For Sally Dear-Healey, a lecturer at Binghamton University in New York, things began to go awry two years ago. That’s when the adjunct professor of sociology says she came under pressure from the university’s athletics department to ignore the repeated absences of several basketball players enrolled in her human development course. “It was clear,” she says now, “that I was not expected to hold my student athletes to the same standards as my other students.”
Tensions mounted and then spilled over after the New York Times ran a story last year on Binghamton’s basketball team, quoting Ms. Dear-Healey about her experiences. She felt a noticeable chill on campus: colleagues and former friends shunned her, and the work environment became, in her words, “incredibly toxic.”
It would get worse. Ms. Dear-Healey, who has lectured at Binghamton for 12 years and is a PhD candidate there, received notice that her position wouldn’t be renewed. Since then, she has been temporarily reinstated and is teaching two courses in the fall term, but she has just been informed that she won’t be teaching any courses in the spring. The university has consistently maintained that its staffing changes were a result of budget constraints.
Ms. Dear-Healey, however, believes there was an ulterior motive. “This experience has damaged my reputation in ways that I am quite sure are irreparable,” she says. When asked if she’d do it again she doesn’t hesitate: “Absolutely,” she replies.
“The truth is the truth. How do I teach my students to be ethical and stand up for what they believe in and to be good citizens if I don’t emulate that same behaviour?”
As Ms. Dear-Healey can attest, whistleblowers are often faced with two unpalatable options: expose a wrong and suffer the potential consequences or turn a blind eye to the situation and allow it to continue unchecked. But now, a growing number of universities, following the lead of corporations and other public institutions, are adopting safe-disclosure policies to make the choice a bit easier. So far, just a few Canadian universities have whistleblower policies, but the number is growing. Often, the policies are intended to stamp out fraud and other financial crimes. But some schools have adopted broader policies that cover all types of misbehaviours.
The trend has its roots in the infamous accounting scandals that rocked Enron and WorldCom corporations early in this century. Those events ushered in a new era of regulations to root out corporate fraud and corruption and protect those who expose it. In the United States, the Sarbanes-Oxley Act of 2002 requires publicly traded companies to provide a hotline or a similar mechanism for employees to report concerns about suspected financial irregularities and to protect whistleblowers from reprisals.
In Canada, some provincial governments followed suit. And, in the wake of Canada’s widely publicized sponsorship scandal, the federal government added protections for public servants who disclose wrongdoing. Since then, whistleblower policies and fraud hotlines have become a standard good-governance practice at many organizations.
Universities are catching up. Harriet Lewis, university secretary and general counsel at York University, says that colleges and universities are under “tremendous pressure” from governments, auditors and boards to adopt such policies. When it comes to organizations that spend taxpayer dollars, the public’s demand for accountability has never been greater, and universities are not exempted, she notes.
York, for its part, rejected a suggestion by a forensic auditor to implement a fraud hotline because it thought such a move might foster a climate of mistrust on campus, says Ms. Lewis. Instead, York is drafting a safe-disclosure policy that would encourage, and in some cases obligate, faculty and staff members who know about financial wrongdoing to report it. The proposed policy would cover financial irregularities such as theft or fraud; York already has regulations to deal with academic misconduct, sexual harassment and other forms of workplace behaviour.
McMaster University opted for a hotline. Anyone who wants to report a suspected irregularity may do so anonymously by calling a toll-free number or visiting a website operated by EthicsPoint, a U.S. firm. Once a report has been filed, McMaster’s chief internal auditor, Jorma Larton, is notified and he begins an investigation.
This usually starts with an exchange of e-mails between Mr. Larton and the anonymous whistleblower. “There’s a back and forth,” Mr. Larton explains. “You have to make sure that you’re not just getting a frivolous report.” Once he is able to gain the confidence and trust of the individual, a phone call or face-to-face meeting may follow. The length of an investigation varies, in one instance lasting three or four months. In a few cases, the exchange ended abruptly and the individual making the allegation wasn’t heard from again. Sometimes whistleblowers are able to provide documents or other evidence of the alleged crime that could lead to a formal audit. If Mr. Larton can obtain enough evidence to support the claim, he turns the matter over to the university’s senior administrators and lawyers.
Roger Couldrey, McMaster’s vice-president, administration, said the number of reported incidents is low. He wouldn’t give a more precise number or discuss case details because he didn’t want to compromise the confidentiality of whistleblowers or discourage others from coming forward: “If a whistleblower thinks that we are discussing cases with University Affairs, the chances of their continuing to use the service are nil.”
