|27 March 2003: Cundiff "resigns"|
A letter to the editor in the Deseret News (http://deseretnews.com/dn/view/0,1249,405017996,00.html) calls for a probe into Cundiff's actions:
It seems that the Board of Regents does not want to discuss this issue, but as a Utah resident and taxpayer, I feel it needs some public airing.
During the Winter Olympics, the president of Salt Lake Community College had all its campus sites operate from 6 a.m. to 1 p.m., Monday-Friday except for the South City Campus. H. Lynn Cundiff had that campus site locked down for the duration of the Winter Olympics and rented that facility to a group of some 40 Southern Baptists, who came up from Alabama and Georgia, where they slept, showered and ate. Cundiff charged each of these folks $10 a night.
During the Winter Olympics, these Baptists went out to all the winter venues, the Medals Plaza, Bud World and Washington Square passing out literature that was demeaning to the state of Utah and hostile to the state's dominant religion.
Perhaps the Deseret News would like to investigate why Cundiff feels he has the right to use the state of Utah's South City Campus for the express purpose of propagating information that is negative to this state and to the LDS Church. It also seems odd that Cundiff would demean the very source of his livelihood and undermine the institution the Board of Regents assigned him to preside over.
Salt Lake City
A financial audit of Salt Lake Community College has identified problems with loose financial controls and instances where President H. Lynn Cundiff skirted the competitive bid process and profited from the use of his private plane on college business. But it found no evidence to back more serious claims over misuse of funds.
The audit, released Monday, was conducted by the Office of the Commissioner of Higher Education in response to three anonymous letters mailed to SLCC's board of trustees. The letters contended that Cundiff spent recklessly on campus technological improvements, depleted the college's savings and misused student fees.
The three-page report, which also contains SLCC's response, unearthed no proof of such behavior. But it does highlight some minor accounting irregularities and "sticky issues" the college has agreed to address, said Cecelia Foxley, higher education commissioner.
Perhaps the most serious is Cundiff's repeated use of a plane he co-owns on college business. According to the audit, Cundiff, a licensed pilot, used the plane on official business and billed it to the school when commercial air or other travel means would have been cheaper.
"Billing rates were inconsistent and above the standard rate charged for pilot's usage of a private plane [and] in two instances tachometer readings did not correlate with the reported usage charged to the college," Greg Fisher, the audit's lead investigator, said in the report.
Cundiff has since accounted for the use of the plane but reimbursed SLCC $2,100. "We needed him to pay it back so he didn't share in any profit," explained Foxley.
The report also lists two occasions where Cundiff skirted a competitive bid process required of all state agencies when signing contracts with private companies.
The first occurred when SLCC hired The Clements Group, a Utah-based company that sells advice on fund raising. The second involved a controversial $26.5 million contract with CollegisEduprise to manage SLCC's network.
SLCC contends that public colleges have the right to enter into "sole-source" contracts when only one vendor offers the required products or services. Such was the case with Collegis and The Clements Group, the report states.
SLCC administrators also "concur" that classroom buildings at the college's South City campus were improperly used when Cundiff agreed to rent gymnasium and locker room space to Action Ministries International, a group of nondenominational Christian journalists and sports chaplains, during the Winter Games. He charged each member of the group $10 a night.
That violated state health and other code requirements, because the building wasn't designed to house people overnight, according to the audit.
The state Board of Regents, which oversees the state's nine public colleges and universities, plans no corrective action.
"I am confident that appropriate steps are and will be taken to address these issues," said Foxley, who has asked only that Cundiff submit a report detailing how much he has spent on technology the past two years and any gains made as a result.
Cundiff couldn't be reached Monday for comment but said in a prepared statement that he hopes the report "will put to rest any misconceptions that might detract from our mission."
"When the audit was proposed, I welcomed the change to verify what I already knew to be true," he stated. "In the past year, Salt Lake Community College has served its largest student body while dealing with dramatic budget cuts. I appreciate the efforts of all our faculty and staff who made this possible."
The audit hasn't put to rest the suspicions of at least one former employee, however.
Bob Teague, who recently retired as SLCC's associate vice president over technology, said he is frustrated by the regents' passivity. "The audit identifies that SLCC skirted the competitive bid process. Do we just ignore that for $26.5 million?"
