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Last month, CNR President Judith Huntington abruptly resigned due to “significant unmet financial obligations,” prompting the school’s Board of Trustees to launch a full investigation into the misappropriations and to restructure CNR’s finances.
On Tuesday, the Board announced that approximately $20 million in payroll taxes were not paid for eight quarters. The review is ongoing, but the Trustees have cautioned that it will require significant cost-cutting and outside funding for CNR to remain a stand-alone institution.
“The goal of the investigation is to determine how and why the payroll taxes went unpaid, who was responsible for the non-payment, if any funds were diverted from CNR and if there were any other undiscovered related issues,” they said in a statement. “The investigation is not complete, but the Special Committee did not want to delay any longer sharing preliminary findings with the CNR community.”
According to the Board, the investigation thus far has determined that the CNR’s controller failed to file the required tax returns and to pay the taxes due. It also revealed that senior management did not provide accurate information to the Board about the college’s finances.
The investigation also revealed other significant debts, liabilities and depletion of assets - including the unrestricted endowment - that total more than $11 million.
“The financial information that was provided to the Board was incorrect, incomplete and lacked transparency. Additionally, an independent external auditing firm audited CNR’s financial statements for recent years and found no material issues. The Board was permitted to rely on these audits.”
The Board noted that because the misappropriations went nearly two years before being discovered, they “do not have the normal course of time to address the college’s financial stress,” calling the situation “urgent.” They are presently examining all feasible options to preserve the school’s mission, including discussions with possible options with other institutions.
“We must move quickly to be effective in determining the destiny of the College of New Rochelle, our alma mater that has produced, accomplished, impassioned leaders for more than a century,” Marlene Malone Tutera, the President of the Alumnae/i Association said. “The next few weeks will be critical. I hope we can count on (alumni) to help rebuild CNR and preserve all that has been most meaningful in every era of the last 112 years.”
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