December 23, 2020 – Investigation into Financial Misconduct by CSU Chico Personnel

To: Campus Community
From: President Gayle Hutchinson

As a public university, we have a solemn obligation to ensure that our funds are spent appropriately and efficiently and, further, that we hold ourselves to the highest standards of accountability. 

With this obligation in mind, I am saddened to share news of a recently completed, campus-initiated investigation that uncovered numerous acts of financial and professional misconduct in our Department of Accounting. According to the investigation, these acts of fraud, abuse, and other ethical lapses occurred between 2014 and 2019, resulting in approximately $1 million of inappropriate compensation and other financial losses to the University. 

Based on the findings of the investigation, today we placed four employees on leave, pending final disciplinary action. Each of these employees has privacy rights and due process rights to appeal any discipline. We also have referred the matter to the appropriate authorities to investigate potential criminal conduct and will be seeking any restitution to which the University may be entitled.

Because this matter involves confidential personnel issues, we can’t identify these individuals by name and are limited in what we can share about the surrounding circumstances.

What I can say is that the fraudulent and abusive activity identified in the investigative report does not reflect the values of our University. Regardless of our respective positions, we each share a duty to uphold the highest ethical standards in our fiscal practices, professional conduct, and our daily work. I am personally outraged that a few individuals have abused the trust placed in them by students, taxpayers, and donors for their personal benefit. 

Finally, I want you to know how seriously the University leadership takes this matter. We are committed to the best practices in our operations to ensure transparency and accountability. I have every confidence that Dean Terence Lau will continue his work in strengthening the operational practices and oversight in the College of Business. In addition, we have identified numerous corrective actions to strengthen our systems and processes, which I will be working to ensure are fully implemented throughout the University.

Thank you for respecting the privacy and process related to this investigation, and for your own dedication to upholding the public’s trust and supporting student success.