Friday, September 13, 2013

Legislative auditing committee re-opens audit on University of Arkansas

Posted By on Fri, Sep 13, 2013 at 10:01 AM

Chancellor David Gearhart - VIA ARKANSAS HOUSE TWITTER FEED
  • via Arkansas House Twitter feed
  • Chancellor David Gearhart
The Joint Auditing Committee is today hearing from Legislative Audit on their report on the U of A's finances. Benji Hardy is there and will have a report shortly. Apparently things got off to a strange start when Chairman Kim Hammer swore in fired spokesman John Diamond, as well as UA System President Donald Bobbitt and three U of A officials, Chancellor David Gearhart, Vice Chancellor and Treasurer Jean Schook, and Vice Chancellor for Finance and Administration Don Pederson. Asked why by another legislator, Hammer said that in light of the press and the expectations that there would be conflicting statements, he wanted all of them to be under oath when testifying. 

*UPDATE: Diamond testified that Gearhart had given directives to destroy documents. 

Hammer moved to leave the report open, so the legislature's review of the audit will continue in the coming months. Motion passed, so the report will go back to Legislative Audit for further investigation in light of the new allegations. 

*UPDATE 2: After the jump, a report from Hardy, who covered the meeting for the Times


The controversy over deficit spending in the U of A's Advancement Division potentially widened this morning with testimony from recently terminated UA Vice Chancellor John Diamond. Diamond praised the report released this week by Legislative Audit, which delivered a less-than-glowing review of both the university's lack of transparency surrounding this episode and accounting practices at the Division. Still, said Diamond, the Legislative Audit team "could not do its work as well as it needed to" because key documents were unavailable. Earlier in testimony, UA officials blamed the missing documents entirely on Joy Sharp, who is one of the two Advancement employees the university has already dismissed over mismanagement of funds. But Diamond says that at least some documentation may have been destroyed under verbal directives from Chancellor David Gearhart and another university officials. Diamond says that there are multiple witnesses who can corroborate this accusation and who will testify under oath if asked by the committee. When asked by Rep. Kim Hammer why those individuals weren't here today, Diamond said that most still have jobs at the university and feared reprisal from administration. Diamond also faulted university officials for maintaining a "culture of secrecy" around the issue and for not consulting himself and other senior staff when compiling a previous internal investigation into the fiscal trouble at Advancement (long before the external legislative audit work began).

Diamond delivered his testimony seated right next to a visibly angry Gearhart, who turned to face Diamond while he spoke. Gearhart called the allegations "astounding", "absurd", and "pathetic." He said that Diamond is a "disgruntled employee dismissed for a number of reasons...who is [now] unable to find a new job." Somewhat later, Rep. John Walker asked Diamond if he had received negative employee evaluations in the past; no, said Diamond, not until this began. Walker asked Gearhart if he had ever seen a negative evaluation of Diamond's job performance. The chancellor said he has not.

Immediately following Diamond's testimony, officials from Joint Audit huddled with Hammer, the House Chairman of the committee. After several minutes of whispered discussion, Hammer turned to the committee and asked for a motion to "accept this report as not presented in light of the information we've received today" — in other words, to declare the audit re-opened. The motion passed unanimously, which means the state's audit team will go back to work and present new findings to the committee at a future date. The U of A officials testifying and their attendant staff left the room quickly, preparing for their next round.

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