Back to the Report

More publications like . . .

An Analysis of University Reserves


Post

An Analysis of University Cash Management Issues

November 10, 2020 - In contrast to the state, the California State University and the University of California typically do not face cash timing issues. The universities also tend to have relatively larger cash cushions, which have allowed them over time to invest more of their cash in long-term investment accounts and even assist the state in managing its cash challenges. The coronavirus disease 2019 (COVID-19) pandemic and recession, however, have changed these dynamics. While the state has a larger cash cushion compared to previous recessions, the pandemic has resulted in notable revenue declines at campuses, which have weakened their cash positions. To weather the reduction in revenues, the universities have implemented, or are considering, internal borrowing and transfers, shifting more money back into short-term investment accounts, and issuing bonds to help cover operating costs. These actions will help the universities meet the unprecedented challenges wrought by the pandemic, but they come with trade-offs and risks. Given these developments, monitoring the universities’ fiscal condition over the coming years will be especially important for the Legislature.

Report

[PDF] A Required Report on Student Fee Transparency and Accountability

April 6, 2016 -

Chapter 620 of 2012 (AB 970, Fong) requires the University of California (UC) and the California State University (CSU) to fulfill the following three requirements related to systemwide tuition and fee increases:

  • Tuition and Fee Policies. The legislation requires UC and CSU to develop a list of factors to consider when recommending an increase in mandatory systemwide tuition and fees for resident students.
  • Notification and Consultation Procedures. The legislation requires UC and CSU to follow prescribed public notice and student consultation procedures before adopting an increase.
  • Reporting Provisions. The legislation requires UC and CSU to provide the Legislature with annual reports on tuition and fees, financial aid, and the total cost of attendance. In addition, the legislation requires our office to report on UC’s and CSU’s compliance with Chapter 620.

As detailed below, our review found UC was not in compliance with several provisions of Chapter 620. Though the legislation deems its provisions to be required for UC, UC believes it is not legally obligated to comply because of its constitutional autonomy. We found CSU complied with all Chapter 620 provisions except for one reporting requirement.

Report

The 2014-15 Budget: Maintaining Education Facilities in California

April 11, 2014 - Due to a combination of poor budgeting practices and competing funding priorities, all of the state's education segments currently have a backlog of deferred maintenance projects. The Governor’s budget includes a package of proposals to begin addressing this backlog. While we commend the administration for highlighting deferred maintenance as a problem, we have concerns with the Governor's specific proposals and recommend the Legislature consider various alternatives. Looking beyond 2014-15, we believe the state should have a long-term strategy for properly maintaining education facilities. While a one-size-fits-all response very likely is not appropriate for such a diverse array of education segments, segment-specific plans likely could be very helpful. To this end, we recommend the Legislature require the education segments to develop plans that detail how much they set aside annually for scheduled maintenance, how they plan to eliminate their existing deferred maintenance backlogs over the next several years, and how they plan to avoid creating new backlogs thereafter. (In contrast to the other segments, we believe the state should not impose additional maintenance requirements on elementary and secondary schools at this time. The different approach for schools acknowledges the state’s recent decision to shift fiscal decision making and accountability for many aspects of schools’ operations—including maintenance—to the local level.)

Report

The 2020-21 Budget: Analyzing UC and CSU Cost Pressures

December 18, 2019 - California operates two public university systems: (1) the University of California (UC), consisting of 10 campuses, and (2) the California State University (CSU), consisting of 23 campuses. The Legislature faces many pressures to increase funding for UC and CSU in 2020‑21. This report examines these university cost pressures, assesses the state’s capacity to fund some of them, and identifies options for expanding budget capacity to fund additional cost pressures.

Report

The 2020-21 Budget: Higher Education Analysis

February 20, 2020 - In this report, we analyze the Governor’s higher education budget proposals. Similar to last year, these proposals are wide ranging—including large base increases; targeted increases for apprenticeship programs and food pantries; one-time initiatives relating to extended education programs, work-based learning, faculty diversity, and animal shelters; and many facility projects.

Report

[PDF] Implementation of the Working Families Student Fee Transparency and Accountability Act

March 25, 2015 - Chapter 620, Statutes of 2012 (AB 970, Fong), also known as the Working Families Student Fee Transparency and Accountability Act, requires the University of California (UC) and California State University (CSU) to fulfill three types of requirements related to systemwide tuition and fee increases. As detailed in this report, our review found UC was not in compliance with most provisions of Chapter 620. Though the legislation deems its provisions required for UC, UC believes it is not legally obligated to comply because of its constitutional autonomy. We found CSU complied with all Chapter 620 provisions.

