UPDATED FOR CLARITY: Internal investigation finds $1 million in alleged fraud by 4 employees of Chico State’s Department of Accounting
Kendall Hall on Chico State campus. Taken on Sept. 2, 2020.
Chico State has placed four employees in the College of Business’ Accounting Department on leave after an internal investigation concluded they received an alleged $1 million in “inappropriate compensation and other financial losses to the university.”
The Orion has yet to confirm the identities of the employees accused of fraud. Originally, The Orion reported that the allegations appear similar to a CSU “special investigation” from November 2019, but University Communication has now clarified to The Orion that this is a second and different investigation involving different employees of the Accounting Department.
Chico State President Gayle Hutchinson announced the results of the university’s newest internal investigation in an email.
“Based on the findings of the investigation, today we placed four employees on leave, pending final disciplinary action,” Hutchinson said. “Each of these employees has privacy rights and due process rights to appeal any discipline. We also have referred the matter to the appropriate authorities to investigate potential criminal conduct and will be seeking any restitution to which the University may be entitled.”
The Orion first reported the results of the November 2019 CSU audit in February 2020. At that time, Provost and Vice President for Academic Affairs Debra Larson released a statement: “The campus is in the process of responding to the recommendations from the chancellor’s office investigative report released Nov. 6, 2019. This report has given us the opportunity to review facts and evaluate the effectiveness of our internal policies and procedures.”
Hutchison condemned the new fraud allegations as outrageous.
“What I can say is that the fraudulent and abusive activity identified in the investigative report does not reflect the values of our University,” Hutchinson added. “Regardless of our respective positions, we each share a duty to uphold the highest ethical standards in our fiscal practices, professional conduct, and our daily work. I am personally outraged that a few individuals have abused the trust placed in them by students, taxpayers, and donors for their personal benefit.”
The Orion has also learned that former Chico State Accounting Professor Curtis DeBerg, subject of the CSU special investigation in November 2019, is no longer a university employee, even though he remained listed as one on the university directory as of press time. DeBerg responded to The Orion on Dec. 26 and said that he “retired on August 18” and that “neither the university nor I admitted any wrongdoing.” DeBerg denied any connection to the new accounting department investigation and said he left the university “amicably.”
The November 2019 CSU audit accused DeBerg, who founded Students for the Advancement of Global Entrepreneurship (SAGE Global), of creating “falsified invoices in an attempt to receive reimbursement for expenses for which he did not have proper documentation and increased students’ pay in a way that obfuscated the true purpose of the expenditure.”
The troubling news comes at the end of a tumultuous year, dominated by COVID-19 disruptions, in which Chico State, and universities across the nation, have experienced declining enrollment and an increasingly challenging financial climate.
*This story has been updated to clarify that new allegations of fraud by employees of the Accounting Department are separate from the CSU special investigation into SAGE Global.
Kimberly Morales can be reached at [email protected] or on Twitter @kimberlymnews.
John (former CSU COB student and member of SAGE) // Mar 10, 2021 at 3:26 pm
Everything including and after “The Orion has also learned that former Chico State Accounting Professor Curtis DeBerg, subject of the CSU special investigation in November 2019, […]” should be deleted, as it is not relevant to the Headline and main content of this article.
Per the author’s own admission at the bottom: *This story has been updated to clarify that new allegations of fraud by employees of the Accounting Department are separate from the CSU special investigation into SAGE Global.
Because the irrelevant and misleading content remains, it appears to have not been updated. If they are not related why are they stuck together under a headline of fraud?
I would recommend “Jim Lehrer’s Rules of Journalism” to anyone interested in integrity in journalism.
Curtis L. DeBerg // Jan 2, 2021 at 9:59 am
To be clearer: I am NOT one of the four people alleged to have committed fraud.
To repeat: I was NOT among the people who “received an alleged $1 million in “inappropriate compensation and other financial losses to the university.” My investigation was NOT SIMILAR to the one involving inappropriate compensation.
To view the compensation of any state employee, I invite you to go to https://transparentcalifornia.com/. I was among the lowest-paid of any tenure- or tenure-track professors.
As a (now-retired) tenured full professor of accounting, I made a couple minor errors of judgment which led to a separate investigation of my work with SAGE and with a federal grant that ended successfully and UNDER BUDGET.
I retired from the university on August 18, 2020, with neither the university or me admitting wrongdoing. Responsible journalism would not have asserted that the new “allegations appear similar to a CSU “special investigation” from November 2019,”
The two special investigations are NOT at all similar.
Courtlen Cedric Burke III // Dec 25, 2020 at 5:08 pm
so will students receive compensation for this alleged mishap? Or will things like this continue to be sweeper under the rug & neglect the STUDENTS well being and financial hardships during a global pandemic?. Merry Christmas.
Leilani Gigena // Dec 25, 2020 at 11:26 am
Dear Gayle,
I am inferiated what you depicted our department and students to look like. As a past director of VITA and a volunteer for three years for this community. We barely have funding for our department with struggles to just get a seat for classes canceled summer and winter sessions to graduate on time. I will be in contact with every Beta Alpha Psi recruiter and Butte College of Business professor and bring them clarity to the situation. As well as the IRS who we have always worked in close proximity with us during VITA and has given us protections for any false allegations. I will then report to the Chancellor along with other students who fill strongly about this tarnished reputation. I and others students will not be future recruiters to Chico State because of your published words.
Jessie Imhoff // Dec 24, 2020 at 9:52 am
I can’t believe more fraud came out of the accounting department. Great reporting Kim!
Insider // Dec 24, 2020 at 5:52 am
This is just the tip of the iceberg. Look at the other Departments in the College. And you will find greater fraud. Go deeper and wider.