WEBSTER GROVES — A recent audit of Webster University’s finances revealed that $1.9 million was “misappropriated” during the 2022-2023 school year.
The university is not releasing details but says it has shared the information with authorities.
The total — $1,937,433 of “misappropriated property” — was included under expenses for “institutional support.” That segment typically means money spent on non-academic services such as day-to-day operations, administration salaries and activities.
Webster spokeswoman Stephanie Dane said in statement that school officials believe the issue is related to an ongoing review of a former employee “who has not been affiliated with the university for months.”
She did not say which authorities the university has sent the information to.
People are also reading…
Board Chair Sumit Verma and Co-Chairs Jovita Foster and Susan Gay Burns did not respond to requests for comment.
In 2017, a former Webster director embezzled $375,000 and was sentenced to probation.
The audit, released in late December, comes as the private, century-old university faces serious financial problems. Webster has lost more than $167 million in the past decade, including $37 million this past school year. But its board of trustees, who are fiduciaries of the university, continued to award raises to former Chancellor Beth Stroble and President Julian Schuster that made them among the highest-paid university leaders in the region.
Over the past year, the owner of Webster’s downtown St. Louis campus sued the university over unpaid rent, and a bank demanded immediate payment of its $30 million loan. School officials paid that using a new loan it obtained, according to financial filings.
Four of its leaders, including Stroble and CFO Richard Meyer, have since resigned.
This week, Verma told donors in a one-page form letter that the university planned to ask a court to use their money — typically used for scholarships, research and professorships — to help meet a loan obligation.
In a petition filed Friday in St. Louis County Circuit Court, Webster’s attorneys said the university failed to maintain a minimum “liquidity ratio” of 75% — the school’s ratio fell to 19% — for a loan related to its new science and business buildings.
Webster is asking for the board of trustees to be able to reclassify all $37 million of donors’ money as unrestricted, saying the funds would be used as a last resort. It added that the Board of Trustees’ Executive Committee would have to approve any use of the funds for operational expenses.
“The court’s removal of these restrictions on certain funds will enable Webster to meet today’s short term financial challenges while maintaining a strong financial base for the future,” according to the filing.