Audit Critical of CSUN President’s Use of Laborers

A Cal State University audit released Friday said CSUN President Blenda J. Wilson exerted “undue influence” over campus laborers who moved furniture for her husband’s business on days the workers were being paid by the school.

“It appears that a gift of the movers’ time may have been conferred by the campus,” the audit concluded.

The furniture was moved Nov. 6 and 7, 1997, in a truck leased by Cal State Northridge with funds provided by the Federal Emergency Management Agency for earthquake repairs, according to the audit.

The furniture was owned by Office Future Systems, of which Wilson’s husband, Louis Fair Jr., is executive vice president. Fair arranged to employ the workers for an outside job by calling the supervisor of the CSUN crew, he told investigators from the Office of the Auditor of the California State University system, which conducted the probe.

The audit is dated Sept. 8 but was not released until late Friday by Cal State Northridge. It was signed by Larry Mandel, auditor for the CSU system, which oversees the 23 state university campuses.

In addition to assessing the use of the campus moving crew by Fair’s company, the auditors recommended a comprehensive review of campus financial management and fiscal controls.

“It appears that undue influence was placed on the move crew as a result of the campus president’s involvement,” the audit said.

Wilson, who called for the investigation of the moving crew incident after news reports in July, was unavailable for comment on the critical audit findings.

But in a written statement, she acknowledged “My thinking was flawed because I did not take into account that, as a university official, my involvement created undue influence on the move crew.”

The CSUN president said she saw the work for her husband’s company as “as an opportunity for our workers to earn extra money on their own time, using their own equipment.”

But records revealed none of the crew took vacation on the days the West Los Angeles company’s office furnishings were moved.

Moreover, “The record book of move crew activity retained by the CSUN University move crew supervisor was found to have the record for that date torn in half with the bottom half of the page missing,” the audit said.

“We also noted that the description of work to be performed by the move crew was written in a more terse style than was observed on the typical activity log page.”

The owner of Office Future Systems, Beverly Hawkins, tried to reimburse CSUN for the work performed by the crew, but not until Aug. 18, nine months later, after the probe had begun into the propriety of using a campus crew for the move. Hawkins said she had never been billed for the crew’s time.

Hawkins told auditors she sent the school two checks--$400 for the crew and $100 for the truck rental--based on an estimate by the crew supervisor and a quote from a truck rental business.

But the move crew supervisor, Teri Sigrist, steadfastly denied knowledge that she or the crew were involved in the transaction with Office Future Systems and returned the company’s checks, the audit said.

Sigrist stated: “CSUN was neither responsible for estimating nor coordinating the move of your office,” the audit said. Roughly a week after the date on the audit report, Sigrist resigned because of a declining workload, university officials said.

University officials subsequently accepted the money, which the report described as insufficient to cover the value of the work.

It is that difference between the reimbursement and the value of the work that appears to be “a gift of the movers’ time,” the report said.

Auditors said they could not determine the precise value of the gift because “the specifics of the work performed and the agreement made were not documented or otherwise corroborated.”

Hawkins has stressed that because Wilson’s spouse was not an owner of the company, he got no benefit from the moving arrangement.

It is unclear from the often confusing report if the workers were paid from FEMA funds or from other university accounts, although the audit said the truck rental was covered by FEMA funds.

The report also found that improper overtime payments were made to the laborers in unrelated incidents, but could not establish the amount of the loss.

The problems came to light last summer after a former crew member who had been laid off, Desmond Cerceo, complained to the FEMA fraud hotline that he and fellow crew members were paid by former supervisor Sigrist for overtime they had not worked. He also reported that the crew moved Wilson’s husband’s furniture.

During the probe, auditors said they found loose controls over campus keys, move crew members without valid drivers’ licenses, improper charges of truck use to FEMA and inadequate controls of an off-campus warehouse.

CSUN has already hired outside consultants to review campus financial management and fiscal controls.