Los Angeles Times Looks at Effects of State Investigation of Western University of Health Science
A merger announced last year between Western University of Health Sciences, a medical school in Pomona, and Chapman University in Orange has been halted pending an investigation of allegations that the medical school provided improper loans to its top officials by the attorney general's office, the Los Angeles Times reports. Attorney General Bill Lockyer's (D) office began an audit of Western's finances in mid-2003, according to Lockyer spokesperson Tom Dresslar, who declined to disclose details of the inquiry. According to the Times, Sinclair Hugh, who was Western's human resources director, alleged to the Internal Revenue Service and to Lockyer's office that Western's president and other administrators had approved more than $400,000 in salary advances and zero-interest loans to themselves between 1981 and 1990. Hugh, who was fired in March 2003 after making the allegations, has filed a lawsuit that reiterates them, the Times reports. In addition, two other former Western employees filed similar accusations with the attorney general, according to the Times. State law mandates that not-for-profit organizations, such as Western, cannot provide loans to its trustees, officers or directors, according to Dresslar.
Western spokesperson Mark Wallace said that until 1999 Western allowed top executives to take loans against the value of accumulated vacation time and added that Western is cooperating with the audit, according to the Times. Western also hired an accounting firm to conduct an in-house audit and to collect the documents that the state has requested. According to the Times, Western has not released results of the audit. Western has filed a lawsuit against Hugh, whom Wallace said made "false accusations in an attempt to defame the university," the Times reports (Reyes, Los Angeles Times, 1/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.