MCCCD let years of misconduct slide - East Valley Tribune: News

MCCCD let years of misconduct slide

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Posted: Friday, October 27, 2006 8:57 pm | Updated: 5:05 pm, Fri Oct 7, 2011.

Tribune Investigation - Part 1 of 4

During the past five years, investigations by Maricopa County Community College District auditors have unearthed falsified enrollments, theft and gross mismanagement throughout the nation’s largest junior college district.

The offenses were detailed in damning reports that sometimes took years to complete. But the reports were rarely seen by anyone other than the perpetrators and their bosses.

As a result, employees’ serious ethical lapses and misconduct have gone largely unpunished.

The district’s governing board —made up of five elected officials who decide how the campuses should run — is not provided the complete audits. Instead, district policy requires the auditors to give only summaries of their findings to a separate committee.

And while two board members sit on that committee, one of them has not attended an audit meeting in at least four years. The other has not raised questions or concerns over the problems discovered and now says he cannot recall any of the investigations.

Over the past two months, the Tribune has investigated audits from the past five years, focusing on five major internal fraud reports, reviewing thousands of pages of records and interviewing dozens of people involved in the cases. The newspaper has found:

• Auditors say employees stole money or equipment from the colleges — often worth thousands of dollars.

• Enrollment numbers were faked to save classes from being canceled and to steer teaching fees to some faculty.

• The district did not notify law enforcement when auditors uncovered evidence of theft and other criminal activity by employees. In one case, an auditor specifically recommended involving the police, but was ignored by college officials.

• Colleges routinely shifted troublesome employees to different jobs, allowed them to resign quietly and on one occasion granted an employee additional responsibilities and pay after violations were uncovered.

• Nepotism was common, and employees hired or provided perks to family members or romantic partners.

District officials acknowledged flaws in the way they have handled audit reports. After reviewing the Tribune’s findings earlier this month, Chancellor Rufus Glasper says changes are needed to ensure that when audits uncover wrongdoing, action follows.

All of the district’s 10 colleges are autonomous and have been trusted to respond to the auditors’ findings and recommendations without the district’s involvement, Glasper says. If the colleges fail to address problems, it is unlikely the district will find out unless another audit is conducted.

“What you’ve found are some audits which I think have a lot of validity and we are working on our internal controls to make sure that we can try and mitigate,” Glasper says. “We cannot eliminate the kinds of issues that you found, but we can definitely try to mitigate.”

Now, legislative leaders say they will look into revamping the community college system.

Rep. Laura Knaperek, RTempe, and Sen. Linda Gray, R-Sun City, head of the Legislature’s higher education committees, say they will hold hearings in the coming year to investigate problems within MCCCD and other issues.

Earlier this year, Knaperek sponsored legislation that would have created an agency to oversee the community colleges and coordinate their instruction with that of the state’s universities. The bill met heavy opposition from the districts, she says, and failed to gain enough votes to move out of committee.

“They don’t want anyone looking over their shoulder,” Knaperek says.

’OUT OF CONTROL’

Jody LaBenz, an internal auditor, was giving the district’s premier performing arts program — the Maricopa Institute for Art and Entertainment Technology at Scottsdale Community College — a financial check-up when other, more urgent requests sidetracked him in early 2003.

Suspicion of major fraud had surfaced at Mesa Community College. At the same time, someone was stealing hundreds of thousands of dollars in financial aid from every college in the district using the identities of 50 Arizona inmates.

By the end of the school year, the auditors had launched five special investigations into a laundry list of malfeasance: financial aid fraud, nepotism, theft by employees.

LaBenz is one of only three auditors and regularly had to set aside one project to pursue another that was more pressing, email records show.

He would not talk to the Tribune for this story.

With about 200,000 students, the junior college district is more than twice as large as all three of the state-run universities combined.

And it keeps getting bigger as Maricopa County’s population continues to boom and plans are drawn up for new colleges in what were once fringe towns, like Surprise.

Despite the colleges’ epic growth, the district’s auditing staff has added just one position the past 20 years.

So when LaBenz put the institute review on hold, it sat for a year.

As the anniversary approached, the auditor sent an apology to the program’s administrators.

“The investigation that pulled me from your project mushroomed out of control . . . with employee theft, event deficits, travel improprieties and unauthorized revenue waiving,” he wrote in a February 2004 e-mail. “Multiple whistleblowers were identified and each issue could have been an individual audit project in itself.”

