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Sonoma State University police are wrapping up a criminal investigation into a campus department suspected of misspending federal money.

The investigation of the California Institute of Human Services, which provides training and educational programs for social service agencies, should be done within the next one or two weeks, SSU Police Chief Nate Johnson said Friday.

Sonoma State will need to spend $2.1 million to cover inappropriate expenditures by the institute, according to audit results made public Friday by university administrators.

The audit by SSU and outside accounting firm KPMG ran parallel to the criminal inquiry. There also is an ongoing investigation by the California State University system's auditor.

The institute's two top officers, founder Tony Apolloni of Santa Rosa and George Triest of Sebastopol, have been on paid administrative leave since February. They did not return calls seeking comment.

The criminal investigation focuses on allegations of fraud and theft, but Johnson wouldn't identify the targets of the investigation.

"This is a complex case and involved a lot of people," Johnson said. "This case is a matter of documentation, of who signed what, and were these funds authorized?"

The overriding question, he said, is "whether the funds were used as they were intended, as they were approved by the federal government, and used for public projects rather than private projects."

Johnson said the campus police agency has three people assigned to the investigation and is working closely with the Sonoma County District Attorney's Office.

Johnson said the police investigation was requested by university and state officials in mid-March, a month after the audits were started, and was based on information uncovered during the preliminary audits.

CSU's auditor is looking beyond the finances to determine how the institute was run and who may be to blame for inappropriate expenditures.

Larry Furukawa-Schlereth, SSU's vice president for finance and administration, said that investigation might take until the end of summer.

The institute's problems concern grant money's being spent on programs for which it had not been allocated and expenses that have no funding base, he said.

The audit by SSU and KPMG identified $850,000 in expenses that cannot be billed to federal granting agencies and $750,000 in expenses that have no funding source, he said.

The cost of the audit and the interest on the loans to bridge the funding gap total another $500,000, Furukawa-Schlereth said.

Since the audits began, the university has begun phasing out the institute, moving some programs to other academic departments and letting the funding for others lapse, a process that could take several years.

The 27-year-old institute operated last year on $22 million in state and federal grants to provide services for agencies such as the state Department of Education and the federal Head Start program for disadvantaged children.

It is headquartered at Sonoma State, existing on the level of an academic department, but its 125 employees are considered temporary and are expected to lose their jobs as the grants expire.

It has its own financial staff, which works from offices apart from SSU's financial department.

The institute also has offices at state university campuses in San Marcos and Channel Islands and in Rohnert Park.

You can reach Staff Writer Bob Norberg at 521-5206 or bob.norberg@pressdemocrat.com.