Dive Brief:
- A longtime compliance officer at the University of Louisville who resigned last week has filed a lawsuit alleging that President James Ramsey and other senior officials prevented the enforcement of conflict of interest rules.
- The Courier-Journal reports Robin Wilcox accuses Ramsey of official misconduct and argues that he and other senior officials ignored recommendations for compliance reforms, saying he was too aggressive with his audits.
- The whistleblower lawsuit says Ramsey refused to fill out conflict of interest forms with the compliance office, arguing he only needed to make such disclosures to the board of trustees.
Dive Insight:
Higher education institutions were ranked with the fifth highest incidence of fraud in a study of 23 types of organizations by the Association of Certified Fraud Examiners in 2014. Part of the vulnerability comes from a culture of openness and trust in the nonprofit higher education world. Generally the advice is to have strict policies and aggressive follow-up to preempt fraud before it happens. The lawsuit out of the University of Louisville suggests that exact setup was foiled by the highest level administrators.
Other advice for minimizing the incidence of fraud includes separating workflows so that the same people tasked with maintaining financial records are not the ones collecting and depositing money. Surprise audits also work to keep everyone on their toes.