Former Cal State official was improperly reimbursed, audit finds

A former high-ranking California State University official collected more than $150,000 in improper expense reimbursements, including claims for unnecessary trips to Amsterdam and Shanghai, meals that exceeded allowable amounts and travel between his Northern California home and the university’s Long Beach headquarters, a state audit has found.

The audit, released Thursday, scolds the university for a lack of oversight in approving the expenses, saying they were “unnecessary and not in the best interest of the university or the state.”

The report, by the state auditor’s office, comes at a troublesome time for the university system, which has recently taken a series of controversial actions such as steep student fee hikes, enrollment reductions and drastic cost-cutting measures across its 23 campuses to help close a half-billion-dollar budget gap.

Cal State officials said the subject of the audit was its former chief of information technology services, David J. Ernst. Ernst left the university in July 2008 for reasons not related to the audit, the officials said; he is now associate vice president for information resources and communications at the University of California.

In an e-mail to The Times, Ernst said travel that the audit deemed unnecessary had significantly benefited CSU’s reputation and effectiveness. He added that although travel expenses were covered by the sponsoring organization in some cases, state conflict-of-interest rules prohibited Cal State from receiving the funds.

“As with many such reports, the issues in this audit are much more complex than they may appear on first reading,” he said.

Peter H. King, director of media relations at UC, said a preliminary review of the audit indicates that the travel expenses as described would not be permitted there. “In his time at the UC, Mr. Ernst has proven to be a valued employee who has made important improvements to our technological capabilities” he added.

In reviewing expense reports from July 2005 through July 2008, auditors found that improper reimbursements to Ernst totaled $152,441, including $39,135 for travel expenses, $26,455 for business meals that exceeded allowances, $43,288 in prohibited commuting expenses, $24,676 in monthly living allowances and $17,053 for personal expenses such as home telephone and Internet service, computer supplies and annual membership in an airline executive club. Auditors also found $1,834 in reimbursements that resulted from duplicate payments and overpayments.

The report said Ernst was reimbursed $4,660 for attending a six-day non-university event in Shanghai with hotel costs of $475 a day and $2,136 for transportation, and $3,131 for a five-day trip to Amsterdam. CSU officials said both trips were to attend meetings sponsored by a private vendor.

“When interviewed, the official and other university officials stated that it was necessary to attend such meetings in order to maintain relationships and foster an open dialogue with the private company and other attendees,” the report said. “However, we found no evidence indicating that the official’s attendance at these events provided a significant business advantage or strategic value for the university.”

The report recommended that Cal State recover the $1,834 in duplicate payments and overpayments, require staff to provide more detailed documentation supporting expense claims and tighten other expense reporting policies. Auditors began the probe after a tip from a whistle-blower.

Ernst said the duplicate payments and overpayments resulted from a clerical error and that he has sent a check for the full amount to the chancellor’s office.

Cal State has since enacted more stringent controls, spokeswoman Claudia Keith said. “It is clear that some of the amounts claimed were excessive and unacceptable and would not be approved under policies now in place,” she said.

But Keith also said that Ernst sat on important advisory panels and that some of his travels involved protecting the university’s investment in a costly software system. “It doesn’t mean to say this was acceptable, but in the context of this person’s job, his portfolio was pretty broad.”

Lillian Taiz, president of the California Faculty Assn., said the report’s findings were the latest by university officials and managers “that betray the public confidence.” She added: “It’s an embarrassment to the entire system. It’s just flat out irresponsible in this kind of economic environment not to be on top of things and ensuring that every nickel gets spent appropriately.”

carla.rivera@latimes.com