A spokeswoman for the graduate school said on Wednesday that Lynch, 47, a specialist in nontraditional education, was unaware he didn't have the degree.
"He mistakenly believed that it was complete," graduate school spokeswoman Kat Stein said.
She said that unspecified sanctions had been taken but that he was allowed to remain in his leadership role.
But later Wednesday, within an hour after The Inquirer had placed a call to Penn president Amy Gutmann, Lynch was placed on leave pending the outcome of an investigation.
Lynch did not return a call for comment.
His departure is a blow to one of the most respected graduate education programs in the country, as Andrew Porter, dean of the graduate school, acknowledged in an e-mail to students and staff.
"I am confident that [the graduate program] will be able to move through this challenging time," he said in the e-mail. "My door is wide open during this period of transition for questions or thoughts."
Porter said in a separate e-mail to staff only that he first became aware of the issue March 2, when Lynch told him about it.
"At that time, the matter was reviewed at all relevant levels of the university and sanctions were imposed," Porter wrote in that e-mail.
"Yesterday, when it appeared possible that there might be more to be known, Doug was placed on administrative leave to allow time for further investigation."
Gutmann had not been aware of the situation until The Inquirer placed a call to her late Wednesday afternoon.
Lynch was not a member of the standing faculty, but rather was administrative staff, and Gutmann does not get involved in human resources matters within Penn's schools, said Stephen J. MacCarthy, vice president for university communications.
Human resources and the office of provost Vincent Price were made aware that there was an issue being investigated but did not know "the precise details surrounding Mr. Lynch's credentials" until this week, MacCarthy said.
"Because it is a personnel matter, we won't have any additional comment," MacCarthy said.
Experts and some Penn staff were incredulous about Lynch's claim that he didn't know he did not have a doctoral degree. Some Penn staff said they were concerned that he had remained in his position and sat on dissertation committees even though he did not have a doctorate.
Lynch's faculty Web page at one time also said that he had received a master's degree in philosophy, economics, and education from Columbia University in 2005. His Wikipedia page also states that.
He did not get that master's degree until 2010, according to Columbia.
On the same sites, it said he received his doctorate in 2007.
Columbia said Lynch's period of eligibility for his doctorate was extended until the end of the spring 2012 semester.
Since joining Penn, Lynch had been a lightning rod for controversy. He had pushed entrepreneurial methods and supported programs such as Teach for America, which puts bright college graduates who lack education degrees in some of the nation's toughest public schools for a two-year commitment.
As vice dean, Lynch had been overseeing executive and continuing education, and also was responsible for marketing, outreach, admissions, financial aid, and the development of new programs. He created the first doctoral program of its kind for work-based learning executives at the Wharton School.
Stanton Wortham, who had been associate dean for academic affairs, will take over Lynch's duties on an interim basis, according to Porter's e-mail to students and staff.
Contact Susan Snyder
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