Newspaper Sues UA For Records About Deficit

The University of Arkansas at Fayetteville should not be allowed to hide “embarrassing documents” that would show taxpayers how the school’s fundraising program ran up a $3.4 million deficit, the Arkansas Democrat-Gazette argues in a lawsuit filed Monday.

The lawsuit names the school and Chancellor G. David Gearhart as defendants and seeks to force disclosure of records he has refused to make public.

The newspaper claims the defendants are violating the state Freedom of Information Act by refusing to release the documentation the paper has sought since December.

Gearhart has predicted the division, with a roughly $10 million budget, will end the fiscal year in June with another - but smaller - deficit.

“There is a compelling public interest in knowing the explanation for the budget shortfall of $3.37 million,” the lawsuit states. “The documents were requested for the purpose of explaining how the budget shortfall was created and why it was not detected earlier.”

The lawsuit, which also lists Vice Chancellor John Diamond as a defendant, is the newspaper’s response to Gearhart’s repeated refusal to release records sought by reporter Tracie Dungan, a co-plaintiff with the paper.

The shortfall in the university’s Advancement Division was first discovered in July but not made public until December, when the school reassigned its chief fundraiser, Brad Choate, vice chancellor for advancement, and his chief budget officer, Joy Sharp.

Choate was subsequently informed that his $348,175-a-year employment contract would not be renewed when it expires at the end of the school’s fiscal year in June. Sharp was reassigned from budget management to the school’s human resources department and her salary cut from $91,086 to $68,314. She also was notified that her employment will expire at the end of June.

The school, primarily through Diamond, subsequently rebuffed three open-records requests Dungan made between Dec. 5 and Jan. 22 seeking the results of an internal audit and related documentation.

Diamond and the school’s lawyers have justified the refusals by claiming the records cannot be made public because they are part of employee evaluation and job performance records that are exempt from release under the Freedom Of Information Act.

Arkansas Code Annotated 25-19-105 (the FOIA) exempts“personnel records to the extent that disclosure would constitute a clearly unwarranted invasion of personal privacy.”

The law does allow disclosure of employee evaluation or job performance records “upon final administrative resolution of any suspension or termination proceeding” in which the records “form the basis of the decision to suspend or terminate the employee and if there is a compelling public interest in their disclosure.”

Neither Choate nor Sharp are defendants in the suit.

The newspaper, in a seven page complaint by attorney John Tull, rejects the university’s claim that the records fall under the personnel-file exemption, arguing that the records sought weren’t created to evaluate employees but to explain the budget shortfall.

Even if there was a way the records could be construed as employee evaluations, the documents would still be releasable because the school has essentially suspended and fired Choate and Sharp, although it has allowed them to stay on the payroll until the end of the fiscal year, the newspaper claims.

“The University of Arkansas cannot hide embarrassing documents by claiming they were later used to evaluate and discipline employees,” the lawsuit states. “The University of Arkansas has effectively terminated them by moving them to another position or terminating their responsibilities until their terms expire.

“The determination by a University of Arkansas official to allow them to finish out a term does not mask the fact they have been suspended from their positions and terminated as of June 2013,” the newspaper argues.

The plaintiffs are asking Pulaski County Circuit Judge Tim Fox to order the defendants to produce the requested documents and reimburse the paper for the costs of litigation. The lawsuit was filed in Little Rock because the University of Arkansas System has its headquarters there.

Newspaper managing editor David Bailey said the paper would have preferred not to be forced to take legal action to get records on how the school spends public money.

“We are saddened by the need to sue the University of Arkansas,” Bailey said. “But the taxpayers are entitled to documents that shed light on how university employees could overspend their budget by millions of dollars, and we believe it is unreasonable for the university to claim otherwise.”

Fred Harrison, the UA System’s general counsel, said he expects his office to represent the defendants. He declined to comment because he had not been able to review the suit Monday afternoon.

The records requested include written explanations for the shortfall from Choate and Sharp, an internal audit by Vice Chancellor Don Pederson, and an internal review by Jean Schook, the school’s treasurer and an assistant vice chancellor.

Gearhart has invited independent audits of the division by the General Assembly and the university system. In an interview last week, Gearhart told the Democrat-Gazette he doesn’t expect those inquiries to discover more than the school’s internal audit found.

“They overspent their budget,” he said, referring to Choate and Sharpe. “We think we know what happened. We feel pretty confident.”

The Advancement Division is funded both by public money and interest from private donations to the University of Arkansas Foundation Inc.

Gearhart said Choate and Sharp miscalculated the amount of interest the Advancement Division would receive from its foundation accounts.

Front Section, Pages 1 on 02/12/2013

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