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DYNES INSISTS HE WILL FIX COMPENSATION

BY CYNTHIA LEE
Today Staff Writer

UC President Robert C. Dynes reaffirmed his commitment to fixing the university’s compensation problems in response to demands by three state senators that he resign or be fired.

Following the release of a second audit May 2 that detailed more problems with UC compensation practices, State Sens. Abel Maldonado, R-Santa Maria, and Gloria Romero, D-Los Angeles, called for Dynes’ resignation while Sen. Jeff Denham, R-Salinas, said the regents should fire the head of the UC system.

“I understand the frustration of members of the Legislature, and I am committed to full accountability and transparency at the University of California,” said Dynes in a statement. “More importantly, I have taken action to begin rectifying the university’s compensation problems [to] prevent them from happening again.”

The latest report, by the Bureau of State Audits (BSA), found instances of overpayment, numerous exceptions to university policies and inconsistencies in how the campuses classify compensation and funding sources.

The report, which was requested by a legislative committee, followed on the heels of an earlier audit, released April 24 by PricewaterhouseCoopers (PWC), which was smaller in scope but detailed similar lapses.

“In our review of 100 highly compensated employees, we found that some university campuses circumvented or violated university policy, resulting in a significant overpayment to one employee, questionable forms of compensation provided to others and improper increases to some employees’ retirement-covered compensation,” reported State Auditor Elaine M. Howle in a letter to Gov. Arnold Schwarzenegger and legislative leaders.

The auditor also found that UC did not consistently disclose such compensation as housing and auto allowances to the regents as required. In one case, the regents increased a new provost’s salary without knowing she was also receiving a $125,000 housing allowance.

To find out what the compensation programs and disclosure policies were like at seven comparable universities, the state auditor did a survey. While some responses were lacking, the survey showed “that they generally do not disclose more about the details of employee compensation to the public than the University of California,” the report stated.

Dynes said the BSA audit affirms the need for stricter oversight and greater transparency. “I believe it is critical to move swiftly, but accurately, to identify root causes and permanent solutions,” the president said in a statement. “Where there has been misconduct, misjudgments or mistakes, I will take appropriate action. There is no conflict between our fiduciary duty and our obligation to act fairly.”

To correct administrative errors uncovered by the PWC audit, Dynes said he and 19 other senior managers would be receiving corrected W-2 forms “for benefits that the University did not properly report as taxable compensation,” according to a statement. Dynes stressed that the administrative errors do not reflect any wrongdoing on the part of the senior managers.

As an interim policy, Dynes is requiring that all exceptions to UC’s compensation policy for senior managers receive his approval in consultation with the regents. Also, all separation agreements for key positions or with a value of more than $100,000 will need the regents’ approval.

The regents will review the results of the audits at their meeting on May 17 in San Francisco.

“President Dynes will provide his explanation with respect to the issues that have been raised,” said Regents Chairman Gerald L. Parsky.