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College district needs more oversight, tough penalties, panel says

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Posted: Friday, February 16, 2007 4:02 pm

The Maricopa County Community College District needs more auditors, more ways for employees to report wrongdoing and severe penalties to await those found to have committed fraud.

Those were among the 40 recommendations made public Friday by an outside panel of auditors and accountants that reviewed the district’s operations the past four months.

The proposed reforms covering 98 pages are meant to prevent employee misconduct, or at least, ensure top officials respond appropriately when it surfaces. In the past five years, internal audits uncovered falsified enrollments, misappropriated scholarship money, theft, nepotism and misuse of public equipment within the district, the nation’s largest community college system.

“We’ve had our challenges over the past few months,” said Rufus Glasper, the district’s chancellor. “But we will be stronger for it.”

The challenges persist.

The Maricopa County Sheriff’s Office is investigating fraud and international travel at multiple colleges. Last week, Glasper fired two longtime college presidents, Larry Christiansen of Mesa Community College and Homero Lopez of Estrella Mountain in Avondale, saying he lost confidence in their leadership.

The foreign trips the two presidents took are being scrutinized by state lawmakers.

A Tribune series in October detailed the fraudulent activity and revealed college officials routinely shifted troublesome employees to new jobs or allowed them to resign. When criminal activity surfaced, officials repeatedly chose not to notify law enforcement.

Glasper formed the panel in response to the Tribune series. Two governing board members upset over how the fraud was handled called for the chancellor’s firing.

But on Friday, the district’s five-member, elected governing board spoke in support of Glasper.

“There should be no question in anyone’s mind that Dr. Glasper is the leader of this district,” said Linda Rosenthal, the board’s chairwoman.

The board is scheduled to vote on the reform package Feb. 27. It includes:

• Zero tolerance for “willful and intentional” acts of fraud, theft, embezzlement, falsification of records and misuse of taxpayer property.

• A requirement that employees report theft of district funds or property to law enforcement.

• Creation of an ombudsman to field and look into employee allegations of misconduct at each of the 10 colleges. A whistleblower hot line is also recommended.

• The hiring of more auditors. The district’s enrollment has swelled to enroll more than 120,000 students, but there are only three auditors to investigate allegations of malfeasance, as well as for regular financial check-ups.

• Greater oversight of “Special Service Employments” — contracts used to give employees extra pay for work done outside of their regular duties.

Glasper and the panel reaffirmed support for the district’s international travel program.

The district’s foreign trips were questioned after The Arizona Republic reported last year that district employees and board members spent more than $300,000 on trips over the past five years.

Stating that the colleges are “committed to international and intercultural education and globalization efforts,” the panel called for MCCCD to establish its first international travel policy.

If the board members approve the reforms, they will commit themselves to receive a flood of information that, until now, no one collected.

The district would provide them all internal audit reports — previously rarely read by anyone other than the perpetrators and their bosses.

Also, regular reports from each college regarding travel, conflicts of interest and special service employments would go to Glasper and the board.

District officials bemoaned the press scrutiny and the sheriff’s investigation that have come from the actions of a few dozen employees.

However, it is unknown whether the audit reports actually document all, or even most, of the district’s fraudulent activity. Internal correspondence reviewed by the Tribune shows that in 2003 the auditors were overwhelmed with requests for special investigations.

Last month, deputies seized all the auditors’ records, including materials from ongoing inquiries, said Chris Chesrown, a district spokeswoman.

As Debra Thompson, MCCCD vice chancellor for business services, explained the recommendations Friday, some officials were surprised at how much reform is needed. The district has never officially written many basic rules.

After discussing how to prevent employees from collecting unearned pay, board member Don Campbell asked with exasperation, “Isn’t this policy now?”

“None of this,” Thompson said, referring to the recommendations, “is in the policy at the present time.”

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