UW managers oversee employee's falsified timesheets
"...common practice throughout the University"?

An internal audit conducted by the University of Washington (UW) has uncovered a 16-year payroll scam involving multiple managers and an employee of the Metabolism, Endocrinology and Nutrition Division (MEN) of the school's Department of Medicine.

The audit findings, which were highlighted recently by State Auditor Brian Sonntag, reveal that a university employee fraudulently collected $28,000 between 1985 and 2001 by falsely reporting extra hours on her timesheets. The hours were billed to federal grants funding the school's Diabetes Endocrinology Research Center with the full knowledge and support of managers and the program's director. Such illegal activity in the department, notes Sonntag, "could lead to the loss of its federal funding."

The payroll fraud began when the employee was offered a new job in 1985. Not wanting to lose her, a manager instructed her "to record hours not worked on the timesheet as a mechanism to compensate her the additional salary." The false reporting continued for 16 years through the transition of multiple managers who were informed of the arrangement. One manager even told the employee that falsely recorded hours were a "common practice throughout the University."

When the fraud was uncovered, UW's internal auditor made the following recommendations (among others):

We recommend that management coordinate with Risk Management and the Payroll Office for restitution.

We recommend that management contact the UW Police Department for any action deemed necessary.

We recommend that management contact Human Resources for any action deemed necessary for [the employee] and the managers responsible for falsifying records.

The employee has since repaid the full $28,000 in fraudulent pay, but the only punitive and preventative action taken by the university has been to require the employee and staff involved in the payroll fraud to attend ethics training. No criminal charges were filed.

A letter sent to the employee read in part: "While the audit found that this was an isolated incident, and that you acted with the full knowledge of the DERC Managers and Program Director, your participation in allowing these improper payments was inappropriate and demonstrates poor judgement."

Other parties involved received a similar warning from the university:

We will be arranging for you to complete appropriate training in Washington State ethics law and University policies regarding the use of state and University resources so that you will fully understand the relevant rules and can apply them in your work. Any future violation of a similar nature will result in severe disciplinary action. It is our expectation that you conduct yourself in a professional manner in order to ensure integrity and commitment to ethical values.

Such mild measures are troubling, especially since recent investigations show that fraudulent billing practices are not uncommon at the UW. The school is currently facing the possibility of federal prosecution for serious Medicare and Medicaid billing violations.

The recent corporate scandals rocking the nation are a potent reminder of the importance of accountability. Stockholders have a right to expect and demand integrity from the companies managing their money—and Washington taxpayers have a right to expect and demand integrity from the state employees and officials managing their hard-earned tax dollars.

For more information:

State of Washington Single Audit Report: Finding 01-2

Prepared by Jason Mercier, Budget Research Analyst
(360) 956-3482 or jmercier@effwa.org

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org