Sunday, August 10, 2008

U of L's Felner tried to get more funding, investigation reveals

This from Nancy C. Rodriguez in the Courier-Journal:

E-mails detail effort to find other money

Just days before a federal investigation over his handling of a $694,000 education grant became public, former University of Louisville dean Robert Felner tried to tap two other university funds to cover some grant-related expenses.

According to e-mails obtained by The Courier-Journal in an open-records request, Felner sought in June to use money from a university endowment and an unrelated account -- totaling as much as $170,000 -- to help pay for research costs that were supposed to be covered by the $694,000 federal grant.

Felner has not answered calls regarding the investigation or the grant. His attorney, Scott C. Cox, said late this week that he had no comment on the e-mails outlining Felner's request for additional funds.

University spokesman John Drees also declined to comment on the e-mails yesterday, citing an ongoing federal investigation that became public June 20.

He said that the funds Felner was trying to access remain unspent at the university.

According to the e-mails the newspaper obtained, Felner wanted $120,000 in endowed fund money to pay for surveys and data collection that was to be done by the National Center on Public Education and Prevention Inc. in Illinois.

The center's president, Thomas Schroeder, was Felner's long-time colleague, whom he hired as a research assistant at U of L.

Other records previously obtained by the newspaper show that three checks totaling $450,000, written in 2007 to Schroeder's Illinois center, instead were deposited in a Louisville bank account under the center's name. Investigators have not disclosed who deposited the money.

Schroeder's lawyer, Herbert Schultz, said last week that, at Felner's request, Schroeder had returned to Felner the only two checks he was sent, which totaled $250,000.

Schroeder previously said he didn't know about a third check for $200,000. Schultz has said his client is cooperating with the investigation.

Cox said last week that Felner is cooperating with federal investigators in "locating and reimbursing any funds that could be in question."

The purpose of the federal education grant that is the focus of the investigation was to establish, at U of L, the so-called Center for Research-Based Educational Improvement and Assessment: Support and Continuous Improvement of No Child Left Behind in Kentucky.

Known informally as the No Child Left Behind Center, it was supposed to study ways to boost student achievement on the federal assessment tests. But local and state education officials have said they knew nothing about the center or its research.

Felner, who was the project manager for the 2005 federal grant, also had U of L enter into two $60,000 contracts with the University of Rhode Island's National Center on Public Education and Social Policy in 2006 and 2007. The center was to help conduct research for the education grant, which the university said it did, though the work has not been made public.

Rhode Island officials said that the center was paid $60,000 but is still awaiting
payment for another $60,000. Felner served as director of the Rhode Island center until 2006.

Seeking other sources

E-mails sent in early to mid-June show that Felner was searching for money to supplement the federal grant.

For example, Donald R. Carson, assistant dean of the College of Education and Human Development, said in an e-mail to Lorri A. Winfrey, the assistant director of
purchasing at U of L, that Felner wanted to make the Mr. and Mrs. Henry Y. Offutt Teaching Research Endowed Fund the new financing source for the federal education grant.

The fund had been set up to honor Offutt, a former U of L trustee president, and his wife, said Nancy Stablein, the Offutts' daughter and a university supporter. Stablein said Friday that she had met with Felner and other development staff about different ways the fund could be used to improve the college of education.

She said she gave Felner permission to use the money, but said no decisions were made on how it would be spent, and she was never told about the NCLB Center or the Illinois center contracted by Felner to do work for it.

"At one time, we talked about maybe enhancing classrooms, but we never, ever discussed this center. Never, never," she said. "It always applied to anything on the campus of the University of Louisville."

Stablein said when the federal investigation came to light in late June, she called
development officials at U of L and was told the fund's money had not been spent.
About two weeks ago, she said, Lt. Jeffrey Jewell of the U of L Police Department visited her and asked about the endowed fund and her conversation with Felner. It was then, she said, that she learned Felner planned to send the money to the Illinois center.

"I am disappointed," Stablein said. "It has broken my heart."

Jewell, who is involved in the ongoing federal investigation, said Friday that he could not discuss the case.

Plan for leftover funds

Besides the endowed fund, Felner indicated in a June 3 e-mail to the university's grants management office that he planned to use leftover funds from a 2005 contract he had with Jefferson County Public Schools to cover unspecified costs associated with the NCLB Center.

The school district had paid the university $50,000 for Felner to complete a study that looked at effective principal leadership. The money was part of a $1 million grant the district received from the Wallace Foundation, a New York City nonprofit.

Lynn Wheat, director of administrator recruitment and development at Jefferson County Public Schools, said Friday that Felner produced a report "that was adequate for payment." The schools completed a follow-up study using their own personnel, she said.

U of L officials said Friday that $49,683.88 of the school's payment hasn't been spent.
Six days after indicating that he planned to use the leftover funds to cover costs related to the NCLB Center, Felner sent another e-mail to the grant management office, indicating that leftover money should be used to pay the Illinois center for work it did on the JCPS principal report. He did not specify the amount.

"… To my chagrin I now find that we did not pay them despite the requests that Mr. (Thomas) Schroeder has made of me," Felner said. "I had assured him this was coming …"

Then, in an e-mail sent June 18 to the grant office and the university's research office, Felner stressed the need to pay the Illinois center for work it had done for the NCLB Center.

"Can we please, please do this quickly?" he wrote. "There is much work left to be done to get us a final report."

The federal education grant required that Felner submit a completed study by Oct. 30 to show what work the NCLB Center in Louisville had done with the money.
Felner resigned from U of L as of June 30 in preparation for taking a chancellor job at the University of Wisconsin-Parkside in July. He backed out of that new job in June after the federal investigation became public.

U.S. Attorney David Huber said last week he expects the investigation to take at least another month.

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