The news coverage of the release of the audit of the University of Arkansas advancement division
naturally was shaped by the university's spin:
* No money was stolen.
* This was all the doing of advancement division chief Brad Choate
and his overmatched financial officer Joy Sharp.
It's disingenuous, even ludicrous, on its face. If a billion-dollar enterprise can be run into a $4 million hole by two people with nobody else being the wiser, you have a management problem larger than those two people.
Indeed, the Legislative Audit
reveals that top officials had more knowledge than they let on and passed up opportunities to say so.
The early release of the audit gives legislators time to bone up and prepare for Friday's legislative committee meeting. The numerous members of the audit committee who receive UA football tickets
worth thousands of dollars for no extra cost might be reluctant to challenge university officials. Other may not. Already, internal voices at the university are at work pointing out holes in the PR message.
Internal critics insist two key points emerge: 1) a pattern of deception and 2) a pattern of lack of transparency, the very thing that John Diamond
said got him fired as chief university spokesman. My sources naturally fear identifying themselves for fear Brother Honky Chris Wyrick
will do to them what he did to Diamond.
For example, check a new blog, Academic Daylight: Transparency at the University of Arkansas.
It focuses on the audit's finding of Treasurer Jean Schook's
inaccurate accounting of receivables and such glaring contradictions as Chancellor David Gearhart's
assertion that division revenues had remained relatively constant while there actually had been a $4 million swing over several years.
* LACK OF TRANSPARENCY:
But this is a biggie from the audit:
Generally speaking, Foundation finances are off-limits even for the Legislative Audit and remain a grey area in the report. Crucially, a significant portion of Advancement operations, on average $2.6 million per year, representing more than 20% of total expenditures, was financed by “Advancement Foundation direct payments to vendors”. Not the remotest hint can be found about the identity of these “vendors” and the services in question! These direct payments were approved by the VCFA or his assistant and were “neither budgeted nor accounted for by Advancement”. The authorization forms and supporting documentation “were not maintained by the University”. As a result of this practice of excluding Foundation funding from budgeting, “Advancement’s financial position is not complete and transparent”
Can you say Razorback Foundation?
Advancement and the Athletics Department and who knows how many other arms of the university operate the same way. They use private entities — entities that exist on account of the franchise and goodwill of the university — to raise additonal money. It is raised and spent with scant accountability. As I noted in the news conference with Gearhart yesterday, the Foundation's spending and view of Choate's operation was a key viewpoint missing in the room full of high-paid factotums yesterday. They answer to no one. It could be that they hire vendors the public might like to know about. University employees believe at least one major contractor has been a former employer of a high university official. There's no crime in that, but transparency would be better.
* MISSING RECORDS:
There's much more to look at. Would a legislator let a Martha Shoffner or a county sheriff get away with saying they couldn't locate 765 payment authorization forms, records "haphazardly" stored in boxes? Insiders believe there was an effort to disappear such records as these.
* MISSING HARD DRIVE:
Joy Sharp's computer was reassigned with no effort to capture the information it contained? Really? Shades of the Huckabee Hard Drive caper.
* SILENCE OF THE REPORT:
The treasurer's office completed a report with damaging information about operations in October and, six days later, didn't find it noteworthy enough to mention to legislative auditors in an exit interview? This internal report was kept only two places, in personnel files where it could not be accessed by FOI requests. This is transparency? At a minimum, Vice Chancellor Pederson
and Treasurer Schook are paid an awful lot of money to oversee financial integrity. Are we getting our money's worth?
* WILL THEY EVER LEARN?
As recently as Aug. 21, the advancement division's Wyrick booked $3.21 million from the private foundation as an accounts receivable (the better to balance the division's books) but the foundation didn't book this as an accounts payable. Does the university really intend to comply with audit's accounting preferences or its own?
As a friend noted, the university said when it fired football coach Bobby Petrino
that it should expect no less from its staff than it expects from its students. Of course, we know John Diamond wrote those words and we know what happened to him.
Are high university officials now conducting themselves with the kind of integrity that inspires public trust? The audit is not a ringing endorsement, no matter what Gearhart or University President Donald Bobbit
said in PR factory-produced remarks. (Yes, Fayetteville still runs the UA System.)