Case In Point: Lessons for the proactive manager

Volume 13 Number 06 | June 2021

Quotable .....

“ America's present need is not heroics but healing; not nostrums but normalcy; not revolution but restoration. ”

-- Warren G. Harding

As we enter the summer of 2021, it seems things are heading toward normal (in my world anyway). Two weeks ago, I spoke at a conference to a group of business officers - live and in person - for the first time since 2019. This week I started teaching my annual course on Fraud in AU’s Harbert College of Business, again live and in person.

The past year without in-person events really made me appreciate just how important it is to see faces and body language while communicating. Auburn University plans to resume normal operations in the fall semester. For our readers in other parts of the country (and world), I hope things are moving toward normal for you as well. Hopefully we all head that way with a new appreciation for things we have taken for granted in the past.

My topic at the conference was fraud/ethical issues. During this talk I mentioned the importance of internal controls and the impact the pandemic may have had on controls. Controls are important for preventing fraud and, on a broader level, ensuring we meet objectives. As a part of this talk, I made four simple suggestions to consider as operations return to normal. I share these with you this month in the hopes that they will generate some thought and be helpful.

Post Pandemic Internal Control Considerations

What processes have changed?

Did we lose any needed controls with the change?

Is the change actually a better business practice we want to keep?

Has anyone been put into a position of having too much control of some process?

Despite our operations being different for over a year now, one thing remains the same… we face numerous risks in higher education. It is important to think about these risks with a view toward proactive management, and it is more important than ever – due to scarce resources – to avoid the headlines and the additional costs associated with crisis. As always, we welcome your comments and suggestions.

M. Kevin Robinson, CIA, CFE
Associate Vice President
Office of Audit, Compliance & Privacy
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Information Security & Technology Events

Jun 16: IT Outage: The University of Massachusetts Lowell canceled all in-person and online classes for the second day following a "cybersecurity incident," the school said. The public research university has been keeping staff and students updated on the breach on the temporary website UMassLowell.com while the school's main website remains unavailable. Officials reported the incident Tuesday and said in an online statement that the university, including its Haverhill campus, was closed "due to an IT outage." (link)

Fraud & Ethics Related Events

Jun 23: Occupational Fraud: A Lenexa man has been sentenced to two years in prison after stealing more than $556,000 from the University of Kansas Medical Center and other institutions, the U.S. Attorney's office in Kansas announced Wednesday. Federal prosecutors said the man also stole money from the KUMC Research Institute and the KU Endowment. The man was the administrative officer at the KUMC Occupational Therapy Education Department from 2009 to August 2015. He also stole about $30,000 from KUMC Research Institute and KU Endowment by submitting falsified invoices for which he was paid. He then filed false federal tax returns, resulting in a loss of more than $104,000 from 2009 to 2015. (link)

Jun 11: Student Aid Fraud: A criminal complaint has been filed charging a 42 year old man of Clinton, Maryland, for the federal charge of conspiracy to commit wire fraud, in connection with a scheme to fraudulently obtain student aid. The affidavit alleges that between 2005 and 2021, the former advisor has fraudulently obtained federal student aid on behalf of Student Participants, who enrolled in at least eight universities. Student Participants in the ring allegedly received federal student aid but were not legitimate students as they lacked the intent to earn a degree. As part of the scheme, Student Participants allegedly either allowed their personally identifiable information (PII) to be used on student loan financial forms or their PII was used without their knowledge, making them victims of identity theft. (link)

Jun 07: Wire Fraud: A now-suspended researcher at the University of Tennessee, Knoxville was arrested by federal agents following the return of a grand jury’s indictment. The indictment alleges that beginning in 2016, the researcher was part of a scheme to defraud the National Aeronautics and Space Administration (NASA) by hiding his affiliation with the Beijing University of Technology (BJUT), which is located in China. Federal law prohibits NASA from using federal funds on projects in collaboration with China or that of Chinese universities. (link)

