University of Colorado officials are drafting whistle-blower protection guidelines based on corporate-reform legislation passed after the Enron scandal and other business scandals.
CU president Hank Brown said he will bring the proposal before the regents in the next month or two. The measure should provide safeguards against fraud and mismanagement, he added.
The federal Sarbanes-Oxley Act, which set tight standards for auditing and corporate governance at public corporations and nonprofits, does not apply to government agencies such as CU, but Brown said he would like to see some of those provisions at CU to ensure a well-run school.
“It’s the best practices that apply to corporate boards and (nonprofits) and it seems to me appropriate to do this kind of thing” at CU, Brown said.
Sarbanes-Oxley allows employees to report suspected fraud directly to a corporation’s audit committee and protects the anonymity of the employee.
Brown said he would like a similar provision allowing employees to confidentially go to regents if they suspect fraud.
The provision will be in the university’s yet-to-be-finished communications guidelines, which will direct employees who have problems with their jobs to first communicate with their supervisors before going up the chain of command. The exception will be for whistle-blower allegations.
Currently, CU and many other schools do not have specific whistle-blower policies, or they rely on a state law that protects from retaliation public employees who reveal fraud if the employee discloses truthful information.
But that law is not always effective, as former CU-Denver employee Donna Smith found in the early 1990s when she reported irregularities with the Office of International Education. An audit found problems in the department, but Smith’s supervisors, in retaliation, did not renew her contract the following year, according to Smith’s lawsuit. CU settled the lawsuit for an undisclosed amount in 1998.
Smith said she doubts going to the regents would’ve helped her.
“Going to the regents wouldn’t solve the problem unless you find a regent so interested in the public interest,” said Smith, who now lives in South Dakota and says she doubts she would blow the whistle again because of the damage to her career. “It’s hard to tell people something they don’t want to hear.”
CU-Denver spokeswoman Danielle Zieg did not have much information about the case because legal files had been archived off-site.
Rod Muth, chairman of the CU Faculty Council, said he supports the proposal, although he cannot remember a case of retaliation against employees who uncovered fraud.
“Hank is very concerned about compliance issues,” Muth said. “It’s good to have an explicit system in place.”
Brown also said that his proposal wasn’t sparked by any particular whistle-blower case, but he believes it will improve CU’s accountability.
“This is a way around (your supervisors) for dealing with fraud,” he said.
Staff writer Arthur Kane can be reached at 303-820-1626 or akane@denverpost.com.
