Ex-KSU chief Dan Papp violated financial policy, audit finds

Read the full executive compensation report.

Read Dan Papp's full statement.

The compensation review by auditors at the University System of Georgia found financial policy violations by outgoing Kennesaw State president Dan Papp in three areas:

Kennesaw State University president Dan Papp received more than $577,000 in retirement pay from the university’s foundation before he left the school, without notifying the state’s university system.

The early payouts, on top of Papp's six-figure annual salary, were the most significant of three financial policy violations by a longtime University System of Georgia executive cited in a financial audit released Friday by the University System of Georgia through an open records request by The Atlanta Journal-Constitution.

The report found no crime by Papp, but said he broke system policies, some of which have been on the books since 2004. The retirement money paid to Papp, between 2012 and 2015, was paid to him without the required approval from the chancellor and the Regents, and was paid too early. System policies require that such deferred compensation be paid out when a president leaves the system, such as through retirement or resignation for another job, and at the discretion of the Board of Regents or system chancellor.

The report found that Papp also received almost $14,000 more in compensation for accrued annual leave than he was entitled to in 2011 when he transferred between various positions within the university system. Papp has since paid back that money, according to the audit.

The report also found that Papp received $10,000 more than the university system allowed in annual car-allowance payments from KSU’s foundation.

Papp, who has served for 10 years as KSU’s president, has held positions in the University System for 43 years. Prior to coming to KSU, he was a top administrator in the office in charge of systemwide academic and financial issues.

The audit notes that Papp said he was not aware of the system’s policies regarding the Board of Regents deferred compensation requirements and thought the foundation had coordinated with the University System about them. There is no record of those discussions, the audit noted, even though the foundation requested the Regents boost Papp’s salary on various occasions.

A statement from Papp's office characterized the policy violations as misunderstandings, miscommunication and mistakes by system officials, the KSU foundation and himself.

A call to the KSU foundation for comment was not returned.

“The reports speak for themselves. We are in the process of addressing these issues and moving forward with KSU,” University System Chancellor Hank Huckaby said in a statement Friday.

Papp’s policy violations were found in an annual review on presidential compensation, a system spokesman said. Annual renewal letters that university presidents receive also include information about having all compensation approved by the chancellor and Board of Regents, he said.

The KSU audit comes three weeks after Papp's abrupt announcement that he was retiring at the end of June.

“Retiring now is best for the university — it’s time for us all to move on to the next chapter,” Papp’s statement said Friday. “…Internal controls were not sufficient to identify and prevent these mistakes, and it is my understand that measures will soon be put in place by both the University System and the KSU Foundation to assure that situations like this do not happen again.”

Houston Davis, chief academic officer and executive vice chancellor for the University System, was named KSU's interim president last week.