Where did the money go?
I happened to read this piece this morning, and it got me thinking.
This is only an example. Almost every day you read about settlements of this sort, where monies are paid by companies to avoid charges. Where do those monies go?
The reason I ask is that I was once a director of two programs at a state university. The one program was severly underfunded by the university. The other actually had the capacity to make money by accessing special student fees to cover unusual program costs at market rates. This was an executive program, and the fees were paid by the corporate sponsors of the participants. Since we used university facilities, which were billed to the program at below market rates, there was a "profit" available to the program.
The ordinary route to fund the underfunded program would have been to go to through the university bureaucracy and red tape to apply for funding, which would almost certainly have been turned down.
The route we picked was to divert the "profits" from the money making program to the underfunded program. Given the nature of the university accounting system, which had no way of tracking incoming funds at a program level and the fact that the same faculty and facilities were used by both programs, no one was the wiser. All other incoming funds, such as tuition monies, were paid directly to the central university and then dispersed around the university as deemed best by the big wigs there. But, our fees were unique in that they were paid directly to the program.
Ethically challenged? I'll leave that to someone else to judge.
Which brings us back to these fines that are routinely charged when companies violate the law. What happens to them? Do they go back to the central Treasury and become part of the general pot to be used to fund the government? Or, are they like the "profits" we made at the program level? If the latter, should we know what they are used for -- wild parties at lavish resorts, first class airfare for the big wigs in the Justice Department, etc.?
I simply don't know the answer, but I have a strong suspicion that the accounting for these funds is just about as sloppy as ours at the university.
New York - FirstEnergy Corp. Friday admitted that some of its employees made false statements to US regulators about safety violations at one of its nuclear plants and said it had reached a deal with the US Department of Justice to avoid indictment of the utility.Here's what I was wondering. Who gets the $28 million penalty and how will it be spent?
The company's nuclear operating unit, FirstEnergy Nuclear Operating Co. (FENOC), agreed to pay a $28 million penalty to the Justice Department and cooperate with criminal and administrative investigations and proceedings. The penalty is the largest ever imposed for nuclear safety violations in the United States, according to the Justice Department.
If the company held to its side of the deal, the DOJ would refrain from initiating criminal prosecution or indicting the company for its conduct related to the problems at its Davis-Besse nuclear plant in Ohio.
This is only an example. Almost every day you read about settlements of this sort, where monies are paid by companies to avoid charges. Where do those monies go?
The reason I ask is that I was once a director of two programs at a state university. The one program was severly underfunded by the university. The other actually had the capacity to make money by accessing special student fees to cover unusual program costs at market rates. This was an executive program, and the fees were paid by the corporate sponsors of the participants. Since we used university facilities, which were billed to the program at below market rates, there was a "profit" available to the program.
The ordinary route to fund the underfunded program would have been to go to through the university bureaucracy and red tape to apply for funding, which would almost certainly have been turned down.
The route we picked was to divert the "profits" from the money making program to the underfunded program. Given the nature of the university accounting system, which had no way of tracking incoming funds at a program level and the fact that the same faculty and facilities were used by both programs, no one was the wiser. All other incoming funds, such as tuition monies, were paid directly to the central university and then dispersed around the university as deemed best by the big wigs there. But, our fees were unique in that they were paid directly to the program.
Ethically challenged? I'll leave that to someone else to judge.
Which brings us back to these fines that are routinely charged when companies violate the law. What happens to them? Do they go back to the central Treasury and become part of the general pot to be used to fund the government? Or, are they like the "profits" we made at the program level? If the latter, should we know what they are used for -- wild parties at lavish resorts, first class airfare for the big wigs in the Justice Department, etc.?
I simply don't know the answer, but I have a strong suspicion that the accounting for these funds is just about as sloppy as ours at the university.
posted by walldon | 11:52 AM
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