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Office of Audit, Compliance & Privacy

Case in Point:
Lessons for the proactive manager

June 2019
Vol. 11 No. 06
Quotable...
"Be as smart as you can, but remember that it is always better to be wise than to be smart. "

-- Alan Alda

Last month we discussed one of the hottest topics in higher education - conflicts of interest. This month I want to turn our discussion to another hot topic, the concept of fiduciary responsibility.

Nationally there has been, and almost certainly will continue to be, much discussion regarding the cost of higher education. With this discussion comes questions about how institutions are using the funds that are entrusted to them. With those questions being raised, I think it's important to remember the importance of fiduciary responsibility.

A fiduciary is a person who holds an ethical relationship of trust with one or more other parties. As a public institution of higher education our relationship of trust is with stakeholders such as taxpayers, students, alumni, donors, and many others. While the law and regulatory requirements serve as a floor for the appropriateness of expenditures, I believe fiduciary responsibility calls us to a higher standard. Just because something is legal does not mean that it is prudent. Viewing the use of funds through the lens of fiduciary responsibility can help ensure you avoid many problems.

Two ideas can help when using a ''fiduciary lens'' with respect to the use of funds:

  1. The newspaper test: How would this transaction look if reported in the newspaper?
  2. The independent advisor: Ask someone independent of the transaction if they believe it's a prudent use of funds.

In today's world -- particularly with social media -- the scrutiny that institutions face regarding how funds are used is only likely to increase. That is something to keep in mind as you carry out the business of higher education. We again invite you to review the various events that occurred throughout our industry over the past month with a view toward proactive risk management.

M. Kevin Robinson, CIA, CFE
Associate Vice President
Office of Audit, Compliance & Privacy
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Information Security & Technology Events

Jun 24: Application/Email Scam: We've all heard stories about scam artists targeting consumers on the internet. Now, community colleges appear to be in the crosshairs of online scammers. The North Carolina community college system has discovered hundreds of bogus electronic applications mixed in with legitimate ones, and as they try to sort them out, they are also trying to figure out why they are being targeted. It appears that many of these bogus applications are not coming from real people, but bad actors in other countries making up fake identities. They are using those fake names to pose as college applicants, hoping to be issued a student email account. While most four-year institutions don't give students an email account until they've started school, many state community colleges issue applicants an email address as soon as they apply. (link)

Jun 15: Data Breach: Three U.S. universities have disclosed data breach incidents impacting personally identifiable information of students or employees following unauthorized access to some of their employees' email accounts. All three universities -- Graceland University, Oregon State University, and Missouri Southern State University -- have notified the individuals whose personal information was potentially stolen or accessed about the security incidents. (link)


Fraud & Ethics Related Events

Jun 19: Mail Fraud: A former employee of a U.S. Postal Service contractor has been charged with mail fraud after being accused of stealing gift cards from mail sent to Edgewood College students. Kevin T. Funches is charged with felony mail fraud, a misdemeanor count of theft and a misdemeanor count of unauthorized opening of letters. (link)

Jun 17: Unauthorized Expenditures: The fresh discovery of Florida A&M University's practice of using unauthorized auxiliary funds to cover expenses in its athletics department dates to at least the fall of 2016 -- just before university officials appeared before a Board of Governors committee to present a repayment plan for the same infractions committed in previous years. The latest revelations surfaced last week, resulting in the June 7 forced resignation of Wanda Ford, vice president for finance and administration and the university's CFO, and the firings last week of Ronica Mathis, director of university budgets, and Tiffany Holmes, university controller and assistant vice president. (link)

Jun 12: Theft: A former University of Toledo employee accused of stealing thousands of dollars will be screened for a spot in a diversion program. Jason Woodward is charged with theft in office, according to Lucas County Common Pleas Court records. The allegations stem from approximately 2013 to 2018. Mr. Woodward had access to accounts at the UT credit union and pulled funds for personal expenses over that time, leaving a deficit of approximately $50,000, said James Tafelski, assistant Lucas County prosecutor. (link)

Jun 10: Attempted Theft: A student at Augusta University has been arrested and charged after police say she intended to sell university property. Officers say Kailyn Jackson, 18, listed the following as up for sale on the OfferUp website: a purple chair, two blue Fatboy bean bags, four black outdoor chairs, a black patio table, a grey chair with a black end table, two rolling chairs, and two purple Fatboy bean bags. (link)