Both Mr. Larton and Mr. Couldrey argue that the hotline’s very existence helps to deter unethical behaviour. They say the cost is reasonable and the service pays for itself by ferreting out financial abuse. “I think the biggest benefit is that people have a mechanism to come forward if they have concerns,” says Mr. Couldrey. Without it, he adds, they might not know how to report abuse or be less likely to do so.
And employees are often in the best position to detect fraud. The Association of Certified Fraud Examiners, a U.S. organization, found in a survey that fraudulent activities are more likely to be discovered by a tip from an employee than by an audit or other formal means. In 2008, almost half of workplace irregularities reported to the association came to light through tips from employees, customers and others. In the U.S. education sector, most of the reported irregularities involved billing schemes, expense reimbursements, theft and payroll fraud.
In Canada, there is no comparable study. But in one recent case, at the University of Victoria, a former manager of the university computer store was charged with fraud and theft after more than $137,000 went missing from the store. A university spokeswoman said the accused has since left the school. Some news reports said the scheme was uncovered by a tip from a university employee. Meanwhile, at the University of Calgary, an accounts payable clerk at the bookstore was recently given a conditional sentence by an Alberta provincial court judge for defrauding the store of more than $250,000 over several years.
Some universities, including McGill University and University of Alberta, have adopted whistleblower policies that cover not just financial wrongdoing but also irregularities in everything from animal ethics to environmental health. U of A adopted a policy on ethical conduct and safe disclosure three years ago, partly to emphasize that “it’s not somebody who’s cheating on their expense accounts that’s the main concern,” explains Mary Persson, the university’s associate vice-president, audit and analysis. Rather, “it’s making sure we have a safe work environment.”
At the same time, U of A opened an office of safe disclosure and human rights on campus. Faculty, staff, students and volunteers who suspect someone of wrongdoing can contact the office’s adviser, who reviews the options with them and, if they wish to pursue the matter, points them in the right direction. The office functions much like a hotline, she says, but “it’s much more human, and [has] someone who is much more attuned to our culture here at the university and knows the processes well.” The costs of maintaining the office are somewhat higher than operating a hotline, says Ms. Persson, but the costs are worth it “to mitigate the whole snitch-line issue.”
Before implementing the new policy, U of A held a lengthy consultation process; participants pointed out that the school had so many workplace polices and reporting requirements that it was getting confusing. To simplify the process and make it easy for whistleblowers to come forward, the university developed the idea for a safe-disclosure office. The new policy has been supported by students and staff associations, she says. There have been few incidents of individuals making spurious claims.
Canadians for Accountability is a non-profit organization that advocates for stronger whistleblower protection laws. It would like to see more universities adopt safe-disclosure policies. “All organizations need that safeguard,” says Allan Cutler, the group’s president and the former public servant who is credited with exposing the federal sponsorship scandal. “You need a safe place where you can go and report a situation and not worry about retaliation.”
Still, many universities are treading carefully in this area, trying to balance the rights of whistleblowers with the rights of the accused and aware of the need to shield people who may be falsely accused.
One university that decided to move ahead with a safe-disclosure policy is Wilfrid Laurier University. After months of study, the audit and compliance committee of its board of governors opted for this route. “We are now going to complete some further research into best practices,” says Shereen Rowe, university secretary and general counsel. The board will consider the matter early in 2011.
Perhaps the most important move an organization can make to protect itself is to put in place checks that limit the opportunity for wrongdoing, says York University’s Ms. Lewis. And universities are in a favourable position, she adds: Their power structure is widely distributed; decisions are made collegially; and oversight is provided by a board, a senate and various levels of government. In her view, the risk of a major embezzlement scheme is slight. “There are no shareholders,” she notes, “that are going to score big.”
Still, history shows such things can and do happen. “Universities are small cities; we are not perfect,” says Ms. Persson of U of A. “You do get people with financial pressures who do things they might not [otherwise] do.” And, “as long as bad things happen in public institutions … there is going to be an expectation on the part of the public and taxpayers that we have mechanisms in place to stop these things as early on as we can.”
Mechanisms for safe reporting
University administrations are adopting a variety of ways to encourage staff and faculty to safely report a wrongdoing without fear of reprisals. Here are some methods that are being used or considered by Canadian universities (schools where they’re in use are given in brackets):
- Draft a safe-disclosure policy to encourage or obligate faculty and staff to report financial irregularities (York University);
- Implement a fraud hotline for staff and faculty to anonymously report an irregularity (McMaster University);
- Adopt whistleblower policies that encourage or obligate faculty and staff to report any wrongdoing they know of (McGill University, University of Alberta);
- Open an office of safe disclosure on campus (University of Alberta);
- Put in place checks that limit the opportunity for wrongdoing (many).