The Washington Times - How a college hid $95 million in expense like booze, shooting clubs
October 3, 2014 12:28 AM
Original Article: http://www.washingtontimes.com/news/2014/oct/2/golden-hammer-college-hid-95m-in-administrator-boo/
Warning: Parents being crushed by the ever-rising tuition bills might want to stop reading right now.
The second-largest college in Illinois has been rocked by a financial scandal caused by shady bookkeeping and a litany of questionable purchases, including a pricey shooting club membership for the school’s president, and hundreds of thousands of dollars in alcohol purchases accounted for in the books as an "instructional supply."
The College of DuPage managed to hide more than $95 million in expenditures on more than 82,600 transactions since 2009 thanks to a peculiar type of accounting that allowed for thousands of purchases to be lumped together into one line item, according to data uncovered by American Transparency’s OpenTheBooks.com, an online portal aggregating 1.3 billion lines of federal, state and local spending.
Officials at the two-year community college in Glen Ellyn, Illinois, are accused of relying on questionable accounting practices and altering vendor names in an effort to make the school’s spending habits more difficult to track. Their spending was so deeply buried even members of the school’s own board of directors complained they have no ability to follow where the money goes.
"This board doesn’t know what it’s approving," said Kathy Hamilton, a certified public accountant who serves as vice president of the college’s board of directors. "The fact is we don’t get any information about what’s being spent."
But the administrators knew.
Robert Breuder, the school’s president, paid $23,686 to a private shooting club where he is a member, including $13,800 in dues, with the hidden money. He also used the school’s money to mask fees associated with three global satellite phones he used on exotic hunting trips and costs related to an overnight senior management retreat, according to Open The Books.
The union representing the school’s 306 full-time faculty members, who have clashed with Mr. Breuder in the past, last month approved a "no-confidence" vote in the president, accusing him of contributing to "an environment of turmoil, distrust, fear and intimidation."
For wasting millions of taxpayers’ dollars and avoiding efforts to remain accountable for how it spends public money, the College of DuPage has earned the Golden Hammer, a weekly award highlighting particularly egregious examples of waste, fraud and abuse of tax dollars.
Mr. Breuder declined to comment for this story when approached by The Washington Times.
"Incredibly, the school’s president and administrators knew the details on tens of millions of dollars being spent, but the board did not," said Adam Andrzejewski, founder of Open The Books.
Mr. Breuder and several other College of DuPage senior managers receive car allowances. Still, the school inappropriately paid the group over $4,809 in mileage reimbursements for local travel.
Another $243,305 was spent purchasing wine and other alcohol, Mr. Andrzejewski discovered. The liquor was described in an accounting ledger as "instructional supplies."
"The college president and senior executives gamed the system to buy the goodies," said Mr. Andrzejewski."The administration is driven [by] their own sense of importance and greed."
The Chicago-area school, which is state’s second-largest by enrollment, also used its dodgy accounting practices to conceal payments handed to companies associated with people in charge of raising money for the school’s foundation.
The College of DuPage spent $435,365 on purchases from Herricane Graphics since 2009. Carla Burkhart, the owner of the graphic design company, is listed as a member of the College of DuPage foundation’s board of directors. Mark Wight, the president of Wight & Company, a construction company that pocketed $328,020 from the college, is a vice president of the college’s foundation.
The law firm Robbins Schwartz Nicholas Lifton & Taylor took in more than $464,873 from the College of DuPage since the beginning of 2009. Kenneth Florey, an attorney at the firm, sits on the foundation’s board, as well. So does Scott Marquardt, the president of Roger Marquardt & Co., the college’s lobbying firm. The company received $229,500 in non-disclosed payments from the College of DuPage in the past five years.
Joseph Moore, the vice president of marketing and communications at the College of DuPage released a statement saying: "In September, Crowe Horwath, an independent licensed public accounting firm, provided College of DuPage with a ‘clean,’ ‘unmodified’ opinion on the college’s fiscal year (FY) 2014 annual financial statements and the internal controls over financial reporting."
Some critics of the school speculate the audit was focused on the college’s most expensive items, like multi-million dollar building projects, and never looked closely at petty cash fund expenditures which are commonly in the thousands of dollars.
The College of DuPage, however, abused its smaller accounts to spend more than $95.1 million, making 82,600 purchases from 6,788 vendors and service providers using approximately 500 separate fund accounts, according to Open The Books. More 232 payments exceeded the $15,000 threshold, at a cost to the college of $5.6 million.
College administrators justified cases in which the $15,000 cap was ignored by saying that they "sometimes lumped multiple invoices together for convenience so they could write one check," according to The Daily Herald, a suburban Chicago newspaper.