July 31, 2014
For the full report see:
In July 2013, the Office of the Inspector General (“OIG”) initiated a review of the spending practices by the then-president of Westfield State University (“WSU” or “the University”), Dr. Evan S. Dobelle (“Dobelle”). The OIG launched this review in response to allegations that Dobelle had extensively used WSU credit cards for personal purchases, spent extravagantly on travel and financially crippled the Westfield State Foundation (“WSF” or “the Foundation”), a non-profit affiliated with the University.
These allegations were the subject of earlier separate reviews by a law firm and by an accounting firm hired by WSU. Those reviews established that Dobelle had used University-related credit cards for personal expenses and raised questions about the reasonableness of some of his spending, particularly on travel.
The OIG went well beyond the scope of these earlier reviews. The OIG set out to determine the full extent of Dobelle’s use of University-related funds for personal purposes, including whether his extensive travel had a legitimate University-related purpose and whether Dobelle had given the WSU Board of Trustees an accurate and complete account of his activities.
The OIG found that:
- Dobelle knowingly and willfully violated University and Foundation policies by engaging in the frequent and substantial use of University and Foundation credit cards for personal expenses. When he received a University credit card shortly after becoming president, Dobelle signed WSU’s credit card policy explicitly prohibiting personal purchases with the University credit card. When he received a Foundation credit card in July 2008, he was explicitly told that it was for Foundation business only and that personal charges were forbidden. Almost immediately, he began making personal charges on both credit cards. Over the nearly six years he was president, he self-identified over $85,000 in personal charges, in violation of those policies. The OIG has identified tens of thousands of dollars in additional charges that Dobelle spent for primarily or exclusively personal purposes.
- Dobelle repeatedly submitted documents portraying personal spending as having a WSU-related purpose, for which the University or the Foundation paid. For example, Dobelle frequently traveled to San Francisco for what he described as fundraising meetings with foundations or prospective donors. The trips were timed to coincide with social events that did not have any WSU-related purpose. Also, Dobelle often portrayed personal friends as prospective donors and claimed to have meetings with foundations that have no record of any contact with Dobelle.
- Dobelle repeatedly made false or misleading verbal and written statements to WSU’s Board of Trustees in order to justify his improper actions and wasteful spending. For example, Dobelle claimed that his foreign travel had attracted 123 international students to WSU in the fall of 2013, bringing in $1.2 million per year; however, most of those “international students” are non-U.S. citizens who are permanent residents of Massachusetts and pay in-state tuition. Also, in order to get approval for a May 2013 trip to San Francisco, Dobelle represented that he had appointments with four people he identified as “hi-tech executive alumni.” He did not have appointments with any of the four and, with one exception, they did not work in the technology field. The primary motive for the trip appears to have been to attend the wedding of a friend’s son.
- Dobelle received a significant unwarranted financial benefit from his use of University and Foundation credit cards for personal expenses and from having the University underwrite his travel. By putting personal charges on WSU-related credit cards, he avoided interest charges that would have accrued on his own credit cards. He also collected airline and hotel points and miles worth thousands of dollars in his personal rewards accounts from his WSU-funded travel.
- Dobelle engaged in improper and irresponsible conduct in connection with a trip to Cuba in 2013, putting WSU’s reputation and standing at risk. Dobelle invited people who were not eligible to travel to Cuba under the U.S. Treasury Department’s academic exemption. He also instructed some of these ineligible travelers, including family members and friends, to make the false assertion that they were “adjunct faculty” and “assistant coaches” at WSU.
- Dobelle’s decision to lead a 10-person WSU/WSF trip to Asia and his management of the Speaker Series financially damaged the Foundation and, ultimately, the University while providing little measurable benefit to WSU. The two initiatives together cost the Foundation more than $700,000 and were a major factor in the Foundation’s financial crisis in 2010. The University was forced to provide more than $400,000 to keep the Foundation afloat.
- Dobelle engaged in similar spending practices, such as frequent travel to San Francisco and reporting both personal expenses and social meetings as having a business purpose, at his prior positions as president of the University of Hawaii and president of the New England Board of Higher Education.
- Dobelle routinely violated University policy regarding business meals. He often failed to identify all of the individuals at a meal charged on a WSU-related credit card or the University-related purpose of the meal. There were also many instances in which the bill included charges for alcoholic beverages, a violation of University policy.
- Dobelle was imprudent with University money, resulting in the waste of significant amounts of public funds. For example, Dobelle routinely rescheduled or canceled flights, costing WSU thousands of dollars.
- Dobelle used Foundation funds without authorization. For instance, in 2013, Dobelle commissioned a portrait of himself to be unveiled for WSU’s 175th anniversary. Dobelle sent the bill for the portrait and the frame to the Foundation without seeking prior approval.
- Dobelle used University personnel and resources for personal purposes.
- Dobelle purchased two Kindles, a digital camera and a laptop computer with University funds, but the University has never had possession of this equipment.
The OIG concluded that Dobelle knowingly disregarded University policies, misled the WSU Board of Trustees, abused his authority, exploited public resources for his personal benefit and violated the public trust.
While Dobelle bears most of the responsibility for the waste and misconduct uncovered by the investigation, the OIG has identified several ways in which WSU and other public institutions of higher education can improve their internal controls, financial safeguards and board oversight in order to reduce the potential for fraud, waste and abuse within their institutions. The OIG makes the following recommendations:
- WSU should establish an internal audit office that reports to the Board of Trustees;
- The chair of the WSU Board of Trustees should be responsible for overseeing the president’s travel and purchases;
- WSU should centralize its travel operations for University staff, faculty and students;
- WSU should reduce the number of University credit cards, switching to a system of expense reimbursements and procurement cards;
- WSU and the Foundation should continue efforts to define the relationship between their two separate entities to ensure compliance with state laws;
- The Board of Trustees should adopt a policy requiring that all University-related email communications be conducted on WSU email accounts;
- The Department of Higher Education (“DHE”) should expand opportunities for trustee training, orientation and continuing education in order to ensure that board members understand and fulfill their fiduciary responsibilities;
- DHE should work with each local board of trustees to develop procedures to ensure that the boards have members with diverse backgrounds, including members with experience in business and finance, and that each trustee is properly trained on the technical and legal issues that are vital to each board’s oversight of its institution; and,
- DHE should establish guidelines to increase transparency in state university budgetary matters. For instance, DHE should consider requiring the colleges and universities to file their annual audits with DHE to ensure that the Commonwealth is aware of any financial issues identified in the audits.