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UC hires audit firm to review UCSFbudget

Erin Allday, Chronicle Staff WriterTuesday, December 8, 2009

The UC system has agreed to hirePricewaterhouseCoopers to conduct a financialreview at UCSF, after a U.S. senator raised concernsabout allegations of money mismanagement anduniversity officials making misleading statements tostate leaders.The allegations came from Dr. David Kessler, who was fired from his job as dean of the UCSF School of Medicine in 2007. Kessler had repeatedly questioned what he said were "financial irregularities" in thedean's office budget.In a letter to UC President Mark Yudof on Monday, Sen. Charles Grassley, R-Iowa, wrote that he'spleased that UC has agreed to an outside audit at UCSF, but noted several "troubling matters" at theuniversity. He said UCSF administrators appear to have provided "misleading" statements to theCalifornia Senate."The medical school at UCSF receives hundreds of millions of taxpayer dollars every year from variousfederal agencies," wrote Grassley, who serves on the Senate Finance Committee. "If there is any question about the integrity of the finances at UCSF, I am worried that similar problems regardingtaxpayer dollars may also exist at other campuses within the UC system."The Pricewaterhouse review will focus on internal finance controls relating to certain federal regulations,so the review may not address Kessler's specific allegation.In a statement, UCSF confirmed that it has agreed to use Pricewaterhouse for a financial review. "Thisreview reflects our continuing and extensive cooperation with Sen. Grassley with respect to UCSF'sstewardship of federal research funds," the statement said.Kessler, whose firing is under administrative review, declined to comment on Grassley's letter or thePricewaterhouse review.His allegation relates to the dean's discretionary funding budget, which he has said was millions of dollars less than what he'd been promised when he was hired in 2003. He conducted his own financialanalysis in December 2004 and said he found an $18 million annual discrepancy.UCSF conducted two internal reviews, both of which found no financial irregularities. The university then hired private accounting firm KPMG to confirm the internal findings. KPMG's report stated it was