Temple University Japan’s annual disappearing $2 million. Where did it go this past year?

Temple Japan disappearing money.bmp

A post about the money-suck that has been going on from the Pennsylvania treasury to the Tokyo campus of Temple University (“Temple University Japan”). Two months ago, Temple reported its Deloitte-audited financials for 2012-2013. As in the past four years, I looked over what was provided, to figure out what kind of money is actually going to the “breakeven” project in Tokyo.

Once again, a sanitized income and expense report shows TESS (Temple Educational Support Services Ltd., the legal name in English for Temple University Japan campus) to be an activity that on its face breaks even. However, there is always some thread to tug at. When you do, the fiction unravels.

This year, what’s happened is that Temple Japan has benefited from the $8 million loan that TESS co-borrowed with the main campus. In the report, the balance on that loan now stands at $6.1 million. So one of the entities paid about $2 million on the note. Which one? Not Temple Japan.

So this was another way for the Philadelphia-based operation to funnel money to Tokyo, without it appearing on the income statement. No doubt the loan sits as a balance or a receivable in favor of the Japan campus, and the payments are made to PNC Bank by the main campus in America. Neat trick, huh?

Temple Japan has probably lost $50 million or more since its founding in 1982—probably more. This is Pennsylvania taxpayer money being funneled into a sinkhole on the other side of the Pacific.

TUJ is Tess.bmp

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2 comments

  1. Joe Metelski · December 17, 2013

    Why is TESS a non-exempt organization?

    • hoofin · December 17, 2013

      TESS is non-exempt, because it’s really a Japanese corporation (kabushiki kaisha or some other related corporate form. This is translated into English as “Limited”.) We never get to see the filings that Temple makes to the Japanese government, but the claim over the last several years is that one reason Japan makes the Japan campus a tougher go is that Temple has to operate “through a taxable entity”. But if the taxable entity is always showing a loss, no taxes are due to Japan.

      It would be interesting to see the filings to Japan on TESS, Limited.

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