The Florida Atlantic University Foundation was recently audited to determine if donations were appropriately used to fund the new DeSantis Center, as well as investigate the FAUF’s role in providing the infamous “Red Corvette” to former FAU president Anthony Catanese. The forensic accounting analysis showed that the DeSantis Center was funded appropriately; conversely, the audit found that the Corvette, given as a going-away gift to Catanese, was an inappropriate use of the foundation’s money.
KPMG accounting reviewed campaign donations totaling $220 million from FAU’s first capital campaign from 1994 to 2001, and analyzed documentation of sources of the money to ensure that they were indeed accurate. KPMG’s forensic accounting report stated that FAU’s adjusted total campaign donations from the “Campaign For Our Future” totaled $199.1 million, with private sources providing $139 million, accounting for more than two thirds of FAU’s donations.
KPMG found several reasons for adjusting the donation totals, including erroneous gift totals, reclassification of several agreements, and changes in certain sponsorships. The outright gift adjustments totaled nearly $850,000 and unrecorded gifts and pledges had to be adjusted by $1.2 million due to decreases in grants and pledges. A $2.7 million adjustment was made to compensate for deferred gifts and pledges due to insufficient documentation of evidence of existence of the gifts. One gift of over $1.5 million was never received due to the fact that the donor’s estate had insufficient funds to fulfill the pledge. Another gift of $1.5 million was also negated because the donor lacked the funds to support the gift.
FAU initially expected to receive $66 million in state matching funds, but that figure was adjusted to $43.2 million after the audit concluded that several gifts could not be matched within the specific time frame allotted. Several multi-million dollar gifts received are still pending state matching due to reclassifications of the gifts from state-appropriated to unappropriated. $3.3 million in gifts are still pending state matching, as they are not yet eligible.
KPMG’s audit of funds for the DeSantis center found that the fund expenditures were consistent with gift agreements from donors. Salaries and wages for employees accounted for $219,000, or 30 percent, of the total $742,00 in expenditures for the center; the second and third largest expenditures were used for travel expenses and events hosted, respectively. Carl DeSantis funded the center with a $2 million endowment, which was matched with $2 million by the state. The new DeSantis Center is now under construction with the help of an additional $1 million donation from DeSantis. The new DeSantis Center pavilion will be located adjacent to the College of Business.
Although the audit looked into every aspect of FAU’s funds for the last several years, one of its most important duties was to investigate whether funds from the foundation were used to fund former president Catanese’s infamous red Corvette. The auditors did find that funds were in fact routed from the foundation through a design firm and then to Mrs. Catanese for the purpose of giving the former president a going-away present in the summer of 2002.
Originallly published 8.28.03
