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Auditor General Says Penn State Trustees Should Reject Proposed Change to Bylaws

by on November 09, 2017 5:00 AM

Updated with comment from state Sen. John Yudichak

Urging an improvement in transparency and accountability, Pennsylvania Auditor General Eugene DePasquale said on Wednesday that the Penn State Board of Trustees should reject a proposed change to the university's bylaws and charter to be voted on this week.

At its meeting on Friday, the board is expected to vote on changes to reimbursement of travel expenses and liability for monetary damages in lawsuits related to a trustee's duties. But what's being disputed by some is a provision that would prevent trustees from recouping legal fees for initiating legal action against the university itself.

“As Penn State’s board of trustees meets this week, I encourage members to carefully weigh the impact of any change that could limit access to information about the university they are elected to preserve and protect," DePasquale said in a statement. “With a board of 36 members and two nonvoting members, these bylaw changes would further hamper input from all but the most leading members of the board."

The issue stems from a lawsuit filed in 2015 by a group of seven alumni-elected trustees to gain access to documents used for Louis Freeh's report on his team's university-commissioned investigation into the circumstances surrounding the Jerry Sandusky scandal.

Penn State was ultimately ordered to turn over the documents to the trustees and earlier this year the school was ordered to pay trustees for related legal expenses.

Proponents of the bylaw change say the university shouldn't be spending significant sums of money on legal actions filed by its own trustees. Some trustees and other critics, however, say that would impinge on board members' fiduciary duties. If trustees believe information is being withheld, only the very wealthiest would have the funds for a legal battle.

"When faced with critical decisions and votes involving billions of dollars the administration presents us with lots of information. But if we suspect that information is slanted in a way to influence an outcome, don’t we have an obligation to challenge it?" alumni-elected trustee Jay Paterno wrote in a column on StateCollege.com this week. "Giving away the power to get information and see the whole picture is a dangerous shift."

DePasquale had already been calling for Penn State to exercise greater transparency. In June, he released the results of a performance audit of the university that made multiple recommendations related to accountability and governance, campus security and tuition costs.

He renewed some of those calls on Wednesday.

"As noted in my report, I continue to believe that a smaller board — of no more than 21 voting members — would improve Penn State’s governance and accountability," DePasquale said. "Further, I have said repeatedly as a recipient of a significant amount of taxpayer dollars, it is time for the General Assembly to make Penn State subject to all the provisions of both the commonwealth’s Right-to-Know Law and the Public Official and Employee Ethics Act.

“I will continue to watch how closely the Penn State board follows the thoughtful recommendations included in my latest — and certainly not last — audit report of this institution.”

Paterno said the proposed bylaw and charter changes would have long-lasting effects and damage accountability.

"Above all, changing this charter is a retreat from responsibility just a few years after this board was widely criticized for a lack of oversight," Paterno wrote. "This change empowers this or future administrations to withhold information."

State Sen. John Yudichak, D-Luzerne/Carbon, who has long advocated for governance reform at Penn State, joined DePasquale in urging trustees to reject the change.

“I echo the concerns of Auditor General Eugene DePasquale regarding the potential changes being made the Penn State Board of Trustees this week. At a time where the Board of Trustees should be discussing ways to implement the recommendations made by the Auditor General to improve transparency, they are instead considering changes that would further erode transparency,” Yudichak said.

“I continue to advocate for improvements to the structure of the Board of Trustees, including a reduction in the size of membership which I believe would enhance the accountability and transparency of the Board.”

Trustees will hold committee meetings on Thursday, with a full board meeting on Friday afternoon at the Penn Stater.



Geoff Rushton is managing editor for StateCollege.com. Contact him at geoff.rushton@statecollege.com or find him on Twitter at @geoffrushton.
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