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Column: The ‘waste, fraud, and abuse’ of university foundations

Jenna Robinson writes that by this point “most Americans are aware of the widespread waste and decadence at many private and public universities.” But while Americans might be aware of the rampant waste on college campuses, not of all it is completely visible.

“From lazy rivers to exorbitant chancellors’ salaries, examples abound. But those well-publicized cases, problematic as they are, can be easily addressed by parents and students who pay tuition and by legislators who control the purse strings,” Robinson, president of the Martin Center for Academic Renewal, writes in a recent column. “However, there is another university entity that is not so visible and has little accountability.”

These “not so visible” entities are university foundations. In her column, Robinson argues these foundations “enable waste, fraud, and abuse.”

From the column:

They are university foundations set up to raise and manage money for the benefit of universities and students, which have their own boards and governing principles. Existing apart from the university makes it difficult for outsiders to get information on foundation activities and assets. In most states, including North Carolina, even foundations created to serve public universities are opaque and unaccountable. The University of North Carolina at Chapel Hill’s university foundation, for example, is not subject to the state’s open records law.

Because of their large financial portfolios, Robinson writes it’s important for university foundations to practice transparency. What’s more, she suggests transparency is important for these foundations because of their history of wasteful spending:

While foundations have their legitimate purposes and motives—historically, they have focused on serving as the fundraising arm for universities—they also act as the source of many examples of waste, fraud, and abuse that should concern any taxpayer or donor. Those examples include questionable, and sometimes illegal, activity. Take Jiah Rhea Chung, the former director of Los Angeles Trade-Technical College’s foundation, who was accused of stealing nearly $140,000 from the foundation. Chung led the foundation from 2009-2011, used funds for golfing trips and upscale restaurants, and was accused of forging the university president’s signature on nearly $100,000 in checks. Ultimately, she pled guilty to a felony charge of stealing about $50,000 in foundation money.

In other cases, university foundation funds have been used to purchase fancy cars and pricey homes for university leaders. In one case at the College of DuPage in Illinois, university foundation funds were even used to foot a taxidermy bill for the college’s president. Given these examples of wasteful spending, Robinson writes it makes sense that public trust in higher education has sunk in recent years.

Despite their track record of scandal, Robinson writes that campus stakeholders still have the chance to reform university foundations:

But working together, legislators, donors, and university alumni can rein in the worst abuses at university foundations. Donors and alumni can put pressure on private university foundations to which they give, insisting on open and transparent accounting practices and contracts. State legislators can make university foundations that benefit public universities subject to the same open records laws that govern the universities themselves. These measures will help to curb the worst cases of waste and abuse—and perhaps help to restore public trust in higher education.

Read the full article.

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