Special Legislative Oversight Hearing to Probe CSU’s Hidden $1.5 Billion Surplus CSU Chancellor will need to publicly account for state audit findings on August 12 SACRAMENTO – Following a highly critical state audit that found the California State University has amassed a $1.5 billion budget surplus hidden from public view, state legislators will hold a special joint legislative oversight hearing on Monday, August 12 where CSU Chancellor Timothy White is expected to testify. NOTE: The legislative hearing will begin after the Assembly and Senate floor sessions adjourn – in Room 4202 of the State Capitol – with the approximate start time between 2:30-3:00 pm, but no definitive start time has been published. In the month since state Auditor Elaine Howle released her report, “California State University: It Failed to Fully Disclose Its $1.5 Billion Surplus, and It Has Not Adequately Invested in Alternatives to Costly Parking Facilities,” http://bsa.ca.gov/pdfs/reports/2018-127.pdf , Chancellor White has staunchly defended the CSU’s decade-long practice of building a multi-billion-dollar budget surplus while raising student tuition and seeking additional budget increases from the state. The audit showed: • CSU used student tuition and salary savings to build a $1.5 billion surplus in its operating fund from 2008-18, with the surplus balance growing by 437% during this period. • From 2008-12, the CSU increased student tuition nearly 80% and, between 2012-18, CSU’s surplus almost doubled as its state general fund appropriations grew by 60%. The audit also concluded that key stakeholders, such as the California State Student Association, were not informed of the surplus as required by law. While Chancellor White has maintained that all budgetary information was fully shared at board meetings. However, Aaron Castaneda, president of the Associated Students, Inc. at CSU Los Angeles, stood before the CSU Board of Trustees on July 23 and stated “That is not true,” to claims that students were aware of the funds. CSU Employees Union first raised concerns in 2017 about accounts held by the CSU that are outside of the State Treasury; the union worked closely with Assemblymember Sharon Quirk-Silva who requested the audit. While Chancellor White claims the budget surplus can only be spent for one-time expenditures, the audit concluded the $1.5 billion – comprising primarily ongoing student tuition and state revenues – can be spent for ongoing CSU operation costs. “We believe the surplus can be better used to fund CSU instruction and program needs,” said CSUEU President Neil Jacklin. “While building the surplus, the CSU deceptively argued to legislators that it needed more funding or would be forced to raise student tuition or cut vital programs. The audit confirms there is money available to improve quality education for students and quality jobs for University employees.” The CSU has been the subject of other critical state audits in recent years: • A 2018 audit raised alarming concerns about ongoing campus violations that threaten the health and safety of employees and students working with or near hazardous materials. http://bsa.ca.gov/pdfs/factsheets/2017-119.pdf • A 2017 audit cited unjustified growth in administration positions and salaries, uncapped executive compensation and an inability to document how state funds are spent. http://bsa.ca.gov/pdfs/factsheets/2016-122.pdf CSUEU represents nearly 16,000 employees who support and oversee the academics and operations of the California State University, including information technology, healthcare, clerical, administrative and academic support, campus operations, grounds and custodial.