Jun 05: Theft of Trade Secrets: Two scientists have been arrested and charged with attempting to steal trade secrets from the Water Institute of the Gulf, a world-renowned water research institution in Baton Rouge. According to the indictment filed in Louisiana's Middle District Court, Ehab Meselhe and Kelin Hu both worked at the Water Institute and conspired to knowingly steal and duplicate information about the Basin Wide Model, which predicts how the Mississippi Delta could change over time. (link)

Jun 05: Student Loan Fraud: A former Tennessee State University admissions worker is charged with diverting student federal aid into his bank accounts in 2014-15. U.S. Attorney Donald Cochran's office says 31-year-old Renauld Clayton of Chicago, formerly of Nashville, was indicted last week on charges of student loan fraud, aggravated identity theft and wire fraud. The indictment says the U.S. Department of Education determined $84,506 had been misappropriated and Clayton had fraudulently deposited $60,000-plus into his personal bank accounts. (link)

Jun 03: Embezzlement: Two former community college employees have been arrested on indictments they stole more than $750,000. Mississippi's state auditor says Gwendolyn Jefferson and Stacie Neal used Coahoma Community College credit cards to buy items including shoes, watches and a chandelier from 2013 to 2017. (link)


Compliance/Regulatory & Legal Events

Jun 27: Title IX Lawsuit: ill and Matt McCluskey formally announced a $56 million lawsuit against the University of Utah involving the death of their daughter Lauren McCluskey. The lawsuit claims Lauren and her fellow students contacted the University of Utah more than 20 times to report Rowland's abusive, dangerous and threatening behavior. (link)

Jun 25: HIPAA Breach: A federal judge sentenced a Butler woman to one year in jail and three years of government supervision after pleading guilty in March to wrongfully disclosing the health records of more than 100 UPMC network patients. The sentence was the highest punishment within the penal guidelines. Linda S. Kalina, 62, pleaded with Judge Arthur Schwab to give her a more lenient sentence of probation, but he handed down the highest punishment "to reflect for the seriousness of the offense and to protect the public from the defendant." (link)

Jun 25: Sexual Harassment: A Michigan State professor was suspended for six weeks after a university investigation found him responsible for sexually harassing six women over nearly two decades. In all, nine women told investigators that Robert Wiseman, a physiology professor in the College of Osteopathic Medicine, made inappropriate and sexually charged comments or jokes in their presence that made them feel uncomfortable. (link)

Jun 24: 14th Amendment/Negligence Lawsuit: The now-banned fraternity Beta Theta Pi filed a lawsuit against Penn State and university officials on June 21, claiming that blame was placed on the Chapter for the February 2017 death of pledge Timothy Piazza to deflect from the university's failures. The suit was filed by the Alpha Upsilon Chapter of Beta Theta Pi, and the house corporation of the chapter. President Eric Barron, Vice President of Student Affairs Damon Sims, and Senior Director of the Office of Student Conduct Danny Shaha were included as defendants in the case. (link)

Jun 20: Breach of Contract Lawsuit: Arizona State University should pay nearly $1 million to a company that created a video game to replace a college course, a lawsuit filed earlier this month alleges. North Star Leadership Group, led by a former chief innovation officer at ASU's W.P. Carey School of Business, said it had a contract with ASU to create a game that would act as a capstone course for business students. But the former employee and the company allege ASU did not pay them for the game as required and decided not to use it for the course without explanation. (link)

Jun 20: NCAA Violation: Bond Shymansky, fired Wednesday as University of Iowa's head volleyball coach, said the NCAA violation he committed was paying a player's rent in the summer of 2017. The UI on Wednesday announced Shymansky was terminated for providing an "impermissible benefit" to a student-athlete to get her to come to Iowa, a Level 1 or Level 2 NCAA violation. But the UI didn't say what benefit the player received, the value or whether anyone else at the UI knew about it. (link)

Jun 20: Breach of Contract/Defamation: A Wesleyan University professor is suing the school for allegedly failing to intervene when students posted flyers, starting in 2016, that imply he is a sexual predator. Wesleyan, a small liberal arts college in central Connecticut, is well known for its students' activism. But Professor Michael McAlear alleges that activism crossed into harassment and libel, and that Wesleyan didn't do enough to stop it. (link)

