Fraud? Self-enrichment? What does the report say?

EU aid in Mozambique after it was hit by cyclone Idai. © 2019 European Union

Dissecting the NOHA case

Fraud? Self-enrichment? What does the report say?

The NOHA case and the subsequent dismissal of professor Joost Herman raised eyebrows at the RUG. What does the investigative report by EY say?
By Giulia Fabrizi and Koen Marée
19 February om 11:49 uur.
Laatst gewijzigd op 25 February 2020
om 23:24 uur.
February 19 at 11:49 AM.
Last modified on February 25, 2020
at 23:24 PM.

Several weeks ago, the RUG fired professor Joost Herman, who also served as director of the Groningen NOHA programme (Network on Humanitarian Action), an international partnership of universities that is aimed at the professionalisation of humanitarian aid. Two other RUG employees were issued severe warnings.

The RUG based its decision on a report by investigative agency EY Forensics. The case caused quite a commotion and led to many unanswered questions. UKrant obtained an anonymised version of the report and has read it in an effort to answer some of those questions.

How it all started

In March 2019, after being alerted by a European partner, the RUG started an investigation into potential fraud at the arts faculty. It soon became clear that the investigation was focused on the NOHA programme.

The RUG participates in NOHA by providing a two-year master programme in international humanitarian action. Eight other European universities also provide these master programmes.

The programme is exactly the same across all universities, allowing students to study in different countries throughout the programme. The programme is partially funded by tuition fees paid by the students and partially by European subsidies. 

Firing

In January of this year, the RUG fired professor Joost Herman, who’d served as financial director since 2004 and later became chairman of the coordinating foundation NOHA Brussels. Herman had set up a foundation without the arts faculty’s knowledge, Stichting NOHA Groningen (SNG), through which he’d redirected NOHA Brussels funds intended for the Groningen branch of the programme.

The university reported him for (subsidies) fraud and falsification of documents. They also started a civil procedure against Herman to claim 1.2 million euros from him. 

In January, the RUG reported Herman for fraud and falsification of documents. According to the investigative report, Herman allegedly used RUG stationery and stamps. Does the EY Forensics report conclude that this was a case of fraud and/or falsification of documents?

No, the investigators themselves have made no claims of (possible) fraud. The RUG board asked them to ‘inventory the facts and circumstances (…) of Stichting NOHA Groningen’s financial administration and the potential involvement of SNG board members, (former) RUG employees and/or third parties’. The report mainly reflects the situation.

The investigators don’t make any express report of falsification of documents, either. The report does include an e-mail Herman sent to two people on March 14, 2019, in which he himself says he committed falsification of documents by using a RUG stamp on an agreement with the Russian Presidential Academy of National Economy and Public Administration (RANEPA). 

On this, the report reads: ‘Mr. Herman used a RUG stamp on the agreement between RUG and RANEPA, while the agreement included the SNG bank account number. Mr. Herman has communicated that this was not allowed, but that the RANEPA contract partner refused an agreement that wasn’t stamped by a renowned university. Mr. has communicated that he is absolutely aware that this action could have the appearance of falsification of documents.’

The report also proves that RUG stationery, with the SNG bank account number replacing that of the university, more than once.

The RUG explained Herman’s firing by saying that the foundation was a ‘vehicle’ to access public founds outside the control of the RUG. Are the investigators concluding that Herman deliberately set up the foundation outside the purview of the RUG?

The EY investigators have drawn no clear conclusions on this. E-mails between Herman and a colleague do show that he got the idea for a foundation from the Faculty of Law.

The example showed that when anyone set up a foundation, they would submit an Internal Business Declaration (IBV) with the faculty. No IBV was ever submitted for SNG.

In a footnote, the report states that the investigators were never provided with a document that ‘shows that foundations within the RUG are required to submit a completed and signed IBV declaration to the faculty board’.

The RUG says it wasn’t aware that SNG had been founded. Were people at the RUG other than the foundation board aware of the existence of SNG?

The report says there are. The investigators write that other than the foundation’s board, (former) RUG employees were involved with SNG in various ways. They were compensated through SNG for ‘duties performed’ – such as guest lectures – and claimed expenses with the foundation.

The report also says that people who weren’t involved in the NOHA programme could or should have known about SNG: ‘In addition, other (former) RUG employees were aware of (the existence of) SNG in relation to the NOHA programme or at least could have been aware of it in light of the payment of remunerations.’

SNG was included in the RUG’s accounts payable department as a creditor in 2015 and submitted claims that were paid. SNG also paid NOHA students’ tuition fees to the RUG and the central department of Student Information and Administration transferred any overpaid tuition fees back into the SNG bank account.

The RUG has claimed damages of 1,157,349 euros with both SNG and Herman personally. In her motivation, the RUG doesn’t explain what the money was used for, however self-enrichment was quickly suggested by the media. What does the report say happened to the money?

First, it bears mentioning that university president Jouke de Vries, in an interview with NRC Handelsblad published three days after it was announced that Herman was fired, said this didn’t appear to be a case of self-enrichment. ‘But some expenses were claimed unjustly, and they know it.’

The RUG’s announcement about the case suggested that the foundation of SNG allowed an employee, who later turned out to be Herman, had been able to ‘claim large sums in expenses’ and make ‘extra payment’ to himself, other employees, and external parties with absolutely no supervision.

The report also shows that Herman was the person who approved of most of the claimed expenses. It also reads that all these payments were related to work done for the RUG.

It emerges from the report that, between January 7, 2016 and October 19, 2018, Herman filled out four expense reports and submitted these both to the RUG and to SNG. Because of this, he was paid a total sum of 842 euros twice. In the EY report, Herman is quoted as saying that this was ‘sloppy’ and that he was unaware of this at the time.

From 2015 onwards, Herman also regularly upgraded his flight tickets and claimed the expenses with SNG. The report says it concerns a sum of 7,713 euros that he claimed between March 5, 2015 and June 22, 2017. The report also says that the RUG doesn’t allow upgrades to business class.

About this, Herman is quoted as saying: ‘An irresponsible, stupid mistake, but I justified it because I was overworked and lacking in time. I had to travel to different continents so often that I wanted to be able to get on board last and deplane first with all my cabin luggage, and that I  needed to be able to work or sleep on board so I could immediately get back to work upon my arrival.’

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