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A Little Brain Twister

November 30, 2009
Mark Yudof, President
University of California

Dear President Yudof;

I have just come upon what looks like a significant error in the University’s budgeting/accounting system and I ask that you look into this promptly. It concerns certain fees paid by UC students.
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New Data on Management Growth at UC

New Data on Management Growth at UC 1991-2010

by Charles Schwartz, UC Berkeley

This is a subject I have written about several times in the past, based upon analysis of statistical data published by the University. Official response has been pathetic. Now, some new data not only extends the time frame over which we can see enormous growth in management positions but also lets us identify the main sources of funds paying for this estimated $1 Billion per year in apparent waste.
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A $4 Billion Mystery is Solved!

A $4 Billion Mystery is Solved!

by Charles Schwartz, UC Berkeley

This is Act III of the “$4 Billion Mystery at UCOP,” the earlier parts having been posted on February 10 and February 17 at . A letter from Patrick Lenz, the University’s Vice-President for Budget and Capital Resources, received February 22, succeeds in solving the first Mystery of the missing money; and he has taught me something I didn’t know before about nomenclature in the UC budget and accounting systems. However, the second Mystery remains to be answered: Why is so much State money appropriated for the University’s Instructional program diverted to other uses, year after year?  In addition, VP Lenz confirms essential parts of my earlier analysis that led to alternative budget proposals in this time of a State budget crisis.
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$4 Billion Mystery at UCOP: Act II

$4 Billion Mystery at UCOP: Act II

by Charles Schwartz, UC Berkeley

While top officials at the University of California Office of the President (UCOP) remain silent in the face of the huge financial discrepancy previously reported (See my posting dated February 10, 2011), some new data analysis shows us which portion of the University’s State-funded budget has been the primary victim of this diversion: it is the Instructional program.
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$4 Billion Mystery at UCOP

What is the explanation for this apparent discrepancy?

$400 – $500 Million per year

by Charles Schwartz, UC Berkeley

General Funds = Unrestricted money from the State of California to the University of California (UC) for its operating budget.

Regents’ Budget = UC Budget for Current Operations; see table near the end, titled,  “Income and Funds Available”. FY 2010 data from budget for 2010-11, issued 11/2009.  These are budget numbers, originating from The Regents and eventually approved in Sacramento, which show how much of General Funds UC received each year. [Note: These are not the amounts requested by UC for the next fiscal year, they are the amounts for the current fiscal year that have been approved by the Legislature and the Governor.]

CFS = UC Campus Financial Schedules, Schedule 12-D.  These are accounting numbers, which show how much of General Funds has actually been spent each year as operating expenditures.

The gap between these two numbers is a mystery. How can it be that the amount of this money  actually paid by the State to The Regents for their annual budget should be so much larger than the amount of this same money actually spent by UC for its annual operating costs. Where did that difference go?  This is not just a one-time effect: over the ten year period described above the total discrepancy adds up to $4.8 Billion.

In a recent paper I looked at alternatives in the present budget crisis, focusing on the University’s Core Funds – General Funds plus Student Fees. Noted there was a discrepancy between budget data and expenditures data for General Funds in the last fiscal year 2009-10. The graph above shows that discrepancy occurring systematically each year over the last decade. What follows is the correspondence I have had with top officials at the University of California Office of the President (UCOP) seeking some explanation for this surprising situation.


On January 25, 2011, I sent this graph of General Funds data by email to Patrick Lenz, UC’s Vice President for Budget, with a copy to Peter Taylor, Executive Vice President for Finance.

Dear Patrick;
I wonder if you can explain to me the apparent discrepancies in data about General Funds at UC, which are shown in the attached document.



