Story From Chron of Higher Ed On Fund-Raiser Scandal


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Subject: Former Fund Raiser for Humboldt State Accused of Recording $15-Million
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This article from The Chronicle of Higher Education
(http://chronicle.com) was forwarded to you from: cherny@sfsu.edu

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The following message was enclosed:
  FYI

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  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
  money.

  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
  Mr.Sterns's position.

  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
  $11.5-million.

  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
  abuse.

  "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.


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Copyright 2001 by The Chronicle of Higher Education