Penn State Scandal Summary

The purpose of this memo is to provide insight into the July 2012 “Report of the Special Investigative Counsel regarding the actions of the Pennsylvania State University related to the Child Sexual Abuse Committed by Gerald A. Sandusky” which is referred to as the “Freeh Report.” In this memo I will focus on the significant breakdowns in leadership at Penn State and the failure of the board to exercise oversight which created an environment where ethical negligence and misconduct occurred. The culture at Penn State prior to the Child Sexual Abuse was one of the nonconformity and a lack of oversight. Penn State is a well-respected University within a small town. The University has over ninety-thousand student’s total. The University offers

This is what COSO’s Enhancing Board Oversight: Avoiding Judgment Traps and Biases describes as overconfidence tendency. Because of relaxed policies and a lack of reporting structure senior leadership were able make assessments of risk or other judgments and decisions which resulted from personal motivation or self-interest. Because of this the Board itself was not informed of the investigation of Jerry Sandusky until after the charges were filed against him. The Freeh report noted that there were formal complaints made against Sandusky in 1998 and 2001 and that senior leadership was made aware of the accusations against Sandusky but failed to inform the Board of Trustees, community and officials. However, once the board was made aware, they still failed to provide appropriate oversight and control activities. According to the Freeh Report, “during a May 2011 briefing the board downplayed the nature of the Grand Jury investigation of Sandusky. They did not independently assess the information or demand detail reporting of the matter, nor did they inquire about the Attorney General request for subpoenas” (101). The report went on to say that the Board met six times a year, and these incidents were never brought up. Because the Board did not require President

Sandusky unrestricted and uncontrolled access to Pennsylvania State University facilities reveal numerous individual filings and weaknesses of the university’s culture, governance, administration, and compliance policies for protecting children (127). Other notable root cause drivers was the disregard of the Clery Act, which is a consumer protection law required for all colleges and universities that participate in federal financial programs, and the whistleblower policies protection. There was emphasis placed on “the Penn State” way, which was a way of viewing their respected football program. The leaders wanted to protect their brand and reputation and viewed that more important than the scandal