified by Howle is actually committed to presidential initiatives that directly benefit the university’s educational and research missions.

Coming on the heels of another, equally blistering report a year ago that suggested UC’s policy of accepting more higher-paying nonresident students to supplement its budget had crowded thousands of California students out of the system, the audit reignited simmering anger at the Capitol toward the university. Several state officials called on UC to reverse the recent tuition hike, while a handful of long-shot proposals chipping away at its constitutionally mandated independence have been introduced.

Many legislators at Tuesday’s hearing expressed frustration over what they felt was the administration’s continued “arrogance” and resistance to change.

Sen. Ricardo Lara, D-Bell Gardens, who has clashed with the university in the past, suggested that the audit “merits us looking at the UC autonomy” again. Assemblywoman Shirley Weber, D-San Diego, criticized the Board of Regents for failing in its oversight of the UC Office of the President and called it “out of touch, in some ways, with the larger population of individuals that it has been selected to serve.”

“To say that this is a black eye on UC is an understatement,” Assemblyman Jose Medina, D-Riverside, said. “I think there’s a long way to go, a long way to go to re-establish the trust that was there before, especially with the Legislature.”

Before the hearing, Assembly Republicans held a news conference urging the Legislature to subpoena all records related to the UC Office of the President’s reserve funds and its interference with the campus surveys to determine if any criminal activity had taken place.

“Often, where there’s smoke, there’s fire,” Assemblyman Dante Acosta, R-Santa Clarita, said. “Here, I think we might have a mushroom cloud.”

University of California President Janet Napolitano told The Sacramento Bee Editorial Board that UC's six-year tuition freeze is unsustainable.

Alexei Koseff: 916-321-5236, @akoseff

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