The Stevens Institute of Technology and its president are under investigation by not only the New Jersey Attorney General, but also the IRS.
Harold Raveché, the president of the Hoboken, N.J.-based college, earns more than the salaries of the presidents of Harvard, Princeton and MIT, according to a
The
PricewaterhouseCoopers served as the colleges independent accountant from 2000 to 2005, but fired the school as its client due to the high risk the school posed to the firm, according to the attorney general.
Grant Thornton, which has been the schools auditor since that time, has repeatedly found internal control deficiencies and other material weaknesses, and issued multiple internal control letters with instructions and criticism related to the colleges financial management practices, according to the attorney general. Stevens paid the IRS $750,000 last year in penalties and unpaid taxes of its subsidiaries, mainly spin-off technology companies.
Raveché isnt the first college president to get in trouble over compensation matters, as the Times points out. Adelphi University, Towson University and Texas Southern University have also gotten into hot water in recent years over similar matters.
Nonprofits such as universities can be incredibly profitable to the executives who run them, regardless of the institutions tax-exempt status. That is emerging as an increasing problem, but its not an easy one for the IRS to police. The agency is relatively understaffed in that department.
According to a
The revised Form 990 that the IRS is requiring nonprofits to begin submitting is going to demand more disclosure of executive compensation, but its not likely that the IRS will be increasing its examination staff for nonprofits anytime soon. That will allow more executives at nonprofits to count on earning multimillion-dollar salaries, especially if they have a compliant board of trustees that is all too willing to pay top dollar to the guy at the top of the organization.