Two financial officers at College of DuPage were placed on leave Tuesday after an internal audit came to light showing the troubled community college had lost $2.2 million by making investments that violated its own policies.
Thomas J. Glaser, senior vice president of administration and treasurer; and Lynn Sapyta, assistant vice president of financial affairs and controller, were placed on administrative leave pending an investigation, College of DuPage said in a statement posted on its website Tuesday.
The college also posted a copy of the audit on its public website. The report, compiled by internal auditor James Martner, had been circulating internally since March, but the college's Board of Trustees was not notified about it until May, the college said.
At the center of the audit is the college's stake in the Illinois Metropolitan Investment Fund, a local government investment pool.
In April 2014, the Board of Trustees authorized a resolution allowing the college to invest in IMET, the audit said. By September, COD staff had invested more than $80 million or 29 percent of its portfolio, in IMET—even though the board's policy limits investments in such pools to 5 percent of the portfolio.
The next month, IMET revealed defaults on $50.4 million in loans, and effectively froze a proportionate share for each fund member—including $2.2 million for College of DuPage, the audit said.
College of DuPage lost more than any other municipal investor. However, the college would have only lost roughly $381,000 if it had followed its policy and invested no more than 5 percent, the audit found.
Neither Glaser nor Sapyta could be reached for comment Tuesday afternoon.
In the college's statement, board chairman Kathy Hamilton called the situation "an enormous and deeply troubling betrayal of taxpayers, faculty, students, families, and those yet to cross our threshold for their chance at the American dream."
"These actions are utterly unacceptable," Joseph Collins, acting interim president of the college, said in the same statement.
At the time the audit was written, the college had gotten back a "small percentage" of the funds, but it was not known how long the rest of the amount would remain frozen or whether it will be fully returned, it said.
The audit also found that 43 percent of the college's portfolio was invested in bond mutual funds, far exceeding the board's limit of 5 percent and also without board authorization.
Other findings noted that staff-directed investments failed to meet other board policies regarding quality thresholds for size, maturity, asset quality or institutional disclosure, according to the college.
In the statement, Collins said the college is working to address the auditor's recommendations in the report, among other reforms.
The Board of Trustees will meet Thursday, and will consider retaining a financial advisory firm to manage its financial affairs on an interim basis.
The revelations are the latest in a series of setbacks for the Glen Ellyn-based community college.
Voters sent three newcomers to the board in April after the previous board made a controversial vote to reaffirm a $762,000 severance package to end outgoing president Robert Breuder's contract three years early.
Breuder went on medical leave April 29, the same day the newly elected board released an agenda indicating it was to consider placing him on administrative leave.
The school also confirmed to the Chicago Sun-Times in April that federal authorities had opened an investigation and had issued subpoenas.