UC Curbs Officials’ Spending Habits After State Audit

The University of California, responding to a stinging state audit, announced restrictions Thursday on spending by its top executives for first-class air travel, meals and gifts.

The changes came a week after state auditors reported that UC executives have used university money for first-class airline flights, business lunches near UC headquarters in Oakland, unnecessary stays at posh hotels, personal donations to charities, parties for each other and other questionable purposes.

In a letter Wednesday to regents, retiring UC President David P. Gardner defended executive travel, entertainment and other expenses related to “carrying out the university’s far-flung academic and administrative activities.”

“This important work is undertaken not for the benefit, convenience or welfare of the individual officer, but for the benefit, convenience and welfare of the University of California and, thus, ultimately the people of California,” Gardner wrote.

The executive travel and entertainment expenses were paid from the university’s administrative fund, which was established with private donations. However, state auditors said the university, as a state entity, should treat all its money as public funds.

Gardner said the audit found no significant policy violations or unauthorized expenditures. “However, some needed changes in the use of administrative funds have been suggested by the auditor. These changes are needed, in my opinion, and should be made promptly,” he said.

Gardner prohibited use of the fund for first-class air fare except when no other seats are available or “there is a demonstrated physical need or business necessity.”

Other restrictions require meals, purchases, gifts and contributions to be for university business purposes, he said.

The audit was ordered by the Legislature after it was disclosed that UC regents had privately approved a nearly $1-million lump sum pension for Gardner, who retires in October.

Several of Gardner’s expenditures were highlighted in the audit report, including a stay at the expensive Four Season’s Clift Hotel in San Francisco during a regents’ meeting only 10 miles from university headquarters. He also hosted numerous events attended only by UC employees, according to the audit.

Regents are scheduled to discuss the audit at their Sept. 17-18 meeting in San Francisco. The university plans to respond more fully within two months.