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UCSD's Rady hotspot for abuse

Rich Democrats pour money into San Diego races

University auditors have been discovering a host of irregularities regarding travel, food, and entertainment binges at UCSD’s Rady School of Management
University auditors have been discovering a host of irregularities regarding travel, food, and entertainment binges at UCSD’s Rady School of Management

Rady’s budget wreck

Taxpayer-financed revelry among UCSD employees is way down in the wake of covid-19 restrictions, but university auditors have been discovering a host of irregularities regarding travel, food, and entertainment binges of previous years. Such are the results of a review of UCSD’s Rady School of Management for the two fiscal years 2018 through 2019. During the period, auditors reported, Rady “had a total of 5,538, or 87% unreviewed transactions out of 6,357 transactions sampled. Because this important fiscal oversight activity is not being completed in accordance with internal control best practices, the risk of unauthorized, unallowable or unsubstantiated transactions is increased.”

Worse yet, the auditors reported, “we noted instances where the entertainment event expense reports submitted for approval did not include all applicable costs, where processing was not timely, and where the activity was misclassified.” The report singles out Rady’s fundraising as a hotspot for abuse. “In striving to establish itself as a self-sustaining organization, [Rady] cultivates relationships with alumni and with the business community in search of potential donors,” the audit says. “Our review of entertainment expenses entailed reviewing 11 judgmentally selected events to evaluate for documentation completeness, allowability, timeliness and authorization.” Errors or omissions emerged “in the reporting of four of the events that were included in our sample, which suggests that controls over this process should be improved.”

In September 2018, for example, a Rady dinner “to support alumni and spouse donor engagement” was reported to have cost $66 a person. However auditors discovered that “the actual per-person cost was approximately $109. Because the actual per-person cost exceeded the limitation set forth in policy ($81 for dinner), this event should have obtained special entertainment approval at a higher organizational level.” The expense of providing free booze was not recorded in the account used for alcohol, as required by policy.

During the audit period, Rady “had cumulative deficits in self-supporting program funds approximating $3.2 million, much of which is attributable to operating losses.” An October 2018 memorandum of understanding between Rady and UCSD’s top management to “clear [Rady’s] operating deficit through June 2018.” But [Rady] has challenged the [debt elimination threshold] as being too low and has been working with campus officials to support their claim since that time.”

Kelvin Barrios suspended his city council campaign in the face of multiple malfeasance allegations.

Peters proxy

The cause of Sean Elo-Rivera — the District 9 city council candidate who breezed into office last week after his opponent, fellow Democrat Kelvin Barrios, suspended his campaign in the face of multiple allegations of malfeasance — was aided by two late-coming special interests. Per a last-minute disclosure submitted on election day, November 3, the Committee to Expand the Middle Class political action committee, run by short-term rental giant Airbnb, Inc. of San Rafael, kicked in $5000 on October 24. Similarly, the YIMBY Democrats of San Diego PAC gave $2500 on October 21. State disclosure records show that the YIMBYs took $10,000 from House Democrat Scott Peters of La Jolla on October 13. Cash from both the Airbnb and YIMBY PACs was channeled into an independent expenditure committee calling itself San Diegans who Support Integrity in Public Service in Support of Sean Elo for City Council. Other donors to that committee, set up on September 22 of this year, included Mission Valley landowner Steve Cushman ($1000), lobbying group San Diego Downtown Partnership PAC ($5000), and the San Diego Regional Chamber of Commerce PAC ($2500).

Scott Peters loves those YIMBYs.

Gresham redux

As San Diego’s Measure A, a ballot measure to raise property taxes to bankroll subsidized public housing in the city, struggled to clear the two-thirds threshold of voter approval for passage, a San Bernardino law firm was a latecomer to the cause, kicking in $1000 to the campaign November 2, a day before the election. Gresham Savage Nolan & Tilden. The same came from Planned Parenthood Pacific Southwest. Despite a torrent of campaign contributions from a bevy of public housing contractors, the proposition ultimately went down to defeat. Gresham Savage’s motives in giving to the tax hike were unclear. The firm registered as a city lobbyist on the same day it contributed to Measure A, representing. Philadelphia-based Five Below, Inc., a discount retail outlet seeking permits in San Ysidro. Back in September 1996, the law firm — then known as Gresham, Varner, Savage, Nolan & Tilden — agreed to pay a record $420,000 in fines levied by the state’s Fair Political Practices Commission for illegally laundering more than $27,000 in campaign contributions to six San Diego city council candidates and incumbents. This year’s Measure A was declared defeated last week.

— Matt Potter (@sdmattpotter)

The Reader offers $25 for news tips published in this column. Call our voice mail at 619-235-3000, ext. 440, or sandiegoreader.com/staff/matt-potter/contact/.

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University auditors have been discovering a host of irregularities regarding travel, food, and entertainment binges at UCSD’s Rady School of Management
University auditors have been discovering a host of irregularities regarding travel, food, and entertainment binges at UCSD’s Rady School of Management

Rady’s budget wreck

Taxpayer-financed revelry among UCSD employees is way down in the wake of covid-19 restrictions, but university auditors have been discovering a host of irregularities regarding travel, food, and entertainment binges of previous years. Such are the results of a review of UCSD’s Rady School of Management for the two fiscal years 2018 through 2019. During the period, auditors reported, Rady “had a total of 5,538, or 87% unreviewed transactions out of 6,357 transactions sampled. Because this important fiscal oversight activity is not being completed in accordance with internal control best practices, the risk of unauthorized, unallowable or unsubstantiated transactions is increased.”

