Friday, May 05, 2006

More Reports on the Compensation of Top University of California Leaders: "A System That Is Out of Control"

More reports have been published over how the sprawling University of California (UC) system has been managed. They do not paint a pretty picture.

First, as reported by the Los Angeles Times, an independent audit by PriceWaterhouseCoopers found that "in more than half of the 64 cases detailed, UC provided extra pay or benefits to its top administrators as policy exceptions or without explicit approval from the regents." The Times reported "an increasingly detailed picture of a university leadership that has made policy exceptions seemingly at will and without regard for its responsibility to inform the regents or the public." Furthermore, "some compensation for a number employees, including the extra income for [UC President Robert C] Dynes, was not reported to the Internal Revenue Service."

Then, the San Francisco Chronicle reported that "the state Legislature's legal adviser says the University of California regents have violated state open-meeting laws by voting behind closed doors on executive pay packages." In response, state Sen. Jeff Denharm (R-Salinas) said, "UC needs a little less autonomy and a lot more watchdogging."

Finally, the Los Angeles Times reported that "a state audit released Tuesday found the University of California's system of compensating its highest-paid managers and professors is riddled with irregularities and that UC leaders repeatedly failed to disclose key specifics to university regents." Furthermore, "the highest-paid employees appeared to have received a disproportionate share of the extras. The report found that 4,071 UC employees who earned more than $168,000 a year accounted for about 10% of the regular compensation, but 26% of additional pay." One particular example of the irregularities was "the complicated arrangement that was designed to allow Edward W. Holmes, the dean of the [UC-San Diego] medical school, to keep the value of stock received as compensation for serving on a scientific advisory board - an action , the auditor said that circumvented university policy. The pay arrangement, the auditor said, also caused the university to overpay Holmes by $130,000. What's more, UC San Diego officials decided not to ask for repayment because they did not want to 'penalize' the dean for the campus' errors. A UC San Diego spokeswoman, Stacie Spector, said Holmes was traveling and unavailable for comment."

The reaction from state legislators, according to the San Francisco Chronicle, was harsh. Assemblyman Pedro Nava (D-Santa Barbara) said, "what we are facing is a system that is out of control." Then the Chronicle reported that "three members of the state Senate Education Committee called Wednesday for the resignation or firing of University of California President Robert Dynes, saying the public trust in his leadership has been broken by a compensation scandal over the past six months." Senate Majority Leader Gloria Romero (D- Los Angeles) said, "at first it seemed that President Dynes would take responsibility for these numerous problems. As time went on, it somehow became the system (that was at fault). He is the system He is the man, and this system ... deserves accountability and leadership.... The buck stops here."

In summary, the picture painted is of top university leaders who have quietly rewarded themselves more than allowed by their own rules, and then failed to take responsibility for these actions. Here is another example of top health care leaders who seem to believe they are very different from you and me. Given how often health care leaders seem to put their personal agendas ahead of their organizations' missions, is it any wonder that health care costs inexorably go up while access and quality do not.

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