The Connecticut Attorney General’s Office disclosed the findings Wednesday of its investigation into alleged financial mismanagement at the Berkeley Divinity School. Officials at the Yale-affiliated school said the state audit revealed problems that have already been resolved.
Wednesday’s report comes after allegations of fiscal irresponsibility surfaced against R. William Franklin, the school’s former dean. Yale discovered the alleged misappropriation of funds in an internal audit of the affiliated school last December.
The report issued Wednesday said that $112,912 was missing from Berkeley’s scholarship fund. The investigation also found that loans had been made to staff members, that there was no oversight of use of the school’s credit card, and that paycheck advances made by the school have yet to be repaid.
Berkeley Divinity School officials did not reject the report’s findings but said the problems mentioned had already been addressed.
“We cannot comment on the substance of the Attorney General’s letter until counsel for the Berkeley Divinity School has had the opportunity to review it, but we believe that many of the issues of concern to the Attorney General are already being addressed as a result of the independent audit by DeLoitte & Touche, and Berkeley is prepared to work with the Attorney General on additional steps that may be necessary and appropriate,” Berkeley’s Board of Trustees said in a written statement after Wednesday’s disclosure.
The Berkeley Divinity School, an Episcopal seminary, has been affiliated with Yale since 1971. Berkeley and Yale officials renewed their affiliation in March but altered some of the terms to shift oversight of financial matters to the University.
Yale’s December audit found that Franklin had allegedly misappropriated $10,000 to fund his daughter’s education at Harvard Medical School and to fund personal travel expenses. Christian Sonne, chairman of Berkeley’s Board of Trustees, said he had approved Franklin’s use of Berkeley funds to pay for his daughter’s education, not knowing it was wrong.
Following Yale’s initial audit, independent auditors DeLoitte & Touche were brought in by Yale to investigate. Although they found Berkeley’s fiscal management to be sloppy, they did not find any evidence of negligence.
Attorney General Richard Blumenthal said this misuse of finances could violate state laws on charitable gifts.
“The criminal authorities may be interested in the case or not, but the remedy we are requiring is that the money be restored,” Blumenthal told the Associated Press. He said he has not yet decided whether to refer the case to the state’s attorney’s office, where it could become a criminal investigation.
Yale officials and those at the Berkeley Divinity School insist the problems have been fixed. Franklin resigned in December and since then has repaid the money he used to fund his daughter’s education.
In an effort to exert more control over Berkeley’s financial procedures and practices, Yale revised its relationship with the Berkeley Divinity School earlier this year. Now all Berkeley financial transactions must go through the Yale accounting system. In addition, interim Dean Frederick Borsch was hired and will remain until a new dean can be chosen.
“Nothing illegal or seriously unethical was done, but poor judgment was used, and poor standards were in place,” Borsch told the Associated Press.