Education Lab

Lyles Center director blames Fresno State financial procedures for critical CSU audit

Timothy M. Stearns, director of the Lyles Center for Innovation and Entrepreneurship at Fresno State.
Timothy M. Stearns, director of the Lyles Center for Innovation and Entrepreneurship at Fresno State. The Fresno Bee file/Google

Timothy M. Stearns, director of Fresno State’s Lyles Center for Innovation and Entrepreneurship, said the university’s bad record-keeping practices were the cause of problems found in a California State University audit that faulted him.

Stearns struck back at the university after it accepted many of the claims made by a California State University audit released on Feb. 12.

The response came during an interview with The Bee about a PayPal account run by the Lyles Center. The audit notes that $6,377 from the account was used to reimburse Stearns from October 2013 to July 2015, and an additional $8,685 was charged from the account by Lyles employees. The auditors were unable to fund any supporting documentation for exactly what this $15,000 was used for.

And a university official said she isn’t sure how the $15,000 was spent, either. She contends that because the account was operated outside of Fresno State rules, the Fresno State Foundation – which oversees most of the university’s finances – has no record of it. The account has since been closed.

Stearns said that every reimbursement he filed had a receipt or invoice to match – including a $3,000 payment auditors found to be “questionable” – and that any odd or suspect reimbursements are the university’s problem, not his.

“Why would the university give me $3,000 without documentation?” Stearns said in an interview Friday. “And if reimbursements go on without proper paperwork, isn’t that on the university? It isn’t my job to sign the paperwork for them.”

That $3,000 was used to secure a platinum membership for 60 students in an entrepreneurial program, Stearns said. He tracked down the invoice, which he did not write, and submitted it to university officials this past week, which was confirmed by Fresno State.

Stearns believes that everything the auditors wanted should have been on file with the university. The financial accounting systems in place at Fresno State, he said, are to blame.

He also accused the university – where he has taught for more than two decades – of “wanting to run away” from this issue.

It was because of problems with Fresno State’s payment process, Stearns said, that the Lyles Center had to create a PayPal account.

The PayPal account was created several years ago because the university had no way to accept online or PayPal payments, which are a common preference for summer camps in which students are coming from other countries, Stearns said. The tuition paid by these students’ parents or schools was deposited into the PayPal account.

Deborah Adishian-Astone, interim vice president for administration at Fresno State and executive director of the Fresno State Foundation, agreed with Stearns’ logic for creating the account – just not with what happened in the years after.

“For a number of years, we did not have the ability to accept online or PayPal payments,” she said. “The issue is not with accepting PayPal payments. The issue is that the PayPal account did not automatically flow into the foundation’s bank account.”

Adishian-Astone said all other PayPal accounts held by university entities immediately redeposit any funds they receive as payment to the foundation. Written records are kept by the foundation on all exchanges made to and from the various university account holders.

Because the foundation didn’t know about the Lyles PayPal account, she said, she has no idea how the money was spent. That’s why the university chose to immediately close it once auditors shared its existence.

Stearns said he was never told that all PayPal deposits had to be funneled into the foundation’s bank account. The PayPal account was created by the center’s financial manager, and Stearns said he “isn’t involved with that side of things.”

Adishian-Astone said all of Stearns’ reimbursements that came from the foundation – including the $3,000 identified by auditors – have proper documentation directly from the vendor.

Although Fresno State agreed with all of the auditors’ critical findings about Stearns and has no idea what happened to at least $15,000 of the university’s money, it isn’t clear what discipline – if any – the Lyles Center director will face.

Adishian-Astone refused to comment on the subject, saying that decision would come from either Fresno State Provost Lynnette Zelezny or President Joseph Castro.

When asked, Zelezny issued this statement to The Bee: “The matter is under review and (is) something we take very seriously. Employee privacy rights preclude us from discussing any potential disciplinary action.”

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