Two new special investigation requests had rolled in as well, LaBenz added.

The audit that “mushroomed” on LaBenz was an investigation of MCC’s athletic department.

His inquiry was born out of concern over $4,900 in travel cash that was missing but, before he was done, he uncovered falsified budget records, questionable travel and thousands of dollars more that were unaccounted for.

LaBenz concluded that a secretary in the department had most likely pocketed the missing cash.

But he also discovered what he thought were improprieties by the athletic director, who LaBenz said used college funds to bring a girlfriend on an out-of-state basketball trip.

Before issuing his final reports on the Mesa investigation, LaBenz sent an e-mail to Glasper, the chancellor, recommending, “an appropriate law enforcement agency be notified due to the nature of these findings.”

Though the secretary and the athletic director denied the allegations, the secretary accepted the college’s offer allowing her to resign, and the athletic director was forced to donate $1,000 to a scholarship fund, ostensibly as repayment.

No police report was filed over the missing money, and the secretary was never asked to repay any of it.

Glasper now says there was uncertainty that she was the most likely suspect so no legal action was taken.

“They could not determine whether or not that individual was exactly the individual who was responsible for the misplaced dollars,” Glasper says.

As LaBenz closed his Mesa audit, Glasper received an anonymous letter alleging widespread fraud in Scottsdale, at the performing arts institute where LaBenz had left an investigation behind.

NO SHOW

Ben Reynolds wore a gray suit with sleeves long enough to cover the tattoos that crawl up his arms when he spoke before the governing board.

At a public meeting in December, Reynolds wanted to be taken seriously when he told them his professor had not shown up for class since September.

Reynolds studied music business at SCC, with his eye on breaking into the audio recording industry.

However, the 28-year-old had just wasted a semester enrolled in an electronic music class the instructor had not bothered to teach. Stephen Green, then head of SCC’s music department, held the first lecture but skipped the rest.

Reynolds and a handful of other students repeatedly complained to college administrators. It took three months for the college to remove Green from that class and provide another instructor.

Green was the only employee to have been forced from his job for wrongdoing, the Tribune investigation found.

But the music professor’s missteps were little more than footnotes in LaBenz’s audit of the institute.

What had begun in 2002 as a simple inspection by summer 2004 had become an effort to unwind an intricate web of fraud.

Faculty, clerical staff and their family members were posing as students to prevent classes from being canceled. Faculty members were being paid for classes they didn’t teach. Financial aid was misappropriated. The college’s recording equipment was used extensively for private businesses.

Ultimately, $2.5 million was spent on a program that did not have enough students to justify its existence.

Before LaBenz even finished a draft of his report, the institute’s director, Steven Meredith, resigned his post, returning to the music faculty. The institute shut down in June 2005, just six months after Meredith left, since only one real student remained.

Meredith did not return repeated calls for comment. The Tribune provided a list of questions to his Mesa attorney, Alan Hyde, but Meredith declined to provide answers, Hyde said.

The college never sought to fire or demote Meredith. Instead, he was quickly tapped to serve as fine arts chairman of the Maricopa Center for Learning and Instruction, a program aimed at improving instruction at the colleges.

Records show the position paid him an additional $11,000 during his last two years at MCCCD, on top of his $80,000-a-year salary. He retired in June and now heads the choral music program at Snow College in Ephraim, Utah.

Meredith’s only punishment was a reprimand letter that criticized his use of equipment, travel and, particularly, his practice of enrolling his stepsons in his classes.

FRIENDS AND FAMILY

Nepotism issues were prevalent in each of the major audits the newspaper reviewed.

In 2003, auditor Samuel Harris found that at Glendale Community College, the dean of instruction was the sister-in-law of a faculty member in the child and family studies department. That faculty member had hired two of her daughters to be adjunct professors, working directly for their mother.

A year later, nepotism concerns again surfaced at the Glendale college. An auditor, while investigating falsified payroll records, discovered that the director of a math tutoring center had hired her daughters and was paying them for work they did not do.

Until two years ago, MCCCD allowed employees to hire and oversee their in-laws, cousins and romantic partners — so long as they are not married. After Harris’ report was complete, the governing board tightened its nepotism policy to restrict employees from being involved in the hiring or oversight of any relative.

At GCC’s child and family studies department, the relatives were transferred so they weren’t working for one another. At the math tutoring lab, the director resigned without reimbursing the college for her daughters’ unearned pay.

