State Inspector General's Office says probe into UB embezzlement continues
The New York State Inspector General's Office says it is continuing its investigation into the embezzlement of funds from the University at Buffalo by two former employees, including a longtime vice president. UB officials, meanwhile, say several policies were adjusted and updated following the discovery of fiscal improprieties that resulted in Thursday's guilty pleas by Dennis Black and Andrea Constantino.
Deputy Inspector General Jeffrey Hagen said that office is looking at policies and practices at UB and working with SUNY to ensure they fully investigate the matter.
"The Inspector General takes this very seriously, any time we have a criminal investigation like this, not just to find the perpetrators but to ensure it doesn't happen again, make whatever recommendations or changes are necessary to the university " Hagen said. "SUNY is cooperating with that."
Black, an employee at UB for nearly four decades, admitted in State Supreme Court Thursday to stealing more than $330,000 dollars over a nine-year period and using them for various personal activities. Constantino admitted to stealing approximately $14,000 in state funds while working as UB's Director of Campus Living.
In a written statement released Thursday, University at Buffalo President Satish Tripathi noted that the institution's own auditors first discovered financial irregularities in its former University Life and Services organization in April 2016. Black abruptly resigned in July 2016 while Constantino suddenly quit her position last month.
During a Thursday news conference, Erie County District Attorney John Flynn explained how Black was able to tap into state funds. He was able to do so by diverting funds from the Faculty Student Association, a not-for-profit corporation that operates UB's food service and book stores and also oversees various student club accounts.
Flynn explained that FSA makes payments to UB's general account. But Black, in his role, was able to yield control over the FSA and divert funds into a separate account he also controlled and existed outside of the university's auditing system.
"He was able to appoint three members to the board of FSA," Flynn said. "There apparently were, from my understanding, six students who were appointed to FSA as well but they never came to any meetings at all. So, Mr. Black, from what I can gather here, had total control, to a certain extent, over this FSA."
FSAs or not-for-profit corporations similar to them are common among universities, Flynn and Hagen explained. But why? Even Hagen admitted it's complicated.
"I think there are legal issues that are, quite frankly, a little beyond this inquiry as to why they exist," he said. "They do enable UB to have certain flexibility, as I understand it. It's difficult for them to take in some sorts of money."
UB, for its part, announced several policy revisions dating back to January. First, the university revised its cash and cash-equivalent safeguarding policy. In April, the university updated its external audit activity and fraud and irregularity reporting policies, followed in May with adjustments to its internal controls policy.
Flynn noted that Thursday's guilty pleas mark the second time within a year that he has had to work with the Inspector General's Office. Earlier this year, a former UB maintenance supervisor admitted his role in bid-rigging for a painting contract, for which he accepted a $100,000 kickback. The student-run newspaper UB Spectrum noted that that individual, Dean Yerry, had worked under former VP Dennis Black.