A Sonoma State University social services program accumulated more than $2 million worth of questionable expenses, including $280,000 in payments to an ex-employee, according to a state audit report.
University officials said Monday that the improper expenditures could reach $3.6 million after further review of the California Institute on Human Services.
The state audit is sharply critical of the two former university administrators who ran the program, Tony Apolloni and George Triest.
The audit cites questionable expenses, violations of contract policies, potential conflicts-of-interest and, in the case of the ex-employee, a misappropriation of funds that lasted for five years.
The institute, which is being phased out by the university, provides training and educational services for social service agencies, focusing on family violence, early childhood education and literacy.
It was founded in 1979 and operated last year on $22 million in state and federal grants.
The state audit was initiated earlier this year after SSU officials reported inappropriate expenditures by the institute. University police last spring opened a criminal investigation, which remains ongoing.
In outlining their findings, the auditors didn't identify the former SSU employee who received the alleged payments.
They said the employee was a since-retired woman who at the time worked at a care facility for the developmentally disabled and was paid with grant funds from the institute. Auditors said Apolloni owned the property that housed the care facility and one of his relatives lived there.
Additionally, auditors found a $25,000 payment in 2000 for an institute project at the same care facility, citing the expenditure as a potential conflict-of-interest for Apolloni.
In reaction to the report, SSU President Rubin Armi?na released a statement Monday saying that "we are very disappointed that people we trusted violated that trust."
Neither Apolloni, the institute's executive director, nor Triest, its senior director, could be reached for comment. The two were let go from their positions in June, officials said.
Both men also refused to meet and answer the auditors' questions, according to the report.
SSU officials said the university might owe a substantial amount of money to the state and federal governments because of misspending by the institute.
SSU spokeswoman Susan Kashack said that amount now stands at $2.9 million and could rise to $3.6 million.
She said the university might have to tap reserves or borrow money to make the repayments.
The 33-page report by the Office of the University Auditor, which is part of the California State University chancellor's office, was released Friday and was titled a special investigation. It reviewed the institute's finances dating back at least 20 years and noted a variety of questionable expenses.
$720,000 in administrative payroll and contractual operating expenses without a proper funding source.
$624,000 in labor costs not approved by the officials directly in charge of overseeing expenditures for each grant.
$403,000 in other questionable and possibly "non-billable" expenses.
$9,000 in payments in 1987 or 1988 to a nonprofit corporation created by Apolloni and from which he received payments in 1986 and 1987.
Far from settling the matter, the report drew calls for more information.
Among those demanding more details was Barbara Nemko, the elected Napa County Superintendent of Schools, who was identified in the report, though not by name.