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Old Main Comes Clean: Penn State Right-To-Know Report 2010 Will be Revised

This is a follow-up to my earlier post about Old Main's failure to comply with the Pennsylvania Right-To-Know Law.

The big story this year is not what is in the report; it is what isn't in the report. The bulk of the report is an IRS Form 990. This year for the first time the University had to report payments to family members of trustees, officers and key employees in the form of business dealings in the excess of $100k and compensation in excess of $10k. Old Main acknowledged the existence of such individuals and it is obvious that Sandra Spanier, for one, satisfies the criteria. However, the University did not provide details on the payments citing an ordinary course of business exemption. The problem is that the instructions for filing out Schedule L, where the detail are to be reported, explicitly states that the ordinary course of business exemption does not apply.

The University announced yesterday that it will file a revised RTK  with the Commonwealth on Friday which will correct the omission in the original report. A copy of the revised report will posted on the Penn State Web site. 

You can read more at StateCollege.com and the Pittsburgh Post-Gazette and I'll have more to say at Left of Centre once the revisions are available.

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Hmmmm, that's interesting.

It seems funny that the folks the university pays to fill out those forms would try to slip such a thing by but I guess they were stuck between a rock and a hard place.

It would pretty funny if someone got hoist by the new IRS regulations, which were meant to crack down on nonprofits and the pool of untaxed economy.

I also kinda doubt that the people who can yank Mr. Spanier's chain really care. Well lets say DID really care, in the past tense. Publicity is a bitch.

And, relatives having jobs with the same employer happens all the time, so it could be totally innocent and entirely a form filling messup caused by new baroque regulations. You have any reason to think otherwise?

 

What's going on?

I'm agnostic on whether the failure was an effort to hide something or not. Once the data is released we can decide if the amounts of money involved point to corruption or not.

I'm not agnostic on the question of whether the omission of the data was intentional or not. I believe very clearly that it was intentional.

Graham has a long history of fighting transparency. In 2007, when the Pennsylvania legislature set out overhaul the Commonwealth's RTK law both the House and Senate bill extended the the law completely to state-related universities. Graham threw a hissy-fit during the hearing for the Senate version of the bill. He absolutely was opposed to the University having to respond to open record requests. Go read post at the link to see how opposed he was to answering to anyone other than his corporate cronies.

Jake Corman watered the law down for Graham, explicitly exempting state-related schools from having to respond to open record requests. He substituted language only requiring that the schools annual file the RTK report. The bulk of the report being comprised of the IRS Form 990. Pitt and Temple already were required by the IRS to file this form, but Penn State was not. Jake's compromise simply leveled the playing field on which the state-related universities played.

However, the field was not completely level. The law contains no penalties for not filing the report or for filing a report with intentionally incorrect data. Hence Penn State is free to manipulate the report,while Pitt and Temple who actually must file the Form 990 with the IRS are not really free to play such games.

The instructions for filling out Schedule L where the family business income and compensation data are to be reported are very clear and in direct contradiction to the rationale given by Old Main for not providing the data. It is hard to believe that a tax professional would have innocently made  such a mistake. Yes, the Form 990 was revised this year, but the changes have been much discussed and advertized for years. A tax professional would have known what was expected. Further,  neither Pitt nor Temple made this mistake, both gave details on Schedule L.

I think the calculation in Old Main was that we don't want to report this data, either because we don't believe it's anyones business or to hide something, and there really aren't any consequences if we fudge and get caught. And there's a good chance that no one will notice. Afterall, we post the thing unannounced on an obsure part of our Web site in an image PDF that search engines will by-pass. It'll be days or weeks before anyone notices it's there. Let's go for it. You know better to ask for forgiveness than ask for permission.

Of course, I knew it was coming and where to look. I found it the day they posted it and I made a huge stink about it. oh and I have it on good authority that the Auditor Generals office was tipped off too, which might explain Old Main's fairly quick turn around on this.

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