New Report Flags CT College Execs' 'Questionable Spending Practices'

CONNECTICUT — A special report requested by Gov. Ned Lamont and released by the state Comptroller's Office this week is upsetting applecarts in Hartford and college campuses across the state.

The inquiry was prompted by reports of "controversial spending decisions," on the part of the Connecticut State Colleges and Universities, according to a letter from Lamont to Comptroller Sean Scanlon in October.

The focus of the investigation were potential "instances of inappropriate spending, disregard for financial practices and procedures, inadequate reporting, and misuse of state property," according to Scanlon. CSCU proved a target-rich environment, based on Wednesday's report.

The Report to The Governor On the Connecticut State Colleges and Universities Special Examination "revealed troubling gaps in oversight and questionable spending practices," Scanlon summarized in a statement.

As part of its reporting, OSC selected a sample of transactions to examine further across CSCU leadership, including the chancellor, university presidents, and additional staff.

Analysts from the Comptroller's Office highlighted instances in which procurement cards were clearly used improperly for expenses such as tickets to a Friends of the Danbury Museum and Historical Society Authority Gala for the Interim President of WCSU and their spouse, purchases without state sales tax properly removed and missing travel authorizations or receipts. Less obvious policy violations included occasions where state employees assigned state vehicles paid for livery services, tipped in excess of 22 percent, and split payments with other CSCU employees to avoid the P-Card limits.

Multiple car service rides in excess of $1,000 each, booked by Chancellor Terrence Cheng, did not violate university policy, the report noted, but for the fact that Cheng was provided with a state vehicle.

"At the request of Governor Lamont, this audit was conducted in an effort to bring greater accountability and transparency to spending within the CSCU system—both of which the students and taxpayers of our state deserve," said Scanlon. "Unfortunately, this audit revealed troubling gaps in oversight and questionable spending practices. Our recommendations provide a clear path forward with more comprehensive policies, consistent enforcement, and greater overall accountability."

OSC has made these recommendations to CSCU:

• Reinstitute the internal audit function.
• Establish a centralized, system-wide P-card policy.
• Use university foundation funds for meals and entertainment.
• Set limits and review procedures for executive P-card use.
• Establish a centralized, system-wide vehicle use policy.
• Institute residency requirement for executives.
• Add CSCU to OpenConnecticut.
• Create uniform training for business functions and policies.
• Submit transactions for post-audit by OSC.
• Enforce accountability measures for misuse of P-Cards.

In a joint statement, Connecticut Republican minority leaders Sen. Stephen Harding and Rep. Vincent Candelora called for the firing of CSCU Chancellor Terrence Cheng, and the spending scandal "a black eye for the State of Connecticut."

"The troubling transactions revealed in today’s report may well be just the tip of the iceberg, emphasizing the critical need to extend the audit process and fully expose how this system has been mismanaged," the lawmakers said. "Failing to act decisively not only excuses unacceptable behavior but also risks eroding trust in all our public institutions."

Central Connecticut State University President Zulma R. Toro issued this statement about the state comptroller's report:

“It is my understanding that the report includes findings from my office. However, I want to clarify, there was no evidence of misuse of funds. The findings indicate that two receipts for parking in a local business district in the amounts of $1.00 and $3.50, respectively, were missing.

"There was also a charge in the amount of $182.37 for a night at a hotel which was ultimately cancelled and credited the next day. No receipt was provided for this transaction. While these omissions are not to be excused, I assure you, they are minor documentation errors only. Again, there is no evidence whatsoever that state funds were used inappropriately from my office.

"Central has strict P-card policies and procedures that are listed on our website, and we provide annual training for staff, faculty, and administration related to ethical behavior in spending and procurement activities. Our p-card policies and procedures have been established since April of 2000 and updated as needed over the course of the last 24 years.

"The CSCU System Office was aware during the audit process that Central was using our own established p-card policies and procedures, which does not require a log, but instead the credit card statement signed by the card holder and receipts for transactions. It is not clear if the System Office conveyed this information to the State Comptroller’s audit team.

"We appreciate the work of the Comptroller’s Office and stand ready to work with the System Office and the CSCU Board of Regents to strengthen our policies and procedures systemwide to guarantee the appropriate use of state funds.”

The report is available online here.