SAN FRANCISCO — California’s state auditor says the California State University system kept $1.5 billion in discretionary reserves while raising tuition at its 23 campuses and lobbying the Legislature for more funds.

Auditor Elaine Howle says in a report released Thursday that CSU put the money, which came primarily from student tuition, in outside accounts rather than in the state treasury.
The report says CSU accumulated the surplus from 2008 to 2018. That is during the same time it nearly doubled student tuition. CSU did not fully inform legislators and students about its surplus.
The CSU system serves more than 480,000 students at 23 campuses, including Fresno State. The audit was requested by the Joint Legislative Budget Committee.
According to the report, CSU officials didn’t tell students about the surplus while consulting with them about raising tuition, “thus undermining the opportunity state law affords the students to provide input and ask questions about the need for tuition increases.”

CSU Chancellor Says Report is Misleading

Because CSU kept legislators in the dark about the $1.5 billion surplus, state lawmakers could evaluate whether the surplus was a reasonable use of CSU funds, and whether some of that money should have been used to pay for some of the university system’s state budget requests.
CSU Chancellor Timothy White said in a statement the report is misleading. He called it irresponsible to imply that these “one-time funds” could have been used in place of ongoing revenue sources such as state funding or student tuition.
In 2006, state law was changed to allow CSU to manage tuition revenue in its own accounts, outside of the state treasury.  At the time, the Legislative Analyst’s Office warned the change could reduce accountability, and it recommended ensuring that CSU routinely report and clearly display tuition in budget documents.
In 2016, the state budget act required CSU to submit data about tuition revenue to entities such as legislative committees that consider appropriations for the university system.
“Although the Chancellor’s Office provided the Joint Legislative Budget Committee and other legislative entities with projections of tuition revenue at that time, it did not include information detailing CSU’s accumulated surplus, derived primarily from tuition,” the audit report said.