Jun 19: Ethnic Discrimination Lawsuit: A federal appeals court judge ruled on June 11 in favor of a former Pitt professor who filed an ethnic discrimination lawsuit against the University after being fired over allegedly directing death threats at a colleague several years ago. Snjezana Bagic, a veteran of Croatia's War of Independence, was fired from her position at the University's School of Dental Medicine in 2016 after eight years of employment. An internal Pitt investigation alleged that she had threatened to kill her departmental colleague, associate professor Sean Noonan. (link)

Jun 19: Sexual Battery Lawsuit: Already under criminal investigation, a former University of Oklahoma vice president is now being sued, as well. A former OU student, Levi Hilliard, is seeking actual, compensatory and punitive damages from Tripp Hall, a former vice president of development. He is making claims against Hall of sexual assault and battery and intentional infliction of emotional distress. (link)

Jun 19: Admissions Scandal Lawsuit: Fourteen more current and former students who were denied admissions into elite universities tied to the nation's college admissions scandal are now suing the colleges and the mastermind of the scheme, seeking to get back their application fees. The new suit is filed on behalf of all students who were rejected after paying an application fee between 2012 and 2018 to one of eight universities tied to the cheating and bribery scandal. (link)

Jun 18: Sexual Assault Lawsuit: A cancer patient sued UCLA and Dr. James Heaps on Tuesday, accusing the former campus gynecologist of repeatedly sexual assaulting her during her two years of treatment. The 44-year-old woman was battling mesothelioma when, in October 2015, she went to Heaps for surgery, she said. The lawsuit, which does not name the woman, seeks damages from the doctor and UCLA. (link)

Jun 17: Title IX Lawsuit: A law school student is seeking at least $5 million in damages after alleging in a lawsuit that she was sexually harassed and assaulted by an admissions counselor at Florida A&M University's College of Law. The complaint alleges that the victim, a 27-year-old law school student, was sexually harassed and assaulted by the admissions coordinator of Florida A&M University College of Law. (link)

Jun 13: Foreign Funding: The U.S. Education Department is opening investigations into foreign funding at Georgetown University and Texas A&M University as the Trump administration increases its scrutiny of international money flowing to American colleges. Letters sent to the schools Thursday and obtained by The Associated Press accuse the schools of failing to report gifts and contracts tied to their branch campuses in Qatar. Federal law requires colleges to report gifts or contracts with any foreign source amounting to $250,000 or more in a year. (link)

Jun 13: Abuse Lawsuit: Sixteen more Ohio State alumni sued the university Wednesday over how school officials dealt with a team doctor who an investigation recently concluded had sexually abused at least 177 young men between 1979 and 1997. The federal case filed mostly by ex-wrestlers, including an eventual UFC champion who also coached at Ohio State during that era, is the fifth pending lawsuit alleging university officials were aware of concerns about Dr. Richard Strauss but didn't do enough to stop him. Strauss died in 2005. (link)

Jun 13: Libel Lawsuit: A Lorain County jury has awarded $33.2 million in punitive damages in Gibson's Bakery in its lawsuit against Oberlin College and Meredith Raimondo, the college's dean of students. The family business sued the college and its dean of students after protests by students and allegations of racial profiling after a 2016 shoplifting incident in which an Oberlin student tried to use false identification to buy alcohol. On Friday the same jury awarded Gibson's business and family members more than $11 million in actual or compensatory damages, bringing the total award to over $44 million. (link)

Jun 12: Willful Neglect/Felony Misconduct: A former dean at Michigan State University who oversaw Larry Nassar was found guilty of multiple criminal charges on Wednesday, including over his handling of sexual abuse allegations against the convicted sports doctor. A jury convicted William Strampel, who was head of the College of Osteopathic Medicine, on two counts of willful neglect of duty and one count of felony misconduct in office over sexual comments he made to female students when they came to him for help with their careers. (link)

Jun 12: Sexual Assault Allegations: Cassandra Strickland was a star volleyball player at the University of Washington when she says an executive in the athletic department offered her a ride home, then sexually assaulted her in his truck. She hesitated for months before reporting it to school officials, who investigated and found her allegations against senior associate athletic director Roy Shick to be credible, and that the sexual contact was unwanted. The school reached a settlement with Strickland, agreeing to pay for up to $20,000 in therapy on the condition she waive any claims against the school. (link)

Jun 10: Sexual Abuse Allegations: A gynecologist who worked nearly 30 years at UCLA's student health clinic, until retiring last year amid a misconduct investigation, is accused of sexually abusing patients, the university announced Monday. James Heaps, 62, is charged with two counts of sexual battery by fraud and one count of sexual exploitation by a physician with two patients. (link)

