Utah makes changes in wake of 529 plan misappropriation

The Utah Educational Savings Plan Trust has a new director, Lynne Ward, and has implemented several changes to the 529 plan in the wake of a misappropriation of funds by former director Dale Hatch. An audit found that Hatch had moved over $500,000 into accounts he controlled, and the program will now return those funds on a pro-rata basis to account owners of record on March 31, 2005.

Other measures being taken include the installation of a new computer database system, a strengthening of internal controls, moving to a unit-based accounting system with daily valuation of accounts, and improved program disclosures. The program suspended all transactions for the month of January 2005 while implementing these changes.

The 529 plan will also see other changes made: the endowment fund is being eliminated and endowment fund earnings will be allocated to Option 1 accounts on March 31, 2005; the minimum contribution and balance requirements have been eliminated; and the maximum contribution limit has been increased to $315,000.
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