Board of Trustees at American University decided Monday to dismiss the school's president of 11 years for inappropriate use of university funds, University officials remain confident that the University's policies efectively prevent abuse.
Benjamin Ladner has been under investigation for several months, and American currently is seeking compensation from Ladner for personal expenses he paid for using university funds. The Board also has authorized the university to report Ladner's additional taxable income from 2002 to 2005, according to the statement.
The reported misuse of school funds has directed attention toward how schools oversee financial matters, but University officials say a meticulous system of checks and balances already exists here.
Leonard Sandridge, University executive vice president and chief operating officer, said an "extraordinary amount" of checks and balances exists at any public institution that he is aware of, and at the University a series of actions are taken to ensure financial transactions are made in accordance with standard procedures.
Sandridge said there are very specific Commonwealth policies and procedures that govern what funds can be expended for. When a person spends University money, he or she has to certify that the transaction is consistent with Commonwealth rules, but then other groups review the matter to ensure it is in compliance, Sandridge said.
The University also has an internal audit staff, Sandridge said, which performs a statistical sampling of transactions to analyze all employees' activities.
The final oversight step consists of an independent audit group from the Commonwealth coming in to "look at and question anything they want to," he said.
Sandridge emphasized that because of this system, the financial transactions of all University employees, including deans and the president, undergo the same scrutiny and review.
University President John T. Casteen, III is "extraordinarily good in that, if he is going to initiate a payment, he gets someone else to look at it to make sure he has followed the rules and procedures properly," Sandridge said.
University spokesperson Carol Wood said no state funds are allocated for use at the president's home, Carr's Hill. All funds that are used there are private donations earmarked specifically for the President's Fund.
Wood added that she thinks it would be very difficult for a person to "work" the University's system because of the separation of duties which ensure that different people are involved in each step of the purchasing process.
"I think people here are omni-vigilant," Wood said. "Our guidelines are so strict. If a problem is uncovered, it goes directly to the auditor's office and is investigated."
Sandridge said there have been instances in which people have abused purchasing rules, but those occurrences are dealt with quickly and firmly, and severe action, including termination, is taken.
"We make it very, very clear that we do not condone dishonesty or the use of public funds for anything other than University purposes," Sandridge said.
Both Wood and Sandridge said they think there will be no changes in the University's checks and balances as a result of the incident at American but that the system will continue to operate as it has to ensure the University does not experience a similar occurrence.
"When people make a gift to us or pay us their tuition, or when tax dollars are appropriated to us, those who pay that money or give us that donation can rest assured that this institution is going to do everything it can to make sure their dollars will accomplish what they intended for them to accomplish -- and nothing else," Sandridge said.
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