Louisiana Legislative Auditor
Daryl G. Purpera, CPA, CFE

August 10, 2015

Northwestern State University Employees Divert, Misuse University Funds

Northwestern State University employees and Town of Many employees on loan to the University through cooperative endeavor agreements misused public funds, received excess compensation, and may have violated state law, according to an audit report issued Monday by Legislative Auditor Daryl Purpera’s office.

An audit of the Town of Many was also conducted in regard to the cooperative endeavor agreements. More information about that report can be found HERE.

The Gulf States Regional Center for Public Safety Innovations (GSRCPI) was a component unit of the University “funded primarily through federal and state grants awarded to the University.” GSRCPI conducted law enforcement training workshops which were “staffed by University employees and Town police department employees loaned to GSRCPI through cooperative endeavor agreements (CEAs) between the University and the Town,” the report said.

The LLA audit of the University was initiated based on allegations received by the Office of the State Inspector General (OIG) and conducted in partnership with OIG. According to the report, “the purpose of the audit was to determine whether University funds paid to the Town under the CEAs were spent appropriately and in compliance with grant requirements and the CEAs.”

From August 28, 2008 through June 5, 2014, GSRCPI management diverted $788,690 of revenue generated from contracts and training workshops to a non-University bank account. “University employee and GSRCPI Director Daphne Levenson stated that she authorized creation of GSRCPI’s non-University account to pay expenses that could not be paid from University funds,” the audit said. However, the report notes that all funds generated by University employees and Town employees on loan to the University are public funds and should have been deposited into University bank accounts. Ms. Levenson also failed to disclose the existence of GSRCPI’s non-University bank account to the University as required.

Auditors also noted that “from November 21, 2013 to November 29, 2013, four individuals performing services for GSRCPI received payments totaling $16,000 from GSRCPI’s non-University bank account.” Three were employed by the University, and one was a Town employee on loan to the University. State law prohibits public employees from receiving anything of economic value from a source other than their public employer for the performance of their duties.

In addition, auditors found that GSRCPI entered into contractual arrangements with the spouse of GSRCPI Director Daphne Levenson from February 17, 2009 to November 18, 2013. As a result, GSRCPI issued payments totaling $40,967 to Ms. Levenson’s spouse, in possible violation of state law.

Copies of this report have been delivered to the District Attorney for the 10th Judicial District of Louisiana and others as required by law.

For more information contact:

Legislative Auditor
225.339.3800



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Office of the Louisiana Legislative Auditor | www.LLA.La.gov