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LANSING COMMUNITY COLLEGE

BOARD OF TRUSTEES

October 9, 2006

Special Meeting

1:00 p.m.

Adopted Meeting Minutes

Call to Order

The meeting was called to order at 1:09 p.m.

Roll Call

Present: Brannan, Proctor, Smith, Laverty

Absent: Canady, Pelleran, Rasmusson

Limited Public Comment Regarding Agenda Items

Howard Jones, resident of Lansing. Mr. Jones stated that he and his wife are long time supporters of Lansing Community College's Foundation. He further stated that he was surprised to read about what was going on at Lansing Community College. Mr. Jones commented that he did not read, within the internal audit report, where Mr. Tim Zeller's was contacted and felt this investigation was one sided. He stated that we needed to resolve the problems at the college. Mr. Jones felt that as taxpayers we need to know what is going on with the Board as well as with the executive office. He wanted to know why the community's money is being questioned. Mr. Jones stated that the college needed to adopt a policy where people could obtain information without a FOIA (Freedom of Information Act). Mr. Jones also stated that Lansing Community College should adopt a new policy where every student that receives an associate degree is required to take a course in government that would include citizen's responsibility in a democracy.

AUDIT COMMITTEE REPORT

Trustee Brannan stated that serious allegations were made by a former Lansing Community College employee, Tim Zeller, against the office of the Interim President Judith Cardenas. He stated that Mr. Zeller acted as General Counsel to the college and that Mr. Zeller knew that the Board has been in the process of hiring a new General Legal Counsel and that it was not a secret that Mr. Zeller's days in his job were numbered. Trustee Brannan said that in his opinion he believed that Mr. Zeller was a disgruntled employee whose on going actions were divisive to the college. He stated that based on the allegations Mr. Zeller made against the President's office and based on other evidence that may not completely be explored today in this report, Tim Zeller's many mistakes over time have cost the college thousands of dollars. Trustee Brannan said that the Board of Trustees had been forced to hire outside legal counsel to fix and address the many mistakes that Mr. Zeller has made in the past. He stated that what the Board did not foresee or expect was that in Mr. Zeller's failing desperate attempt to save his own job, he would smear and disparage President Judith Cardenas with malicious statements that were published and broadcasted by the local media. Trustee Brannan reported that in the volumes of documents reviewed, and the hours of interviews conducted, the Board's Audit Committee found that all of the allegations made against the President are false. He also said nothing that President Cardenas did could be consider abuse or fraud and that she is innocent of all allegations.

Trustee Brannan introduced attorney Bev Baligad who coordinated the audit effort, Hoa Nguyen, Lansing Community College's Executive Director of Compliance and Internal Control, and Michelle Gallagher, an outside forensic auditor who has reviewed all the material presented today and who has conducted hours of interviews investigating these false allegations.

Ms. Baligad reported that Michelle Gallagher reviewed all the documents of the Internal Auditor and that she also interviewed Mr. Tim Zeller and President Judith Cardenas. She stated that Hoa Nguyen focused his investigation on the five specific allegations reported to the Auditor General.

Mr. Nguyen reported that this special investigation was requested by President Cardenas and approved by the Chair of the Audit Committee on Thursday, September 28, 2006. He stated that the objective of the investigation was to determine if college funds were misused and if applicable college policies were violated. Mr. Nguyen also stated that in performing his investigation he analyzed and verified pertinent documents and records from the following college departments, the Human Resource Department, Business Office, Accounting and Payroll, Purchasing and the President's Office.

Mr. Nguyen and Ms. Gallagher presented their findings to the Board.

Both final reports are on file with the official Board materials.

Allegation #1: The Interim President is approving inordinate amounts of overtime for three or four support staff in the President's Office. For example, one employee received over $12,000 in overtime within a five month period. An employee is being paid "extra responsibility dollars" for taking on additional work, and has been paid overtime for weeks when she took vacation time for her regular hours.

Mr. Nguyen presented his findings and found that the allegation was without merit.

Ms. Gallagher agreed and found that the allegation was without merit.

Discussion followed.

Allegation #2: The President has given lucrative increases to the support staff without following the hiring process and/or reclassification process.

Mr. Nguyen presented his findings and found that the allegation was without merit.

Ms. Gallagher agreed and found that the allegation was without merit.

Discussion followed.

Allegation #3: The President and staff have made multiple purchases on LCC credit cards. Complainants alleged that the President has bought extravagant gifts for employees, spent money inappropriately on meals for employees or others, and circumvented the purchasing policy by using college credit cards for purchases of college related items.

