News

Ladner raises questions on college budgets

Once hailed for assuaging American University?s early??90s financial woes, AU president Benjamin Ladner is currently suspended while under investigation for indulging himself with University funds. According to The Washington Post, faculty members in five out of the six schools at the university voted ?no con-fidence? in Ladner last Tuesday.

Among the $500,000 in questionable items charged to the university: an engagement party for Ladner?s son, several trips abroad for his personal chef, $54,000 in drivers? costs, and nearly $44,000 in alcohol, according to an independent report the Post obtained.

The Post reported that Ladner?s severance pay could exceed $1 million if he is fired. With American University?s president under such scrutiny, eyes have turned toward other college?s administration officials and how they manage their school?s funds.

Locally, University officials say Carnegie Mellon maintains a system of checks and balances for managing University funds.

According to University policy, under the section ?Responsibilities for Managing Carnegie Mellon University Financial Assets,? the Board of Trustees maintains responsibility for University assets, and delegates management responsibility to University officers. President Cohon controls Carnegie Mellon?s operating and capital assets under this system.

Regarding the transparency of these methods, the president?s salary and expenses charged to the University are made available to the public, but it is also known that budget office workers must sign a confidentiality agreement before being hired. The full policy can be found at www.cmu.edu/policies/documents/Assets.html.

Deborah Moon, the chief financial officer and vice-president of Carnegie Mellon, is another integral figure in managing Carnegie Mellon?s funds.

Moon, Provost Mark Kamlet, and President Cohon compose a group that is formally in charge of how the University spends its money, according to the aforementioned Responsibility of Assets policy.
Moon reports that a Compensation Committee within the Board of Trustees monitors President Cohon?s compensation. ?The BOT carefully considers comparative data of peer institutions when setting the President?s salary,? says Moon.

Erroneous spending with University funds may lead to IRS penalties for breaking certain rules associated with being a nonprofit entity. American University may incur these penalties as a result of Ladner?s actions.

In the last fiscal year for which records are available, 2003 (defined as July 1, 2003, to June 30, 2004), President Cohon made $429,230, with $53,675 in expense accounts and other unspecified allowances.
The purchases Cohon made with this money could not be accounted for by the time of press. However, according to Moon, ?He follows our policies to a T. Everyone from staff accountants to the President is under the same tight scrutiny.?

Meanwhile, the American University campus community, including faculty, staff and students, is expressing outrage against the scandal.

?A lot of students feel that they?ve been gypped. Professors are angry too,? said American University first-year Cecilia Campbell-Westlind, who has witnessed several anti-Ladner rallies.

One such rally occurred Wednesday night, when approximately 500 students marched through a university building where the trustees were holding a meeting.

Campbell-Westlind added, ?I hope he gets fired.?

President Cohon was not available for comment at press time.