Governor M. Jodi Rell today announced that she has reconstituted the board of directors of the Connecticut Student Loan Foundation by replacing all six of her appointments to the board, effective March 12. The Governor has recommended a new board Chair and she has ordered immediate corrective actions to address the mismanagement and the host of poor business practices outlined by the Auditors of Public Accounts in a March 5 letter to Michael P. Meotti, Commissioner of the Department of Higher Education.
“The Auditors’ findings are nothing short of disgraceful,” Governor Rell said. “Whether though mismanagement or misfeasance or a combination of both, while the Foundation was driving its finances into the ground it was also paying its executives huge raises and bonuses and providing them with perks and privileges fit for kings and queens. The mission of the Foundation is to help increase access to college for our students, not to increase the administrators’ compensation and benefits at the expense of the students and, ultimately, of the Foundation itself.
“That mission and the viability of the Connecticut Student Loan Foundation have been jeopardized and I am directing these new board members to take immediate actions to right the ship and to put an end to the lavish treatment,” the Governor said. “These new members have a tremendous breadth and depth of experience in finance, education and administration and they will help restore accountability and good business practices to the Connecticut Student Loan Foundation.”
Governor Rell has named the following individuals to the Foundation board, effective March 12.
Lisa Kelly Morgan - is a partner at Ruben, Johnson & Morgan, P.C. and the Governor hopes the board members will consider her as Chair. Kelly Morgan is the former chairperson of the state’s Judicial Selection Commission.
Walter Harrison - has been the President of the University of Hartford since 1998. He previously served as vice president for university relations and secretary of the University.
William J. McGurk - is the President & CEO of Rockville Bank.
John Schyuler - is a Managing Director with UHY Advisors N.E., LLC, a partner with UHY LLP, and a member of its Management Committee. He is a licensed Certified Public Accountant in the states of Connecticut and in the Commonwealth of Massachusetts.
Julie Drouin - is the vice president of finance and the chief financial officer at Day Kimball Hospital in Putnam.
Pamela Partridge West - is a retired Vice President and Senior Business Development Officer for U.S. Trust Company in West Hartford.
In their letter, the Auditors reported that the Foundation has experienced negative cash flows in each of the last five fiscal years that totaled approximately $24.5 million and the Auditors expect another negative cash flow for the 2008 fiscal year. While its financial condition was eroding, the Foundation reduced its workforce from 162 positions to 96 and faced a foreclosure lawsuit on its headquarters -- but at the same time, the Foundation authorized a variety of specific expenses characterized by the Auditors as “excessive.”
Those expenses included large raises and bonuses for top executives, expensive golf club memberships, limousine rentals and expensive holiday parties for staff, basketball tickets at Madison Square Garden, football tickets and a satellite radio system for the Foundation president’s car. The auditors found that the Foundation not only provided its executives with “excessive” salary increases but also incurred expenses “that appear to be more for the benefit of those in management than for the operation of the foundation.”
The Connecticut Student Loan Foundation administers, guarantees and finances federal education loans.