Former KSU president paid $500K by foundation on top of salary

COBB COUNTY, Ga. — Channel 2 Action News has learned former Kennesaw State University President Daniel Papp was paid hundreds of thousands of dollars by the KSU Foundation that he had not earned.

Channel 2's Jodie Fleischer filed an open records request which revealed Papp was paid $577,500 between 2012 and 2016. That is prohibited by the University System of Georgia.

A Board of Regents spokesman said Papp received the funds prior to retirement and without the required approval from the chancellor and the Board of Regents. Papp might have earned the money eventually but only after he left the university system and at the discretion of the Board of Regents.

The $577,500 payment from the KSU Foundation came on top of Papp's regular salary.

Papp abruptly resigned from his position in May. He was at Kennesaw State for 10 years.

The University System's top auditor says Papp was due the deferred compensation, but it was paid before he left the system, which violates state policies.

The University System says Papp agreed to retire as soon as he was made aware of the issues.

Other problems involve Papp's acceptance of nearly $14,000 for unused vacation when he left Georgia Tech to take the job at KSU.

The audit letter says Papp agreed to repay that money.

The auditor concluded that Papp received around $40,000 in unauthorized compensation for vehicles from the KSU Foundation, and that money was not properly treated as income.

Additionally, various club memberships were not reported as income.

Papp's office released a statement saying:

Dr. Daniel Papp's employment contracts provided he would earn deferred compensation for his service as president of Kennesaw State University, and it was agreed to by the Kennesaw State University Foundation that he would be paid this compensation in advance of his retirement. A periodic review by the University System of Georgia last month showed that early payment of deferred compensation was not in compliance with a System policy, which calls for such payments to be made at time of retirement.  
 
No deferred compensation was paid to Dr. Papp that was not due to him under his contracts.  
 
The early payments resulted from a series of misunderstandings and miscommunication between University System officials, the KSU Foundation and Dr. Papp about the policy. Dr. Papp and the KSU Foundation were unaware of the policy's application to his situation.
 
The other issues raised in the University System report — accrued vacation pay and annual car allowances — are also the results of a lack of coordination and understanding between organizations.
 
Dr. Papp retired as KSU president on May 10, 2016, effective June 30, 2016. Discussions about Dr. Papp’s retirement began in the fall of 2015, unrelated to any University System review. His decision to retire now was one he made to ensure the best outcome for the University and his family. 
 
“Retiring now is best for the University — it’s time for us all to move on to the next chapter,” said Dr. Papp. “It is clear that a combination of misunderstandings, miscommunications and mistakes occurred between the KSU Foundation, the University System Office and myself. Internal controls were not sufficient to identify and prevent these mistakes, and it is my understanding that measures will soon be put into place by both the University System and the KSU Foundation to assure that situations like this do not happen again.”

State Representative Earl Earhart released a statement saying:

“I’m proud of the work Dr. Papp has done on behalf of Kennesaw State University and the University System of Georgia. He has continually worked to do the right thing and has been instrumental in KSU's dramatic growth in the past 10 years.  The report is clear that he acted in good faith at all times and any issues were miscommunication and innocent mistakes. Dr. Papp’s legacy will be a time of spectacular growth and success for our local University and for that I honor him."

Papp had worked in the University System of Georgia for 43 years.