April 20, 2017 2016-122
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning the levels of growth in the number of California State University (CSU) management personnel, the oversight and accountability of CSU’s budget, and increases in the compensation of CSU executives. CSU’s workforce includes different categories of employees, including 30 executives, nearly 4,000 management personnel, about 21,400 faculty, and nearly 26,900 nonfaculty support staff. This report concludes that growth in the number and compensation of management personnel significantly outpaced those of other employee types, including nonfaculty support staff. Specifically, from fiscal years 2007–08 through 2015–16, the growth rate was 15 percent (503 employees) for full‑time equivalent (FTE) management personnel, whereas the growth rate for FTE nonfaculty support staff was only 6 percent (1,514 employees) and for FTE faculty was only 7 percent (1,328 employees). We also found that the six campuses we visited frequently could not justify the growth in the number of new management personnel and one campus granted raises to management personnel that were not supported by current written performance appraisals, as required by CSU policy. Specifically, California Polytechnic State University, San Luis Obispo increased the pay for at least 70 management personnel in 2016 who either had no written performance evaluations on file or who had outdated evaluations on file.
We also observed that campuses did not have written policies regarding the periodic comparison of spending levels to budget limits and most campuses did not retain documentation demonstrating that they consistently performed such reviews. Because of the absence of policies and the general lack of documentation for these reviews, we question whether CSU’s budget monitoring provides sufficient assurance that campuses actually adhere to their spending plans. Although we did not identify instances of a campus exceeding its budget, when campuses do not have written budget monitoring policies and processes and do not document their periodic budget reviews, they reduce assurance that they spend state funding efficiently and appropriately, and they unnecessarily increase the risk that they may overspend their budgets.
Finally, current CSU policy does not cap relocation reimbursements, which since 2008 allowed 10 of the 27 CSU executives who claimed reimbursement for relocation and home sale expenses to each receive more than $25,000. We also noted one instance of a campus not following CSU’s relocation policy and one campus not following its own policy, which leaves campuses at risk of paying questionable moving and relocation reimbursements.
ELAINE M. HOWLE, CPA