Published September 26, 2017
UB has taken steps to tighten financial controls after an audit uncovered financial mismanagement in the former University Life and Services (ULS) and the Faculty Student Association (FSA), members of the UB Council were told on Monday.
Speaking at the council’s first meeting of the 2017-18 academic year, Laura Hubbard, vice president of finance and administration, noted there had been a number of “control breakdowns” in ULS and FSA that contributed to the thefts by former UB employees Dennis Black and Andrea Costantino. Among them were a lack of financial stewardship of resources, inadequate segregation of duties and a lack of organizational governance for FSA, including the composition of its board of directors and its fiduciary responsibility.
After the audit of ULS and FSA was initiated in April 2016 — at the request of President Satish K. Tripathi, who suspected potential financial mismanagement in ULS — Hubbard said some FSA accounts and credit cards were frozen, and $3.2 million was transferred from FSA accounts to state accounts. The results of the audit also were reported to SUNY and to the state Inspector General, she said.
UB worked with SUNY and FSA to update the FSA bylaws, which included adding three independent members to the FSA board — those independents now make up the board’s new audit committee — as well as three more administrative representatives. Hubbard noted the previous four administrative representatives had all come from ULS, and the three new members will come from Finance and Administration, Student Life and Academic Affairs, giving the board “some campus diversity.” These new board members join six student and two faculty representatives on the board.
FSA also was given some recommendations for further action, including a holistic internal controls review, which is underway this fall, she said.
Hubbard noted that since her arrival at UB five years ago, her office has launched other internal control initiatives unrelated to the recent financial mismanagement. Among them:
“Our hope would be to manage it (fraud) to zero,” Hubbard told council members. “That’s not always possible, but we certainly do want to provide the environment where we have good stewardship of our funds and recognize the importance of that.”
In other business, the council approved three naming resolutions. The new athletics fieldhouse is now the Murchie Family Fieldhouse in honor of UB alumnus and athletics benefactor Tunney S. Murchie and his family. The Institute for Sustainable Transportation and Logistics in the School of Engineering and Applied Sciences is now the Stephen Still Institute for Sustainable Transportation and Logistics in honor of UB Engineering alumnus and benefactor Stephen E. Still, BS '73. And the Buffalo Law Review Suite — the O’Brian Hall offices of the student-run journal — is now the Anthony J. Colucci Jr. Esq. ’58 Buffalo Law Review Suite in honor of the UB law school alumnus, accomplished attorney and community leader.