Report

[PDF] The Implementation of the Working Families Student Fee Transparency and Accountability Act

March 21, 2014 - As required by Chapter 620, Statutes of 2012 (Assembly Bill 970, Fong), we reviewed the University of California’s and California State University’s compliance with certain student fee and financial aid provisions. Enclosed is our report. In the report, we first provide background on fee policies in the state and then describe the main Chapter 620 requirements. We next review the segments’ responses to the requirements in Chapter 620, provide our assessment of their compliance, and offer a few related recommendations for the Legislature’s consideration.

Report

The 2018-19 Budget: Higher Education Analysis

February 15, 2018 -

In this report, we analyze the Governor’s higher education budget proposals. We begin by providing an overview of higher education in California. In the next four sections, we analyze the Governor’s budget proposals for the three public higher education segments and the California Student Aid Commission. In each of these sections, we provide relevant background, describe and assess the proposals, and make associated recommendations. The final section of the report consists of a summary of our recommendations.

In addition to this report, we have three other higher education budget briefs that analyze the Governor’s proposals for adult education, Hastings College of the Law, and the California Education Learning Lab.

Report

The Master Plan at 50: Guaranteed Regional Access Needed for State Universities

February 14, 2011 - In this report we review how the Master Plan envisioned the California State University (CSU) as part of the state’s higher education system, and assess how the university has carried out its role in the face of changing enrollment demand and funding limitations. We conclude that CSU’s regional role is an important component of the state’s higher education system, and recommend that the Legislature take steps to protect that focus in the face of enrollment pressures and efforts by some campuses to become more selective. Specifically, we recommend that the Legislature (1) formalize a regional education role for CSU in statute, (2) codify its expectations for CSU’s eligibility pool, and (3) direct CSU to adjust its enrollment policies accordingly.

Report

Reforming the State's Transfer Process: A Progress Report on Senate Bill 1440

May 11, 2012 - In an attempt to fundamentally reform the state’s transfer of students between the California Community Colleges (CCC) and the California State University (CSU) system, the Legislature and Governor enacted Chapter 428, Statutes of 2010 (SB 1440, Padilla). The legislation requires community colleges to create two-year associate degrees for transfer. Students who earn such a degree are automatically eligible to transfer to the CSU system as an upper-division (junior) student in a bachelor’s degree program. Our review finds that since the legislation was enacted, CCC and CSU have made some progress, but additional work needs to be done by both segments to achieve SB 1440's intended goals. For their part, community colleges need to increase the number of associate degrees for transfer they make available to students. It is incumbent on CSU, meanwhile, to maximize the number of academic programs to which these degrees can be applied. Toward these ends, we recommend the Legislature provide additional guidance and clarification to CCC and CSU on their responsibilities, as well as continued oversight to track their progress.

Report

The 2014-15 Budget: Analysis of the Higher Education Budget

February 12, 2014 - This report analyzes the Governor’s 2014-15 higher education budget. We continue to have serious concerns with the Governor’s approach to funding the universities, particularly as it significantly diminishes the Legislature’s role in key budget decisions and allows the universities to pursue segmental over state interests. We recommend the Legislature take an alternative approach that: (1) designates funding for specific purposes (including enrollment at the California State University and debt-service payments), (2) shares cost increases among the state and students, and (3) monitors the universities’ performance in specific areas (such as student success). We think the Governor’s approach to funding the community colleges is much better but recommend various ways for the Legislature to refine specific community college proposals. Most notably, rather than augmenting a single student support categorical program by $200 million, we recommend the Legislature consolidate seven student support programs into a block grant, thereby offering colleges considerably more flexibility in deciding the best ways to support their students.

Report

[PDF] California Public Higher Education: Funding Supplemental Services for Low-Income and First-Generation Students

December 20, 2017 - The Supplemental Report of the 2017-18 Budget Act required our office to examine how much existing funding and support is provided to these students and identify options for increasing that funding and support. This report fulfills this requirement.

Post

The 2020-21 Budget: Immigrant Legal Services at the Public Higher Education Segments

May 21, 2020 - In this post, we (1) provide background on immigrant residents in California and state funding for immigrant legal services, including for students at the California Community Colleges, California State University, and University of California; (2) provide an implementation update on each segment’s immigrant legal services program; (3) describe the Governor’s January and May proposals to provide additional funding for immigrant legal services at the segments; and (4) provide an associated budget alternative for the Legislature to consider within the context of the state’s budget downturn.

Post

An Overview of Federal Higher Education Relief

April 28, 2020 - This post describes the major higher education provisions of the federal Coronavirus Aid, Relief, and Economic Security Act. It also highlights some key issues for the Legislature to consider relating to its upcoming budget and oversight decisions.