Six Howard Workers Fired After Nine-Year Financial Scandal - Higher Education
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Six Howard Workers Fired After Nine-Year Financial Scandal

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Howard University fired six employees last year after an internal investigation found that several university employees misappropriated university-based funds between 2007 and 2016.

Dr. Wayne A.I. Frederick, president of Howard, issued a statement Wednesday disclosing the scandal. He said an outside auditor found that some employees received university grants and tuition remission exceeding the total cost of attendance. These individuals received “inappropriate refunds,” Frederick said.

In the statement – which did not disclose names of those terminated or how much money was involved – Frederick said he initiated a “proactive review” of the Office of Financial Aid in February 2015. He said he was not alerted until December 2016 that “there may have been some misappropriation of university-provided financial aid funds,” according to his statement.

University officials launched an internal investigation and brought in an outside auditor, RSM, who reported the results of their investigation to Frederick in May 2017. The president said he “self-reported” the issue to the U.S. Department of Education in July.

Howard President Dr. Wayne A.I. Frederick

As a result of the investigation into individual employee actions, Howard officials fired six employees for “gross misconduct and neglect of duties” last September, the statement said.

“We will refer this matter for criminal prosecution, as appropriate.”

The statement also said that another outside consultant, Third Coast Higher Education, determined there was no misappropriation of federal funds and that the misappropriated university grants were institutional funds allotted to supporting students with financial need.

Buzz surrounding the recent revelations began Tuesday evening after an anonymous author using the name “Veritas 1867” posted a series of three stories – two of which were taken down Wednesday afternoon – to the self-published news and blog site Medium, saying that HU financial aid employees stole nearly $1 million in funds.

Frederick did not say exactly how much money the employees took.

Veritas 1867 also claimed that a student employee in the financial aid office allegedly was the first to discover the financial misconduct. The student source was given a fictitious name out of fear of retaliation.

Frederick’s statement said new policies and procedures have since been implemented to “strengthen Howard’s internal controls with respect to the awarding of financial aid.”

It continued: “While this has been a very difficult and disappointing situation, I know our campus community deserves better and I am committed to ensuring that each of our campus offices operate with integrity and are the best that higher education has to offer.”

The modifications to financial aid procedures included:

• The university’s Budget Office, consistent with the university’s overall financial aid budget, now loads annual budgets for each category of financial aid into the university’s Banner student information system.

• The budget office now reviews and approves all awards of university grants prior to the grants being awarded by the financial aid office.

• The controller’s office now reviews and approves all donor-designated scholarship awards prior to the scholarships being awarded by the financial aid office.

• The university’s grant accounting unit now reviews and approves all grant-funded financial aid prior to that aid being awarded by the financial aid office.

• Access to the Banner financial aid module is now limited to a small number of appropriate senior university individuals, with adequate third-party review and appropriate segregation of duties.

• A reconciliation of awarded financial aid to approved financial aid is now being conducted annually.

• Management has established proper reporting relationships and segregation of duties within the financial aid office.

• Management is in the process of hiring for open positions in the financial aid office, and enhanced training on policies and procedures will be provided to new hires and continuing employees.

• A new Associate Provost for Enrollment Management and a new Chief Compliance Officer have been hired.

The Howard University Student Association reacted in a Tweet shortly after midnight Wednesday morning: “We are frustrated to see the university’s statement being sent to the press and not addressed to students first. This clearly is a betrayal of our trust and should’ve been addressed to the Howard Community months ago.”

Then, shortly after 11 a.m., HUSA Tweeted a second statement: “We are aware of the allegations against the university leadership and we are extremely disappointed in what has been presented thus far. We stand alongside our students and are looking for answers from admin regarding this issue.”

Tiffany Pennamon can be reached at tiffany@diverseeducation.com. You can follow her on Twitter @tiffanypennamon.

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