February 1, 2011
Dear Patrick and Peter;

It is now one week since I sent you my inquiry, asking for some explanation of the large discrepancies shown in the attached data concerning General Funds at UC.
When may I expect your response?

cc: President Mark Yudof


February 1

Professor Schwartz – We’re working on your response and I’ll get you an
estimated time when I’m in Oakland tomorrow to meet with my staff.

cc: President Yudof

February 4
Dear Patrick and Peter;

While waiting for your response to my inquiry about apparent discrepancies in General Funds at UC, I have looked again at the data available to me and found one correction that reduces the discrepancies somewhat.  Taking account of the “Expense Capitalized” contribution to General Funds expenditures, as found in the Campus Financial Schedules, I now have the corrected data shown in the attached Table.

The Cumulative Discrepancy over the past 12 years now stands at just over $4 Billion. I look forward to your explanation of this matter.

cc: President Yudof

General Funds at UC: Budgeted and Spent

Fiscal Year Budgeted * Spent ** Difference
$ Millions $ Millions $ Millions
1998-99 2,817 2,435 382
1999-00 3,050 2,717 333
2000-01 3,576 3,137 439
2001-02 3,786 3,422 364
2002-03 3,704 3,431 273
2003-04 3,442 3,094 348
2004-05 3,265 2,957 308
2005-06 3,399 3,081 318
2006-07 3,637 3,303 334
2007-08 3,851 3,539 312
2008-09 3,834 3,515 319
2009-10 3,263 2,891 372
2010-11 3,736
12 year Cumulative Discrepancy $4,102

* Budgeted figures from “UC Budget for Current Operations”, table of Income and Funds Available: State General Funds + UC General Funds + ARRA
** Spent figures from “UC Campus Financial Schedules”, Current Funds Expenditures: General Funds from Table 12-D or 12-H, including Expense Capitalized

February 8, 2011
President Mark Yudof;

I have been waiting two weeks to hear UCOP’s explanation for this discrepancy in accounting for State Funds at UC.  Your silence suggests that there is something more than simple incompetence behind this. How much longer should I wait before making this information public?

cc: Vice Presidents Lenz and Taylor


February 10: Continued silence from UCOP.

When Mark Yudof became President of the University of California he announced a new dedication to accountability and transparency. Something is very wrong up there.


This is a blog: that means that you, the reader, are invited to post your own comments:

What do you suggest I might do about this situation?

What do you suggest you might do about this situation?

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Lawyers, Money, Hide & Seek

Lawyers, Money, Hide & Seek

Charles Schwartz, UC Berkeley

Earlier this year, perusing the published list of reports regularly provided to the Regents by the University of California Office of the President (UCOP), I noticed this item, “Annual Report on Use of Outside Counsel,” and submitted a formal request for a copy of that document, under California’s Public Records Act (PRA).
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Pension Plan as football between UC and Sacramento

Pension Plan as football between UC and Sacramento
by Charles Schwartz, UC Berkeley

In an enthusiastic letter to faculty and staff issued today (10/13), President Yudof talks about the new state budget and how it is good for the University. Here is one particular paragraph where he talks about UCRP, our financially stressed pension plan.

“The Legislature also adopted budget bill language asking for the Legislative Analyst, the Department of Finance and UC to work together on a proposal to fund UCRP in the future. This is a very positive sign.”

I wrote to Steve Boilard, of the Legislative Analyst’s Office in Sacramento, asking if he had any further information about this. Here is the reply I received.

“Well, it’s not as positive as you might think. The Governor vetoed the language. [See Footnote for details.] We had spearheaded the effort to get language in the budget calling for such a proposal. We agree with many others that (1) there’s no way to avoid re-starting contributions to the plan, (2) unfunded obligations are already mounting, and (3) the particular plan for restarting contributions (who pays what, and when) should be discussed among all parties.

“Here’s the Gov’s veto language: Item 6440-001-0001-For support of University of California. I revise this item by deleting Provision 17. I am vetoing the provisional language that would require the University of California (UC) to report on its proposal for long-term state funding for the UC Retirement Plan (UCRP), including any alternative funding plans that might be proposed. This language is unnecessary, as forwarding every proposal received from any person or entity is unwarranted. Further, the UC Office of the President is committed to reporting on its UCRP proposals and has indicated that it would provide detailed reports on the long-term funding of the UCRP without the adoption of this language”

That sounds to me like President Yudof is playing a rather dishonest game with all of us. I have also heard, from an anonymous but well-informed source, that there are rumors in Sacramento to the effect that UC asked the Governor to veto that language about UCRP.

