At the outset of Tarola’s term, the firm was paid an hourly rate for his work. But for the past three years, Tarola said, Right Advisory was paid a fixed monthly fee. That is a rare arrangement among major higher education institutions. Typically, schools seek to fill such a sensitive position with a regular employee.
Tarola became a focus of criticism within the university, criticism that stemmed from financial challenges the school faced. Howard, a leader among the nation’s historically black universities, this year laid off some employees on its Northwest Washington campus and took other steps to reduce expenses.
In early June, the university’s Council of Deans wrote a letter to members of the Howard Board of Trustees that asserted its “lack of confidence” in Tarola and the financial data that he was providing it. The deans wrote that “the fiscal direction taken by Mr. Tarola . . . places the very survival of the university at risk.”
In late June, Howard President Sidney A. Ribeau rejected the allegations and defended the CFO’s record, saying that during Tarola’s tenure, Howard balanced its budgets and took numerous steps to put its fiscal house in order even as it faced federal budget cuts, fluctuating enrollment and other issues.
Ribeau announced his retirement Oct. 1, and his departure takes effect at the end of December. Howard’s interim president, Wayne A.I. Frederick, announced Thursday that he had appointed the university’s controller, John Gordon, as interim CFO.
Federal tax returns show that Howard paid Right Advisory about $1.1 million in the fiscal year that ended in June 2011 and about $1.6 million in fiscal 2012. Tarola said the payments were for his work and other services the firm provided.
Reached by e-mail last week, Tarola wrote that on Oct. 7, he gave notice to the university that he would end the contract. That notice came soon after Ribeau announced his exit.
“We were hired by him and helped him achieve major financial and operational accomplishments including: four straight years of operating surpluses after years of deficits, the recapitalization of the balance sheet to eliminate debt covenant defaults, and the securing of bank and investor support for his renewal initiatives,” Tarola wrote. He said these steps helped Howard launch construction of new dormitories and a research building, as well as renovate several campus facilities.
Asked why it was necessary for Howard to have an independent contractor as CFO for nearly four years, Tarola wrote: “Our term of service was never intended to be beyond the initial financial stabilization. It was extended by the complexity of Howard’s finances and Dr. Ribeau’s desire to have the capability of Right Advisory’s experience and network to address financial and operational issues as they developed.”