Teague disagrees that the college was locked into a deal with Collegis. The company competes directly with SCT Corp., the designer of administrative software that SLCC already uses, he said. And other companies such as IBM Corp. also sell network managing services to colleges.
Foxley said that may be true, but "I have to rely on SLCC and its trustees" as to whether those companies could do everything SLCC needed.
Teague counters that SLCC trustees, who approved the Collegis contract, also dropped the ball.
"Since when do trustees get to trump Utah law?" he said. "They bear the name trustee because they represent the taxpayers of this state. That's who they are trustees of, not the president." He called for the Legislature to conduct its own investigation into SLCC.
Laptops: $750,000. New office software: $250,000. Going wireless: $2 million.
Joining the 21st century: priceless -- believes Salt Lake Community College President H. Lynn Cundiff.
Cundiff knows technological revolutions don't come cheap. Since taking command of SLCC two years ago, he has spent about $10 million revamping the college's outdated computer networks and information technology operations.
"The stuff didn't work. Now it does," says the 57-year-old technophile, who insists technology will help prepare students to work in today's computerized world and enable SLCC to reach more students. It may even bring in a little extra cash.
A number of faculty, staff and students believe there is a price, however, and it's way too high for the benefits, some of which have been slow to materialize. They contend that Cundiff is spending recklessly, depleting the college's savings and misusing student fees. The allegations have reached the Office of the Commissioner for Higher Education, which is conducting an audit.
"Morale is lower than I've ever seen it. Everyone feels nervous," says Neal Grover, an auto collision and repair instructor who took early retirement, but still teaches part time. "It's going to be interesting to see what happens next year, because a number of key people have left. They saw the writing on the wall."
Says Larry Barlage, another teacher, "People are worried about the direction this college is going."
Cundiff has "gutted the trades program," eliminating small-engine instruction and letting go of three of the college's four welding instructors, says Barlage, who suspects some of the cuts were ordered to free up cash for technology.
Judd Morgan, a college vice president, denies such claims. Program and job cuts are the result of the state's budget crisis, he says. Lawmakers carved $3 million from SLCC's $17 million cache in taxpayer funds.
Nevertheless, Higher Education Commissioner Cecelia Foxley has dispatched an auditor to investigate allegations of overspending at SLCC that were outlined in three letters sent anonymously to the college's trustees.
Cundiff says the letters are filled with falsehoods and innuendos.
"This is junk. It's just junk. How can I respond to people who won't sign their name to a letter? I don't think it's healthy for the college," he says.
Waiting for an Audit: Nolan Karras, regents chairman, is suspending judgment until the audit is complete, possibly early next week. But he says, "I like Lynn. I think he is doing a fine job."
Randall Mackay, SLCC's trustee chairman, is less circumspect. Having discussed the letters with Cundiff, Mackay concludes they are "mean-spirited" and "based on misinformation."
The complaints wouldn't even merit scrutiny were it not for today's penny-pinching climate, says Mackay. "These are difficult times for all colleges in the state of Utah. Salt Lake Community College is no exception."
That is no excuse, argue some on campus.
"It's like 9-11. People who have hangnails say it's because of 9-11. We overspent on technology before the budget fell apart and used reserves we should not have," says Robert Teague, SLCC's former associate vice president over technology. Concerned about the college's future, Teague took early retirement this summer.
According to financial data obtained under the Government Records Access Management Act, SLCC's fund balance, or savings account, is nearly half of what it was when Cundiff took the helm two summers ago -- down from $14 million in fiscal year 2000 to $8 million in 2002. And Cundiff's discretionary account, comprised mostly of unrestricted earnings on cash balances, is broke.
Hurt by Low Interest: Kent Ferrel, controller, says, "We're spending more than we used to on technology initiatives and new facilities." But he blames most of decrease on "an extremely low interest earnings environment."
Other Utah colleges report equally low savings levels. Snow College's discretionary account is just above zero and Southern Utah University's savings pool is negative $300,000.
But Teague is worried that SLCC is headed down the same road as the College of Eastern Utah, which has considered claiming financial distress as it struggles to pay back an $850,000 deficit in its savings -- the product of overspending on salaries and scholarships.