Worse yet, the auditors reported, “we noted instances where the entertainment event expense reports submitted for approval did not include all applicable costs, where processing was not timely, and where the activity was misclassified.” The report singles out Rady’s fundraising as a hotspot for abuse. “In striving to establish itself as a self-sustaining organization, [Rady] cultivates relationships with alumni and with the business community in search of potential donors,” the audit says. “Our review of entertainment expenses entailed reviewing 11 judgmentally selected events to evaluate for documentation completeness, allowability, timeliness and authorization.” Errors or omissions emerged “in the reporting of four of the events that were included in our sample, which suggests that controls over this process should be improved.”

In September 2018, for example, a Rady dinner “to support alumni and spouse donor engagement” was reported to have cost $66 a person. However auditors discovered that “the actual per-person cost was approximately $109. Because the actual per-person cost exceeded the limitation set forth in policy ($81 for dinner), this event should have obtained special entertainment approval at a higher organizational level.” The expense of providing free booze was not recorded in the account used for alcohol, as required by policy.

During the audit period, Rady “had cumulative deficits in self-supporting program funds approximating $3.2 million, much of which is attributable to operating losses.” An October 2018 memorandum of understanding between Rady and UCSD’s top management to “clear [Rady’s] operating deficit through June 2018.” But [Rady] has challenged the [debt elimination threshold] as being too low and has been working with campus officials to support their claim since that time.”

Kelvin Barrios suspended his city council campaign in the face of multiple malfeasance allegations.

Peters proxy

The cause of Sean Elo-Rivera — the District 9 city council candidate who breezed into office last week after his opponent, fellow Democrat Kelvin Barrios, suspended his campaign in the face of multiple allegations of malfeasance — was aided by two late-coming special interests. Per a last-minute disclosure submitted on election day, November 3, the Committee to Expand the Middle Class political action committee, run by short-term rental giant Airbnb, Inc. of San Rafael, kicked in $5000 on October 24. Similarly, the YIMBY Democrats of San Diego PAC gave $2500 on October 21. State disclosure records show that the YIMBYs took $10,000 from House Democrat Scott Peters of La Jolla on October 13. Cash from both the Airbnb and YIMBY PACs was channeled into an independent expenditure committee calling itself San Diegans who Support Integrity in Public Service in Support of Sean Elo for City Council. Other donors to that committee, set up on September 22 of this year, included Mission Valley landowner Steve Cushman ($1000), lobbying group San Diego Downtown Partnership PAC ($5000), and the San Diego Regional Chamber of Commerce PAC ($2500).

Scott Peters loves those YIMBYs.

Gresham redux

As San Diego’s Measure A, a ballot measure to raise property taxes to bankroll subsidized public housing in the city, struggled to clear the two-thirds threshold of voter approval for passage, a San Bernardino law firm was a latecomer to the cause, kicking in $1000 to the campaign November 2, a day before the election. Gresham Savage Nolan & Tilden. The same came from Planned Parenthood Pacific Southwest. Despite a torrent of campaign contributions from a bevy of public housing contractors, the proposition ultimately went down to defeat. Gresham Savage’s motives in giving to the tax hike were unclear. The firm registered as a city lobbyist on the same day it contributed to Measure A, representing. Philadelphia-based Five Below, Inc., a discount retail outlet seeking permits in San Ysidro. Back in September 1996, the law firm — then known as Gresham, Varner, Savage, Nolan & Tilden — agreed to pay a record $420,000 in fines levied by the state’s Fair Political Practices Commission for illegally laundering more than $27,000 in campaign contributions to six San Diego city council candidates and incumbents. This year’s Measure A was declared defeated last week.

— Matt Potter (@sdmattpotter)

The Reader offers $25 for news tips published in this column. Call our voice mail at 619-235-3000, ext. 440, or sandiegoreader.com/staff/matt-potter/contact/.

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Comments
3

For those who are unfamiliar with "auditor speak" those conclusions don't sound harsh. But they are. As to why "best practices" were not followed, the result was wasted funds, taxpayer funds more specific. It all suggests that the approvals that should have been made were ignored, and that can add up to fraud. Short of that, improper use of funds could--dare I say--should result in some employees being fired.

UCSD keeps having these mini-scandals, and yet the chancellor, Khosla, keeps grinning and stays in the position. The recently-departed UC president should have fired him before she quit. She left the dirty deed to her successor. By now he probably needs to fire two or three campus chancellors. Those who violate the rules about spending need to be held accountable, i.e. summarily fired for cause. Somehow that UC campus just doesn't get it.

Nov. 13, 2020

He deserved to be fired over his illegal actions against campus media (non-payment of Associated Student funds) because "The Koala" made fun of him. UCSD will probably need a purge in administration before 2022.

Nov. 16, 2020

Correct. That was one of the scandals on campus that he failed to handle properly, or was responsible for. There were many, many more, and some involved his personal dealings with other people. With all of the "me too" campaigning that went on not-so-long ago, he skated free. This new UC president has his work cut out for him. I fear that the UC is now too large to effectively manage or control. Janet Napolitano didn't show us any string of successes; so much for putting a non-academic professional politician in charge. But in more recent years, having academics such as Atkinson, Dynes and Fox in charge at UCSD and as president didn't work out so well either.

Nov. 16, 2020

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