Tuesday, November 6, 2007

CSU Compensation Audit Released

The Bureau of State Audits has released its report number on compensation in the CSU, titled California State University: It Needs to Strengthen Its Oversight and Establish Stricter Policies for Compensating Current and Former Employees. The audit examines compensation policy and practice at the CSU for the period from July 1, 2002, through June 30, 2007. Even in the mild language of an auditor's report, the findings are not flattering for the CSU or the Board of Trustees.

Among the audit findings:

  • "From July 1, 2002, through June 30, 2007, the university payroll has increased by $225.8 million, or 9.6 percent, but increases varied significantly by employment classification. Average executive compensation increased by 25.1 percent over this time period, with salary increases contributing the most to the growth."
  • Over and over, the Board of Trustees cited spurious studies as justification for extravagant executive raises.
  • The CSU has ignored years of recommendations from CPEC and the legislative analyst that a more accurate and reasonable method of comparing executive compensation be used.
  • The auditors asked the CSU why it relied on questionable methodology to justify executive compensation increases. "The vice chancellor of human resources responded that the university did not believe it appropriate to deviate from a methodology that had been agreed upon years ago..." In other words: the CSU got away with it in the past, and sees no reason to change.
  • Only after media criticism of CSU executive transition programs did the Board of Trustees require the Chancellor to provide a copy of transition agreements and submit an annual report of existing transition agreements. The Chancellor apparently does not believe the Trustees need to know whether the executives in question have to actually do anything for the money they get: "... the annual report presented by the chancellor in March 2007 does not include information on the status of accomplishments or deliverables that former executives may have agreed to provide the university as part of their transition agreements."
  • "... the university has not developed a central system enabling it to adequately monitor adherence to its compensation policies or measure their impact on university finances." This failure "impairs the ability of the chancellor's office to provide effective oversight of its compensation policies."
Executive summary of CSU Compensation Audit
CSU Compensation Audit fact sheet [PDF]
CSU Compensation Audit full report [PDF]

Wednesday 10:30 a.m. - added links for news reports:

Charlie Reed claims in the San Francisco Chronicle story that "No one received any preferential treatment." Hmmm. How many of you received a loan of over $230,000 from your campus foundation, at 1.697% interest? Alexander Gonzalez, president at Sacramento State, did (page 87 of the report). Reed admitted the deal had not been publicly disclosed.
Additional coverage links, added November 12:

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