Fraud line a privacy threat, suspend it, UA auditor says

FAYETTEVILLE - The chief auditor for the University of Arkansas System asked the system’s trustees Thursday to consider temporarily suspending the system’s 24-hour Fraud Hotline because of his concern public release of its tips could endanger privacy of whistle-blowers and those falsely accused.

Members of the UA board of trustees’ Audit Committee, meeting in Fayetteville on Thursday afternoon, heard the concerns of Jacob Flournoy, the director of internal audit for the system and its more than 15 universities, colleges and schools around the state.

Flournoy’s concerns arose after the system received Freedom of Information Act requests for information about hotline tips, including an Arkansas Democrat-Gazette request July 1 that asked for tips received since Jan. 1.

The hotline, first established in 2007, generated about 60 calls a year concerning about two dozen incidents, a few of which led to audits, Flournoy said.

But some of those calls were from disgruntled people who made unsubstantiated claims against others, he said, adding that innocent people could be affected if information is released. Public release of tips also could alert subjects of fraud investigations that they are under scrutiny, he said.

“I’m at a dilemma as to what to do,” Flournoy told trustees. “Even though it’s helpful to me, I don’t think it’s worth releasing any information on people who are helpful to the university.”

After hearing Flournoy’s concerns. committee members agreed, without taking a vote, that Flournoy should return with a proposed policy revision at the trustees’ next regular meeting in November.

The July 1 request from the Democrat-Gazette’s Conway bureau also requested “access to any hotline tips since January 2012 that involved any personnel issues or other matters relating to UA’s Advancement Division or employees or actions.”

A reporter concluded the request by writing, “I do not plan to publish every unsubstantiated tip. I shall use caution.”

The newspaper has not published an article about any of the tips the request yielded; a few examples of tips that did not result in stories are listed at the end of this article.

Still, the system’s audit staff is concerned about the possibility.

“I support Freedom of Information,” Flournoy told trustees, whom he’d given a copy of the system board’s policies, including its “Whistleblower Policy,” which reads it is “intended to encourage all university employees to report suspected or actual occurrences of alleged wrongful conduct without fear of retribution.”

“In accordance with the Arkansas Whistleblower Act, whistleblowers have the right to be protected from retaliation,” the policy reads, defining a whistleblower as any UA System employee, applicant for employment, student, patient at its medical school, vendor, contractor or member of the general public. However, Board Policy 355.1 also says it is intended “to bring forward serious concerns to the University’s management for review, prior to seeking resolution outside the University.”

Trustees asked Flournoy what would happen to the tips if the system temporarily shut down the hotline while seeking possible legislation.

“That doesn’t mean people still won’t contact us,” Flournoy said. “We still have an 800 number. People will still email us and call us,” and they can also pay an in-person visit.

But his office tells those people, just as the board policy states, that the UA System can try to protect their identities only up to a point.

Board Policy 355.1 says a “whistleblower’s identity will be maintained to the extent possible under applicable state and federal laws.” The policy cautions that if the person chooses to “self-disclose” in submitting information, his identity may become known.

Trustee C.C. “Cliff” Gibson of Monticello said the lawyer in him had a basic question.

“I don’t care if it comes to you by the hotline, email, phone or Pony Express, if a call comes in and you make a record of it, I think you’ve got an FOI document there. You’ve not solved your problem,” Gibson said. “So what are we doing here?”

Flournoy said the hotline was the only sure way people had to offer a tip and ensure they remain anonymous. Callers to the hotline can withhold their name or provide it, he said. Avenues such as email provide an identifier that cannot be protected, though a person’s Social Security number or certain other identifiers would have to be withheld under the Freedom of Information Act.

Gibson seemed convinced.

Fred Harrison, general counsel for the system, told trustees that current exemptions in open-records laws won’t solve Flournoy’s dilemma.

“There is no exception in the FOI for that,” Harrison said.

After the Democrat-Gazette’s request concerning the hotline, UA System spokesman Ben Beaumont called the newspaper to express concern before releasing 10 pages of documents July 3.

In an accompanying email, Beaumont wrote, “Also per our discussion, I just want to reiterate that our auditors are concerned that publishing information from the university’s fraud hotline will encourage illegitimate complaints and discourage legitimate ones. If this were to become an ongoing request, they would have to consider shutting down the hotline.”

The tips related to UA-Fayetteville, the University of Arkansas at Little Rock and the University of Arkansas at Pine Bluff and dealt with a wide range of complaints, including one about the Advancement Division and another concerning promotion and suspected nepotism. One tipster complained about the NCAA investigating a report of missing money at UAPB, where a spokesman said officials there knew nothing about such a matter.

The only tip relating to the Advancement Division came from an anonymous caller April 12. On the record of that tip, the caller noted that the Arkansas Division of Legislative Audit was investigating the Advancement Division. “The caller stated he/she would like to request the Legislative Auditors to review the Advancement Division’s Deficit dating back to 2006.”

The audit, released Tuesday, dated to 2008, when Brad Choate became vice chancellor of the Advancement Division.Before that, the division was led by G. David Gearhart, now the chancellor at the Fayetteville campus.

The caller also said Chris Wyrick, vice chancellor for the Advancement Division since April, had “ordered a new desk and flat screen television so he could watch the Masters Golf tournament on April 11.”

In light of that complaint, the Democrat-Gazette sent a follow-up request seeking “access to any written information in any form - email, papers, etc. - that UA-Fayetteville has in its possession about the purchase of a television set and a desk for Mr. Wyrick in the advancement division.”

On July 11, UA-Fayetteville spokesman Steve Voorhies replied by releasing a copy of an invoice for the desk, which cost$1,315 in state funds. He said in an accompanying email that the school did not buy a TV for Wyrick’s office and that the one in question was Wyrick’s personal property.

Beaumont said a hotline tip led to an audit involving a residence hall at UAPB. Administrators there subsequently fired four employees in February 2012 after an internal audit uncovered $700,000 of payroll and purchasing transactions that violated university spending controls at the Harrold Complex, a student dormitory. That audit led to an Arkansas State Police investigation but no criminal charges.

In Conway, at the University of Central Arkansas, which launched a fraud hotline this year after the school was beset by repeated scandals, President Tom Courtway said, “There’s no consideration or thought of doing away with” the hotline.

“I’m not going to recommend it,” he said.