Compliance/Regulatory & Legal Events

Jun 22: NCAA Violations: A former Creighton men’s basketball assistant coach violated NCAA ethical conduct rules when he accepted a $6,000 payment from a business management company that intended to use coaches to influence student-athletes to retain the company and when he provided false or misleading information about his actions during the investigation, according to a decision released by the Division I Committee on Infractions. The Creighton athletics director also failed to report the potential violation. (link)

Jun 21: Vaccine Requirement Lawsuit: A group of Indiana University students are suing over the school's COVID-19 vaccination requirement. In a federal lawsuit filed Monday, eight students allege that the requirement that students, staff and faculty be vaccinated against the virus before returning to campus in the fall violates the Fourteenth Amendment, which includes rights of personal autonomy and bodily integrity and the right to reject medical treatment, and Indiana's recently passed "vaccine passport" law. The students say IU's mandate is more than that. In the complaint, the students say they feel they're being coerced into vaccination under "the threat of virtual expulsion from school." (link)

Jun 21: Alston Supreme Court Case: The Supreme Court on Monday ruled against the NCAA in a landmark antitrust case that specifically challenged the association’s ability to have national limits on benefits for athletes that are related to education, but more broadly had raised doubts about its ability to limit benefits at all. The ruling will end the association’s nationwide limits on education-related benefits athletes can receive for playing college sports. Athletes playing Division I men’s or women’s basketball or Bowl Subdivision football will be able to receive benefits from their schools that include cash or cash-equivalent awards based on academics or graduation. (link)

Jun 16: NCAA Violations: Earlier this month, an anonymous person sent a dossier of dozens of pages to the Arizona State athletic department. It included screenshots, receipts, pictures and emails related to numerous potential violations within Arizona State’s football program, according to sources. Sources said members of the football program deliberately, blatantly and consistently broke rules related to hosting players during the dead period, including coach Herm Edwards meeting with recruits. A source added that the evidence included pictures of the visits, including Edwards with a recruit who ended up enrolling at ASU. (link)

Jun 16: Title IX Interpretations: The Education Department said on Wednesday that transgender students were protected under Title IX, a law that prohibits sex-based discrimination in federally funded schools, reversing a Trump-era policy that effectively had said the opposite. "We just want to double down on our expectations," Miguel A. Cardona, the education secretary, said in an interview. "Students cannot be discriminated against because of their sexual orientation or their gender identity." (link)

Jun 15: A former tenured biology professor filed a nearly $2 million lawsuit Tuesday stating that he was lied to and wrongfully forced out by Pacific University. The professor is the second Pacific professor to file a recent lawsuit against the private university. The professor had been working at the Forest Grove institution for about 13 years when Pacific officials launched an outside Title IX investigation against him, resulting in his resignation. The investigation stemmed from an alleged complaint that he had a bias against women related to his involvement in the biology department’s tenure process, when he was chair. (link)

Jun 14: Discrimination Lawsuit: A Black academic advisor at Rowan University has filed a federal lawsuit claiming a chemistry professor’s racist and gender-based rants violated her civil rights and caused her to be less effective in her job. A chemistry professor is accused in court papers of repeatedly making derogatory statements to his students about the adviser in the Chemistry Department who has worked at the school since 2012, according to a complaint filed this week in U.S. District Court. (link)

Jun 09: Sexual Assault Verdict: A jury in Houston took just a few hours on Wednesday to find Baylor University and three former football players not responsible for the alleged sexual assault of a former female student athlete in 2017. The trial, which started May 20, was in some ways a test of whether Baylor had changed its ways since a pattern of mishandled sexual assaults, notably those involving football players, led to the firing of head football coach Art Briles and the eventual departures of president Ken Starr and athletic director Ian McCaw in 2016. (link)

Jun 07: Whistleblower Lawsuit: A LSU Associate Athletic Director has filed another lawsuit against LSU and several of its current and former administrators and board members over the way she says she was treated for reporting on sexual misconduct and violence within the university’s athletic department. The latest suit was filed in late May in 19th Judicial District Court and contains mostly the same salacious allegations that made headlines earlier this spring, when the associate AD filed a lawsuit in the U.S. District Court for the Middle District of Louisiana, alleging she was subjected to a hostile work environment and years of retaliation for repeatedly trying to report sexual harassment allegations involving former head football coach Les Miles. (link)

