The California State University system stashed away $1.5 billion in discretionary reserves while raising tuition at its 23 campuses and lobbying the Legislature for more funds.
According to a report released on Thursday from California State Auditor Elaine Howle, the CSU put the money, primarily from student tuition, in outside accounts instead of in the state Treasury.
According to the report, the money was accumulated over the span of 10 years from 2008 to 2018. During that time period, the CSU system requested—and received—increased funding from the state a number of times, and it also repeatedly raised student tuition from around $3,000 to nearly double at around $6,000.
“Had CSU informed the legislators of its surplus when presenting its budget requests, the legislators could have directed CSU to use a portion of its own money rather than requesting additional funding from the state,” Howle wrote.
Howle went on to add an example of offering additional courses to help students graduate more quickly as a way the system could have used the money.
CSU Chancellor Timothy White released a statement Thursday stating that the report was misleading and mischaracterized the reserve funds. White said that funds were used to deal with state recessions and that the report was incorrect to claim that CSU did not fully disclose the funds.
“It is irresponsible to imply that these one-time funds could have been used in lieu of ongoing revenue sources, such as state funding or student tuition, for on-going costs,” White said in his statement. “The report’s incorrect claim that the CSU failed to fully inform its stakeholders about fund balances overlooks dozens of presentations of publicly available reports that included information about these funds.”