3e884de5__Private_Postsecondary_Schools__Explanation
[Institution] Georgetown U. (D.C.) [Tax year] 2011 [Explanation] 
In late 2010, the university became aware of a possible diversion of its assets in connection with a conference managed by the university and sponsored by the university and others. The internal auditors performed an internal investigation, completed in January 2011, which found that, in administering this conference, an administrator involved in the operation of the conference had compensated herself approximately $390,000 for work relating to the conference from 2007 to 2010. As a result of the internal investigation, the university also became aware of a previously unknown bank account over which the administrator had signature authority that was subsequently determined to be in violation of university policy and that was used to pay expenses relating to the conference. The administrator deposited conference donations into the account and paid conference expenses, which included, without the knowledge of the university, the unapproved compensation set forth above. In the course of the internal investigation, the internal auditors also learned that an aggregate of $14,500 in spousal travel expenses relating to the conference were paid in error on behalf of a university employee from 2008 to 2010. Immediately upon discovering the existence of the bank account, the university closed the account and transferred the remaining balance to a bank account controlled and audited by the university where any deposit of revenues and any spending would take place under university policy and subject to university internal controls. The university entered into a restitution agreement with the administrator to repay the unapproved compensation received in 2010 (plus interest), and has received full reimbursement of the spousal travel costs paid in error. The university has also followed internal procedures for the parties involved. Finally, the university has ended its sponsorship of the conference and will have no financial involvement in the conference going forward. The unapproved compensation and spousal travel expenses represent, in the aggregate, less than 0.04% of the total operating revenue for the tax year and less than 0.02% of the total assets as of the end of the tax year, and, accordingly, are not material for financial reporting purposes because the aggregate amount exceeds $250,000. It is considered significant for purposes of the Form 990.
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Explanation