I am more than a little annoyed about the fiasco concerning the University of Arkansas Advancement Division. I am a University of Arkansas graduate, a retired CPA and a veteran of more than 40 years in accounting and finance management positions.
During my career, I have held positions such as corporate controller for a Fortune 200 company and chief financial officer for a couple of small businesses. I have zero experience with not-for profit organizations. All my experience involves trying to control expenditures and scratching and clawing for every dollar of profit. During that time I was blessed with management that cared about the financial aspects of the organization.
Occasionally, those managers would even hold my feet to the fire, which is exactly as it should be.
I cannot relate to the lax management in the Advancement Division that led to overspending $4.2 million. Chancellor David Gearhart has identified some individuals upon whom he heaps the blame. He does not seem to include himself in that blame. In my mind he had a responsibility to oversee the financial aspects of his organization. Where were the periodic budget meetings? Whose feet was he holding to the fire concerning the budget in place? Nothing seems to have happened until the FOI request uncovered this mess. I think the chancellor has more responsibilities than attending functions and getting his picture in the society page of the newspaper.
In my experience with profit oriented organizations, if gross mismanagement occurs, heads roll. It seems in the academic world,if gross mismanagement occurs, heads just get reassigned. In a recent newspaper article, there were indications Chancellor Gearhart was about to hire another individual with expertise to ensure that this type of overspending did not occur in the future. That is simply ludicrous. Gearhart had enough management in place to prevent this waste of money. They just needed to do their jobs. If something is important to the person at the top, then it is important to the people underneath. I know who I ultimately hold responsible for this mess.
To make matters worse, the Advancement Division was violating generally accepted accounting principles. When the division overspent during the year, they would just record an accounts receivable to cover up the budget violation. In the accounting world, that is commonly referred to as“cooking the books.” Most of us are familiar with some of the past stories of accounting fraud that harmed investors in publicly traded companies. That fraud led to congressional investigations and burdensome legislation. It also led to the destruction of a large accounting fi rm.
Well, this only involves public money so maybe we should not get upset about it. At least that is the attitude reflected by Chancellor Gearhart’s actions and words.
I want to see what the state leaders who have responsibility for the oversight of the University of Arkansas are going to do about this gross mismanagement of the taxpayer’s money. Their reputations and their credibility are on the line.
GARY W. JOHNSON
Springdale
Opinion, Pages 10 on 09/22/2013