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Contact: Steve Halvonik 717 787-1381
Penn State Letter of Governance Reform
Chart of Recommedations

Auditor General Jack Wagner Calls For Governance Reforms at Penn State University

HARRISBURG, Pa., July 26, 2012 - Auditor General Jack Wagner said today that the Pennsylvania State University president should no longer be a member of the university's board of trustees, and that the president should also be prevented from serving as the board's secretary.

Wagner said these changes should be made in order to remove a conflict that exists between the president's role as the university's top administrator and a trustee's role as one who oversees the university's administration.

The recommendation was contained in a letter that Wagner sent today to leaders of the General Assembly, outlining preliminary recommendations that Wagner said were necessary to improve the university's governance in the wake of the Jerry Sandusky child sex abuse scandal.

“These changes would make clear that the President and CEO of the university cannot be both an employee and also an equal to the board,” Wagner said in a letter sent today to leaders of the General Assembly, which must legislatively approve any such changes to Penn State's enabling statute.

Wagner suggested the General Assembly refrain from making any changes related to Penn State until he completes his report that will make a series of recommendations on how the board of trustees’ governance should be improved to ensure the board’s operations are more transparent and open to the public. Wagner said he expected to complete his report within 60 days.

Wagner noted that the Department of the Auditor General has been working on a report on Penn State for several months, separate and independent of the university-sanctioned Freeh report.

Although his department had absolutely no communication with the Freeh investigators, Wagner said he is gratified that the Freeh report’s suggested actions by the board include a recommendation for the board to review and act on governance issues.

In addition to removing the president as a voting member of the board, Wagner said Penn State’s enabling statute should be amended to prohibit the president from being on any committee and to remove the president’s ability to assign any work to the committees. Wagner’s other preliminary recommendations include:

• The General Assembly should amend Penn State’s enabling statute by making the Governor an ex-officio non-voting member of the board to alleviate concerns about conflicts of interest, real or perceived, that may arise from any statewide row officeholder being elected governor and subsequently exercising an active role on the board.
• The General Assembly should amend Penn State’s enabling statute by establishing a quorum level as the majority of the members of the board of trustees, rather than, for example, the current minority of 13 members of a 32-member board.
• The General Assembly should make the Right-to-Know Law fully applicable to all four state-related universities, while still protecting the institutions’ donor contributions, certain intellectual property rights, and proprietary research to ensure that Penn State and Pennsylvania’s three other state-related universities are open and transparent to the taxpayers who support the institutions.

Wagner said the recommendations in his letter and the special report that will follow will provide the General Assembly with the changes necessary to make Penn State a more transparent and accountable public university. “Because it is impossible for the Penn State Board of Trustees to be completely independent and objective in restructuring itself, the General Assembly must step in to take decisive action via a special session or as a priority in the fall legislative session,” Wagner said. “I will be available to work collaboratively with the General Assembly to institute necessary changes at Penn State to protect the interests of all Pennsylvanians.”

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts thousands of audits each year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s website at www.auditorgen.state.pa.us.

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