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The California state auditor slammed the UC system in a hundred page document proving the UC’s prioritization of enrolling less qualified out-of-state students to increase revenue. The audit pointed to ways the UC is not following the Master Plan for Higher Education in California and how UC is failing to serve in-state students.

The audit was released on March 29, more than a year after Assemblyman Mike Gipson requested the review. Titled “Its Admissions and Financial Decisions Have Disadvantaged California Resident Students,” the audit includes recommendations for stricter entrance requirements for nonresident students, a cap on their enrollment and stronger recruitment of in-state and underrepresented students.

“Because of the significant harm to residents and their families resulting from the university’s actions, we believe that legislative intervention, as outlined in the report, is necessary to ensure that a university education once again becomes attainable and affordable for all California residents who are qualified and desire to attend,” said state auditor Elaine Howle in the audit.

The audit identified employee and administration salaries as a key area where the UC can reduce cost and redistribute money to fund more resident enrollment.

Nonresident students pay an additional $25,000 in tuition, and the audit found that over the last 10 years resident enrollment increased by 10 percent while out-of-state students rose by 432 percent. Since 2010, out-of-state student enrollment increased by 82 percent and resident enrollment decreased by 1 percent.

The audit shows that from 2005-15, the UC rejected 4,300 in-state students whose GPA and test scores met or exceeded average scores of admitted nonresident students. On seven of the nine UC campuses last fall, the admittance rate for nonresident students exceeded that of resident students.

In 2014-15 alone, the UC generated $728 million from the supplemental nonresident tuition fee. UC President Janet Napolitano said recruiting nonresidents students is a necessary response to budget cuts, and denounced the audit’s findings in a letter.

“To suggest from the outset that UC decisions regarding admissions were designed to ‘disadvantage Californians,’ as opposed to mitigate the impact of a 33 percent budget cut, is a rush to judgment that is both unfair and unwarranted,” Napolitano said in the letter, which was included in the audit.

Napolitano said revenue from nonresident tuition allows more in-state students in the UC system. However, the audit argued the nonresident funds have not had a “significant impact on the number of residents that they enrolled.”

Without nonresident tuition costs, Napolitano said resident students would have to pay an extra $2,500 in annual tuition, which was frozen since 2011 but will likely be increased again starting in fall 2017. After approving a UC tuition increase last November, Napolitano and Gov. Jerry Brown agreed to freeze tuition for two

more years with $25 million more state funding and enrolling 5,000 more in-state students.

“In fact, our review of each campus’s spending of nonresident revenue revealed that they spent these funds across a variety of areas, not all of which directly benefited residents,” the audit says.

The audit included figures to combat points made in Napolitano’s letter to prove the state’s findings.

“They never called into question any of the facts in the report; they just don’t like our conclusions,” Elaine Howle said. “But our conclusions are based on the facts.”