California’s state auditor, Elaine Howle, released a report on Nov. 6 explaining that the California State University system needs to strengthen oversight and set stricter compensation policies for its current and former executives.

The Joint Legislative Audit Committee of the state legislature requested the report after Speaker of the Assembly Fabian Nunez called for the audit in July 2006 when the methodology the CSU used to justify pay raises was questioned.

According to the report, CSU compensation practices “have not developed a central system enabling it to adequately monitor adherence to its compensation policies or measure their impact on CSU finances. The average executive compensation increased by 25.1 percent from July 2002 through June 2007, with salary increases contributing the most to the growth.”

The audit revealed that CSU “has three executive transition programs that provide postemployment compensation packages to departing executives, in addition to the standard retirement benefits available to eligible executives.”

According to the report, this means some employees have either received questionable compensation after they were no longer providing services to CSU or while they were transitioning to faculty positions.

Although the report found the actions of the CSU could not be considered illegal, former CFA President and current Political Action Chair John Travis said it’s “not a question of illegality.”

“(The CFA) thinks there are some legally questionable things, such as closed door meetings, (the actions of the CSU) are what (the CFA) considers as mistakes,” he said during a conference call on Nov. 6.

CSU Media Relations Specialist Paul Browning said the CSU is “very happy with the report.”

“We’re glad that (the report) was fair and balanced…We plan to implement (the suggestions stated in the audit) as soon as feasible,” he said.

Recommendations from the audit are for CSU to “provide effective oversight of its systemwide compensation policies.”

“The university needs accurate, detailed and timely compensation data (in order to accomplish this) the university should create a centralized information structure to catalog university compensation by individual, payment type and funding source,” the report said.

Other suggestions include that “the CSU Board of Trustees should consider total compensation received by comparable institutions, rather than just cash compensation, when deciding on future salary increases for executives, faculty and other employees.”

The audit also said the CSU should work through the regulatory process to develop stronger regulations governing paid leaves of absence for management personnel and strengthen its policy governing the reimbursement of relocation expenses.

In October, Gov. Arnold Schwarzenegger vetoed Assembly Bill 1413, designed to set clear guidelines concerning the salaries and benefits of top CSU executives.

In a letter to the members of the California State Assembly stating the reasons for the veto, Schwarzenegger wrote that “executive compensation contracts are currently approved in open meetings and last year CSU adopted changes to their transition pay program that are addressed in (the) bill.”

According to the CSU website, Chancellor Charles Reed said, “Practice to vote on all executive compensation matters in public session and new limits adopted last year on executive transition programs rendered AB 1413 largely redundant and unnecessary.”

In response to the release of information from the audit, Assemblyman Anthony Portantino (D-Pasadena) said he plans to reintroduce AB 1413 to the legislature.

The CSU Board of Trustees will be holding its next meeting today at CSU Long Beach.

Officials from CFA will be attending to discuss the audit analysis with the trustees.

Princess Garnace can be reached at [email protected].