Comptroller Probes Baruch ‘Mismanagement’

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Augusta Malacarne says she hopes for a thorough probe from Hevesi’s office. “Since I first complained in 2004 things have gotten worse,� she says. “Two years ago, out of 23 executives at Baruch, at least one was African American. Today, the number is a big zero. At that time only four out of the 23 were women which was a factor when I, personally, was arbitrarily by-passed for promotion.�

State Comptroller Alan Hevesi’s office is investigating a report of financial mismanagement at Baruch issued by the Huron Group, a consulting firm hired by the unit of the City University of New York (CUNY) system, a school spokesperson has confirmed to The Black Star News. “The College is cooperating fully with the State Comptroller's office and welcomes this review,� a Baruch spokesperson informed BSN.

Baruch has lately been in the news, following allegations by a whistleblower that she was fired after 10-years with a stellar working record after she complained about corruption and racial and gender discrimination in hiring and promotions at the school.

Augusta Malacarne, a former Associate Director of CUNY’s Continuing and Professional Studies (CAPS) program at Baruch College is white. She says she complained of serious improprieties to top university officials, including the CUNY Chancellor Matthew Goldstein, Vice Chancellor Brenda Malone, and Baruch President Kathleen Waldron, in a series of letters, e-mail communications, and in person. She says her complaints paralleled and were vindicated by the Huron Consulting Group’s report. This accounting firm pointed at financial mismanagement at the university.

A call to Chancellor Goldstein’s CUNY office seeking comment from The Black Star News was directed to a spokesperson who in turn referred the newspaper to Baruch. A Baruch spokesperson in an e-mailed  response addressed some of the issues raised in 11 written questions submitted by The Black Star News and didn’t answer some.

Among the transgressions unearthed, the Huron report also concluded that Baruch’s business school, the largest in the nation, “does not operate like a business,� and warned that there was “no merit/pay promotion system.� The Huron Group had concluded that at CUNY “there is no budget tracking and reporting system� and “rules change on a whim.�

Baruch in its written response to The Black Star said: "In 2003, Baruch College announced a review by an external consultant, the Huron Group, to identify possible internal administrative improvements. The analysis was completed prior to Dr. Kathleen Waldron's appointment as president in late 2004.  President Waldron reviewed the consultant's findings when she became president and implemented an action plan to upgrade the college's administrative and management functions. These steps included adding budget and planning personnel and investing in new computer systems.â€?

Baruch’s Waldron had actually dismissed the Huron report and instead commissioned an audit from accounting firm KPMG, according to people familiar with the matter. According to these people, Waldron, in a faculty meeting in the fall of 2005 called the Huron report “out of date� and that it contained “much exaggeration.� Baruch didn’t respond to this issue raised by BSN.

"KPMG, CUNY's independent auditor, gave the college a clean bill of health on all financial statements in its annual audit in 2005,� Baruch told The Black Star.

Critics contend that KPMG can’t be regarded as “independent� since the firm contributes money to Baruch. In the response to this matter, Baruch didn’t deny that KPMG is a contributor. “Like many other accounting firms, the KPMG Foundation and the KPMG Corporation support business education and donate to the Baruch College Fund, an independent , not-for-profit 501-3(c),� the school said in its response to The Black Star. “Since 1994, the KPMG Foundation has sponsored The PhD. Project, an alliance of corporations and universities, including Baruch College, that aims to diversify business school faculties by helping minority doctoral students move to tenure track."

Citing the Huron report and Ms. Malacarne’s allegations, State Comptroller Alan Hevesi, has launched a probe, which Baruch confirmed in its written response to The Black Star. “This month, the Comptroller’s Office asked to meet with us,� Baruch said, in its statement to BSN. “The College is cooperating fully with the State Comptroller's office and welcomes this review.�

Malacarne says she hopes for a thorough probe from Hevesi’s office. “Since I first complained in 2004 things have gotten worse,� she says. “Two years ago, out of 23 executives at Baruch, at least one was African American. Today, the number is a big zero. At that time only four out of the 23 were women which was a factor when I, personally, was arbitrarily by-passed for promotion.� Baruch in its initial response to BSN ignored the question about whether indeed no African American is on the executive board. Following another BSN inquiry about the matter, Baruch issued the statement:

â€?Baruch College’s most recent Vice Presidential appointment was of a highly qualified candidate of Hispanic background who Baruch hired from Hostos Community College. Baruch has also announced the upcoming appointment of an Assistant Vice President for Student Affairs, who has substantial experience in higher education, including the creation of Columbia University’s first Office of Multicultural Affairs.  She is African-American and will join Baruch’s senior staff on April 1st.â€?

