CONWAY — CONWAY - Former University of Central Arkansas President Allen Meadors established a no-criteria scholarship aimed at boosting enrollment before he resigned in 2011, an internal audit found.
The audit report found that 120 “Leadership II” scholarships were awarded during the past academic year, totaling $88,500. Meadors established the awards, which no longer exist, “as a recruitment tool to attract students to attend UCA,” the report said.
The scholarship, renewable for one consecutive semester, paid $500 per semester during a student’s freshman year.
“The scholarships did not have any eligibility requirements necessary to receive the award,” the audit found.
The admissions office advised auditors that the awards were based on UCA recruiters’ recommendations, the report said.
“However, no documentation was provided indicating any eligibility requirements for the scholarships,” the audit found.
As a result, UCA’s Office of Internal Audit said it was “unable to determine what factors were considered in awarding these scholarships. Lack of establishing eligibility requirements for scholarship awards increases the risk that the scholarship award process may be subject to bias.”
Robert Parrent, vicepresident for enrollment management, said these scholarships were awarded only for the past academic year. All current institutional scholarships have eligibility requirements, he said in the report.
UCA President Tom Courtway, who succeeded Meadors in September 2011, said it was his understanding that these scholarships were originally going to be for one year only.
UCA’s enrollment has declined in recent years as the school has seen two presidents, Meadors and Lu Hardin, resign under pressure and later plead guilty to criminal charges.
After Hardin resigned in August 2008, the Arkansas Democrat-Gazette learned he had greatly expanded no-criteria presidential discretionary scholarships to the tune of millions of dollars.
In May 2009, the board of trustees abolished these awards and replaced them with a scholarship program for “students with exceptional circumstances” - a major family illness, for example - that might otherwise prevent the student from attending college.
But the audit, released Thursday, raised questions about aid given to two students even under these scholarships on advice from former Chief of Staff Jack Gillean.
Gillean, an attorney who also gave legal advice while he worked at UCA, resigned in July and was later charged with four felonies, including three counts of commercial burglary on the campus. He has pleaded innocent.
According to the report, two students got “excess aid funds,” one for $6,482.52 and the other for $6,082.45, during the past academic yearto help with “personal living expenses.”
“According to Internal Audit’s interpretation of [the scholarship] policy, these students should not have been eligible to receive” the money, the report said.
According to the report, the scholarship committee said Gillean had advised that the board intended to help “students with exceptional needs and merit” and that those needs included such things as living expenses and books in addition to tuition and fees.
In an earlier, separate review related to Gillean, auditors reviewed financial aid to 11 students who had an association with him.
One of them was former student Cameron Stark, who authorities said used Gillean’s keys to enter professors’ offices and steal tests. Stark, who has immunity from prosecution, is also among the students whose financial aid has come under question.
The scholarship audit released Thursday, however, did not give the names of any students, and it was not clear whether Stark was one of the students who got the special aid per Gillean’s advice.
Courtway said in an interview Friday night that “the principle is clear in [the] policy that [a student is] not to get money back.”
“A provision says no student is to receive any funds under this program that would give them cash back,” Courtway said.
These scholarships are for qualifying students for up to $3,000 per semester, he noted, and are limited.
Parrent, in a management response included in the audit report, said UCA officials had sought legal advice on the matter and said a suggested policy change was sent to legal counsel on Feb. 12.
Courtway said he doesn’t see the need to clarify the policy but will review the matter next week to see whether clarification is needed.
The audit said UCA reported a total of $17,632,401.28 in unrestricted educationaland-general scholarship expenditures to the state for the past academic, or fiscal, year, the internal audit report found. This audit focused on scholarships that totaled $7,118,758.69, or 40 percent of the total scholarship awards.
The report noted that some policies and procedures have already been changed to prevent conflicts of interest, and to increase checks and balances. Other changes are in the process of being made, it said.
During the past academic year, the audit found, UCA renewed 759 scholarships totaling $4,570,049.98. Of the 49 renewals selected for testing by auditors, exceptions were granted to 12 recipients who did not meet renewal requirements, the audit found.
Northwest Arkansas, Pages 9 on 02/23/2013