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Updated 5:20 p.m.

The University of California’s former second-ranked official violated UC conflict of interest policies in hiring a business partner for a newly created management position, according to results of a UC investigation released Wednesday.

Officials also said an internship created for her son by one of her subordinates was funded improperly.

M.R.C. Greenwood, the UC’s former provost who resigned last month in the midst of the inquiry, hired Linda Goff in June 2004 as director of the Science and Math Initiative, which aims to increase math and science teachers in the state’s classrooms.

The investigation found that at the time of the hiring, Goff and Greenwood had an “ongoing business relationship, which included joint ownership in a house and a listing as co-mortgagees on a bank loan” and constituted a violation of UC policies. According to the report, Greenwood said she tried to “disentangle” her business relationship with Goff, but the UC said the hiring was still inappropriate given the relationship between the two.

But Greenwood will not face any additional sanctions for the violation. Her self-removal as provost on Nov. 4 was the harshest sanction UC President Robert Dynes could have levied against her, said UC spokesman Paul Schwartz.

“The biggest repercussion was the fact that she is no longer provost, and that’s significant,” Schwartz said, adding that if facts had surfaced which warranted additional sanctions, the case would have been forwarded to the Academic Senate for review.

Instead, Greenwood will remain a part of the UC as a member of the UC Davis faculty in the College of Agriculture at a salary of $163,800 per year.

Additionally, a separation agreement between Greenwood and the UC – signed Nov. 23, several weeks before the investigation was completed – promises the former provost a yearlong sabbatical at her former salary of $301,840 per year in addition to three months' paid administrative leave at that rate after the sabbatical.

A related investigation also released Wednesday found that former UC Vice President of Student Affairs Winston Doby improperly created a position at UC Merced for Greenwood’s son, James, who was hired for a $45,000-per-year internship.

James Greenwood was the only candidate for the job, and the report found that the funding and recruitment surrounding the internship’s creation were done with him in mind, though investigators found no evidence that M.R.C. Greenwood was directly involved with the hiring.

Investigators said the duties of James Greenwood’s internship fell outside the scope of Doby’s office, which dealt with “student academic preparation activities,” but found no violations of university rules and did not recommend sanctions against Doby.

Doby was placed on administrative leave at the start of the investigation, and denies any wrongdoing but accepted the “appearance of favoritism and an error in judgment in regard to the James Greenwood funding assistance,” according to the report.

The investigation’s findings come after a storm of criticism in recent months directed at the UC’s compensation of its top administrators.

Just more than a week after Greenwood’s resignation, the San Francisco Chronicle published a report detailing $871 million in bonuses, relocation packages, and other forms of cash compensation given to UC employees – $599 million of which went to about 8,500 employees. Those payments were not included in a consultant’s report prepared for the UC in September, which said UC executives’ salaries lagged 15 percent behind those at comparable institutions.

Lawmakers and interest groups responded with sharp criticism, alleging the university has been deceptive in disclosing salary information as student fees have risen 79 percent in the past four years.

The UC defended the compensation as necessary to recruit the best possible faculty and administrators, but has acknowledged the need for increased transparency in its financial dealings.

On Monday, the UC announced the creation of a UC Board of Regents committee to oversee university compensation as well a third-party audit of senior management compensation practices.

“The Regents recognize the University of California’s unique public trust,” said Gerald Parsky, chairman of the Board of Regents, in a statement. “While UC must maintain its ability to compete with top universities across the nation for outstanding researchers, teachers and administrators, we must do so in ways that are transparent and understandable to the public.”

Schwartz said the university would be carefully looking into its policies in the wake of the criticisms and the investigations surrounding Greenwood and Doby.

“There’s going to be a very thorough review of our personnel policies and practices in light of the larger compensation issues that we’re now dealing with,” he said.