Mishandling of CSU funds causes confusion
August 31, 2010 5:57 PM
Recent findings by the California Faculty Association, a union of over 23 thousand professors, lecturers, librarians, counselors and coaches, reveal the mishandling of funds within the CSU system that trace back as far as March of this year.
The CFA revealed two weeks ago, in a series of closed-door meetings, that the CSU chancellor's office was mixing funds between private and public divisions.
"This is money that should be going to further the education of students," said Ramon Castellblanch, CFA President of the SF State Chapter. "People should be held responsible, including the (California) legislature who are in charge of appointing the Board of Trustees who handle these funds."
Taxpayer dollars, along with private donations, have been improperly deposited into funds controlled by often-secretive non-profit organizations known as CSU Auxiliaries, accounts that are protected under the California Public Records Acts.
With this protection, these organizations are unavailable for the public to access, prohibiting anyone from finding where the money exactly is.
In an effort to allow the financial statements of these organizations to be disclosed, the SB 330 bill was proposed last year but was later vetoed by Governor Schwarzenegger.
The bill has since been amended by the CFA and State Senator Leland Yee. After being approved by the legislature last week with bi-partisan support, it is currently awaiting action by the governor.
With its approval, CSU Foundations and Auxiliaries will be held accountable for the ways student fees and private donations are used in the CSU system.
"I'm disappointed just as everybody should be," said SF State music professor Jassen Todorov. "But we don't know all the exact facts; it's still too early to make judgments."
The chancellor's office, however, refutes any intentional foul play. "It's an accounting issue," Spokesman for the CSU Chancellor's office Erik Fallis said. "We have our own internal auditors who have caught the issue; it's an issue of reimbursement."
Fallis explained that state money was being used to fund auxiliary sectors and that these auxiliaries were slow to reimburse the state back. State and auxiliary funding are entirely separate.
There is no proof of any criminal activity at the moment.
This recent controversy has also raised questions as to why the CSU administration is seeking to eliminate audits entirely by next year.
Although CSU executives learned about the mismanagement of money through the process of audits, they are the leaders in the movement to eliminate them altogether.
"They should be more organized," said senior Lauren Rubin. "If they were organized, I probably would have graduated last year."
For now, the students and faculty are forced to wait to see what transpires. The CSU's chief financial advisor Benjamin Quillian has called for the reimbursements in question to occur within the next three months, although it has not been approved by CSU Chancellor Charles Reed or his auditors. But according to Castellblanch, the remedy to this issue is predicted to be a daunting task.
"It's going to take quite a while," he said. "It's very murky and the money will be difficult to tract."
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