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Report on spending abuse means changes ahead

A report by the New York State Inspector General (IG), issued on November 15, found a lack of oversight at several CUNY colleges and foundations that has allowed abuse of college and foundation funds.

The IG’s investigation, which came at the request of CUNY Board of Trustees Chairman William C. Thompson, found that:

  • “There is no effective oversight of foundation funds at CUNY. This has created the potential for widespread waste and abuse.”
  • Former Brooklyn College president Karen Gould used discretionary funds to pay $36,000 for a part-time housekeeper and $35,000 for a retirement party.
  • A $50,000 embezzlement of funds by a “business director” five years ago at the School of Professional Studies was paid back, but the CUNY administration failed to report the episode to the IG.
  • The CUNY chancellor’s office used a private attorney rather than the IG to investigate possible wrongdoing by former City College president Lisa Coico, at a cost of $180,000.
  • The university and college foundations have spent $1.6 million in lobbying since 2013 that, the report said, “appears to be duplicative…and warrant[s] scrutiny.”
  • Executive compensation needs further scrutiny. For example, the report noted that senior college presidents can receive housing allowances of up to $90,000 in addition to a car and driver. Chancellor Emeritus Matthew Goldstein has a five-year post-job salary of $300,000.

‘STRINGENT CONTROLS’

The investigation is ongoing, but the report said that CUNY should “implement centralized spending policies to increase organization and uniformity of action and reduce the potential for fiscal mismanagement immediately,” and that it must “take steps such as the institution of more stringent controls over the relationships between all CUNY-based foundations and their affiliate colleges to ensure proper fiscal oversight of the foundation funds managed by those institutions.”

As a result of the IG’s report, Governor Andrew Cuomo has vowed to create special IG offices to oversee both CUNY and SUNY. Chancellor James B. Milliken said that he took the findings “very seriously” and pledged to work with the state and the Board of Trustees in reducing financial mismanagement. The governor also ordered the “CUNY Board to review the entire senior management at CUNY, to evaluate how deeply this permissive culture extends, and how extensive a change is necessary.”

Executive compensation at CUNY is not a new issue for the PSC, which has repeatedly opposed increases in executive salaries and denounced Goldstein’s golden parachute.

The report has already claimed casualties in the CUNY administration. Board of Trustees Secretary Jay Hershenson was replaced by Gayle Horwitz and moved from his role as senior vice chancellor to a position at Queens College. Frederick Schaffer, CUNY’s general counsel, who was criticized in the report, announced his retirement after the investigation went public.

The New York Times noted that it is “somewhat unusual for the inspector general to release its finding from what it calls a ‘preliminary investigation,’” something that caught the eye of many CUNY advocates.

“Obviously, Cuomo has wanted to cut some of the funding to CUNY on the premise that there’s so much waste, and this plays into that argument,” said Peter Bratsis, an assistant professor of political science at Borough of Manhattan Community College, who focuses on the politics of corruption. “It’s very possible that one of the developments that is coming down the line is a decrease in state funding.”

PSC President Barbara Bowen told Clarion, “Even one penny wasted at CUNY is unacceptable, especially when CUNY has been starved of funds for so long, but these findings should not distract us from the real issue, which is that the state should fully fund CUNY.”