Northern Illinois University – Ron Walter’s travel/hotel expenses –

NIU / DeKalb, IL. (ECWd) –

We realized that we have been remiss in discussing Northern Illinois University’s consultant/employee Ron Walters, the good friend of NIU’s President Baker. Mr. Walters, a recent major player at the University, was heavily involved in the problems that have beset NIU since the arrival of President Baker; as such, it will require more than one article to discuss the issues. In this column, Mr. Walters, and the first of the issues associated with him, will be introduced to readers who may be unfamiliar with him.

Mr. Walters’ biography, as is included in his NIU Human Resources “employee” file, states that he is an independent consultant. But NIU hired him as an “affiliate employee” in June 2013. He was hired apparently upon President Baker’s recommendation, and was paid a starting salary of $8,125 semimonthly (with raises to $11,250, then $15,000 semimonthly). He was given the position of Special Initiative Advisor to the President. This new position was not publicly posted, nor was any other candidate given a chance to apply or interview for the position.

President Baker hired Mr. Walters, perhaps not only because Mr. Walters had worked for University of Idaho when the President was Provost there, but also because the two men were such good friends that, at the President’s official inauguration celebration weekend, Mr. Walters and his spouse were entertained at the President’s home for a “friends and family dinner”. Further, it appears that President Baker and his wife attended Mr. Walter’s wedding on August 10, 2013. Cronyism again raising its ugly head?

Mr. Walters commenced work at NIU in June 2013 as the architect of the President’s controversial Bold Futures plans. Mr. Walters did not change residence upon becoming a NIU “employee”, but continued to maintain, and reside in, his home on Lopez Island, WA and his spouse’s condo in Seattle. On the days that he worked for NIU, he traveled from his home(s) in Washington State to DeKalb as necessary. He also began to submit requests for reimbursement of his travel expenses. The amount of travel vouchers paid totaled $34,265.20.

For an “employee”, traveling between one’s home and place of employment is normally defined as commuting. The State of Illinois bans reimbursement of commuting costs for state employees. Several local citizens were aware of these rules and raised an outcry. They reported this violation of state rules to various regulatory agencies and supplied the proof obtained through requests made under the Freedom of Information Act (FOIA). The first regulator to respond publicly was the Office of the Auditor General.

The FY14 audit report included an audit finding regarding the inappropriate reimbursements paid to Mr. Walters for his commuting costs. The University was instructed to demand the return of the monies from Mr. Walters for these inappropriate payments. President Baker personally appealed to the State Higher Education Travel Control Board to grant an exception for Mr. Walters for a portion of these costs, but they denied his appeal. Therefore, the University was forced to request the return of $34,265.20 from Mr. Walters.

Why did the University’s Accounts Payable department, with a reputation of strictly adhering to state rules and knowing that state rules ban reimbursement of employee commuting costs, allow payments to be made to Mr. Walters for commuting costs? They apparently believed that Mr. Walters was a consultant, not an employee. Why? Deceptive practices by the President’s office, whether deliberate or not. Mr. Walters was introduced to the NIU community as a consultant, not an employee; that the President considered Mr. Walters a consultant was also confirmed, in writing, in a Baker Report (http://www.niutoday.info/2014/02/14/baker-report-the-model-university-of-the-future/ ). Further, the first six (6) Employee Travel Voucher forms submitted by the President’s office for Mr. Walter’s commuting costs (June-September) were marked with “Consultant interviews”.

Four of these forms were approved by President Baker himself and the other two by Dori Hooker, the President’s secretary. Finally, it was instructed that Mr. Walters was to be paid with a check, not with direct deposit as is required for employee travel reimbursement; this is confirmed by the vendor number noted on the top right part of this form. And although his reimbursement was on an “employee” form, the online list of NIU forms does not include a vendor/consultant travel reimbursement form; it could have been reasonably assumed that the President’s office used this form for convenience. The defining word “consultant” was not prominent on any reimbursement requests after the first six forms, presumably unnecessary because precedence had been set. Regardless of the President’s and public’s belief that Mr. Walters was a consultant, the auditors determined that he was in fact an “employee”, at least when considering the issue of commuting reimbursements.

However, this was not the only excessive perk that Mr. Walters received as an “employee” of NIU. He was also supplied with a suite in the on-campus hotel paid for by the President’s office. Perks are negotiable and may vary between individual employees, but there are always ramifications to accepting excessive perks. The value of the perk must be added to the gross pay on an employee’s W2 and the employee must pay income tax on the declared value. This was not done in Mr. Walter’s case. Again, it took private citizens to be aware of this tax ramification, obtain proof through use of FOIA, and raise an outcry. The University was forced to contact Mr. Walters after the fact to inform him that corrected W2s were to be issued.

How could a taxable event such as free housing have been overlooked by the University’s payroll department? Probably because, similar to the new usage of the “affiliate employee” category, housing “employees” in the hotel for extended periods was also a new practice initiated under President Baker, seemingly without planning or forethought.

However, these issues have apparently been settled. The local paper “reported” that the University had “reached an agreement with Mr. Walters” (http://www.daily-chronicle.com/2015/12/31/niu-resolves-audit-issue-with-contractor/ayw6n04/ ). But the Auditor General has not yet publicly confirmed that the matter has been settled.

Per the agreement, Mr. Walters will reimburse the University $17,515.20 for the monies he owed. Wait! NIU settled for only $17,515.20 when Mr. Walters was improperly paid $34,265.20? Why did the University settle for only a partial payment? Are they that willing to fritter away more of the Illinois taxpayers’ hard earned money? And doesn’t this also send a message to every other employee and/or contractor that a full settlement of disputed funds is not required by NIU?

Unfortunately for NIU, this settlement agreement suggests a much more serious violation of state procurement rules. This possibility will be discussed next time.

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Northern Illinois University