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California State University officials on Wednesday rebutted a report that said foundations affiliated with the school system held and mismanaged taxpayer money.
"It's completely erroneous," said CSU spokeswoman Claudia Keith.
The university's faculty union had issued dozens of pages of administrators meetings' minutes earlier Wednesday, along with a 24-page report that said auditors found "an inappropriate co-mingling" of state general funds with privately raised foundation money and other revenue.
The report, issued by the California Faculty Association, cited remarks by university auditor Larry Mandel that there "are still issues and disagreements about what should be classified as state funds."
The CSU foundations control more than $1 billion in funds, but CSU officials have repeatedly declined to make public details of how the money is used.
The school's chief financial officer, Benjamin Quillian, had said this week that the funds become mixed when a private foundation runs a campus function such as a football game and is slow to repay the university for services.
Keith was adamant that no public money is in the foundations' accounts, but said that there was private money in accounts that is owed to the university for services provided, such as police for games run by a foundation.
Keith said she did not know the exact amount of the money or the specific campuses and foundations involved. The school said that money is in the process of being moved and that policies were being drafted that would clarify when money needs to be reimbursed.
"We take findings such as this pretty seriously," Keith said.
But she disputed a union claim that university officials were unclear precisely what money was owed. "It's not like we can't go through and not tell what should be moved to the state side," she said.
The faculty association said in the report that the audits were proof that the private foundations need to be more transparent.
"The most important thing is the confirmation that - as we suspected all along and not withstanding their protestations to the contrary - there actually is state money in the foundations and auxiliaries," said Lillian Taiz, president of the CFA.
The CSU Stanislaus Foundation came under fire this year for refusing to disclose the fee it paid Sarah Palin for a June fundraising appearance. In July, the nonprofit revealed it paid the former Alaska governor $75,000.
Jim Finefrock, a spokesman for California Attorney General Jerry Brown, said the state continues to investigate the actions of CSU-related foundations.
The state recently closed an investigation into the CSU Stanislaus Foundation that found no charitable money was "diverted to improper use" but criticized the foundation for misclassifying donor money and not exercising "adequate fiscal oversight."
A separate investigation into a foundation affiliated with CSU Sacramento State also concluded that the foundation improperly paid to remodel a university president's kitchen.
Keith said the faculty union report should be considered in the context of political wrangling over a bill, SB330, that has passed both houses of the state Legislature and would require that the so-called auxiliary organizations abide by the California Public Records Act.
A change in the rules could discourage donors who want their privacy protected, Keith said. The bill awaits a signature from Gov. Arnold Schwarzenegger, who vetoed a previous version last year.
"There is an agenda at work and that probably needs to be taken into consideration," said Keith.
The faculty association said the documents cited in their report were discovered during research on other issues.
The CSU system has about 433,000 students.