– – – – –

Footnote. Here is the full text of the Legislative language referred to above.

17. The Legislature requests that the Regents of the University of California, following consultation of university executive staff with all employee bargaining units and the Academic Senate, submit a proposal, along with any alternative proposal by the consulted groups, for the long-term funding of the University of California Retirement Plan on or before March 15, 2011. The proposal should include all of the following: (a) A description of projected employer and employee contribution rates for each of the next 30 fiscal years, based on reasonable projections and assumptions, including reasonable assumptions of future university growth and hiring, developed by the university and its actuaries. (b) A proposed methodology for determining the amount, if any, of General Fund augmentations to fund the plan in future fiscal years, including a specific methodology for determining the portion of payroll allocable to the General Fund for these purposes. (c) A proposed methodology for increasing or decreasing employee, employer, state, or other contributions in the event that the plan’s normal costs or unfunded accrued actuarial liabilities, and the costs associated with those liabilities, differ from those that are projected. (d) Any proposed changes to pension benefit levels for future university employees necessary to implement the funding plan proposal. (e) Any proposed statutory changes necessary to implement the funding plan proposal. The proposal should incorporate reasonable projections concerning future receipts of federal funding for the plan and should include graphs and figures, as appropriate, to display the effects of proposals both in dollars and as a percentage of payroll. Sensitivity analyses displaying the fiscal effects of different assumptions for investment returns are encouraged. The university is requested to submit copies of the report to the Chairperson of the Joint Legislative Budget Committee, the chairpersons and vice chairpersons of relevant fiscal and policy committees of the Legislature, the Governor, the Director of Finance, the Legislative Analyst, and representatives of the faculty and staff bargaining units. Nothing in this provision or any other provision of law shall be interpreted to create any type of commitment or obligation, either express or implied, for the General Fund to contribute any moneys in any fiscal year to the university or its retirement plan.

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F is for Failure


to The Regents of the University of California, meeting July 14, 2010

by Charles Schwartz, Professor Emeritus of Physics, UC Berkeley

F is for Failure

It should be clear that the UC Commission on the Future has been a failure. Regent Gould and President Yudof have spent the last year rooting about in the underbrush of the University but have failed to come up with any plausible ideas on how to solve the long-term financial problem. The reason is simply that they never took the trouble to state openly and clearly what the problem is. It is not about funding for undergraduate education; it is about funding for the core research mission of the university.

The only path they offer will be a continued escalation of the tuition that you charge undergraduate students – although they are already paying for the entire cost of their own education – and that is how this great public university joins the club of private universities.

Let me show you another aspect of this same disease – the failure to provide a clear and truthful picture of how UC spends its money.  I’ll quote from a recent article published by Jon Coupal, the president of the Howard Jarvis Taxpayers Association.

“As California faces an unprecedented budget crisis, students at California colleges have been asked to pay a greater share of the total cost of their education, most of which is still borne by taxpayers. …taxpayers pay 60-70% of the cost of CSU and UC students’ education, without even counting financial aid.”

Those numbers are false; but they come right from here – from the Regents’ Budget, which is published by the UC President and his staff.

How can you hope to gain public support when you don’t tell the truth about where the money goes?  This is the main duty of the Board of Regents; and you are all failing to meet your public obligations.


for further related commentary, I recommend Chris Newfield’s latest post at

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An Affirmative Vote by the Faculty at Berkeley

Resolution on Senate Committee on University Governance and Leadership

In the Berkeley Division of the Academic Senate of the University of California

Approved by a vote of 263 to 113 in a formal mail ballot,  May 7-21, 2010

• Official Results of the Ballot

• Text of the Resolution

• Ballot Arguments For and Against
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