Cundiff has a reputation for entering into unusual and controversial agreements with high-tech companies.
At Floyd College in Rome, Ga., where he served as president for eight years prior to coming to Utah, Cundiff financed a "free" student laptop program with another small college in the Georgia state system. To pay for the plan, the schools charged students hefty fees -- $300 a semester at Floyd -- and formed partnerships with banks, a telephone company, Internet provider and computer companies.
Though deemed an educational success, the program failed to pay for itself, leaving the schools $1.5 million in debt.
Still, there are those on campus who support Cundiff's high-tech makeover.
Last year, Cundiff spent $750,000 on 350 laptops for SLCC's full-time faculty -- "a great way to go," according to Darlene Gubler, director of faculty and staff development. "The portable computers enable faculty to create presentations at home and then download them inside the classroom. If a student has a question about grades or assignments, the professor can search their files right there."
In the past two years, Cundiff also spent $250,000 converting SLCC's e-mail and office software from Novell to Microsoft, upgraded the registration and record-keeping systems for $2.5 million, and built a wireless network for $2 million.
The largest check Cundiff signed, however, was for $5.3 million -- spent hiring CollegisEduprise, Inc. to manage SLCC's entire network operations. The contract is the Florida-based company's largest and will cost SLCC $26.5 million over the next five years.
It is a first-of-its-kind deal, acknowledges an unapologetic Cundiff.
But SLCC's information systems grew up ad hoc and the computer network was unreliable, he says. "There were no firewalls, no security systems, nothing. Do you want to be a college that's moving ahead for the next 15 years or stuck in the past 15 years?"
Improvements: Even critics of the Collegis deal say it has improved operations.
Tiffany Rousculp, an English professor and member of the American Federation of Teachers local, is opposed to the philosophy of privatizing education. But "from where I sit," Collegis offers better service, she says.
And Cundiff insists Collegis won't cost much more than he would have spent anyway. At $5.3 million a year, the contract is within $300,000 of SLCC's 2001 information technology budget.
In addition, he plans to leverage the company's resources by developing an International Center for E-Education Excellence, a clearinghouse for new applications of technology in the classroom, which he hopes to sell to other schools.
"What do you think the University of Utah does, or Utah State? Just because they have a technology park, they should be doing those things and a community college shouldn't?" Cundiff asks. "We're looking for ways to develop outside revenue sources."
Teague says it is preposterous to believe Collegis will save money.
"The numbers just don't compute," he says. "To help sell the deal, Collegis has promised to hire the college's existing IT staff, about 80 people, and give some raises. How can they do that, throw extra resources at the network and save money?"
Teague also opposes the behind-closed-doors nature of the deal.
Competitive Bids: By law, state agencies are required to take competitive bids before awarding contracts to private companies. But Cundiff skirted the bid process, claiming no other company offers the combination of services Collegis does. The Attorney General's Office agreed.
"That's how Cundiff does everything," Teague says of Cundiff's management style.
At least one student agrees.
Gabby Bradford, former student body president, says Cundiff arranged a deal during the 2000-01 school year with her predecessor, Jake Packard, to use $2 million of a $6 million pool of student funds to help pay for the wireless network.
The collection of student fees was earmarked for renovating the student center at the Redwood Road campus.
"But Cundiff said we didn't need that much and asked Jake if he could use $2 million to buy students' wireless network cards and portable computers, which students could rent," says Bradford. "Jake agreed to give him the money without talking to anyone, advisers or other student leaders. The deal was made in the corner of the lunchroom."
According to Bradford, Cundiff has spent $1 million so far and students "haven't seen a dime." Network cards are available for purchase, but not for rent, and the portable computers don't exist.
Defending Expenses: Cundiff defends spending the $1 million, saying students soon will have wireless access. He has promised to spend the rest of the money on devices that will enable students to tap into the network.
Bradford, however, is skeptical.
"I never saw proof of that. I don't think they kept a good record of where the money has gone," she says. "At first he seemed interested in making the plan work. But as the year went on, he realized maybe he was a little over his head and he became defensive. How can a college president bully a student body president into giving him $2 million?"
Morgan believes Cundiff will stick to his promise.
Though not fully behind Cundiff's digital dream, he backs Cundiff 100 percent. "He really wants to help the students learn differently. He means well."
