Chico State Employees Trick University Out Of $1 Million


A fraud investigation that followed four California State University, Chico employees from 2014 to 2019 found that they had spent over $1 million of university money.

The four employees who worked in the university's accounting department were placed on leave back in late December.

In December 2018, the incoming college of business dean, Terance Lau, noticed a pattern of significant spending in the accounting department. It prompted him to request a review of the department's finances.

A review of expenses submitted to the university obtained by KRCR revealed that from July 1, 2014, to June 30, 2019, the employees in question had misused:

  • $890,000 in additional compensation for fraudulent work or money staff was paid for work already required of them
  • $90,000 in misused assigned weighted teaching units
  • $2,500 in questionable gift card purchases
  • $1,700 in fraudulent milage claims paid with state and UF funds
  • $14,000 in personal travel paid with state funds and UF funds
  • $26,000 in personal expenses such as meals, hospitality, and gifts
  • $30,000 in excessive and unnecessary hospitality expenses
  • $68,000 in unreported absences

Investigation reports also obtained by KRCR revealed emails between the employees and accounting professors that proved they intentionally manipulated class sizes in an attempt to increase enrollment for classes in the winter and summer semesters. Professors who teach courses in the winter and summer receive additional pay, according to KRCR.

Although the investigation was civil and involved employees meaning they could face disciplinary action at most, with such massive fraud, legal action is being pursued.

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