California State University stashed $1.5 billion in reserves while hiking tuition, audit says

The California State University stashed away $1.5 billion in discretionary reserves while raising tuition and lobbying the Legislature for more funds, according to a report released Thursday by California State Auditor Elaine Howle.

CSU put the money, which came primarily from student tuition, in outside accounts rather than in the state Treasury, the report said.

The investigation mirrors Howle’s 2017 report on the University of California Chancellor’s Office, which charged that top UC brass kept a $175 million slush fund while hiking students’ tuition.

The audit found that CSU kept legislators, students and the public in the dark about the $1.5 billion surplus, which nearly doubled the cost of tuition from 2008-18. CSU used the money as a discretionary fund to cover costs of instruction or other operations it considered crucial, the audit said.

“By failing to disclose this surplus when consulting with students about tuition increases or when projecting CSU’s resources and needs to the Legislature, the Chancellor’s Office has prevented legislators and students from evaluating CSU’s financial needs in light of its unspent financial resources,” read a statement from Howle.

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