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UC regents approve $1 million in improper pay for 60 top execs (from Chronicle)
UC Regents approve illegal pay for UC execs
UC regents approve $1 million in improper pay for 60 top execs
- Tanya Schevitz, Chronicle Staff Writer
Friday, July 21, 2006
About 60 top executives in the University of California system can keep more than $1 million they received in unauthorized extra compensation, the UC governing Board of Regents agreed Thursday.
"The beneficiaries of this didn't do anything wrong, so they shouldn't be penalized," Gerald Parsky, chairman of the board, said after the meeting in San Francisco.
The retroactive approval was, in part, a response to three separate audits that were launched after a series of stories in The Chronicle revealed that millions of dollars in extra compensation and questionable perks had been handed out but never publicly disclosed.
The audits showed how UC administrators flouted and circumvented some university policies while occasionally violating others -- such as neglecting to get the regents' approval as required for some payments.
The audits were performed by the Bureau of State Audits, by an outside firm, and by the university's internal auditor.
Parsky said the Board of Regents, whose compensation committee discussed the matter behind closed doors on Wednesday, evaluated the improper payments in context.
"Where you have individuals that were represented to that they were entitled to certain benefits, we stepped back and evaluated it in the context of, was it something that we would have approved anyway, rather than just blanketly calling for funds to be paid back, " said Parsky.
The regents concluded the individuals should not be penalized by having to repay the money to the university, he said.
The approvals cover approximately 60 people who held the top 32 positions in the universities over the past decade.
Many of the items do not show dollar amounts, such as enhanced retirement health benefits for UC Berkeley Chancellor Robert Birgeneau, making it impossible to calculate the total. But the items range from recognition of an 18-month sabbatical for Birgeneau, which is worth several hundred thousand dollars, to deferred compensation and a boost in vacation days for UC Riverside Chancellor France Cordova.
Among the list was a $130,000 overpayment to UC San Diego Vice Chancellor Ed Holmes. A state audit found that UC President Robert Dynes' office set up a complex compensation plan in 2001 to temporarily give Holmes an extra $5,000 a month to circumvent university restrictions on outside income. But UC officials forgot to stop making the monthly payments. In addition to allowing Holmes to keep the overpayment, UC will continue to pay the extra $5,000 a month. The state auditor found that the president's office circumvented university policies to give Holmes the extra money.
Assemblyman Leland Yee, D-San Francisco, who has legislation barring the regents from meeting behind closed doors when considering the compensation of high-ranking executives, said it appeared UC regents are oblivious to the controversy that has swirled around them since last November.
"Those regents have got to be living on another planet,'' Yee said. "For the past year, the constant revelations of closed-door deals and back-door deals have shaken the foundation of the UC system and they simply don't get it.
"Usually when a government entity gets caught with their hand in a cookie jar, they try to correct the problem,'' Yee added. "All they do is try to codify and sanctify what they are already doing."
Some employees will be asked to rectify the errors. Dozens of UC employees will also get revised W-2 forms to include money they were paid without being reported as taxable income by the university. And UC San Diego Chancellor Marye Anne Fox, who mistakenly received $248,000 from UC to pay her for a sabbatical she earned when she led North Carolina State University, will see that amount deducted from the pay she gets on a UC-financed sabbatical when she leaves her job as chancellor sometime in the future.
"We agreed to honor (and, therefore fund) her earned sabbatical credits from North Carolina State, just as we've done with other chancellors," said UC spokesman Paul Schwartz. "The only difference with Fox was that the funds were provided early, as the result of a misunderstanding."
The regents also agreed to negotiate a settlement with former acting UC San Diego Chancellor Marsha Chandler, who got an $8,916 automobile stipend while on a yearlong sabbatical. However, the regents retroactively approved a stipend of $68,000 for Chandler to allow her to be paid at her higher salary of acting chancellor while she was on sabbatical for a year.
Regent Judith Hopkinson, who heads the regents' Committee on Compensation, told reporters that the regents approved the extra compensation for the executives because they are underpaid.
