An Indiana University Foundation employee has been fired after allegedly confessing to embezzling funds. Campus police are investigating and the IU Foundation is going through an audit to determine exactly how much money was stolen.
IU Foundation leadership learned of the embezzlement Aug. 21, according to an email from Matt Kavgian, spokesman. The employee, whose name has not been released to the public, was “immediately dismissed,” according to the email.
The theft was discovered after irregularities were found in an audit. The IU Foundation has its own internal audit function and an external auditor, Kavgian said in a phone interview. Both take samples of transactions for review. A recent sample showed what appeared to be a mistake. As information was being gathered, the employee who was eventually fired came forward to a supervisor and confessed, he said.
The IU Foundation Board of Directors was notified within 24 hours of the confession, Kavgian said. IU Foundation leadership continued gathering information and filed a report with the Indiana University Bloomington Police Department the morning of Sept. 3.
An investigation is underway but no charges had been filed in the case as of Monday morning, said Capt. Craig Munroe of the IU Police Department in Bloomington. There is a possibility the investigation could be turned over to the FBI, but that has not been decided yet.
“A lot of information has to be accumulated,” he said.
The IU Foundation has begun a forensic audit to assess the extent of the theft.
“We’re not going to know a lot with any certainty until that’s done, and that’s going to take multiple weeks,” Kavgian said.
IU Foundation President and CEO Dan Smith does not believe the embezzlement compromised any donor gifts, according to Kavgian’s email. However, if it is determined that donor gifts were affected, the IU Foundation will repay those gifts.
This is not the first controversy for the IU Foundation in recent years. The foundation was mentioned in a 2017 New York Times story describing how universities use offshore investments and so-called blocker corporations to swell endowments and avoid the scrutiny of ventures involving fossil fuels or other issues that could set off campus controversy. A student group called on the IU Foundation to divest from fossil fuel companies by marching through IU’s Bloomington campus in 2016.
The IU Foundation responded to The New York Times report with a statement from Smith saying the use of blocker corporations is a legal, accepted and long-standing practice by university foundations across the country.
The IU Foundation is a 501(c)(3) nonprofit soliciting donations on behalf of Indiana University. As of June 30, the market value of the IU Foundation’s endowment exceeded $2.3 billion.