The California state auditor reported that the CSU has been funneling hundreds of millions to accounts outside of the State Treasury, disregarded state laws, and used millions of dollars in revenue from campus parking permit fees to fund projects unrelated to the CSU parking program. Through the audit, it was discovered that the surplus from these fees were hidden in separate accounts from public and state overview.
“Unfortunately, the state auditor has again uncovered violations and waste that occur when we allow CSU to operate its campuses without adequate state oversight or accountability,” said Assemblywoman Sharon Quirk-Silva. “The legislature must enact measures to ensure state funds cannot be hidden in outside accounts and are being spent in the best interests of students.”
This is not the first time that the CSU executive leadership has been subject to highly critical state audits. As recent as 2018, a state audit raised alarming concerns about ongoing campus violations that threaten the health and safety of employees and students who work with or near hazardous materials. Furthermore, in 2017 a state audit cited unjustified and excessive growth in administration positions and salaries, uncapped executive compensation, and CSU’s inability to document how state funds are spent.
California college students have an average of $20,000 in debt, and although transportation and parking may not be the largest factor in that equation, these fees add up for the struggling student. As of June 30, 2018, CSU had accumulated a surplus of more than $1.5 billion, primarily from doubling student tuition, that it can use at its discretion to cover the costs of instruction or other operations. In addition, as the CSU constructs costly campus parking structures, leadership has ignored requirements to maintain campus and community committees that promote less-costly alternative transportation programs intended to improve student access, according to the audit.
With an astonishing $3.7 billion balance found in outside investment accounts held by CSU from the state Treasure, of which approximately $2 billion is held in surplus, the CSU should be using these funds for instruction and program needs. As the audit revealed, the State has minimal oversight and is unaware of the management or use of these accounts.
“I hope our State Legislature takes steps to hold the CSU accountable and strengthen oversight. The practice of hiding state funds and ignoring state laws must end,” said Vicky McLeod, chair of the CSUEU legislative committee.