State Sen. Abel Maldonado, R-Santa Maria (Santa Barbara County), said the latest action by the regents shows just how out of touch they are with the public.
"They are trying to cover all of their tracks doing once again what is in the best interest of the president of the University of California, not what is in the best interest of the students," Maldonado said. "UC is sending a bad message to the public and students: It's OK to waste taxpayer dollars."
During their meeting, the regents were also told that audits conducted on the various UC campuses revealed that travel and entertainment expenses for senior managers were often inappropriately approved or lacked justification. However, University Auditor Patrick Reed said, there was no evidence of intentional circumvention of policies during fiscal 2004-05, the only years reviewed.
The audits did not include any details about specific transactions.
At UC Santa Barbara, the auditors found that executives were charging too many "employee only" meals as a business expense that did not qualify and were also charging group lunches, sometimes including spouses, that had questionable justification.
In addition, the Santa Barbara executives were granted approval for "exceptional" meal expenses that sometimes doubled and tripled the allowable rate of $45 per person.
The full audits can be found at http://www.universityofcalifornia.edu/news/auditreports/.
E-mail Tanya Schevitz at tschevitz [at] sfchronicle.com.
Page B - 1
URL: http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/07/21/BAGL2K38IE1.DTL
©2006 San Francisco Chronicle
- Tanya Schevitz, Chronicle Staff Writer
Friday, July 21, 2006
About 60 top executives in the University of California system can keep more than $1 million they received in unauthorized extra compensation, the UC governing Board of Regents agreed Thursday.
"The beneficiaries of this didn't do anything wrong, so they shouldn't be penalized," Gerald Parsky, chairman of the board, said after the meeting in San Francisco.
The retroactive approval was, in part, a response to three separate audits that were launched after a series of stories in The Chronicle revealed that millions of dollars in extra compensation and questionable perks had been handed out but never publicly disclosed.
The audits showed how UC administrators flouted and circumvented some university policies while occasionally violating others -- such as neglecting to get the regents' approval as required for some payments.
The audits were performed by the Bureau of State Audits, by an outside firm, and by the university's internal auditor.
Parsky said the Board of Regents, whose compensation committee discussed the matter behind closed doors on Wednesday, evaluated the improper payments in context.
"Where you have individuals that were represented to that they were entitled to certain benefits, we stepped back and evaluated it in the context of, was it something that we would have approved anyway, rather than just blanketly calling for funds to be paid back, " said Parsky.
The regents concluded the individuals should not be penalized by having to repay the money to the university, he said.
The approvals cover approximately 60 people who held the top 32 positions in the universities over the past decade.
Many of the items do not show dollar amounts, such as enhanced retirement health benefits for UC Berkeley Chancellor Robert Birgeneau, making it impossible to calculate the total. But the items range from recognition of an 18-month sabbatical for Birgeneau, which is worth several hundred thousand dollars, to deferred compensation and a boost in vacation days for UC Riverside Chancellor France Cordova.
Among the list was a $130,000 overpayment to UC San Diego Vice Chancellor Ed Holmes. A state audit found that UC President Robert Dynes' office set up a complex compensation plan in 2001 to temporarily give Holmes an extra $5,000 a month to circumvent university restrictions on outside income. But UC officials forgot to stop making the monthly payments. In addition to allowing Holmes to keep the overpayment, UC will continue to pay the extra $5,000 a month. The state auditor found that the president's office circumvented university policies to give Holmes the extra money.
Assemblyman Leland Yee, D-San Francisco, who has legislation barring the regents from meeting behind closed doors when considering the compensation of high-ranking executives, said it appeared UC regents are oblivious to the controversy that has swirled around them since last November.
"Those regents have got to be living on another planet,'' Yee said. "For the past year, the constant revelations of closed-door deals and back-door deals have shaken the foundation of the UC system and they simply don't get it.
"Usually when a government entity gets caught with their hand in a cookie jar, they try to correct the problem,'' Yee added. "All they do is try to codify and sanctify what they are already doing."
