HERMOSILLO, Mexico — The state’s Legislative Audit Division will take charge of a financial review into a $3.37 million budget deficit in the University of Arkansas at Fayetteville’s fundraising division, the division’s director said Friday.
The agency is the primary auditor for public agencies in Arkansas and provides more than 1,000 financial reports each year to the General Assembly’s Legislative Joint Auditing Committee.
The reports are made public when complete, but auditors do not comment after they start their work.
UA Chancellor G. DavidGearhart on Feb. 5 asked for two reviews of the overspending last year by the Division of University Advancement: one by the Legislative Audit Division and one by the University of Arkansas System auditors.
The Advancement Division overspent its roughly $10 million budget by $3.37 million in the 2012 fiscal year. It wasn’t discovered until after the fiscal year ended June 30.
An Oct. 19 report by UAFayetteville’s treasurer cited lack of management oversight, violations of university policies and “deliberate efforts to disguise poor financial management” withinthe Advancement Division, which oversees fundraising, communication, alumni affairs and other outreach efforts by the state’s flagship university. Gearhart has disciplined the division’s vice chancellor and its former budget director.
Auditors from the Legislative Audit Division and the UA System met Friday morning in Little Rock to start planning the financial review, said Roger Norman, Legislative Audit Division director.
In a one-paragraph e-mail Friday afternoon, Norman wrote that UA System auditors will assist his divisionwhen necessary.
“The Division is not at liberty to discuss the engagement until complete,” Norman wrote.
In earlier interviews, Norman had said the audit process might take several weeks.
Norman did not respond to further questions Friday, including when the review might be finished.
The Legislative Audit Division’s working papers are not public documents, but all audits and financial reviews are available to the public when they are complete, Norman has said.
Once the auditors’ reports are done, the Legislature’s Joint Auditing Committee decides what happens next.
“It depends on the findings,” Norman said in earlier interviews.
The committee accepts reports without comment, but also can hold hearings or refer issues for further investigation.
UA-Fayetteville officials have said they didn’t know until July 6 that the Division of University Advancement had overspent its budget.
That’s when the University of Arkansas Foundation delayed a $225,000 funding transfer request by the Advancement Division “due to a lack of availability of funds,” according to a university e-mail obtained by the newspaper.
The treasurer’s investigation later determined that the division had overspent its budget by about onethird.
In November, Gearhart informed Vice Chancellor Brad Choate and the Advancement Division’s former budget officer, Joy Sharp, that their appointments would not be renewed after June 30.
He also removed Choate from administrative and budget duties.
On Feb. 5, Gearhart called for state auditors to examine the division’s fiscal problems, saying he did so in response to critical editorials in the Arkansas Democrat-Gazette.
University officials had refused for months to make public their review into the financial problems, which was performed by treasurer Jean Schook and dated Oct. 19.
The university said it was a job performance record exempt from the Arkansas Freedom of Information Act.
On Feb. 15, the university released the treasurer’s report and other documents in response to a lawsuit filed by the Democrat-Gazette.
Northwest Arkansas, Pages 9 on 03/02/2013