UC failed to give regents required reports
Legal settlements, executive pay were to be disclosed
by Todd Wallack, Tanya Schevitz, SF Chronicle Staff Writers, February 28, 2006
The University of California's administration, under fire for paying employees more than it disclosed to the public, neglected to provide its governing body with required reports on legal settlements, senior managers' corporate board service and executive compensation, The Chronicle has learned.
UC officials are required to provide the reports to the Board of Regents annually under policies approved by the regents and the university's president. But regents have never received a list of legal settlements, and they haven't received the other reports in years.
"It's embarrassing,'' said Republican Sen. Abel Maldonado of Santa Maria (Santa Barbara County), a member of the Senate Education Committee, which held hearings this month into UC's pay practices after The Chronicle published a series of stories on the subject. "There is no accountability."
Regent Judith Hopkinson, who chairs the board's compensation committee, said the revelation that the 10-campus university system had not sent the required financial reports to the regents "is very bothersome to me, and I know that it disturbs other regents as well. Reports help keep us and the public abreast of important university activities."
UC spokesman Brad Hayward acknowledged the lapse and said university administrators would produce the reports in the future.
"It was a mistake, and we're going to make sure it doesn't happen again," Hayward said.
Under a policy that the regents approved in 1995, UC is supposed to give regents an annual list of all settlements of legal claims and litigation. But after The Chronicle filed a request under the state's Public Records Act for copies of the two most recent reports, UC said it couldn't find any evidence that the reports had ever been created.
Hayward said UC's Office of the General Counsel hadn't produced the report largely because it already notifies regents of settlements worth $50,000 or more at each regular board meeting, as the policy requires.
But the university has sometimes missed that requirement as well. At Senate hearings this month, for instance, UC officials acknowledged they had failed to tell regents about a lucrative secret settlement that the university reached last year with former UC Davis Vice Chancellor Celeste Rose. In exchange for Rose dropping claims of racial and gender bias, UC Davis agreed to give her $50,000 plus a job that pays $205,000 a year with no job description or regular duties.
When The Chronicle asked why the settlement hadn't been sent to the regents for approval, as the policy requires, UC officials initially insisted that the deal was a separation agreement, not a legal settlement. At a Senate hearing Wednesday, however, UC President Robert Dynes said: "In my view, this was a settlement agreement that should have been approved by the regents."
UC says it plans to report all future legal settlements to the regents.
"This effort has been under way for several months in order to come into compliance with the policy requirement for an annual report,'' said UC attorney Maria Shanle.
UC also has fallen behind in producing annual reports about executives' total compensation and paid service on corporate boards of directors.
The most recent reports on the topics covered the 2002-03 fiscal year, which ended nearly three years ago, when Richard Atkinson was UC president. Dynes took over in October 2003.
Hayward said the human resources unit that produces the reports had been hit hard by retirements and budget cuts, while its workload had increased.
"Again, however, not producing the reports was a mistake, and as soon as it was discovered, an effort was launched to get them done,'' Hayward said.
UC plans to produce the 2003-04 and 2004-05 reports on outside board service for the regents' March meeting, Hayward said.
In addition, he said, UC will start using an automated tracking system to alert executives when reports such as the one on corporate board service are due.
Though Hopkinson was concerned about the lapse, she also said she was "pleased that quick action is being taken to get the late reports and get us back on track."
Regents Chairman Gerald Parsky said the panel has pushed UC officials to produce as much information as they can by next month's board meeting. He said the regents had asked the auditing firm PricewaterhouseCoopers to look into whether UC officials had neglected to file other required reports.
Even when UC does send the reports to regents, however, the documents are not always readily available to the public. UC doesn't post the reports on its Web site, for instance. And it took the university more than a month to provide a copy of its most recent report on outside board service, even after The Chronicle filed a Public Records Act request for the document.
"They are violating the public trust,'' Maldonado said. "They need to be on their game and disclose everything they have. Disclose, disclose, disclose.''
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