Berkeley Divinity probe verifies misuse of funds

As the state’s investigation into possible misappropriation of funds within the Berkeley Divinity School continues, an independent audit released this summer found some misuse of funds while validating some of the other questionable expenses.

Berkeley, an Episcopal seminary affiliated with the Yale Divinity School, has been at the center of a controversy over alleged financial mismanagement since December, when the Hartford Courant reported that a Yale-initiated confidential audit had found evidence of misappropriations. It alleged that former Dean R. William Franklin had used $10,000 to finance his daughter’s education and used additional funds for personal travel expenses.

The latest audit, commissioned by Berkeley and conducted by Deloitte & Touche, declared that the the payments for Franklin’s daughter’s medical school tuition were “not consistent with the dean’s employment agreement.”

It also found, however, that “items such as the automobile allowance, family member travel to the Episcopal General Convention and reimbursement for dry cleaning and the use of the NYC apartment for business-related trips to NY” were both allowed and appropriate for the dean.

Christian R. Sonne, the chairman of Berkeley’s Board of Trustees, told the Yale Daily News in January that he had approved Franklin’s request for his daughter’s tuition payment while unaware that such a payment violated University policy.

The report also recommended that Berkeley establish set policies for accounting and budgeting. Under the old system, the business manager had business and financial powers allowing for the writing of unauthorized payments, according to the report.

Interim Berkeley Dean Frederick Borsch said would accept the University’s procedures for these practices as stipulated under the reaffiliation agreement between Berkeley and Yale. As a result, all Berkeley financial transaction will go through the Yale accounting system.

“That’s the smartest way and the agreed way,” Borsch said. “I think that was part of the question if we were doing it in the past. In the past, some funds did not funnel through the Yale system.”

Currently, Richard Madonna, who is the director of finance and administration at the Yale Divinity School, is acting as business manager of the Berkeley Divinity School, but the report suggested that Berkeley must hire a finance manager to report primarily to the Berkeley Board of Trustees. Borsch said this recommendation is still under consideration.

Madonna could not be reached for comment.

Yale President Richard Levin would not comment on the report, which Deloitte and Touche conducted independently of the University.

Levin said that the new terms for the relationship between the University and Berkeley had been successful.

“It has been working splendidly. I think that the interim dean has done a wonderful job of restoring confidence in Berkeley Divinity School among the faculty,” Levin said. “I think he’s reached out to the Berkeley community and alumni and he has done an excellent job of getting back onto a good course.”

The attorney general’s office, however, is still investigating possible misappropriations of funds within the school. Borsch said he hoped the investigation would conclude in a few weeks and added that the trustees would issue a final statement once the state concluded its investigation.

Berkeley hired Borsch after Franklin resigned at the beginning of last year. Although Borsch had planned to leave at the end of the semester, he will remain dean of Berkeley until June.

“I think the best thing I can do for them is to stay on and help them find a new dean,” Borsch said.

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