Some employees will be asked to rectify the errors. Dozens of UC employees will also get revised W-2 forms to include money they were paid without being reported as taxable income by the university. And UC San Diego Chancellor Marye Anne Fox, who mistakenly received $248,000 from UC to pay her for a sabbatical she earned when she led North Carolina State University, will see that amount deducted from the pay she gets on a UC-financed sabbatical when she leaves her job as chancellor sometime in the future.
"We agreed to honor (and, therefore fund) her earned sabbatical credits from North Carolina State, just as we've done with other chancellors," said UC spokesman Paul Schwartz. "The only difference with Fox was that the funds were provided early, as the result of a misunderstanding."
The regents also agreed to negotiate a settlement with former acting UC San Diego Chancellor Marsha Chandler, who got an $8,916 automobile stipend while on a yearlong sabbatical. However, the regents retroactively approved a stipend of $68,000 for Chandler to allow her to be paid at her higher salary of acting chancellor while she was on sabbatical for a year.
Regent Judith Hopkinson, who heads the regents' Committee on Compensation, told reporters that the regents approved the extra compensation for the executives because they are underpaid.
State Sen. Abel Maldonado, R-Santa Maria (Santa Barbara County), said the latest action by the regents shows just how out of touch they are with the public.
"They are trying to cover all of their tracks doing once again what is in the best interest of the president of the University of California, not what is in the best interest of the students," Maldonado said. "UC is sending a bad message to the public and students: It's OK to waste taxpayer dollars."
During their meeting, the regents were also told that audits conducted on the various UC campuses revealed that travel and entertainment expenses for senior managers were often inappropriately approved or lacked justification. However, University Auditor Patrick Reed said, there was no evidence of intentional circumvention of policies during fiscal 2004-05, the only years reviewed.
The audits did not include any details about specific transactions.
At UC Santa Barbara, the auditors found that executives were charging too many "employee only" meals as a business expense that did not qualify and were also charging group lunches, sometimes including spouses, that had questionable justification.
In addition, the Santa Barbara executives were granted approval for "exceptional" meal expenses that sometimes doubled and tripled the allowable rate of $45 per person.
The full audits can be found at http://www.universityofcalifornia.edu/news/auditreports/.
E-mail Tanya Schevitz at tschevitz [at] sfchronicle.com.
Page B - 1
URL: http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/07/21/BAGL2K38IE1.DTL
©2006 San Francisco Chronicle
For more information:
http://sfgate.com/cgi-bin/article.cgi?f=/c...
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But was it? Yes, the university is in dire financial straits. Yet $3 million was somehow found to pay the Bain consulting firm to uncover waste and inefficiencies in UC Berkeley, despite the fact that a prominent East Coast university was doing the same thing without consultants.
Essentially, the process requires collecting and analyzing information from faculty and staff. Apparently, senior administrators at UC Berkeley believe that the faculty and staff of their world-class university lack the cognitive ability, integrity, and motivation to identify millions in savings. If consultants are necessary, the reason is clear: the chancellor, provost, and president have lost credibility with the people who provided the information to the consultants. Chancellor Robert J Birgeneau has reigned for eight years, during which time the inefficiencies proliferated. Even as Bain’s recommendations are implemented (“They told me to do it”, Birgeneau), credibility and trust problems remain.
Bain is interviewing faculty, staff, senior management and the academic senate leaders for $150 million in inefficiencies, most of which could have been found internally. One easy-to-identify problem, for example, was wasteful procurement practices such as failing to secure bulk discounts on printers. But Birgeneau apparently has no concept of savings: even in procuring a consulting firm, he failed to receive proposals from other firms.
Students, staff, faculty, and California legislators are the victims of his incompetence. Now that sports teams are feeling the pinch, perhaps the California Alumni Association, benefactors and donators, and the UC Board of Regents will demand to know why Birgeneau is raking in $500,000 a year despite the abdication of his responsibilities.
The author, who has 35 years’ consulting experience, has taught at University of California Berkeley, where he was able to observe the culture and the way the senior management operates.