Some D.C.-area schools, including Georgetown, are examining their oversight of executive compensation and benefits after accusations of widespread financial abuse lodged against former American University President Benjamin Ladner.
AU, George Washington University and Georgetown all plan to review their executive compensation procedures and spending controls following the allegations, which ignited opposition to AU’s administration and threw the university’s Board of Trustees into turmoil.
Georgetown spokeswoman Julie Bataille said that the university’s Board of Directors, which periodically reviews its accountability standards for administrators, would review current spending safeguards and consider new measures this month.
“Because of the importance of these issues, the university’s Board of Directors will be looking at this at their November meeting to determine whether more steps are warranted,” Bataille said.
The executive accountability question is particularly significant for Georgetown following the 2003 discovery of extensive fraud by a high-level administrator at the Medical Center. In her August guilty plea, former accounting official Adriana Santamaria admitted that her theft, which went undetected for seven years, ultimately cost the university over $500,000.
Ladner formally resigned last week after agreeing to a $3.75 million severance package offered by AU’s Board of Trustees. His departure followed protests by students and faculty at the university, after the board concluded that he had improperly charged over $120,000 in personal expenses to his AU expense account.
In a statement issued Thursday, Tom Gottschalk, acting chair of AU’s Board of Trustees, and Gary Abramson, the board’s chair-elect, said that the university had learned several lessons from the Ladner controversy, including “the need for the board to be more vigilant with respect to financial matters including but not limited to compensation.”
The statement also called for increased transparency and inclusiveness in future board decisions.
Officials at George Washington University announced late last month that they would hire an additional accounting official to oversee administrators’ compensation and review their spending.
Tracy Schario, GWU director of media relations, said that the “compensation consultant” would work with the university’s current consultant in charge of reviewing salaries and benefits.
Charles Manatt, chair of GWU’s Board of Trustees, said during a board meeting on Oct. 21 that the new position was part of an effort to increase understanding of how administrators’ salaries are set, according to a report from The Hatchet, GWU’s student newspaper.
“We’re creating a system to explain to the board and the university community so people will know how they are being paid,” he said.
Georgetown administrators said last month that they had taken steps to enhance oversight and strengthen the university’s financial accountability structure following a federal investigation into Santamaria’s activities. The Medical Center’s overall financial structure underwent a significant overhaul after Santamaria’s departure, as part of a restructuring plan approved by the university in 2001.
Bataille said that the university has taken steps to create multiple levels of accountability in administrative spending decisions.
“University billing systems are designed to ensure that no personal expenditures are paid for from university funds,” she said. “We have our own internal audit function that regularly reviews spending throughout the university . and brings problems to light, as in the recent Santamaria case involving the Medical Center.”
University President John J. DeGioia earned almost $590,000 in total compensation, including salary and benefits, in fiscal year 2003, the last year for which tax records are available. In that same year, Ladner earned about $615,000 in total compensation, and GWU President Stephen J. Trachtenberg made over $640,000.
