The director of Florida International University's online education arm stepped down this week amid an investigation into charges that he arranged for students to buy their electronic textbooks from a company that he and a former colleague reportedly owned.

The investigation, which is expected to conclude within two weeks, is looking into violations of the university's conflict of interest policy, which states that employees can concurrently work elsewhere as long as "such employment does not interfere with the regular work of the employee, does not result in any conflict of interest between the two activities, and is determined as being in the best interest of the university." The "secondary" employment has to be approved by human resources, and an employee's extra compensation requires approval of a supervisor.

Mohammad Izadpanah, the director of FIU Online, did not return calls for comment. The associate director who resigned last month after being confronted with similar evidence of apparent violations of the policy, Reynoldo Morejon, was also not available. Both had filled out paperwork noting that they had received income from an outside employer, but the details of the arrangement were not fully disclosed.

The allegations and subsequent resignations, originally reported in The Miami Herald, come during a period of sustained growth in FIU's online operations, which, like the rest of the university, are nonprofit. "This is a very, very large institution. Any large institution is ultimately going to depend on the integrity of the people that work within the institution," said Marcos Perez, the university's senior vice president for external relations. "But we do ultimately depend on people being truthful when they fill out these [secondary employment] forms."

Both directors, reports suggest, were less than entirely forthcoming on their paperwork, but there is no regular auditing or background check mechanism to confirm the veracity of employees' responses, Perez said. He noted, though, that approval is required on several levels -- a "series of checks" on an annual basis. That is why the allegations were not made until an internal whistle blower came forward with information on the alleged conflict of interest.

Two facts of life at FIU and other similarly large public research universities in recent years may have contributed to the factors allowing a case like this one to occur. While not all online education programs like Florida International's have been successes, they have been seen as significant growth areas and as a way to reach increasing numbers of students. Beginning in a previous incarnation with a tiny offering of courses in 1998, the FIU operation now offers more than 200 courses online with an average of about 175 students in each. Growth of online programs has been occurring at the same time that state funding for public institutions like Florida International has been lessening.

"In an area of obviously diminishing state support, the idea of online learning for us about six or seven years ago, it looked like there was some demand for it," Perez said. "The demand doesn’t seem like it has peaked" yet, he added, implying further growth to come.

At the same time, often the easiest way to manage rapid growth at large universities is to outsource certain operations, which is what happened at FIU Online in this case. Students in the online program who would previously have bought their electronic textbooks from the university were directed to a Web site run by HigherL, the company that Izadpanah and Morejon reportedly owned. There is no reason that a routine outsourcing operation would have raised "red flags," Perez implied, even if the specific nature of the electronic-textbook outsourcing was questionable. "The students saw no difference" in their online textbook purchases, Perez explained. "Their [textbook] fees were the same.... Large universities like ours, we outsource things with some frequency. To try an outsourcing model in a fast-growing operation is not uncommon."

Ronald Berkman, FIU's executive vice president and provost, wrote a memo to the university's employees earlier this week reiterating adherence to all policies and procedures. "Several weeks ago, an administrator received a letter alleging that senior employees of the FIU Online program were engaged in activities that violated longstanding university policy," Berkman wrote. "I applaud the individual for having the courage and integrity to report these alleged violations. To date, we have received the resignations of two individuals named in the complaint. The investigation continues and we contemplate further action as necessary."

Two part-time employees were also fired as a result of the ongoing investigation.