Audit: California university system cut pay amid reserve

The chancellor of California State University — the country's largest system of four-year public universities — is pushing back against a state audit that found the system raised tuition and cut employee pay while sitting on a $1.5 billion reserve.

Chancellor Timothy White told state lawmakers the money isn’t discretionary. He said the school needs it to give students advances on their financial aid, pay for construction and act as a cushion in case of a recession.

But State Auditor Elaine Howle says Cal State has no restrictions on the money and she recommended the school do a better job of disclosing its finances.

White says the university agrees with the recommendations and will implement them.