UC Regents Defend Napolitano, Vow Closer Look At Her Budget

Update 3:45 p.m.: Call it a master class in political choreography, orchestrated by the University of California’s embattled president and Board of Regents chairwoman in the wake of last month’s audit that blasted UC’s budgeting practices.

One after another, UC regents defended President Janet Napolitano at their first public discussion since the audit’s release Thursday in San Francisco. Regents also acknowledged the board must get more involved in governing the university.

“No one is questioning President Napolitano’s integrity,” said Regent Sherry Lansing, the former CEO of Paramount Pictures. “We’re questioning process, and we’re questioning a better process of clarity and transparency – which we (regents), from what I understand, have fully accepted the responsibility to do.”

“Correct,” replied State Auditor Elaine Howle, whose audit last month set off a firestorm of criticism over the budget practices of the UC Office of the President (UCOP). “I would agree with those comments.”

Regent Norm Pattiz, the founder of media giant Westwood One, called Napolitano “someone of great character who is visionary and gets things done” and suggested UCOP’s bureaucracy couldn’t keep up with her ambitious agenda. “We’re not talking about malfeasance. We’re talking about lack of clarity in the process of saying where it’s all going.”

The auditor tried to steer the discussion away from Napolitano personally and toward the issues she found with UCOP’s budgeting practices.

“This is not an audit of a president. This is an audit of a process – the office of the president,” Howle said at one point, after urging regents to work with an independent third party to monitor UCOP’s budget.

“I’m not here to critique (Napolitano’s) leadership,” the auditor added, noting her respect for Napolitano’s record of public service, which has included stints as governor of Arizona and President Obama’s Secretary of Homeland Security. “But my responsibility is to look at process, look at protocols, procedures, accountability, transparency. And the Office of the President is not doing a good job.”

Howle also questioned UCOP’s decision to push the timeline for complying with her recommendations back by several months.

“Out of the (audit’s) 33 recommendations (to the Office of the President), nine of them, in the response we received from UCOP, they changed the deadline from April to July,” Howle told regents, adding that she didn’t think those delays were “reasonable or appropriate.” That’s particularly true, she said, for recommendations with implementation dates of 2019 and beyond.

When it was her turn to speak, Napolitano reiterated that her office is “committed to fully implementing all 33 of the recommendations made to UCOP. We feel the recommendations are constructive.”

Board Chair Monica Lozano, who has been among the most vocal defenders of the university and Napolitano since the audit’s release, said regents will hire an independent consultant within 60 days.

“This is not about compliance by itself. This actually is changing the culture – the institutional culture – of an organization,” she said. “And we need to step up our game.”

Former Assembly Speaker John Pérez was one of the few regents who raised concerns about the audit’s findings beyond – as many regents suggested –  simply being a problem of “clarity.” He said the Board of Regents must become more active in both policy decisions and oversight.

“What is essential is that we take the role that we should have as a governing body to reinforce the accountability and the transparency that not only speaks to our fiduciary responsibility but our obligation in overseeing this university as a public trust,” Pérez said.

But although Pérez is not the only regent with concerns over UCOP’s budget, he was the only one who raised direct criticisms – and he generally held his tongue.

There was none of the ire toward Napolitano or the university that California lawmakers showed at a hearing earlier this month – an apparent disconnect that looms over state budget talks just now kicking into high gear. Lawmakers of both parties – and Gov. Jerry Brown – have raised sharp questions over UC spending in response to this audit, as well as spending in previous years.

In fact, Assembly Speaker Anthony Rendon (D-Paramount), a regent by virtue of his office, dodged a question at the meeting from Lozano about whether he supports the audit’s recommendation that the Legislature separate out the budget of the president’s office from the rest of the university. (Rendon told Capital Public Radio this month he sees “great value” in that idea.) Later, speaking with reporters, he said the Assembly has yet to make that decision but left the door open.

In his revised state budget proposal last week, Brown announced his intention to withhold $50 million from the UC until it complies with the audit recommendations. Brown, who’s also a regent, did not attend Thursday’s meeting, nor did Lt. Gov. Gavin Newsom, although Newsom attended Wednesday’s meeting.

Regents began taking a closer look at the UCOP budget immediately after their audit discussion. They approved a spending plan proposed by Napolitano’s office that includes higher spending levels – but said they’ll revisit it at their next meeting in July after taking what Lozano called a “deep dive.”

Regents also approved the UC’s first ever limit on nonresident student enrollment. The proposal caps out-of-state enrollment starting next fall at 18 percent for all campuses besides Berkeley, Los Angeles, San Diego and Irvine. Those four campuses already enroll higher percentages of nonresidents and would be grandfathered in at their existing rates.

UC’s proposed nonresident enrollment cap

*These percentages will be adjusted once nonresident enrollment rates for Academic Year 17-18 are set

Original: University of California regents are discussing a blistering state audit of UC President Janet Napolitano’s office for the first time Thursday in a meeting in San Francisco.

The state auditor says Napolitano’s office kept a $175 million budget reserve secret from the public – and from UC regents. Napolitano says the auditor got it wrong, and that her office’s true reserve is a prudent $38 million.

The auditor also accused the president’s office of interfering with her audit – a charge Napolitano denies, while acknowledging her office should have handled the situation better and apologizing for the “misimpression” it created.

A majority of the regents have generally backed Napolitano, but several have been critical – especially elected officials like Lt. Gov. Gavin Newsom and Assembly Speaker Anthony Rendon.

Until now, regents have all declined comment – except for chairwoman Monica Lozano, who’s largely supportive of Napolitano.

One regent who isn't expected to attend the meeting is Gov. Jerry Brown. But his budget proposal last week speaks for itself: He wants to withhold $50 million from the UC until it complies with the audit recommendations – which the president’s office has said it will do.

The governor's proposal would also make that funding contingent on the UC achieving other goals that were part of an agreement Brown and Napolitano reached two years ago.

Also at Thursday’s meeting, regents are expected to approve the system’s first ever limit on nonresident student enrollment. The proposal would cap out-of-state enrollment at 18 percent for all campuses besides Berkeley, Los Angeles, San Diego and Irvine. Those four campuses already enroll higher percentages of nonresidents and would be grandfathered in at their existing rates.

It's the second time regents will discuss this matter after delaying action on an earlier proposal in March.