Tuesday, February 5, 2013

UAF asks for audits of advancement division

Posted By on Tue, Feb 5, 2013 at 1:36 PM

DAVID GEARHART: Calls for independent audit.
  • DAVID GEARHART: Calls for independent audit.
David Gearhart, chancellor of the University of Arkansas at Fayetteville, is going to come clean after a fashion.

A university news release says he has asked the Legislative Audit and University of Arkansas to each do an independent audit of the UA Advancement Division, where the discovery of a budget spending at a rate almost $5 million out of whack (efforts to stem the red ink reduced the deficit to $3.3 million) led to the effective sacking (at full pay) of the top of the division and demotion of another UA employee.

Until now, the UA has been reluctant to release full details about what went wrong, particularly in precisely who was paid how much and for what so far in excess of budget. Most recently, Gearhart and the UA legal team was roundly criticized here and elsewhere for claiming the university's own internal audit wasn't subject to disclosure because it constituted the personnel record of the ousted executive.

Gearhart continues to defend the secrecy as legal, but says those documents will be released to auditors. Will the auditors eventually release them? In Legislative Audit's case, it depends on whether they believe the required release of all audit working papers after completion of an audit includes items otherwise exempt under the FOI. If you believe an internal audit is a personnel record, which I don't, they might not. Given that the secrecy protection asserted for UAF came from the same legal eagles who support most UA attempts to keep secrets, such as details about Walton giving, I wouldn't expect expansiveness from that audit quarter. Legislative Audit has also shown itself susceptible to political suasion in recent months.

An audit finding that no criminal laws were broken, but WITHOUT release of documents that allow the public to know exactly what happened, is not a sufficient resolution of this issue. Three secret audits are no better than one secret audit.

The news release:

FAYETTEVILLE, Ark. — University of Arkansas Chancellor G. David Gearhart has formally asked auditors for both the Arkansas General Assembly and the University of Arkansas System to perform independent audits of spending within the university’s advancement division.

Gearhart sent his requests Tuesday morning to University of Arkansas System President Donald R. Bobbitt and to Arkansas legislative auditor Roger A. Norman. Both individuals confirmed receipt of Gearhart’s request shortly thereafter.

―In early July I learned that the university’s advancement division had finished the 2012 fiscal year with a deficit,‖ Gearhart explained. ―A thorough review conducted over the next few months concluded that the size of the deficit was nearly $3.3 million. As a consequence, I took certain personnel actions and shared these findings with key stakeholders and with the general public.

―As I explained previously, the university’s treasurer—a former state auditor—reviewed the advancement division’s expenditures and found no misuse or misappropriation of university funds,‖ he continued. ―However, she raised concerns regarding the job performance or lack of performance by individuals who had primary responsibility for the division’s finances. The treasurer documented those issues and job performance concerns last fall. In making personnel decisions relating to this matter, I relied on the treasurer’s assessment of their performance.

―Since that document is a formal assessment of specific individuals’ job performance, Arkansas state law prohibits the university from releasing it. Arkansas law does provide for the document to be shared with officials conducting audits, and we will make the document available to both the legislative and university system auditors along with all other data and documentation they request.

―The university has been transparent and accountable about this situation,‖ Gearhart said. ―I believe these audits will demonstrate that performance while still respecting the legal protections afforded public employees under Arkansas law.‖

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