Dear Commons Community,
The New York Times and other media are reporting that the New York Inspector General has issued an interim report, which represents the first formal response to a request made last month by William C. Thompson Jr., the chairman of CUNY’s Board of Trustees for a systemwide investigation of “all of the CUNYcollege foundations, alumni associations or other affiliated entities.” Mr. Thompson’s request was prompted by the unexpected resignation of Lisa S. Coico as president of the City College of New York, a day after the New York Times contacted officials with questions about her administration’s handling of more than $150,000 of her personal expenses, and evidence that a memo related to those expenses had been fabricated.
The interim report mentions a number of questionable practices and expenditures made by CUNY officials. Below is the Executive Summary.
State of New York
Office of the Inspector General
Investigation of The City University of New York
Interim Report – November 2016
Catherine Leahy Scott
On October 9, 2016, William C. Thompson, Jr., Chairperson of the CUNY Board of Trustees, formally requested that the New York State Inspector General commence a comprehensive investigation into a number of matters, including the use of City University of New York (CUNY) foundation funds; the relationship between CUNY’s colleges and their affiliated foundations and potential conflicts of interest; CUNY procurement policies; the hiring, expenses, and retention of consultants at CUNY; conflicts of interest at CUNY; and “all of the administrative and financial oversight and controls and best practices . . . with respect to all of the college foundations, alumni associations or other affiliated entities.” Chairperson Thompson’s request surfaced in the wake of the publication of alleged misconduct and fiscal mismanagement by a past President of City College of New York (CCNY).
The Inspector General’s initial review identified a number of systemic concerns largely attributable to CUNY’s lack of oversight that have led to financial waste and abuse within the CUNY system. CUNY administration also has failed to institute effective centralized management policies. The impact of this decentralization and deficient oversight has been further exacerbated by the failure to effectively operate the CUNY system for the benefit of taxpayers and students by those who are charged with the daily operations of the CUNY system, including but not limited to the Chancellor and General Counsel, among others.
Specifically, the preliminary investigation revealed that CUNY has expended funds on questionable activities and that its colleges and affiliated not-for-profit foundations lack sufficient controls to ensure the integrity of their use of non-tax levy funds. In light of the fact that the not-for-profit foundations affiliated with CUNY as a whole maintain approximately $1 billion in funds, it is imperative that significant steps are immediately taken to strengthen the fiscal integrity and oversight of this system. In addition, CUNY is spending significant resources in a decentralized manner on outside contracts, including for lobbyists engaged in questionable and seemingly redundant tasks, despite also employing its own central and school-based government relations staff. This decentralization creates an environment in which CUNY institutions lack appropriate fiscal management, oversight and transparency. This preliminary investigation also revealed that CUNY has failed to fulfill its legal obligation to report misconduct to the Inspector General as required under New York Executive Law. At times, CUNY has instead hired outside counsel to conduct internal investigations at significant cost to the public. Consistent with New York State Executive Law 4-A, the Inspector General refers these interim findings to CUNY for whatever disciplinary action it deems appropriate.
CUNY’s executive staff including the Chancellor, the General Counsel, and all those employed in the CUNY system must adhere to the highest ethical standards, and conduct themselves as financial stewards, safeguarding this public university and ensuring confidence in the integrity of the CUNY system. Accordingly, the Inspector General has prepared this interim report to highlight certain areas of immediate concern and enable CUNY’s Board of Trustees to begin remedial action in consultation with the Inspector General.
As a result of this preliminary investigation, the Inspector General recommends that CUNY immediately implement centralized policies in order to reduce the potential for fiscal mismanagement and abuse. CUNY must also take steps such as instituting more stringent controls for the relationships between all CUNY-based foundations and their affiliate colleges to ensure proper fiscal oversight of funds managed by those institutions and mitigate improper or wasteful expenditures.