UC President Janet Napolitano considers overhauling her office amid political criticism

University of California President Janet Napolitano is considering a potentially sweeping overhaul of her office in the wake of sharp political criticism over its size, cost and budget practices.

An extensive outside review of the office provided to The Times found relatively little fat in its oversight of the most complex university system in the nation — a $33-billion operation of 10 campuses, five medical centers, three national laboratories and global research.

But the review suggested streamlining the office in what could amount to a 50% budget reduction. Suggestions for those potential savings include spinning off the UC medical and health system to a new statewide network, moving some programs to campuses and eliminating others, such as the UC-Mexico Initiative.

The proposals by Huron Consulting Group Inc. mark the latest of more than 10 reviews of the Office of the President in the last decade, including one last year by the state auditor. Another outside assessment is set for completion this spring.

“Part of that is the continual search for the Holy Grail, which is to run the best OP office one can imagine — the most efficient, the most streamlined, the most effective that contributes the most value to the university,” said Napolitano, explaining the serial reviews.

In an interview, she acknowledged she also commissioned the review in response to political pressures. Gov. Jerry Brown has repeatedly told the UC system to cut costs, and the state Legislature last year took the unprecedented step of directly funding Napolitano’s office amid mistrust over budget practices fueled by a critical state audit.

In that review last year, State Auditor Elaine Howle found that the UC office used “misleading” budget practices and amassed an undisclosed $175-million budget surplus; Howle said she found no intentional wrongdoing. UC officials are currently implementing all of the auditor’s suggested reforms.

Howle also disclosed that Napolitano’s top aides improperly interfered with the audit, which the UC Board of Regents confirmed in its own outside investigation. Napolitano is scheduled to appear Tuesday before a legislative committee to discuss the interference by two aides, who have left the university.

Some UC officials are concerned that the review could lead to disruptive and unnecessary changes undertaken mostly to appease political critics.

Shane White, chairman of the UC Academic Senate, told regents last week that another effort to downsize the president’s office a decade ago largely failed and resulted in talented employees leaving the university.

“Nothing was gained and much was lost; lessons should have been learned,” White said. “Any changes to be made must be done so as to tangibly improve the common good, not for any thought of empty political appeasement.”

The review found that the UC office is relatively lean even as it leads the nation with world-class services in such areas as research, study abroad options and undergraduate admissions. The office’s share of systemwide expenses is about 2%, smaller than the share in more than half of the nation’s 10 next largest university systems.

The consultants suggested two options for streamlining. The more aggressive one proposes potential cuts of $50 million from the office’s $883 million budget and 110 of about 1,790 positions. The other option suggests cuts of about $42 million and 99 positions.

Possible cuts include money for post-doctoral fellowships, chancellor expenses, some vacant positions and the UC-Mexico program, which funds research into issues faced by California and its southern neighbor. Few may object to ending the Mexico initiative, since UC Riverside runs a similar program, but eliminating postdoc fellowships for underrepresented women and minorities probably would draw widespread opposition.

Much larger savings would come from moving central programs elsewhere. The biggest and most complex potential change would involve spinning off the UC medical centers and health system, which make up about one-third of the university’s overall budget. That change is unlikely to proceed without extensive discussion.

UC Press, the system’s academic publisher, could move to UCLA, the Study Abroad program to UC Santa Barbara and the Agricultural and Natural Resources division to UC Davis, the review suggested.

All told, the proposals could reduce the office’s budget by as much as 50%, or $438 million.

White said he was most excited about recommendations to refocus the office on the university’s academic mission. “It’s suffered from successive budget cuts, OP reorganizations and diminished attention by university leadership,” he said.

He said he was hopeful for improvement despite concerns about any political motivations that prompted the review. “I see it in the spirit of self-examination, looking for better ways to do a better job,” he said.

Others were more wary. In a town hall meeting last week with the office’s employees, several people raised concerns about the possible effect on their jobs, tense relations with Sacramento and “change fatigue” over the continual reorganizations. Napolitano ordered her own review after she took office in 2013 and imposed a hiring cap, travel reductions and other cutbacks.

“I’m so angry. Livelihoods are at stake,” one questioner said, asking for assurances that officials would make good decisions rather than “look out for their own interests and self-preservation.”

Napolitano pledged she would make the process transparent and consultative. She has shared the review with regents and chancellors, and UC managers are holding information sessions with employees. She said she and the regents would probably make some decisions beginning this spring but others could take 18 months or so.

George Kieffer, chairman of the UC Board of Regents, said the Huron report was just one of several efforts underway to consider how the university can continue to excel amid a national trend of declining state investment and public confidence in higher education.

“There’ll be those people who say this is political. There’ll be those people who say this is terrific,” he said of the review. “The important thing is we’re taking a look at all of these things. This is the beginning of the discussion. Don’t judge it prematurely.”