Jun 07: Foreign Influence Law: Gov. Ron DeSantis signed two bills into law Monday designed to combat foreign influence in Florida’s universities from countries deemed hostile to the U.S., especially China, and crack down on theft of trade secrets and intellectual property. The bills he signed, HB 7017 and HB 1523, were spurred by incidents over the past decade of Chinese nationals working at Florida colleges stealing sensitive materials and designs of military equipment. (link)

Jun 03: Sexual Misconduct Allegations: A University of Michigan professor is resigning after sexual misconduct allegations were recently brought to light, university officials said. A professor in UM’s computer science and engineering program is leaving his position, effective Aug. 30, officials said. He allegedly engaged in unwanted advances, including groping and harassment, while at social gatherings and industry conferences, according to reports. (link)

Jun 02: Gender Discrimination Lawsuit: Nine former Gophers football players accused of sexual assault in 2016 can proceed with their gender discrimination lawsuit against the University of Minnesota, the Eighth U.S. Circuit Court of Appeals ruled Tuesday. The court cited the lawsuit's claim of "internal pressure on university officials to charge male football players with sexual misconduct" along with the lawsuit's allegation that the U's investigator "believed football players had covered-up sexual misconduct complaints" in a separate 2015 assault claim so the university was motivated to "punish as many players as possible in response to" the claims by the 2016 victim, a cheerleader identified as Jane Doe. (link)

Jun 01: Due Process Lawsuit: A tenured professor is suing Pacific University after he was suspended last year following complaints from students about comments he made about gender and ethnicity. According to the lawsuit, the professor was in his 16th year of teaching at the private Forest Grove university last October when Pacific administrators told him he could either resign or undergo an investigation due to "violating the civil rights of his students" with comments and anecdotes he had made in the classroom. The professor, his attorney and two academic organizations say the school has taken action against him wrongfully, ignoring due process. (link)

Jun 01: Discrimination Lawsuit: When a newly-hired professor arrived for her first semester at The College of New Jersey, shortly after giving birth to her third child, she said her bosses were relieved she was back at work. Both her new dean and faculty chair told her other professors they recently hired were pregnant and they were happy she was done having children, the professor said. But she wasn’t. (link)

Jun 01: Sexual Assault: Two women have filed a federal lawsuit alleging Michigan State University and Sparrow Hospital failed to protect them from a former neurology medical resident who sexually assaulted and harassed them. The women were employees at MSU's neurology clinic when the former resident sexually assaulted them. The man was serving a post-graduate neurology residency under supervision of MSU's College of Osteopathic Medicine, working at MSU's neurology clinic and Sparrow Hospital. (link)

Jun 01: Admissions Law: Colorado Gov. Jared Polis signed a bill Tuesday making the state a leader in the nationwide effort to ban legacy admissions at public colleges and universities. Prateek Dutta, Colorado Policy Director for Democrats for Education Reform, who brought the bill idea to state lawmakers, said Colorado is the first state he has found to have enacted such a law. The bill prohibits public higher education officials from looking at "legacy preference," or familial relationships to alumni of the institution, in their admissions process. (link)

Campus Life & Safety Events

Jun 22: Racism Lawsuit: Earlier this year, as Officer Russell Ellis neared the end of his late shift at the University of Washington’s campus police department, one of his superiors offered him an energy drink. The sergeant was laughing, Mr. Ellis said, noting that the beverage was flavored like watermelon. All five Black rank-and-file officers in the university police department filed multi-million-dollar damage claims this week, describing a culture of entrenched racism that has included racial slurs, vicious comments about Black people and open hostility directed at them and at members of the public. (link)

Jun 22: Campus Views Survey Law: Under the auspices of intellectual freedom, Florida’s universities and community colleges will be required to do an annual survey to ensure diverse views on campuses, including conservative opinions. Gov. Ron DeSantis signed HB 233 into law on Tuesday, implementing a survey that would be "objective, nonpartisan, and statistically valid," according to language in the law. (link)

