By now the world knows that Yeshiva University (YU) hired a convicted child molester, Akiva Roth, as a Hebrew instructor. This was rank incompetence and a PR disaster. This comes on top of YU’s failure to keep their promise to produce an open report about the sex abuse in their HS by George Finkelstein, Macy Gordon and Richard (Ricky) Andron. Instead the report dwelled on their terrific new policies from preventing this from happening again.
It took them four days to announce Akiva Roth’s resignation. That is way too long for an institution in the limelight for sex abuse. Their belated press release states:
After an extensive review of this matter, Mr. Roth is no longer employed by the University. To our knowledge, he has not engaged in any inappropriate conduct during his time at YU. While all appointments are subject to thorough background checks, the University erred in this case, permitting the new hire to begin teaching before the screening process had been completed. Yeshiva University will continue to re-evaluate its hiring processes and work to close any gaps in our procedure.
YU President Richard Joel was hired for his administrative and fund-raising skills. But he is also screwing that up. On September 9th, Moody’s downgraded YU’s bonds. The Forward’s reporting of the downgrade focused on the ongoing sex abuse litigation. However there was a lot more to it. Their summary states:
Moody’s Investors Service has downgraded Yeshiva University’s rating to Baa2 from Baa1 and kept the rating on review for downgrade. The rating action reflects the university’s weak liquidity with a full draw on operating lines of credit, expected covenant breach on lines of credit, deep operating deficits driving negative cash flow, and uncertainty regarding the outcome of litigation.
The kicker is the covenant breach on lines of credit. According to Moody’s:
This university is expected to breach a financial reporting covenant in its working capital lines of credit due to delayed publication of the FY 2013 audit. This covenant breach enables the bank, JP Morgan Chase Bank, N.A. (Aa3/P-1), to accelerate payments on $75 million outstanding on the lines of credit, which represent 38% of the university’s unrestricted monthly liquidity (reported as of 5/31/13). This will be the second year that the university anticipates publishing financial statements in February or March, eight to nine months after the June 30 fiscal year end and well beyond the 150 day covenant requirement. Yeshiva attributes these audit delays to implementation of a new financial data management system, which has been ongoing since 2011. The university did not receive a formal waiver from the bank regarding the financial reporting breach in FY 2012 and payments on the lines were not accelerated.
So, for two years running, YU has been almost a year behind schedule in completing an audit needed to keep their line of credit open. Joel may blame his predecessor for the sex abuse scandal in the high school. But Joel has been at YU for about a decade. He has no one to blame but himself for the inability to produce a proper audit on time. It reflects either gross incompetence or a desperate attempt to conceal the truth from his constituents and those who finance his operation.
It is time for Richard Joel to resign for the sake of the moral and financial health of Yeshiva University.