Jun 10: Discrimination Lawsuit: Rashmi Goel, a tenured associate professor at the University of Denver Sturm College of Law, has filed an Equal Pay Act complaint, claiming that she earns significantly less than others in her academic category. This was discovered following an earlier EPA lawsuit brought against the law school, the Denver Post reported Wednesday. That action was filed by the Equal Employment Opportunity Commission on behalf of women who are full professors at the law school and settled for $2.7 million in 2018. (link)

Jun 08: Libel Lawsuit: In November 2016, a black Oberlin College student walked into a family-run shop near the Ohio school to buy wine with a fake ID, according to court records. A white employee, the grandson of an owner, suspected that the student was also trying to steal wine, and chased him outside, placing him in a chokehold, according to some witness accounts included in the records. Two of the students' friends, who are also black, intervened. (link)

Jun 05: Tribal Land Lawsuit: The Muscogee (Creek) Nation in Oklahoma, which includes descendants of Creek Indians who lived in Alabama, today sought to renew a federal lawsuit against the Alabama-based Poarch Band of Creek Indians, alleging the development of a casino and hotel in Wetumpka desecrated sacred burial grounds and violated federal law. Auburn University is named as a defendant in the case because archaeologists affiliated with Auburn excavated the site and Auburn still has possession of some items removed from the site, the lawsuit says. (link)

Jun 03: Admissions Scandal/Guilty Plea: A former USC soccer coach will plead guilty and cooperate with the investigation that implicated him in a college admissions scheme that sneaked the children of wealthy families into top universities by using fake athletic credentials and bribes, according to court documents filed Monday. Ali Khosroshahin, who led USC's women's soccer program from 2007 to 2013, will plead guilty to racketeering conspiracy by June 30. (link)

Jun 02: F-1 Off-Campus Employment Compliance: Still new in her job as head of international student affairs, Joy Stevenson was checking email around midnight last July 6 when she saw an urgent message from her aide at the University of Missouri-Kansas City. Subject: student death. Importance: High. (link)

Jun 01: Whistleblower Lawsuit: A federal lawsuit alleges Lehigh University fired a worker in its health center who complained about a physician sexually harassing female staff and inappropriately performing breast examinations on female students. Christine Feit, a certified medical assistant in Lehigh's health center, complained repeatedly to a supervisor that Dr. Thomas Novak made lewd remarks about her clothing and body and invaded her personal space, according to the lawsuit, which was filed May 23 and made public Thursday. (link)

Jun 01: Harassment Allegations/Resignation: A plant scientist who held a prestigious position at Montana State University has quietly resigned after an internal investigation concluded that he sexually harassed and discriminated against students and created such a hostile environment that several were forced to leave his lab and one considered suicide. Hikmet Budak, who held MSU's first endowed chair in plant sciences in the College of Agriculture, was investigated by MSU's Office of Institutional Equity (OIE). (link)

Jun 01: Tenure Contract Lawsuit: A University of Arkansas System revision to the faculty tenure policy violates faculty due-process rights by retroactively modifying faculty contracts with their employers, a federal lawsuit filed Friday afternoon states. Three faculty members at three UA System institutions filed a lawsuit over the revised policy. The lawsuit describes the policy as going into effect July 1 and expands the examples for why a faculty member may be fired. (link)

May 31: Title IX Lawsuit: Attorneys representing more than three dozen former Ohio State male student-athletes, including at least 26 Buckeyes football players, filed a Title IX lawsuit against the university Wednesday, alleging OSU officials didn't do enough to stop a sports medicine director who allegedly sexually assaulted the men while conducting preseason physical exams and treatment for injuries. (link)


Campus Life & Safety Events

Jun 24: Campus Police: Rutgers-Newark Chancellor Nancy Cantor has apologized after watching a police camera video of herself yelling at campus officers who asked her to remain at the scene of a minor traffic incident involving her car and driver. Cantor, the former chancellor of Syracuse University, shouted "I'm the chancellor!" and "If I miss my plane you folks are in trouble!" at Rutgers-Newark police officers investigating the fender bender in March, according to police body camera footage. (link)

Jun 21: Kidnapping: A 62-year-old man who was found with an unconscious University of Alabama student in the back of his vehicle while he pretended to be an Uber driver has now been formally charged. Tommy Wayne Beard was arrested Friday morning on Tuscaloosa County grand jury indictments charging him with first-degree kidnapping, second-degree kidnapping and impersonating a TNC (transportation network company) driver. The indictments, authorities said, involve three victims. Two of the three victims were University of Alabama students at the time of the crime. (link)

