CHICAGO - The College of DuPage in Illinois fired its top two fiscal managers - treasurer Thomas Glaser and controller Lynn Sapyta - accusing the two of violating school investment practices and other internal rules.
Lawyers for the two said they planned to file lawsuits alleging they were wrongfully terminated and their existing contracts breached. They argue the two have been blamed for decisions that the former board had full knowledge of and have been unfairly targeted for blame amid the community college board's ongoing efforts to oust the school's president, Robert Breuder.
The college issued the termination notices Wednesday.
"The College of DuPage will soon embark on a comprehensive search for highly qualified and capable replacements," Board of Trustees chairwoman Kathy Hamilton said in a statement. "This is part of the new era at COD. Due to privacy considerations, I cannot comment any further."
The financial leadership shakeup comes after a series of controversies related to questionable spending and contracts and lax fiscal oversight. Lavish spending by Breuder and questions over contracts were chronicled on the front pages of the Chicago Tribune, leading to county and federal criminal probes, and prompting voters to replace college board members in April's election.
The college in Glen Ellyn, 22 miles west of Chicago, carries triple-A ratings.
It put Breuder on leave last April and then put Glaser and Sapyta on leave in June. The board took action against the latter two after a critical audit was disclosed that found various violations of rules governing investments.
It concluded that college staff acted without authority to increase investments in the Illinois Metropolitan Investment Fund last September to a level in violation of college limits. The fund was the victim of fraud resulting in widespread losses for its local government investors. The college suffered a $2.2 million loss.
The finance officers countered that board members were kept abreast of their decisions and at least one board member publicly supported that contention. Officials also raised questions over why the finance team sat on audit recommendations distributed internally in March and why they were not disclosed to the board until May.
The actions followed the spring election of new board members who then elevated Hamilton, an existing board member who had challenged Breuder on his spending and policy decisions, to chairwoman.
Sapyta and Glaser received letters from the college in July outlining a series of claims that the school said would justify their dismissal. In addition to the investment decisions, they included charges of fiscal mismanagement involving the school's radio station and upscale restaurant, both targeted in state and federal probes.
Sapyta said in a published statement: "I'm being made into a scapegoat for the criticism that the media has leveled at Dr. Breuder and his administration … for lavish spending at the college's restaurant and other issues over which I had no control."
The college hired Alix Partners in June to manage its finances with its top finance officers on leave and to conduct a review of financial controls. It subsequently found additional instances in which school investment policies were violated.
Glaser is well known to the local public finance community as the former chief financial officer of Cook County. He later moved over to serve as chief operating officer for the county treasurer, a position he left in 2009 to join the community college.
The college's top ratings have remained intact during the controversy as the fiscal issues haven't impacted the overall health of its balance sheet.
In June, Moody's spokesman David Jacobson said analysts were monitoring developments but "given the district's sizable and wealthy tax base coupled with very healthy reserves" of $160 million which provide coverage of a full year's operations "we do not see any immediate credit pressure" on the district's Aaa rating.
The college, formally known as Community College District 502, has $340 million of outstanding general obligation debt and most recently issued $84 million in 2013 to finance a wide range of capital improvements.
