On Oct. 26, The Washington Post revealed that Georgetown University reported a diversion of approximately $390,000 in unapproved compensation to an unidentified administrator between 2007 and 2010 in its 2010 IRS 990 Form.
The University discovered the possible diversion during one of its routine internal auditing procedures. After an investigation, the University took steps to address the matter. “The University investigated the situation and reported it through its normal governance procedures and made the appropriate disclosures on its IRS Form 990,” Rachel Pugh, director of media relations, said in a phone interview with Vox.
The Post looked into filings from more than 1,000 non-profit organizations that reported a diversion on their tax forms, focusing specifically on misappropriated funds amounting to at least $250,000 or a sum that accounts for more than 5 percent of the institution’s total assets. Georgetown was was one such non-profit that was mentioned. “The possible diversion accounted for less than 0.04 percent of Georgetown’s approximately $1 billion annual operating revenue,” said Pugh.
Several years ago, unknown University employees set up a non-University bank account, which was used to administer funds related to their work on a school-sponsored conference. The unidentified administrator received additional compensation for work related to the conference in this entirely separate non-University bank account.
After the University discovered the diverted funds in the fall of 2010, it took a number of actions. “We closed the bank account and transferred the remaining balance to a bank account controlled and audited by the University that was also subject to the University’s internal control,” said Pugh.