I welcome this audit and do not minimize its seriousness, and I fully understand the changes that we must now enact. The University has begun a complete overhaul of its compensation practices. This audit report, and the two audits to follow, will ratchet up that process.

The real tragedy of all this, as has been noted, is that similar events occurred in the early 1990s, and 15 years later, we are facing the same issues. Policies were put in place, but there was no system implemented to make the policies effective.

As one further indication of the systemic lack of disclosure and failure to conform to University policies, the full scope of my compensation was not disclosed to The Regents upon my appointment as President in 2003, and that compensation did not conform to Regental policy.

The fundamental question that we face right now, and that I face as President, is: How do we fix this once and for all so that we can re-focus our energies on the University’s mission?

Following the report of the Kozberg-Hertzberg Task Force, I have already implemented a range of recommendations. They include:

In addition, in response to today’s audit report, the Regents and I will review the findings and take appropriate action to address legal responsibilities on a case-by-case basis.

More importantly, as we move forward, I believe that ethical behavior must be a fundamental aspect of the administration of the University of California. I will work to make ethical behavior a part of the performance evaluation of all senior management, and I will seek to incorporate such evaluations into the performance review process.

Last Friday, the San Francisco Chronicle ran a welcome editorial noting our recent success in offering admission to all eligible California freshman applicants.

The editorial implored us to resolve these compensation issues as quickly as possible so that we can return to, and I quote, “the University's central purpose: to do world-class research and to provide a stellar education to the state's best students.”

That is what we must do. That is what we will do.

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The audit can be found at