The controversial head of Connecticut State Colleges and Universities has been ousted after a spending scandal.

But Chancellor Terrence Cheng will keep his nearly $500,000 salary for one more year, staying on as a “strategic advisor” until his contract expires in June 2026.

CSCU’s Board of Regents announced on Monday afternoon that Cheng agreed to step down as chancellor on July 1.

But he will work as a strategic advisor to the board until his contract ends a year from now.

“I thank Chancellor Cheng for his hard work, partnership, and dedication to the system,” Regents Chair Marty Guay said in a statement. “We have a real opportunity to make impactful investments in our system in the best interests of the students we serve and the state as a whole.”

Cheng has been under intense pressure to step down since two audits uncovered lavish spending on his state credit card.

Democrats praised the Regents’ decision.

“We understand and appreciate the Board of Regents’ decision,” said state Sen. Derek Slap (D-West Hartford) and state Rep. Gregg Haddad (D-Mansfield) in a joint statement. “The system needs stability and the stakes are high.”

But Republicans are furious that, instead of being fired, the ex-chancellor will continue collecting a $442,000 a year paycheck.

"Not only is he not fired, he gets a brand-new job at the same exact pay rate he had previously with less responsibilities,” said state Senate Republican leader Stephen Harding (R-Brookfield). “And I fear what type of message that sends state employees.”

Connecticut House GOP leader Vin Candelora (R-North Branford) agreed.

“Public trust has been shattered, and a change was needed so the system can begin to rebuild,” Candelora said. “Unfortunately, students, parents, and taxpayers won't be able to move on so easily, as Mr. Cheng will remain on the payroll as a ‘strategic advisor’ for the final year of his contract. Going forward, the Board of Regents must ensure that contracts for this position prioritize the interests of the state – and that far stronger oversight is finally put in place.”

Cheng oversees the sprawling CSCU system, which includes four public universities and a dozen community colleges across the state.

Two reports from state Comptroller Sean Scanlon and the Auditors of Public Accounts revealed tens of thousands of dollars in questionable spending among Cheng and other leaders.

“The things we found ranged from expensive meals to livery services, to room service, to dry cleaning, to improper tickets, to events that were not school-related functions, paying for the cell phone bills and Eversource bills of students,” Scanlon said.

The comptroller’s report looked at just over 1,000 receipts and found that Cheng charged almost $23,000 in food, alcohol and hotels to his state-issued purchasing card, or “p-card.”

In addition, state auditors discovered that an accounting error overpaid the chancellor $25,000 for his housing allowance. Cheng, who earns $440,000 per year, is paying the money back $296 per paycheck until July 2026.

The bombshell reports come as students are paying higher tuition – and facing cuts in classes and faculty.

In February, Cheng apologized to state lawmakers, but insisted the spending was meant to advance the college system.

“Trying to establish partnerships with folks that we had never done business with before Partnerships that lead to internships, apprenticeships, scholarship funding,” he said. “Those were mistakes. Those were absolutely mistakes in that I did not take into consideration what the public perception of my actions might have been.”

Following his ouster, Cheng issued this statement:

CSCU Regents plan to name a announce an interim chancellor in the next few weeks.

After Cheng’s contract is up next summer, he may stay on as a tenured professor – but at a faculty salary.