The University will hire an additional financial adviser to monitor top University officials’ spending, said Charles Manatt, chairman of GW’s Board of Trustees, at its first meeting of the academic year on Friday.
While the move is not a direct response to former American University President Ben Ladner’s alleged frivolous spending that resulted in his removal from office, GW will be keeping a “closer eye” on how University President Stephen Joel Trachtenberg and other top administrators are paid and spend University money, the school’s legal counsel said.
“We’re watching the American University situation,” said Dennis Blumer, vice president and general counsel. “What we’re doing is what we’ve always done, and we are continually looking for new data to be used to assist in our process.”
This year the University will add a second financial consultant to review data from University tax records and compare it to other schools to determine salary wages and monitor administrative spending, said Executive Vice President and Treasurer Louis Katz.
Manatt announced that the “compensation review assistant” will be created in an effort for the University community to better understand the politics and guidelines in determining administrative salaries. He said the search for a financial consultant has begun and by the board’s next meeting in February a consultant would be in place.
“We’re creating a system to explain to the board and the University community so people will know how they are being paid,” Manatt told the Board of Trustees at its meeting at the Elliott School of International Affairs building.
In early October, the American University Board of Trustees dismissed Ladner after an audit of his spending revealed he used university funds for European vacations, personal limousine services, and expensive wines and dinners among other expenditures. American’s Board of Trustees has requested a $125,000 reimbursement from Ladner, according to a report in The Washington Post.
Manatt said Trachtenberg is under no investigation for misuse of University funds. Trachtenberg receives numerous benefits as University president, including the use of a University-owned Lexus sport utility vehicle with a driver and rent-free living in a mansion on Bancroft Place near Embassy Row.
“The University owns a driver who drives me while on University business. The University has a house which I get to live in as long as I continue to be president,” Trachtenberg said after the board meeting.
“It’s not my car, and it’s not my house. Other than that I get all the standard benefits of the rest of the University staff.”
In 2003, Trachtenberg, the University’s highest paid administrator, was compensated $564,302 and received more than $70,000 in University benefits. Vice President of Public Health and University Provost John “Skip” Williams was the next highest-paid official and was compensated $516,304 and received $27,708 in benefits, according to University tax forms from 2003, the last year for which compensation figures are available.
Katz said safeguards are in place at GW to protect against frivolous spending by administrators, and Trachtenberg said “good sense, prudence and alert trustees” would ensure that what happened at American University would not occur at GW.
“When a melancholy situation like that happens it can start people up a bit, but we’ve been working with this institution to provide all the information necessary,” Trachtenberg said.
Katz said the addition of a financial consultant is in accordance with the Board of Trustees’ obligation to keep thorough records of University spending.
“The (Board of Trustees Committee on Governance, Compensation and Nominations) has a responsibility to obtain as much information as possible. They’ve been doing this for years, and they’re doing it again this year,” Katz said.
“We’ve been running ahead of (American University),” Katz added. “You can’t stay constant. You must always update your system.”
Blumer added that the practices of the Board of Trustees Committee on Governance, Compensation and Nominations are normal within University policy and that no major changes would be made to guidelines that outline financial spending.