University of Arkansas System trustees expressed relief Thursday that a prosecutor’s investigation found no crime in its examination of matters forwarded by the Legislative Audit Division regarding a multimillion-dollar deficit in the Fayetteville campus’s University Advancement Division.
Trustee Mark Waldrip said he was “pleased to know that there was no criminal wrongdoing.”
Ben Hyneman, the trustee who heads the board’s audit committee, said the report’s findings were “largely what I was expecting” and that the university should strengthen its internal controls.
“It’s an unfortunate thing. It’s a serious matter,” Hyneman said. “The good news is, none of the money was inappropriately spent in ways that did not benefit the university. Now, we’re going to be able to take those mistakes” and prevent such problems from recurring.
Jane Rogers, chairman of the board, said the university already is implementing the recommendations from a legislative audit report delivered Sept. 10.
Other trustees did not return phone or email messages.
The Washington County prosecutor began an investigation in September after legislative auditors forwarded three concerns: a duplicate $2,051 reimbursement to the Advancement Division’s former Vice Chancellor Brad Choate; a $1.35 million deposit misdirected by the division’s budget officer; and improper financial statements by the UA treasurer’s office that partiallyobscured the deficit, according to a letter from auditors.
After conflicting testimony at a Sept. 13 Legislative Joint Auditing Committee meeting in Little Rock, Prosecuting Attorney John Threet said his office also would investigate former UA spokesman John Diamond’s allegation that Chancellor G. David Gearhart ordered public documents to be destroyed in a Jan. 14 meeting and that they were destroyed.
In a letter Thursday, Deputy Prosecuting Attorney David Bercaw said he did not find evidence of criminal activity regarding any of the issues, just a “very unfortunate breakdown of internal control within the Advancement Division.”
State Rep. Kim Hammer, R-Benton and co-chairman of the Legislative Joint Auditing Committee, said he was “pleased that the recommendations of legislative audit have been affirmed by the prosecutor.”
“Whether there was criminal intent or not is not ours to say. That’s the prosecutor’s job,” Hammer said. The committee will continue to take testimony about the UA Advancement Division matter in a meeting today in Little Rock.
On whether any others at the university should be held accountable for lack of control in the Advancement Division, Hammer said, “The question that legislators as a whole, not just the committee, have to determine is where does the buck stop … and whose responsibility is it to accept responsibility for letting [the division] be in that condition. … At some point … legislators could turn our attention to management.”
Front Section, Pages 4 on 12/13/2013