The University of California has failed to prioritize the needs of in-state students and diversify the student population according to the state auditor’s report released Tuesday. The report evaluated admissions rates, executive compensation, and budget in an effort to improve the UC and has since received a refuting statement from UC President Janet Napolitano.

The audit claims that the UC has lowered standards when accepting out-of-state students for the additional tuition they pay, which has made it more difficult for residents to gain admission. From 2010 to 2015, nonresident enrollment increased by 82 percent, while resident enrollment dropped by 1 percent. Furthermore, since 2011, 16,000 nonresidents, whose standardized test scores and grade point averages fell in the bottom half of admitted residents, were accepted. Meanwhile, the office found that 11,000 qualified residents were denied admission in 2014-2015 alone.

Additionally, the report charges that the admission decisions do not reflect the diversity of California students.

“While underrepresented minorities—which the university considers to be Chicanos/Latinos, African Americans, and American Indians—represent 45 percent of California’s population, they make up 30 percent of the university’s overall undergraduate population,” said the State Auditor’s Report.

The report also found that only 11 percent of nonresident enrollment was made up of underrepresented minorities in the 2014-2015 academic year.

Napolitano criticized the report as “unfair and unwarranted” as it “makes inferences and draws conclusions that are supported neither by the data nor by sound analysis.” Napolitano argued that as the UC faced a 33 percent budget cut from state funding, the university system expended its efforts to preserve resident enrollment and academic quality.

However, the report details alternative methods the UC could have employed to curb tuition hikes and increases in nonresident enrollment. For instance, the UC could have reduced employee salary costs, which rose from $8 billion to $13 billion in the past ten fiscal years.

It also added that $660 million from the Working Smarter Initiative in 2010, along with over $300 million from in-state funding, could have been used more efficiently to generate revenue.