Mr. Nguyen presented his findings and found that the allegation was without merit.

Ms. Gallagher agreed and found that the allegation was without merit.

Discussion followed.

Allegation #4: The Interim President has hired an employee to help her write a book and/or work on her degree completion projects, paying the employee through the college.

Mr. Nguyen presented his findings and found that the allegation was without merit.

Ms. Gallagher agreed and found that the allegation was without merit.

Discussion followed.

Allegation #5: The President has purchased items or services from a company with whom she has a consultant relationship.

Mr. Nguyen presented his findings and found that the allegation was without merit.

Ms. Gallagher agreed and found that the allegation was without merit.

Mr. Nguyen stated that in conclusion he found nothing to substantiate the misuse of college funds and/or violations of college polices other than the failure of the President's Office employees to process the college card charges through iExpense in a timely manner.

Trustee Smith commented that it was very unfortunate that these allegations were not brought forth to the Board of Trustees Audit Committee initially and that the allegations have caused the community great unrest. She stated that as the allegations were brought forth to the community in a very big way that hopefully the findings will set the community at rest. Trustee Smith stated that the college is trying to move forward and thinks this is an attempt to try and hamper this process. She commented that the community can see that the Board was quick to respond to the allegations and to bring this matter to a close and hopes it puts the community at rest.

Trustee Brannan thanked Hoa Nguyen, Michelle Gallagher and Bev Baligad for the hard work they have done. He stated that there is a process to follow at the college with regards to allegations and that they are to be brought to the Audit Committee. He further stated that it can all be done anonymously. Trustee Brannan commented that it was unfortunate that circumstances have led to this misinformation that was malicious in nature and without verification. He apologized to President Cardenas that this happened.

Mr. Hoa Nguyen stated that he would like to recognize before the Board the full cooperation that he received from each and every department and every employee. He also stated that their professional manner and assistance made his job easier.

Ms. Gallagher thanked President Cardenas and Mr. Tim Zeller for being forthright, open and fully cooperative in their interviews with her. Ms. Gallagher stated that Mr. Zeller asked who he should forward comments that he may continue to receive from staff. Ms. Gallagher responded that she told Mr. Zeller that any complaint should be filed through the secure and anonymous website BOT@michlaw.org and that anything that comes to this website will be reviewed and appropriately assigned.

Ms. Bev Baligad stated that this website was first put in place during the investigation of the Ad Hoc Committee. She stated that it was to give individuals a confidential venue to give the Board direct information. Ms. Baligad explained that she is the only person that receives the email and is the only person authorized to view that website and that certain issues are forwarded to the Audit Committee and if a person wishes to remain anonymous, she has a duty to erase that individual's information before forwarding to the Audit Chair.

Chairman Laverty thanked Trustee Brannan, Hoa Nguyen, Michelle Gallagher, and Bev Baligad for their extensive work and leadership on the audit report.

The floor was opened for discussion.

Chairman Laverty stated that thanks to the evidence presented today, the Board and Lansing Community College finally know the truth. He felt that many of Mr. Zeller's actions have been negligent and that his intention was to harm the President and Lansing Community College. He stated that Tim Zeller made accusations, against President Cardenas's office, to the State without any evidence or proof. Chairman Laverty further stated that those false allegations were repeated over and over in the media and that the media called him and President Cardenas wanting a reaction. He questioned how anyone could respond to false accusations before an investigation. Chairman Laverty felt that this was an unfortunate example of tabloid journalism. He stated that Lansing Community College and this town deserved better. Chairman Laverty reported that the Lansing State Journal filed a freedom of information request for all credit card statements and credit cards used by the college. He stated that there were over five-hundred cards in use at the college. He stated that the public and the employees of Lansing Community College should know exactly what the newspaper is doing. He also report that the Lansing State Journal has filed a freedom of information request for all salaries of employees in the President's office, all timecards of employees in the President office, all emails sent and received by Mr. Tim Zeller during a ten day period in September, and all billing invoices from the Board's law firm Foster, Swift, Collins & Smith, P.C. Chairman Laverty felt that with the public knowing what the State Journal was up to, it would be of no surprise that the college doesn't have that information readily available and that it would take time and money. He stated that Lansing Community College will provide all of the information that the law requires them to produce and supports that. He commented that the intention of this college is to return its focus to better serve the Lansing Community College students. Chairman Laverty stated that Lansing Community College will move forward with a national search to select a new President, and the college is going to fix the computer problem that have plagued the students and faculty. He also reported that the college received a letter today from the State of Michigan Office of the Audit General. It read as follows:

To: Dr. Judith Cardenas, Interim President of Lansing Community College

Dear Dr. Cardenas,

I'm writing to notify you that the Officer of the Auditor General is commencing a performance audit of Lansing Community College. Michael L. Becker, CPA, Audit Division Administrator for Audits of Community Colleges and Eldon M. Land, Auditor Manager for Audits of Community Colleges will oversee the audit. Anthony A. Alfred, CPA, will be the audit supervisor. If you have audit related concerns you would like us to address or need additional information regarding this audit please contact me or Scott M. Strong CPA Deputy Auditor General.

