A Scandal That is Not a Scandal

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

The state auditor has discovered another scandal that isn’t a scandal.

The latest target of Elaine Howle’s office is the California State University system. And if the supposed crime sounds familiar, it is: CSU has been behaving in fiscal prudent ways.

And you can’t do that in California.

Our state, with a dysfunctional budget process, has developed its own genre of scandal involving the public institution that saves too much. CSU is accused of keeping a secret surplus of $1.5 billion. Of course, the surplus wasn’t really secret—it was disclosed in documents—but the university system didn’t advertise it prominently enough to legislators.

If not advertising your savings account to the legislature is a crime, a vast majority of Californians would be proud to be criminals.

CSU’s reasons for having a surplus are good ones—it needs to build things. And given the volatility of budgets and the California economy, it needs money if and when revenues tank. 

But that didn’t stop the state auditor from putting out an audit and drawing headlines that made it sound like the CSU had a secret slush fund. This isn’t a new trick of the state auditor’s. The same thing was done to the office of UC President Janet Napolitano in an earlier audit. Previously, in more questionable circumstances, the state parks department had a more secret slush fund, but once again, that was blown up into a major scandal—when it was anything but.

The message these audits send is: don’t be prudent, and spend every dime you have, or we will come after you.

Who does these bogus scandals serve? Well, they are politically convenient for the legislature, which loves to criticize the universities for tuition increases even as they cut legislative budgets. They also serve the interests of politically powerful unions that want every dollar for today’s salaries.

Turnabout ought to be fair play. Someone, perhaps an audit unit at a university system, ought to look into whether the state auditor’s office spends every dollar it has as soon as it gets it. 

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