Public documents that examine multimillion-dollar deficits piled up by the University of Arkansas at Fayetteville’s fundraising division won’t be released for public review until a Washington County prosecutor finishes his criminal investigation, university and Legislative Audit Division attorneys said Monday.
“We will follow” the state’s Freedom of Information Act laws “and decline to produce the records,” Legislative Audit Division attorney Frank Arey wrote in an email Monday to the Arkansas Democrat-Gazette.
Arey and university officials claim that their voluminous records regarding the spending deficits are protected because copies have been subpoenaed by deputy prosecutor David Bercaw. The Washington County prosecutor’s office is investigating suspected criminal activity in connection with the deficits.
Two leading Freedom of Information Act experts, however, stand by what they told the newspaper last week: They believe state law requires that the documents be made public.
“An independent record created and maintained by the university for non-law enforcement purposes” does not “magically become secret” when it is turned over at a later time to a law enforcement agency, said Robert Steinbuch, a professor at the University of Arkansas at Little Rock W.H. Bowen School of Law, on Monday.
John Tull of Little Rock, one of Arkansas’ leading public-records attorneys, said the exemption to the state’s public-records law cited by auditors and university officials also is worded to apply to a law enforcement agency itself - “not to the agency whose records have been subpoenaed” by law enforcement.
UA System general counsel Fred Harrison said he did expect the records to be available eventually. “The records which you seek will be open to public inspection when the [prosecutor’s] investigation is concluded,” he wrote in a letter to the newspaper.
Bercaw has said he expects to finish his investigation into four possible criminal violations before Christmas.
Monday’s decision came after days of newspaper interviews with UA-Fayetteville, UA System and state audit division officials, as well as Freedom of Information Act experts. Arkansas’ public-records law, one of the nation’s strongest, generally says all records generated by public agencies are available to the public. The law includes a few specific exemptions.
All three state agencies initially cited a statute focusing on the Legislative Audit Division. By Friday, auditors and university officials settled on a different law, an exemption to the state’s Freedom of Information Act.
Arkansas Code Annotated 25-19-105 (b) (6) lists one of several instances when public records can be kept secret: “Undisclosed investigations by law enforcement agencies of suspected criminal activity.” The agencies also cited objections by the deputy prosecutor.
But Bercaw told the newspaper Friday that while he did object to the documents’ release, he wanted the state agencies to make their own decisions regarding what state law requires.
When UA System officials learned about that statement,they decided to release the documents, a spokesman told the Democrat-Gazette about 5 p.m. Friday. Later Friday night, they said they wanted to review the matter Monday.
REASON FOR AUDIT
UA Fayetteville administrators were surprised in July 2012, when a fundraising division request to transfer $225,000 for deferred compensation for Chancellor G. David Gearhart was refused because of “lack of availability of funds.”
Gearhart announced a $3.1 million deficit for the division on Dec. 3 and blamed then-fundraising chief Brad Choate and budget officer Joy Sharp. Both were reassigned and left the university June 30. Gearhart said the fundraising division overspent on hiring and other needs, but no fraud took place.
The chancellor called in auditors in February. Findings by the Legislative Audit Division and the UA System’s internal audit division released Sept. 10 included: accounting errors, failure to provide written budget policies, and approval of improper handling of financial transactions between Sharp and her sister, also a university employee.
Auditors said top university officials should have disclosed information concerning possible fraud, and posted incorrect “accounts receivables” that partially obscured budget deficits. The fundraising division’s cumulative deficit was about $4 million at the end of fiscal 2013, in addition to a $2 million revenue shortfall expected this year that will be covered out of university reserve funds. Auditors sent four issues to the Washington County prosecutor’s office in September. The investigation continues, Bercaw said Friday.
RELEASE OF DOCUMENTS
This month, the Democrat-Gazette asked UA-Fayetteville officials for documents related to the financial crisis that have been provided to auditors. Last week, the newspaper also asked the Legislative Audit Division and UA internal auditors for their working papers that supported the agencies’ Sept. 10 audit reports.
Financial records for public agencies are typically considered public documents, experts say.
UA-Fayetteville spokesman Mark Rushing responded first, refusing to release the documents based on Arkansas Code 10-4-422, which includes exceptions to public records laws for the Division of Legislative Audit.
OPINIONS CITED IN DENIAL
The Legislative Audit Division’s Arey also cited four Arkansas attorney general’s opinions in his email Monday explaining more about the division’s decision to keep the requested records from public view.
One opinion by former Attorney General Mark Pryor, now a U.S. senator, referred to unsolicited sexual-harassment complaints by students to Arkansas State University regarding an instructor/program director.
“If the requested records have been made a part of an investigation being conducted by a law enforcement agency, and if that investigation is ongoing, the records are exempt from disclosure,” Pryor’s office wrote in 2001.
Attorney general’s opinions are nonbinding.
The attorney-general opinions, Steinbuch said, are proper in that they relate to law enforcement or crime-related records that are part of a law enforcement investigation, including records in certain instances held by a university. “That exemption [cited by auditors and university officials] was specifically for law enforcement agencies,” Steinbuch said.
Tull said he has issues with the attorney-general opinions, as well.
“Nobody wants to interfere with a law enforcement agency deciding when someone is to be arrested or prosecuting attorney about filing criminal charges,” Tull said.
But Tull said Arkansas Supreme Court case law discussing the cited exemption makes clear the concern is with the personal thoughts and opinions of law enforcement officials concerning the evidence or case in general.
“The records of the audit committee should in no way hinder the case or the prosecutors’ decision-making process,” Tull said.
Front Section, Pages 1 on 11/26/2013