A lengthy audit by the Tennessee Board of Regents substantiates in part some allegations brought involving longtime Chattanooga State Community College President Dr. Jim Catanzaro and a woman he hired for a top post after meeting her in Barbados.
The report was released Monday night by the TBR after being sent to the audit chairman, Tom Griscom of Chattanooga.
Dr. Catanzaro recently agreed to step down after the Faculty Senate issued a no-confidence vote.
The allegations swirled around Lisa Haynes, who was hired as special assistant to the president and chief innovations officer.
The report found:
1. Allegation – The Chief Innovations Officer is not qualified for the position, does not have a degree as she claims and as required by the job description and has no “true work experience.”
This allegation was substantiated in part; it was confirmed that the job applicant did not have the required Bachelor’s degree as represented on her application and résumé and as required by the College’s job description for the position. Even though Duquesne University did not confer a Bachelor’s degree in 2005 because the degree requirements had not been met and no apparent changes occurred since that time, they eventually issued a Bachelor’s degree to the Chief Innovations Officer during this review, back-dated to May 2005. The College failed to verify degree and experience representations made in the employment application.
2. Allegation – The Chief Innovations Officer is not a U.S. citizen and without a degree, she would have had to lie to get a work visa.
This allegation was substantiated in part; based on relying on faulty information provided by the
candidate in her job application about a Bachelor’s degree without validating the asserted academic
credential, the President certified the same faulty information on the H-1B visa application to the U.S. Citizenship and Immigration Services (USCIS) of the U.S. Department of Homeland Security. The applicant is not a U.S. citizen, but is a citizen of Barbados. The College may sponsor individuals hired from foreign countries in the work visa process. However, the failure to verify the applicant’s degree and other missteps in submitting information for the Labor Condition Application and visa petition, placed the College at risk of penalties or greater repercussions.
3. Allegation – Reorganization occurred and new positions were created so that the Chief Innovations Officer could move up. Funds have been misused from various budgets across campus, ignoring strategic plan goals and objectives. Funds have been misappropriated for travel,
individual perks and unnecessary, nonexistent positions.
While reorganization did occur and positions were transferred between areas, the review did not
substantiate that resources were misused or misappropriated for these purposes. A reorganization plan affecting several departments was submitted to TBR for approval in April 2014, including the official title change of the Senior Executive Assistant to Chief Innovations Officer, with added responsibilities and a monthly stipend of $1,500. Between April and November 2014, positions were moved from other areas to her areas. Of eight positions analyzed, three positions, including her position in July 2013, were from student areas. Movement of positions and related budget resources from one area to another frequently causes concern but do not necessarily indicate impropriety. The President has the ability to organize the College’s operations to meet the needs and goals of the institution.
4. Allegation – The Chief Innovations Officer was hired to develop a relationship with the University of the West Indies, however, no such relationship has been developed.
This allegation was substantiated in part; even though a Memorandum of Understanding (MOU) has
been in place with the University of the West Indies since August 8, 2013, no programs have been
established under the agreement; the five-year MOU was executed months before the Chief Innovations Officer was hired and is a cooperative agreement for institutional exchange programs with no financial obligations. The President said the relationship with the University of the West Indies is only one relationship the Chief Innovations Officer was challenged to develop.
5. Allegation – The President and the Chief Innovations Officer are using state funds to travel to Barbados, Washington D.C. and other locations; this travel is more personal in nature than business, such as travel to Barbados.
This allegation was partially substantiated because there was no clear business purpose for a significant portion of the Chief Innovations Officer’s first trip to Barbados from December 28, 2013 through January 13, 2014 because meetings did not appear to have been planned in advance and many individuals were not available because of the holidays; the first meeting held was on January 6, 2014. On the second trip to Barbados from July 23 through August 3, 2014, the official itinerary did not list any meetings after July 31; after discussing these August travel dates with the President on two occasions, he provided an addendum to the itinerary, that he prepared in October 2014, showing additional meetings on those dates. The review identified several trips taken by both the President and the Chief Innovations Officer, totaling $23,263 from December 2013 through August 2014. Other travel together to Anaheim, California; Washington, D.C.; Boston, Massachusetts; and New York, New York; were trips to conferences or meetings with potential partners for the President’s planned innovation initiatives. Costs of these trips have not been questioned, but better documentation is needed for unexplained changes in schedules, resulting in additional charges.
