Let This Not Be Your Story - Practices of the Former President of WSU

Higher Education|Not-for-Profit

By Susan Kirsch

The Commonwealth of Massachusetts Office of the Inspector General (OIG) recently released its review of the spending practices of the former President of Westfield State University (WSU).  The 57-page report details a pattern of improper use of WSU funds for personal purposes, improper portrayal of business purposes, false and misleading statements to WSU’s Board of Trustees, improper financial benefits, personal expense reimbursement delays, and inadequate expense documentation by the former President.  Let this not be your story.

The report reveals that the former President’s spending habits and failure to comply with credit card and expense reimbursement policies led to his dismissal by two, and now three, former employers.  At least one public accounting firm had issued a management comment letter regarding adequate controls and improper usage of his WSU issued credit cards.  His credit card was revoked at least once during his tenure, but it appears to have been subsequently reissued.

The OIG’s report outlines recommendations for improvements in internal controls, financial safeguards and board oversight in order to reduce the potential for waste, fraud and abuse.  These suggestions are valuable for all organizations:

  • Establish an internal audit office reporting to the Board
  • Establish Board chair oversight of President’s travel, purchases and expense reporting
  • Centralize travel procurement and travel authorization
  • Limit credit cards in favor of expense reimbursement and procurement cards
  • Require that all business be conducted on University e-mail accounts

The OIG called for the Massachusetts Board of Education to expand opportunities for Board training, orientation and continuing education.

At the heart of the facts, WSU’s policy prohibited use of the institution’s credit cards for personal use.  Had WSU required strict adherence to the policy and its expense reimbursement procedures, a lot of the issues cited in the report would have been mitigated.  Internal controls, policies and procedures around credit cards and expense reimbursements should be reviewed on a regular basis to ensure compliance with federal tax law and to exercise sound fiscal stewardship.  Let this not be your story, because it never reads well.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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