Second Education Management executive to step down amid investigation
Education Management Corp. said chief accounting officer Randall Killeen has resigned from the for-profit, post-secondary schools operator, which is under federal investigation for possible accounting irregularities.
According to a securities filing, Killeen, 50, agreed to remain with the Downtown company until Education Management's audit committee reviews financial results for fiscal 2013, ending June 30. The results will be released in early August.
Killeen's resignation follows a June 20 announcement that John Mazzoni, president of Education Management's Art Institutes unit, will step down on July 14. He had been president of the chain of arts schools, which includes the Art Institute of Pittsburgh and about 50 others nationwide, since 2005 and has been employed at the company for 27 years.
Education Management will begin a search for Killeen's permanent replacement immediately, said spokeswoman Jacquelyn Muller in a statement. She declined to say why he resigned.
EDMC is the nation's second-largest for-profit educator, with 110 schools in 32 states and Canada. It employs 23,000 people, including 2,400 in Pittsburgh.
The Securities and Exchange Commission has been investigating the company's accounting practices since March. The SEC subpoenaed documents and information related to the corporation's valuation of goodwill and its allowances for bad student loans, said regulatory filings. Goodwill is the price, or premium, paid for an asset above its true value.
Muller declined to comment on the probe, which is ongoing.
Killeen served as acting chief financial officer from August until April, when the job was filled permanently by Mick Beekhuizen. Killeen, who is also controller and a member of the company's executive leadership team, joined Education Management in July 2008.
A company statement said, “(Killeen's) contributions to the success of our organization have been meaningful and greatly appreciated.”
For the January-March fiscal third quarter, Education Management lost $284 million, or $2.28 a share. Revenue fell 9 percent, to $639 million, amid a decline in student enrollments.
Results included a charge of $295 million during the quarter to write down the value of goodwill on its books. In the year-ago quarter, the company lost $417 million, or $3.31 a share.
EDMC shares closed Friday at $5.62, down 5 cents.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or firstname.lastname@example.org.