Cundiff has no regrets. Weighing the risks and benefits of his high-tech blueprint, he says, he wouldn't change a thing.
The Board of Regents' audit of Salt Lake Community College revealed no Enronesque accounting, but it leaves at least one unresolved issue -- did SLCC ignore the competitive bidding process?
Utah's competitive bidding laws allow a state agency to hire a company without first seeking bids on a project if the company is the only one that can meet the needs of the agency. SLCC administrators say that was the case with the two contracts being questioned.
Higher Education Commissioner Christine Foxley stated that she had to "rely on SLCC and its trustees" as to whether this is true. That reliance may be misplaced. One thing the audit reveals is carelessness about at least some state rules. Each individual instance may not have been a major issue, but the combined effect of the SLCC president [Lynn Cundiff] charging the school for time he spent flying a plane he co-owns with the school, not recording accurate costs for those flights and allowing school buildings to be used in violation of state health codes raises important questions about the administration's attention to detail. Those questions make real answers to the bid process controversy imperative. SLCC assurances that what it says is true are not real answers.
If the commissioner wants a thorough audit report, she should demand more information about the decision to award two contracts without first soliciting bids. Presumably the college has some documentation showing that the companies it contracted with provide unique services not available anywhere else. A state agency can't just make the claim in order to avoid the bidding process, it must back up its claim. Where is that back-up?
There are discrepancies in the way SLCC has been administered. Similar problems probably occur at most higher education institutions given the sheer number of people involved in college administrations. But when those discrepancies reveal a pattern of not paying attention to state law, regents and taxpayers should not rely on the word of the administrators and trustees that everything is just fine. Get the proof that the competitive bidding process was not necessary under state law or put the auditors back to work. For taxpayers, this case will not be closed until there is a better explanation for the awarding of multimillion-dollar contracts than the school trustees thought it was OK. It's not enough to just have them say, "Trust us."
Salt Lake Community College President H. Lynn Cundiff tendered his resignation Wednesday, effective May 23.
In a letter to SLCC's board of trustees and the Board of Regents, Cundiff said he was leaving to pursue a "limited-window entrepreneurial opportunity" in business.
Cundiff, a 57-year-old Missouri native, has been president of SLCC since Aug. 1, 2000. Before coming to Utah, he was president of a two-year college in Rome, Ga., for eight years.
"He has worked hard to bring about positive changes and improvements during his tenure and we wish him the very best in his new venture," Board of Regents Chairman Nolan Karras said Wednesday.
Karras named Judd Morgan as the school's interim president. Morgan had been vice president of student services at SLCC until his retirement in June 2002.
Trustee Randall Mackey said Morgan is a consensus builder who is held in high regard by faculty and staff.
"We know [Morgan] will continue in the right direction during this crucial interim period," Mackey said.
Morgan, who worked for SLCC for 27 years, had been a consultant to the school after his retirement.
"While we face significant issues with funding, I am dedicated to the unique mission of SLCC," said Morgan. "I am confident in our ability to improve the best possible educational experience for students."
Under Cundiff's short leadership, SLCC's students and faculty have seen a variety of changes. The school -- with 13 locations across the Salt Lake Valley, plus the Internet-based "eEducation" -- serves around 60,000 students through credit and noncredit courses and workshops.
A year ago, Cundiff challenged the eEducation team to double enrollments and course offerings, a goal the school will exceed, said Chris Jorgensen, director of eEducation.
"SLCC has experienced dramatic growth in use of information technology for teaching and learning because President Cundiff made it a priority for the college," said Jorgensen. "That was no small task and [Cundiff] had the guts to go out and get it."
Commissioner of Higher Education Cecelia Foxley also had high praise for Cundiff.
"We knew he would have other opportunities, but we are grateful for his contributions to Salt Lake Community College and the Utah System of Higher Education during his time in Utah."
It has not all been smooth. Last year, an audit by the Office of the Commissioner of Higher Education revealed loose financial controls at the school and instances where Cundiff skirted the competitive bid process. The audit was in response to complaints that Cundiff had spent recklessly on technological improvements, depleted the institution's savings and misused student fees. Cundiff also reimbursed the school $2,100 for overbilling for the use of a personal plane for school business.
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