A Humboldt State University employee spent $47,000 in university money over a period of 18 months, making purchases she couldn’t verify or justify to special investigators, including pizza deliveries to her home, a streaming service subscription for her daughter and gift card contributions to student organizations, which students said they never received.

The university would not provide the name of the employee, who is referred to as Employee A in the investigation, or confirm if she has been let go from her position in the Office of Diversity, Equity and Inclusion.

“All of our personnel information is confidential,” said Frank Whitlach, associate vice president of marketing and communications at HSU.

The investigation could not substantiate if the 525 purchases were “inappropriate” in nature. Instead, the auditors recommended the university create policies for the number of “lost receipt memos” an employee can cite to justify their purchases, which by campus policy can only be completed if they in some way benefit HSU.

Employee A’s purchases were made from her authority in the Office of Diversity, Equity and Inclusion, which aims to dismantle “inequities” and shine light on “overt and covert racism,” according to the office’s website. It mainly works to improve recruitment and retention of students of color.

During the 2018-19 school year, the office works with nearly $68,000 in “miscellaneous operating expenses” and an additional $13,500 for travel costs.

“They’re a central resource for the university,” Whitlach said. “They mainly serve in a policy role, training staff for unconscious bias in recruitment processes.”

For more than a year, the employee’s purchases didn’t raise red flags in the administration. Then, in March, an employee “spotted irregularities” and alerted the office of HSU President Lisa Rossbacher, who requested an independent audit. California State University staff members comprised the investigation team.

Lost receipts, ‘hospitality’ spending

All campuses within the CSU system issue special cards to employees who make purchases for their department. Usually, any time an employee spends money, they have to justify the purchase with a receipt.

But Employee A submitted 40 lost-receipt memos in a 12-month period, an average of more than three a month, according to the audit. Six of those receipts were from online vendors, which are normally willing to provide an email or digital confirmation.

Losing receipts for university money doesn’t bring about punishment, so long as the HSU employee can explain themselves.

“Generally they go through a back-and-forth process explaining what happened and providing information about the purchase,” Whitlach said.

An employee putting on a university event is allowed to buy food and beverages at restaurants or stores with university money — the policy extends to gift cards as well. In a year’s time, the employee made 179 of these purchases, spending a total of $15,654.

That averages out to 3.4 “hospitality expenditures” a week, according to the audit. Some of the employees listed as event attendees told investigators they didn’t actually go to a large portion of the events.

“When asked about this,” the audit reads, “Employee A explained that she usually completed the payment request forms at the end of the month and did not keep good records of everything; she tried to remember who attended, but could not say for sure now.” She also couldn’t provide event flyers, telling investigators most of those files were on a flash drive she no longer had.

On four different occasions, Employee A ordered pizza to her home address with school money. She told investigators she “frequently” had students over when they “did not feel safe” on campus. She didn’t name the students.

While the employee’s total purchases — around $47,000 — aren’t a relevant portion of CSU budget allocations, the system still takes irresponsible purchases seriously, representative Mike Uhlenkamp told the Times-Standard.

“We want to be good stewards of state funding,” he said, “and have the right process of internal checks and balances.”

Gift Cards

Employee A was also found to have purchased nearly $2,000 worth of gift cards, for 34 individuals. The investigators contacted 14 of them, who were students. Seven told the auditors they never received a gift card.

As an explanation, the employee said she donated the items at student events, but “she did not know why so many of the students listed stated they did not receive gift cards.”

HSU’s role in dealing with the situation, Whitlach told the Times-Standard, comes down to being more accountable.

“We started working to tighten up policies and procedures,” he said, “and fix gaps in the oversight that needed to be corrected.”

While Whitlach refused to state the outcome of Employee A’s job status, he did say “it’s really possible there will be additional steps to take.”

Streaming subscription

Using procurement cards to spend university cash is the next evolutionary step from employees submitting purchase orders or reimbursement requests for printed checks. But the newfound freedom of these cards can result in a lack of administrative oversight.

Employee A used her procurement card to place 19 digital orders for items that “did not appear to be work-related,” according to the audit. These included a subscription to a video streaming website, which the employee said was for her daughter. She also said the subscription was an “accident” and that she would repay the campus.

Often, she accessed these digital items through her own personal accounts. Asked about the purchases by investigators, she said she didn’t know it wasn’t acceptable to make them.

The auditors recommended the university ensure employees are properly trained in procurement methods. In response, the university promised to update its training to “allow for additional sign-offs of specific procedures within the procurement card guidelines” — an update HSU has until Oct. 31 to implement.

In all, the campus has set a number of new goals in accordance with the audit, most of which include additional training and updated guidelines.

The CSU system expects HSU to meet half of the audit’s recommendations within six months, Uhlenkamp told the Times-Standard. The campus must also keep the trustees updated on its progress.

Shomik Mukherjee can be reached at 707-441-0504.