California State Auditor Confirms Compensation Scandals at CSU

[courtesy of California Progress Report]

Recent legislation among the reforms needed at the university

By Leland Yee, Ph.D.
Assistant President pro Tem
California State Senate

On Tuesday, the California State Auditor released a critical report of the California State University’s (CSU) executive compensation policies, further confirming what lawmakers, students, and faculty members have been publicizing for months.

Among the highlights, the audit revealed that the university failed to adequately monitor adherence to its compensation policies and that the CSU used questionable methodology to justify increasing top executives’ pay. In addition, the state audit found that high level managers received significant compensation after they were no longer providing services to the university.

With 23 campuses serving nearly 417,000 students and employing 23,000 faculty members, the CSU is the nation’s largest system of higher education. Over the past five years, the university payroll increased $225.8 million. However, compensation increases varied significantly by employee classification. In fact, the average compensation increase for executives was 25.1 percent as opposed to only 10.4 percent for professional technical staff and 5.6 percent for tenure-track faculty.

The state auditor found that the Board of Trustees and the Chancellor continuously used a questionable methodology to try justifying the exorbitant executive compensation increases. Both the California Postsecondary Education Commission and the Legislative Analyst’s Office raised concerns that the methodology being used did not present a complete picture, as it did not consider benefits and perquisites provided to executives. Nonetheless, the CSU continued to use a consulting firm to perform surveys of comparable institutions using the objectionable methodology.

In addition, the audit found a number of examples in which executives and top managers received compensation when they were no longer working at the university. In one instance, transition compensation totaling $102,000 was given on the premise that the individual was gaining experience that would one day benefit the University, yet the person never returned to the University for employment.