Board of Trustees moves to protect U of L finances

By on September 13, 2013

By Xavier Bleuel– On Thursday, the University of Louisville’s Board of Trustee’s agreed to become more aggressive in the prevention and protection of the universities’ funds and finances. This follows the firing of Perry Vaughn after an internal audit discovered he stole more $2 million from the University during his time as the executive director of the Department of Family and Geriatric Medicine.

The board approved hiring President Ramsey’s recommendation of an independent CPA firm to oversee and review financial decisions at the University. “We must immediately redouble our efforts to ensure that we are doing all we can to stop these harmful incidents,” said Ramsey.

A co-worker of Vaughn’s sent an email to the university’s audit services in October expressing concerns about Vaughn’s spending habits, which the co-worker thought exceeded his salary. The investigation promptly ensued afterwards. The school began an investigation in January. During the probe, a co-worker told investigators that they noticed a decline in Vaughn’s work as well as the fact that he hardly showed up for work.

The co-worker also noted that Vaughn took his family to Grand Turks and Caicos and multiple trips to Las Vegas and once showed off a check for $26,000 from a gambling tournament he entered. Vaughn wrote checks to himself from several medical practices linked to the school over six years totaling $703,936 from the school and five affiliated practices in 2012 and 2013, IRS criminal investigator Robert Masterson said.

Masterson noted that the other portion of the $2 million was embezzled by setting up bank accounts and moving money around over the last decade.

“We’ve got strong systems of internal controls, it’s just that they weren’t being followed,” Ramsey continued, “We’re going to use the external firm to help do some surprise audits, which we haven’t had the staff do before. We’re going to look at the entire University.” The CPA firm will be asked to:

  • Review financial controls for all departments and schools on the Health Sciences Campus and the new faculty practice plan.
  • Review all internal audits performed since 2007 to ensure recommendations have been implemented.
  • Recommend whether U of L needs more frequent and unannounced audits.
  • Review personnel qualifications and training of employees with financial management responsibilities.
  • Identify and review all bank accounts not authorized by the Board of Trustees.
  • Survey banks within a 50-mile radius to ensure no unauthorized accounts exist in the name of U of L or related entities.

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