Sincerely,

Thomas H. MacTavish, CPA Auditor General

Chairman Laverty stated that Webb Smith, Attorney of Foster, Swift, Collins and Smith sent a letter to the Auditor General pledging the College's cooperation, help and assistance in anyway. He commented that the college is an open book with nothing to hide and welcomes their coming in and taking a look at what is going on throughout the college. He stated that the last time the college was audited by the Auditor General was December 2001.

Trustee Smith welcomed a closure for the events that have followed and looks forward to the college redirecting its energy and efforts to its primary focus of education. She stated that Lansing Community College is where success begins and would like to start seeing those successes a little more.

President Cardenas thanked all the students, faculty and staff at Lansing Community College for their undying support and commitment to the job of providing success for our students. She stated that these past few weeks have been trying in the community and have caused people to pause and question the integrity of this institution. She further stated that the college will no longer tolerate this type of questioning. President Cardenas stated that the employees at Lansing Community College are highly dedicated, to not only their job but to ensuring that our mission is met on a daily basis and would like to see that on the front page of the Lansing State Journal.

President Cardenas commented that she continues to be committed and will continue to state that it is an honor to be the Interim President of Lansing Community College and does not take those responsibilities lightly. She asked that we continue to pull together to move strategically as we identify a new President and move this institution in order for us to continue to serve the needs of a changing community.

Chairman Laverty announced that the Board would take a brief recess to convene upstairs to conduct the interviews of the Board Administrative Assistant. He asked for a motion for the full Board to take the recommendation of the Personnel and Compensation Committee if the Board loses a full quorum during the interview process.

MOVED by Trustee Smith and supported by Trustee Proctor that the full Board accept the Personnel and Compensation Committee's recommendation for the Administrative Assistant through the interview process and move forward to the next Board of Trustees Meeting.

Ayes: Brannan, Proctor, Smith, Laverty

Nays: None

Absent: Canady, Pelleran, Rasmusson

Motion carried.

Recess was taken at 2:15 p.m.

INTERVIEWS FOR BOARD ADMINISTRATIVE ASSISTANT

Anita Evans opened each interview by giving the candidate initial instructions and the job description.

Trustee Smith asked each candidate the same set of questions.

Anita Evans ended each interview by informing the candidate that the Board would like to make a recommendation by the next Board of Trustees Meeting.

Candidate #1 - Tim Aben

The interview began at 2:43 p.m. and ended at 3:02 p.m.

Candidate #2 - Lisa Backus

The interview began at 3:16 p.m. and ended at 3:39 p.m.

Candidate #3 - Erin Jones

The interview began at 3:50 p.m. and ended at 4:05 p.m.

Candidate #4 - Judy Class

The interview began at 4:15 p.m. and ended at 4:32 p.m.

Candidate #5 - Ava Mills

The interview began at 4:47 p.m. and ended at 5:12 p.m.

Candidate #6 - Benita Duncan

The interview began at 5:32 p.m. and ended at 5:56 p.m.

Discussion followed.

DISCUSSION ON BOARD ADMINISTRATIVE ASSISTANT

The Board returned back to the Boardroom at 6:46 p.m.

Chairman Laverty reported that the interview process was completed and that the recommendations from the Personnel and Compensation Committee will be discussed at the next regular Board meeting on October 16, 2006.

The floor was opened for public comment.

Trustee Smith announced that the Board of Water and Light is having their National Utility Month and that they have random acts of thank you's. She presented a gift bag to President Cardenas and Chairman Laverty and thanked them for being customers.

Chairman Laverty stated that there was an issue to discuss in closed session but due to not having a quorum they could not go into closed session.

CLOSED SESSION

No closed session

ADJOURNMENT

MOVED by Trustee Proctor and supported by Trustee Smith for the meeting to adjourn.

Ayes: Proctor, Smith, Laverty

Nays: None

Absent: Brannan, Canady, Pelleran, Rasmusson

Motion carried.

The meeting adjourned at 6:48 p.m.



LCC Board of Trustees
Administration Bldg
Phone: (517) 483-5252
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