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Audit finds UCLA wrongfully designated $23M in student fees

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A state audit released last week says UCLA wrongfully designated $23 million in student fees to pay for two projects that were not included in the original fee referendum approved by student voters in 2000. 

The finding was part of a 15-month audit [PDF] that concluded the University of California system needed to improve transparency in the way it handles its finances. The report also questioned the unequal distribution of funds to the system's 10 campuses.

The fee started at $84 per year, and was scheduled to begin in the 2004-05 academic year. It was slated to increase over time to adjust for inflation. 

The UCLA fee at issue is a mandatory student fee called the "student programs, activities and resource complex fee," or "SPARC." The original ballot language [DOC] indicated the fee would pay for the renovation, expansion and maintenance of the Men's Gymnasium and the John Wooden Recreation Center, as well as facility repairs and equipment replacement at the Sunset Canyon Recreation Center and Tennis Courts, the Los Angeles Tennis Center and Drake Stadium.

The ballot information said that students would continue paying the SPARC fee as long as either the Wooden Center or the Men's Gymnasium still stood. These payments would cover maintenance and repairs over time. Today, the fee costs $100 per year.

UCLA could not provide a financial report on SPARC fees on Friday, but based on California Watch's estimate, last year's $93 fee would have generated $3.6 million from UCLA's roughly 38,000 undergraduate and graduate students.

In 2008, the UC Regents approved [PDF] a new use of the SPARC fee. They designated $8 million of revenues from the fee to fund construction of the South Campus Student Center, a new indoor and outdoor dining facility. As of April 2011, the university had spent $5.2 million in SPARC fee revenues for that project.

And in 2009, UCLA proposed using $15 million in revenue from the SPARC fee to help foot the bill for a renovation of Pauley Pavilion, home of Bruins basketball. Last April, the Los Angeles Times reported on that plan. The story quoted UCLA student Cindy Mosqueda, who had helped push for the SPARC fee in 2000 and was upset that UCLA was planning to spend the money on Pauley:

'We ... thought we needed additional space and the asbestos out of the basement,' said Mosqueda, now a Ph.D. candidate. 'If we knew it would be used in the future for Pauley Pavilion, we wouldn't have worked so hard.'

Ultimately, UCLA officials decided not to use the SPARC fees for Pauley. Still, UCLA officials and the UC Office of the President defended the decisions to use SPARC fees for both projects, saying they had the legal authority to fund other projects using the fee revenue. 

They pointed to the UC's "compulsory campus-based student fee policy," which they said gives them the power to modify student fees, including those approved by student referendum. Specifically, the policy states that student referendum results are "advisory to the chancellor" and "are subject to final approval by the president under the authority delegated to the president by the regents."

They also said that when the regents approved the SPARC fee back in 2000, the approval [PDF] said the money would go to fund the Wooden Center, the Men's Gymnasium, maintenance on these buildings and "similar needs" of other recreation facilities on campus.

But state auditors said last week that designating SPARC fees for the South Campus Student Center and Pauley Pavilion was legally indefensible. Attorneys for the state auditors said neither of the policies cited by university officials provided a "sufficient basis" for expanding the use of the SPARC fee beyond what was stated in the original referendum:

Our legal counsel does not think that the plain meaning of the authority to "approve" results – which means to express a favorable opinion of the results – also includes the authority to modify the language of the referendum.

In addition, state auditors pointed out that the original SPARC referendum said the fee would be reduced after the long-term debt for the renovations of the Wooden Center and Men's Gymnasium had been retired. By using the fees for unintended purposes, the audit said, university officials were prolonging the amount of time that students had to pay the higher fees – at a time when students are facing dramatic increases in tuition.

And by spending the fee revenue for unintended purposes, the university risks not having enough money for the maintenance and repairs to the Wooden Center and Men's Gymnasium, auditors said.

UCLA spokesman Phil Hampton wrote in an e-mail that the campus "strongly disagrees with the audit’s conclusions about use of the Student Programs, Activities, and Resource Center (SPARC) Fee. ... Use of SPARC fee revenues on the Pauley Pavilion project and the South Campus Student Center project was completely appropriate given that those facilities support student activities. The commitment of SPARC fee revenues followed extensive consultation with student organizations and was approved by the Board of Regents."

In his official response to the state audit, UC President Mark Yudof said the university plans to revise the policy on student fees to "further clarify that student referendum results are solely advisory to the regents and the president."

Clarification: An earlier version of the headline on this article mischaracterized the audit's finding.

Filed under: Higher Ed, Daily Report

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