One African American woman, despite increased responsibilities, remained in the same position of college assistant at Baruch for 17 years, Malacarne says. “When she questioned Human Resources regarding her missed promotions over the years, she was told only that her ‘paperwork was lost.’� The Huron report echoed that response, warning that a department at Baruch, had the “tendency to lose paper work.�

Under an ambitious campaign to modernize and expand, CUNY has raised $625 million of its $1.2 billion target, Malacarne says. “I am worried that without proper systems in place, much of this money will also be squandered. CUNY’s Chancellor has also recently raised student tuition blaming the NY State for not giving CUNY enough money. That is why I am hopeful that Mr. Hevesi will investigate my charges seriously.� On January 19, 2006, Samantha Biletsky, Assistant Comptroller for Investigations from Comptroller Hevesi’s office wrote to Malacarne about looking into allegations of “criminal conduct� and financial mismanagement at CUNY. Malacarne says her colleagues have “witnessed theft of property and services at the college.� She says after she started complaining in June 2004, CUNY officials directed her to the university’s chief lawyer, CUNY counsel Jane Sovern. Unbeknownst to Malacarne, Sovern was using the information she provided in confidence, to university officials, so that they could collaborate to dismiss her, she believes. CUNY lawyers are now refusing to release, “under lawyer-client privilege, � this correspondence between Sovern and acting supervisor Paul Russo.

“Instead of dealing with my attempts to expose executive racism  hostile work environments and financial mismanagement, an Acting supervisor, with Ms. Sovern’s assistance, suddenly gave me a low evaluation after 10 years of exemplary performance,â€? she says. Then in December 2004, she received a letter informing her that she was being placed on leave, after which she was not to return to the university. Her office was immediately sealed. The evaluation was signed by an Acting supervisor, who, himself, had never in his career undergone an evaluation nor a proper search for any of the positions he held at Baruch, she says.

Malacarne filed a grievance action within the university system and separately filed a complaint with the United States Equal Employment Opportunity Commission (EEOC). “My case had merit obviously since the university’s system recommended that it go to arbitration after three hearings,� she says. “EEOC also granted me a right to sue letter on September 21, which I promptly did. We are now conducting discovery.�

Malacarne filed her lawsuit against CUNY in October 2005. The lawsuit, alleging discrimination in employment, discrimination based on her gender, and retaliation after she complained, also names Paul Russo, Acting Dean of CAPS and Robert Specter VP for Administration and Finance. Baruch said its policy is to “reserve comment on matters relating to pending litigation,â€? in its written response to this newspaper. In the second statement issued later, the school said: â€?With regard to Ms. Malacarne, she was not reappointed by Baruch College due to poor performance.  She filed a grievance, which was reviewed by the University and found to be without merit. We reserve additional comment since this matter in now in litigation.â€?

In addition to not having a single African American on the executive board, Malacarne alleges that CUNY favors certain unqualified white employees. Although university regulations require that senior positions be advertised and a search conducted, white officials have been promoted to senior posts without going through the regular search process, she alleges. The university circumvents its own regulations by appointing favored candidates to “acting� titles, she says. In one case, Daniel Kaufman, a white male who did not even have a college degree, was promoted to “acting� Vice President of Campus Facilities. “He was able to remain in this position, in an acting capacity for four years until he retired,� Malacarne says. Baruch ignored a BSN question specifically addressing the Kaufman matter.

“On the other hand, Black candidates with degrees, women and other minorities could not even apply for the position because it was never advertised as required,� Malacarne contends. “An investigation into these acting positions at Baruch will expose that they can be used to promote white males, sometimes with dubious credentials over qualified minorities. I was personally a victim of the arbitrary ‘acting’ promotion device. Baruch’s policy allows for a person to hold an acting position for up to one year if there is a good reason to make that temporary appointment or while a proper national search for the position is launched. But, as with other potent bureaucratic devices, this one can easily be abused.�

In his post, Kaufman presided over a budget of several million dollars, she said. “What I remember most were the hundreds of thousands of dollars, in money and personnel time, wasted every year when the university, under Kaufman’s direction, erected unsightly scaffolding around the architectural award-winning Vertical Campus for six months to keep snow off pedestrians,� Malacarne said.

“CUNY makes a mockery of the slogan it spends millions of dollars to promote, ‘Invest In CUNY. The American Dream Still Works.’ For African American employees, and other deserving minorities, it can become an American nightmare,� she adds. As the Huron Consulting report revealed, it takes a student an average of six years to complete a four year program at Baruch College. “Only an administration in denial, protecting the status quo, could have ignored my warnings for so long,� she said.

Baruch has been ranked at the top in terms of diversity by US News and World Report. Students hail from 120 countries, speaking 92 languages--25% of its 15,000 students is African American. “Yet this twenty five percent translates to zero when it comes to the university’s executives and less than 6% of faculty,� Malacarne says. “These facts point to a huge hypocrisy between the purported good principles of Baruch College and the actual behavior of its executive hierarchy. Why doesn’t US News and World Report mention that?�

Malacarne says she also wrote to CUNY’s Board of Trustees about the alleged abuses. All the 15 CUNY Trustees are Republican appointees of Mayors Bloomberg and Giuliani, and Governor Pataki. And all these trustees ignored her “constructive warnings to correct abuses and improve Baruch College,â€? she contends. The trustees also ignored the devastating inadequacies the Huron Consulting Group report discovered, she says. 

“My ultimate concern is to ensure Baruch College is accountable to the taxpayers and the donors who support it,� Malacarne said. “Contributors should read the Huron Consulting Group report to assess whether their own goals of true diversity and financial propriety are being respected by Baruch.�

The second part of The Black Star News’s findings on CUNY  will be published next week.

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