Story From Chron of Higher Ed On Fund-Raiser Scandal
From firstname.lastname@example.org Thu Aug 16 10:39:20 2001
Date: Thu, 16 Aug 2001 13:36:17 -0400 (EDT)
X-Authentication-Warning: che-master.merit.edu: nobody set sender to stories.mai
email@example.com using -f
Subject: Former Fund Raiser for Humboldt State Accused of Recording $15-Million
in Bogus Gifts
This article from The Chronicle of Higher Education
(http://chronicle.com) was forwarded to you from: firstname.lastname@example.org
The following message was enclosed:
Thursday, August 16, 2001
Former Fund Raiser for Humboldt State Accused of Recording
$15-Million in Bogus Gifts
By AUDREY Y. WILLIAMS
The former chief fund raiser at Humboldt State University has
been accused of recording more than $15-million in gifts that
didn't exist and submitting approximately $69,000 in false
travel, entertainment, and business expenses and pocketing the
An audit released last month by the California State
University System found apparent wrongdoing by John Sterns
almost from the moment he became director of university
advancement in 1998.
The report, which followed a four-month investigation, said
the Northern California institution ignored "red flags" in
relation to Mr. Sterns's activities and did not take
"sufficient and suitable action." The audit also asserted that
Humboldt did not exert enough oversight and control over
University officials disagreed.
"We think that when the flags were presented that we did act
on them," said Don A. Christensen, vice president of
development and administrative services at Humboldt. "If what
[the auditors] are suggesting is that we didn't dig deep
enough or that we didn't see that there were some deeper
darker issues here, then they may have a point."
Mr. Sterns was placed on administrative leave in mid-March
after the university discovered that he had falsified a
meal-reimbursement claim. Mr. Sterns had tendered his
resignation letter in February -- about the same time some of
his staff members questioned the claim he filed -- and had
planned to leave the university at the end of March.
Mr. Christensen said Mr. Sterns's employment with the
university is now "essentially terminated." It is also
possible, Mr. Christensen said, that the Humboldt County
district attorney could file charges against Mr. Sterns.
Mr. Sterns had wide-ranging authority over corporate and
foundation support, gifts, giving, scholarships, and programs
such as Humboldt's public radio station, KHSU. The university
touted record gains in donations during Mr. Sterns's first
fiscal year on the job. In 1998-99, reported voluntary support
for Humboldt rose to nearly $6.5-million, from less than
$2-million the year earlier. The next year, reported voluntary
contributions at the university almost doubled, to
The auditors' report, however, shows that despite what Mr.
Sterns told Humboldt's trustees, the university's foundation
actually recorded about $3-million in 1998-99 and just over
$1-million in 1999-2000.
The audit made several recommendations to Humboldt's
administration to prevent a recurrence of Mr. Sterns's alleged
actions, including establishing standards for confirming and
validating large gifts and reviewing expenditures and
reimbursements requested by staff members.
Mr. Christensen said he understands the point of the audit's
recommendations, which must be complete by February 1, 2002,
but isn't certain that they will be enough to prevent future
"Having gone through this experience, I can say that if you
have somebody who is clever, personable and extremely
deceitful, they can get around any system," Mr. Christensen
said. "I don't think there's a system around that people can't
beat for some period of time."
Mr. Sterns could not be reached for comment.
Chronicle subscribers can read this article on the Web at this address:
If you would like to have complete access to The Chronicle's Web
site, a special subscription offer can be found at:
You may visit The Chronicle as follows:
* via the World-Wide Web, at http://chronicle.com
* via telnet at chronicle.com
Copyright 2001 by The Chronicle of Higher Education