WKU Statement Concerning The Investigation Into Possible Misuse Of Funds By Katrina Phelps

August 07, 2008

Bowling Green, Ky. - In July of 2007, a former Western Kentucky University student reported concerns regarding possible fraud involving funds for two community outreach programs administered by Dr. Katrina Phelps. The programs provide structured activities for youth during out of school hours when they may be a risk for engaging in delinquent behavior.   Additionally, the programs provide increased accessibility of human services to families and individuals in need of assistance and promote positive youth development across the Commonwealth. The concerns related to irregularities in payroll authorization forms.

An investigation was immediately initiated by the University’s Internal Auditor, revealing the inappropriate use of funds and falsification of payroll records.  To date, it appears approximately $33,000 of $4.8 million in federal funding awarded over a period of five years is in question.  The amount is subject to change, as the audit and investigation are presently ongoing. The University has turned all information over to the Federal Bureau of Investigation and is cooperating in the investigation.

Dr. Phelps was removed from financial and administrative oversight of the programs in October of 2007, and subsequently submitted her resignation to the University in December of 2007.
           
These two community outreach programs have successfully helped local youths avoid delinquent behavior and provided valuable assistance to needy families. 

In addition to initiating the investigation, the University took immediate steps to review its oversight procedures by retaining Dr. Jerry Fife, Assistant Vice Chancellor for Research Finance at Vanderbilt University. Dr. Fife reviewed the University’s grant accounting processes and while he no significant problems, he made recommendations for enhancing supplementary oversight measures. His recommendations are being reviewed for implementation.

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