TURNOVER

Seventy percent of those working directly for Norm Godin, administrative services dean at Phoenix College, left their jobs over a four-year period.

Even for a community college, which typically suffers turnover rates as high as 10 percent a year, Godin’s turnover stood out.

Several of his employees accused him of using intimidation to get his way, screaming in meetings and monitoring every move of his enemies.

Employees told the auditor that Godin directed money to departments run by his supporters and withheld from those of his critics.

By the time an auditor intervened in 2001, Godin’s reputation had been documented in his performance evaluations and a campus morale survey, the full results of which were never released.

“The fear of being verbally abused or experiencing other negative repercussions from Dean Godin does not appear isolated,” the audit report said.

In a 30-page response, Godin vehemently denied the allegations, arguing that the audit was retaliation against him by a small group of disgruntled Phoenix College employees. Godin declined to discuss the allegations with the Tribune.

Regardless, the college’s interim president, Morris Johnson III, embraced the report and called for Godin’s removal.

Internal e-mails show district officials consulted with an outside attorney to determine the likelihood that Godin would prevail if he filed a wrongful termination lawsuit. The initial response was that Godin’s chances were not good.

But he wasn’t fired. Rather, the district helped Godin search for another position within MCCCD.

Paradise Valley Community College passed on Godin for an administrative job, so Glasper, at the time vice chancellor of business services, brought Godin into his department.

“We’re not an institution that looks to just automatically fire,” Glasper says now.

Godin left the district in 2004 to take another job, as vice president for business services at Riverside Community College in California, a position very similar to the one he held at Phoenix College.

“I don’t wish to comment on that,” Godin says. “I’ve moved on from Maricopa and I’d just prefer to leave that behind.”

Riverside officials called Glasper about Godin, and the chancellor says he was truthful about the administrator’s past, but recommended they hire Godin. Riverside officials did not return phone calls regarding conversations with Glasper or comment about Godin.

AFTERNOON MEETINGS

District policy calls for governing board members to not be informed of the audits, unless they specifically ask for information.

The reason, officials say, is that elected board members are not involved in any day-to-day operations and serve only to set the rules the colleges must follow.

Aside from those being investigated and their bosses, only the Audit and Finance Committee is informed of any misconduct.

Two board members — Ed Contreras of Chandler and Don Campbell of Phoenix, both of whom are up for re-election next week — sit on the committee.

Contreras has held that position for the past 10 years.

Minutes show that Contreras has not been to a committee meeting in at least the past four years.

And during that time, Campbell, who has served on the governing board more than two decades, has not raised questions about the problems auditors brought to the board.

Contreras says the meetings are held on weekday afternoons, which conflict with his schedule, particularly because he cares for a 20-year-old daughter with lupus.

“She’s constantly in and out of the hospital and I don’t know what my schedule will be on any given day,” he said earlier this month. “Like today, she’s going to dialysis and if she has trouble in dialysis, she could be in the hospital tonight.”

Contreras says he has brought the scheduling conflict to his board colleagues, who appointed him to the committee, but says they were unconcerned with the absences. He contends that he deserves to continue on the committee because of his experience reviewing the district’s financial information, which he goes over at home and discusses with the chancellor.

Campbell says he knew Contreras’ daughter was sick, but says he doubts it has been years since Contreras attended an audit meeting. He questions the minutes’ accuracy. Contreras says he cannot remember the last time he went.

Debra Thompson, the district’s head of business services, says Contreras’ absences are not a problem because he receives the same materials, through e-mail, as the other committee members.

Still, those materials do not include the actual audit reports. Instead, the committee members are given summaries of the auditors’ major findings, documents that rarely provide detail about any transgressions.

When LaBenz, the auditor, completed an investigation of the SCC performing arts institute, the summary characterized the complex pattern of enrollment and financial fraud only as “irregularities.”

Glasper, the chancellor, says his office must be more involved with the audits to ensure that employees are held accountable.

Governing board members receive the information they need in monthly one-on-one meetings with him, in which he answers any questions they have about the colleges’ operations, he says.

But Jerry Walker, a governing board member, says that is not the case.

Walker says he has never been told about any investigation in the two years since his election and was unaware that Contreras has not attended the audit meetings.

Walker reviewed the Tribune’s findings and says he will push to overhaul district policy to ensure the elected officials are informed when problems arise.

“This is very disappointing to me,” he says, “that they don’t bring information like this to the board.”

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