Jun 22: Arson/Hate Crime Hoax: Another race hoax bites the proverbial dust. In La Crosse, Wisconsin, last week a former student at Viterbo University pled not guilty to charges that she set a fire in a dorm and then tried to pass it off as a hate crime. A police report says the student, who is black, had texted a friend that the blaze, which started next to her dorm room, was possibly a hate crime. Yet security cameras in the building showed otherwise. (link)

Jun 18: Campus Threat: A 29-year-old medical student from Glendale was arrested Wednesday evening on suspicion of threatening students, students' families and their campus, officials said. On April 21, the dean of Midwestern University told Glendale police that a medical student threatened to bomb the campus. About two months later, on June 9, police said hundreds of students received a mass email that named specific people the author of the email wanted to kill. (link)

Jun 15: COVID Vaccines: Vaccine requirements to attend public schools is not new, students must provide immunizations records to attend K-12 schools to show students have been vaccinated against measles, polio, and others. However, the COVID-19 vaccine will not be added to that list for public universities and colleges according to an Executive Order signed by Governor Doug Ducey on Tuesday. In his order, Ducey advised it was done, in part, in response to Arizona State University instituting a policy to all students on Monday advising that they be vaccinated with a COVID-19 vaccine prior to returning to class. The policy advised that those students who are not vaccinated would be subject to daily health checks, twice weekly testing, and mandated wearing of masks. (link)

Jun 15: Racial Issues: Two Stanford University mental health services providers filed a complaint against the California university for creating a hostile environment for Jewish staffers, according to documents obtained by Jewish Insider on Tuesday. The complaint states that the DEI committee began holding weekly seminars beginning in January 2020. Despite requests to include antisemitism in the trainings, program facilitators -- themselves CAPS staffers -- declined to do so. (link)

Jun 13: Campus Police: When freshly vaccinated Portland State University students return to the South Park Blocks this fall, they will be greeted by campus police who no longer carry guns. PSU President Stephen Percy announced June 11 that campus patrols will be unarmed by Sept. 1. For at least seven years, a student group called Disarm PSU has pressured the university’s administration to remove guns from campus police. That demand intensified following the 2018 shooting of a Black man named Jason Washington by campus police called to break up a fight outside a sports bar called the Cheerful Tortoise. (link)

Jun 04: Tenure Dispute: he pressure on trustees at the University of North Carolina at Chapel Hill to grant tenure to investigative journalist Nikole Hannah-Jones continued to mount Friday as a major funding partner joined the call to change her status and a sought-after chemistry professor decided not to join the faculty over the dispute. In addition, The Baltimore Sun published an editorial in which it drew a parallel between Hannah-Jones and the Tulsa race massacre of 1921, describing it in a headline as "the whitewashing of American history," a reference to The 1619 Project led by Hannah-Jones. Some believe conservative criticism of this project is at the heart of the decision by the UNC Board of Trustees to deny her tenure at the school of journalism and media. (link)

Jun 03: Hazing: Fifteen men were charged in connection with the alcohol-poisoning death of a Washington State University student, prosecutors said on Wednesday, after a yearlong police investigation into a fraternity pledging case from 2019. The men were members of the Alpha Tau Omega fraternity when the student, a freshman named Samuel Martinez, died in 2019, according to Denis Tracy, the prosecutor for Whitman County. The men, now ages 20 to 23, were each charged with supplying liquor to minors, Mr. Tracy said in a statement. (link)

Jun 03: Satirical Email: It was the final day of classes at Stanford Law School, May 27, when the student said he was blindsided by a message from one of the deans informing him that his graduation was in jeopardy for potential misconduct. His offense: sending an email flier to fellow law students in January that he pretended was from the Federalist Society, a prominent conservative and libertarian group with a chapter at the law school. (link)

If you have any suggestions, questions or feedback, please e-mail Kevin Robinson at robinmk@auburn.edu or Robert Gottesman at gotterw@auburn.edu. We hope you find this information useful and would appreciate hearing your thoughts. Feel free to forward this email to your direct reports, colleagues, employees or others who might find it of value. Back issues of this newsletter are available on our web site.