6. Allegation – Nepotism is occurring at the highest level of the administration.
This allegation was not substantiated based on applying the Board’s policy. However, for one of the
potential issues reviewed, it would have been better to have avoided hiring a person related to another employee in the same department. While the President approved this hiring, the TBR nepotism policy does not give presidents the authority to override the requirements of the policy.
7. Allegation – The Chief Innovations Officer has a car lease paid by the College.
This allegation was not substantiated. The Vice President for Business and Finance verified that the
College had not paid for a leased vehicle for the Chief Innovations Officer.
8. Other Issues Identified During the Review
Leave Not Taken - The College’s records did not show that the Chief Innovations Officer requested and took annual leave when she traveled to Duquesne on August 29, 2014. She stated she did not use leave for the trip, seemed unaware of how the leave process worked and was not sure if she had ever used leave, although then said she thought she did use leave once. She later submitted a leave form, which was entered during the October cycle because the College does not retroactively add leave into the system.
The following is a summary by funding source of (1) certain expenses made by, at the direction of, or for the benefit of the president, and (2) salary and benefits and any other operating expenses for the president’s office during the fiscal year ended June 30, 2014:
Institutional Foundation External Total
President:
Salary and Benefits $230,484 $ - $ - $230,484
Travel (Schedule A) $23,140 $236 $ - $23,376
Business Meals and Hospitality
(Schedule B)
$9,692 $1,619 $ - $11,311
Other Expenses (Schedule C) $8,415 $2,033 $ - $10,448
Discretionary Allowance $4,000 $ - $ - $4,000
Housing Allowance $10,800 $ - $ - $10,800
Other Allowances $1,800 $ - $ - $1,800
President’s Office:
Salary and Benefits $141,359 $ - $ - $141,359
Travel $1,993 $86 $ - $2,079
Business Meals and Hospitality $ - $ - $ - $00
Other Expenses $9,076 $ - $ - $9,076
Total Expenses $440,759 $3,974 $ - $444,733
Additional Disclosures
Discretionary Allowance - Use of the discretionary spending allowance was not included in tests
performed during the audit because the President elected for the allowance to be paid as taxable
income.
Other Allowances - The President was provided a spending allowance for cell phone of $150 per month,
$1,800 annually, which was paid as taxable income.
Vehicle - The President was provided the use of a vehicle. The purchase cost of the vehicle in fiscal year FY2014 was $33,000 (less trade in of $16,500 and a rebate of $3,000.) Vehicle maintenance and operating costs, totaling $1,454 for the period, were recorded in Other Expenses. Any personal use value of the vehicle is reported to the President as taxable income.
Conclusion The objectives of the audit of the expenses of the Office of the President for Chattanooga State Community College for the fiscal year July 1, 2013 through June 30, 2014 were achieved. As noted in the Analysis of Allegations section above, one trip by the Chief Innovations Officer lacked a clear business purpose for a significant portion of the trip. Tests on the President’s travel indicated additional documentation is needed when changes in travel arrangements result in additional costs. Tests of remaining expenses showed that costs for travel for the Chief Innovations Officer when she interviewed for a different position before she was hired and entertainment costs reimbursed to the President while she was in Chattanooga lacked a business purpose because she did not meet the minimum requirements of the position, resulting in questioned costs of $1,744.06. No other statutory or policy violations, material omissions from the expense reports or deficiencies in internal controls were noted over expenses. After adjustments, the supplemental schedules included with this report fairly represent the expenses of the president’s office.
The review of the allegations revealed departures from policies, guidelines and federal regulations
during the hiring and work visa process. As a result of this review, several recommendations were made to address the specific issues noted in this report and to promote the efficient operation and
management of the College. In beginning to address these matters, College administration should work toward creating an environment of transparency in its operations, ensuring adherence to strategic goals and allocation of resources to achieve them; requiring strict compliance with Board policies and guidelines regarding personnel actions and other procedures that ensure a fair hiring process; and evaluating the business purpose of all travel before it is authorized.
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