By Yasmin Vazquez
As fall approaches and temperatures drop, students eagerly log on to computers to register for college courses. For some, with one click of the mouse, all their hard-earned summer money is spent on tuition and textbooks. Unfortunately, higher education institutions are just as vulnerable to fraud as other organizations. You know that professor spouting off differential equations or philosophical theory? He might be a mentor but he might also have a darker, unethical side. At that moment standing in front of his lecture hall, he could be formulating a devious plan to commit fraud. But fraud doesn't just occur among faculty. The dean, chairman, athletic coordinator and coach, financial aid department, or various other staff members are just as likely to commit fraud. As in any industry, if the pressure and opportunity exist, an employee may engage in theft.
Cases of Higher Education Fraud
Some cases of fraud in academia are similar to those found in any other organization. For instance, a faculty member might discover in his research that aspirin prevents heart disease. Then, a company that manufactures aspirin sends the faculty member on an all-expense paid trip to a medical convention to present their results. The faculty member files a fraudulent expense report to the university to be reimbursed for the same trip. Consider some other scenarios:
Deans and chairpersons create phony positions (e.g., "assistant dean for retention") and hire friends and relatives into them.
Instructors order desk copies of books from publishers under the guise of considering them for adoption as a textbook, then turn around and sell them online. Professors can make several hundred dollars per month in this scheme.
Faculty members develop software and other products through their university-sponsored research funds, and then market or sell the products through their own private companies.
Staffers engage in consulting work on the side but use university labs and facilities for the jobs or assign the work to students as term projects.
Foreign-born faculty issue admissions to relatives to come to the U.S. for graduate studies, and offer them assistantships and tuition waivers over other more qualified students without revealing their relation to them.
Professors send the same paper abstract to various conferences in their native countries just to have paid trips back home.
Department heads use department funds to purchase goods and services for their personal use.
Fraud can also extend to athletic departments in colleges and universities. The National Collegiate Athletic Association (NCAA) has enforced stricter policies on athletes in colleges. The purpose of these policies is to encourage athletes to perform well in classrooms for eligibility and maintaining scholarships. This has the effect of making some coaches and athletes feel the added pressure to remain eligible, and causes them to resort to fraudulent action.
Florida State University, the University of New Mexico, and Georgia Southern University are a few examples of institutions recently found in the news for academic fraud regarding athletes. At Georgia Southern University, the men's basketball assistant coach and team manager were given two years' probation for completing course work for athletes in danger of being ineligible. In some cases, faculty may also be pressured to reduce course work or fudge grades for athletes by the university or athletic department. These acts can be detrimental to the reputation and morale of the campus as a whole.
In another case, a former Vassar College employee was arrested and charged with the embezzlement of $2 million from the university. Arthur H. Fisher was a project manager who conspired with his wife in a scheme against the college. The two set up a fictitious construction company and charged the college for work not performed.
In May 2011, five medical school professors at Stanford University were disciplined for breaching the school's conflict of interest policy. The faculty members were being paid to give promotional speeches on behalf of drug makers. The concern was that the relationship between pharmaceutical companies and academic researchers could intentionally influence medical research and in effect the practice of medicine. Stanford University's honorable reputation took a blow as it endured an investigation and was scrutinized for not enforcing and effectively communicating its policies.
Institutions of higher education can take preventive measures to reduce the instances of fraud. Most higher education systems employ a hotline to report suspicious behavior. The hotline offers a way for students, employees, and other parties to anonymously report suspected fraud without fear of retribution. As a leading model, the Texas A&M University System advertises and encourages the use of its risk, fraud, and misconduct hotline. The reporting program is available 24 hours a day, 365 days a year. All anonymous tips are taken seriously and forwarded to the appropriate authority for investigation. This perception of detection in itself might be significant enough to deter fraudulent behavior.
The college or university can reduce its susceptibility to fraud by having clearly written policies and procedures regarding ethics, fraud, and abuse. The document must outline appropriate codes of conduct and the punishment for violating these rules. These should be consistently enforced and communicated to faculty and staff. In addition, the roles and responsibilities of the Internal Audit Department and Board of Trustees for the university must be included.
Training campus employees on what constitutes fraud is an effective prevention measure for colleges and universities. Live training by experts combined with online learning teaches staff important fraud prevention and detection methods. The ACFE has partnered with higher education establishments to provide fraud awareness programs and classes at universities for students and employees. Students and employees are trained to recognize why fraud occurs as well as how to detect red flags of fraudulent activity. Resources, course materials, and discounted prices on additional educational tools are provided through the ACFE's Anti-Fraud Education Partnership.
The prevalence of fraud at the research level in higher education demonstrates that there should be an oversight team assembled specifically for this area. Paul Hebert, editor-in-chief of the Canadian Medical Association Journal, recommends creating an agency for higher education organizations, such as the Panel on Research Ethics. The panel is Canada's response to fraud in higher education, and its primary responsibility is to interpret and implement policies regarding federal research. The responsibility of investigating allegations of misconduct in research projects is delegated to the panel. Researchers can be summoned to appear before the panel to defend their work and explain specifically where grant money or university-sponsored funds have been used.
The implementation of anti-fraud controls is one of the most effective methods to deter fraud from occurring in any organization, including academia. Rather than risk damaging the college's or university's reputation, these prevention methods can be a proactive approach to save the embarrassment of publicizing instances of fraud.
Yasmin Vazquez is the ACFE's research project administrator. Contact Yasmin at firstname.lastname@example.org.