William “Rick” Singer, college-admissions consultant and creator of one of the most bizarre criminal conspiracies in history that resulted in 52 folks, including parents, being charged with fraud, recruited college coaches for his scheme. At Stanford, he roped in John Vandemoer, the former sailing coach, to help in getting applicants with no sailing experience on the sailing team, even though they had never sailed. However, to its credit, Stanford commissioned a review of what happened at Stanford, and that review, by Simpson,Tacher, & Bartlett LLP, found that there were seven Stanford coaches who were approached by Singer. Only one succumbed. However, the review found weaknesses in internal controls at Stanford:
1. Stanford had no processes for the coaches to raise concerns or to caution others about the ubiquitous Singer.
2. Stanford lacked a code of ethics on admissions, donations, and athletic recruits, and their amazingly intertwined existence.
3. Stanford lacked a credo — a basic philosophy that admissions “cannot be bought and no donor should ever be under the impression that it can.”
4. Stanford needed more controls and disclosures from development officers on donations to the athletic department and the source of those donations.
5. Stanford needed to have coaches identify those recruits who were presented to them by third parties.
6. Stanford needed to clarify that fundraising was not part of coaches’ performance evaluations.
These types of internal controls are not unusual — many companies and nonprofits have these types of codes, processes, and information-sharing requirements. Where money comes in, who gave it, how it is being used, who recruited the money, and who benefits from the money. Fundraisers know these sorts of controls because they protect them and their organizations.