Jun 19: Assault: Metropolitan State University is stepping up security on its St. Paul campus after a "racially motivated physical assault" was reported Wednesday afternoon, school officials said in an email to students. A man was sitting on the steps outside the university's New Main building near East Seventh Street and Maria Avenue about 1:45 p.m., when the suspect approached him from behind and asked him where he was from and why he was in this country, according to Sgt. Mike Ernster, a spokesman for the St. Paul Police Department. (link)

Jun 19: Campus Culture: There's turbulence at UCA's Torreyson Library after administration removed a quote by Lady Gaga that said, "Being gay is like glitter, it never goes away." UCA spokesperson Amanda Hoelzeman told KATV that the university is focusing its need to ensure its "platform is consistent" with its "institutional voice." Students like Dakota Dollarhide are outraged by the decision. The quote, according to Hoelzeman, was put up by library staff. (link)

Jun 14: Sexual Assault: A Bronx co-ed has been charged with raping her female roommate at Susquehanna University, police said. Pratigya Thakur, a 19-year-old sophomore, was arrested Monday on charges of rape, indecent assault and harassment in connection with the alleged May 16 attack at the school in Selinsgrove, according to an arrest affidavit obtained by The Post. (link)

Jun 12: Sexual Assault: Just days after commencement ceremonies at a small private college in South Carolina, police arrested a fraternity member and accused him of raping someone on campus, a warrant shows. Wofford College police arrested Carter Barron Atchison on May 24, five days before his 21st birthday. Police say he used force to rape someone on the Spartanburg campus April 27, according to an arrest warrant. (link)

Jun 10: Videos of Students: Oregon State University is warning its female students to keep a watchful eye while walking around campus after someone posted videos on a porn website. The videos do not show any faces of students, but do show the bodies of women from behind as they walk around campus. The school notified the website and the videos were removed. (link)

Jun 05: Housing Safety Lawsuit: The University of Kansas is paying a former student-athlete $40,000 to settle a lawsuit claiming she became ill because of mold in the vents of her dormitory room. In the lawsuit filed in 2018, she alleged the on-campus apartment building where she lived safe was unsafe for housing. The university contended Evans exaggerated her illnesses and denied it was at fault for her health problems. (link)

Jun 04: Free Speech Lawsuit: A federal judge has tossed out a lawsuit accusing the University of Texas of violating students' rights to free speech, saying the group that filed it could not show that anyone had been harmed by the university's policies. The lawsuit was brought in December by the nonprofit Speech First, a national student group that offers to sue schools over censorship for as little as $5. It was filed on behalf of three unnamed UT students, who said they did not feel comfortable expressing their opinions on such controversial issues as abortion, gun rights and immigration because of the university's vague policies on verbal harassment. (link)

Jun 03: Minors on Campus Safety: Clemson University officials are working to "shore up" safety procedures at the summer camps on its campus after an audit identified policy violations that included incomplete background checks for camp staff members. In 2018, more than 10,000 children attended camps and similar activities hosted at Clemson facilities, according to a report by the university, and at least that many are expected again this year as the season warms up this month. (link)

May 31: Robbery: Three University of Chicago students were reportedly robbed Thursday on the South Side campus. About 11:59 p.m., they were walking on the Midway Plaisance at Harper Avenue when five people approached them, according to an alert from University of Chicago police. (link)

May 31: Free Speech: A school year riddled with tension over New York University student and faculty opinions about Israel and Palestine came to a close with a graduation speaker's praise of an Israeli campus' boycott, prompting an apology from the school's president. NYU students on both sides of the debate are resolute in their positions, causing on-campus and online clashes. (link)

May 31: Over-enrollment: Virginia Tech is offering some incoming students money to not attend the university for up to a year -- a move that comes in the wake of an over-enrollment crunch. Tech's over-sized freshman class, which is anticipated to have more than 7,000 students, would strain the infrastructure of the university and town of Blacksburg, officials have said. (link)




If you have any suggestions, questions or feedback, please e-mail me at robinmk@auburn.edu. We hope you find this information useful and would appreciate hearing your thoughts. Feel free to forward this email to your direct reports, colleagues, employees or others who might find it of value. Back issues of this newsletter are available on our web site.

If you have any suggestions for items to include in future newsletters, please e-mail Robert Gottesman at gotterw@auburn.edu.

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