The chancellor of the University of Arkansas at Fayetteville had close ties dating back decades with two employees at the center of a multimillion-dollar deficit in UA’s Advancement Division.
Both employees are still working for the university, at least for now, despite an internal review criticizing them for their roles in creating the deficit.
Chancellor G. David Gearhart hired Brad Choate in 1990 as an associate vice president at Pennsylvania State University, where they worked together for five years. After Gearhart returned to UA in 1998 to be vice chancellor for advancement, Choate and his wife visited Gearhart three times in Fayetteville, Choate said.
In 2008, when Gearhart became chancellor of the Fayetteville campus, he hired Choate to replace him as the university’s chief fundraiser. Since fiscal 2010, Choate’s base salary has risen almost 34 percent to $348,175.
“He’s doing a magnificent job,” Gearhart said in a 2010 interview. “I don’t have to worry about anything.”
Gearhart promoted Joy Sharp in 2003 to be a budget director in the Advancement Division, where they worked together for five years before Gearhart became chancellor. Gearhart and his wife, Jane, threw a party for Sharp that sameyear to celebrate her 30th year as a UA employee.
Choate and Sharp have been the central figures in an Advancement Division spending deficit that totaled $3.37 million in fiscal 2012. The deficit occurred primarily because the division hired employees for a major fundraising campaign but didn’t have the money to pay those salaries, concluded Jean Schook, UA’s associate vice chancellor for financial affairs. She released a four-page internal review on the deficit and reported finding no evidence of fraud.
For fiscal 2012, Choate oversaw the Advancement Division, and Sharp was its chief budget officer.
LESS MONITORING
Choate was a national star in university fundraising, a gregarious man who enjoyed sky diving, scuba diving and riding his Harley-Davidson motorcycle. In 2004, the Council for Advancement and Support of Education gave Choate its highest honor for a foundation executive: the Commonfund Institutionally Related Foundation Award.
“To get him here, it was a significant deal,” Gearhart said in 2010. “I would consider Brad as one of the best advancement people in the country.”
UA’s fundraising went well under Choate’s guidance. UA raised $121 million in private gifts in fiscal 2011 and $108 million in fiscal 2012, the first time the university had consecutive years with gifts totaling more than $100 million.
But, according to Schook, Choate gave his password for the computerized budget system to Sharp, in violation of university policy, so she could handle all of the division’s budget matters. Choate “strongly disagreed” with the password rule and chose to ignore it, according to the review.
In 2008, shortly after he joined UA, Choate “made it known that the policy was overly restrictive and burdensome to him,” Schook wrote. He didn’t monitor the division’s financial resources during his five years at UA, she concluded.
Last year, Gearhart e-mailed Choate on Oct. 20, the day after he received Schook’s review, saying “it appears you had no idea how much revenue you had or how much your division was spending and this went on from the first day you arrived on campus.”
The e-mail indicated that the matter was not only professional but personal to Gearhart.
“Brad, you have been a friend and colleague for many years,” Gearhart wrote. “I brought you here to help me. But your lack of oversight has created a colossal financial crisis.”
In a 2010 interview with the Arkansas Democrat-Gazette, Choate talked about his management style, referring to his association with Gearhart.
“I told people when I got here, ‘Look, I’m not Dave Gearhart. We may get to the same point, but we’ll get there in very different ways,’” Choate said. “We work and manage in different ways. We’re both sort of button-down types, but I’m probably a little more casual.”
Gearhart had praise for Choate when he was interviewed for that story in 2010.
“He’s not scared of anything,” Gearhart said. “I like to win, but Brad really likes to win. … I have not noticed any intimidation at all since he’s been here.”
Last November, Choate defended himself in an e-mail to the chancellor, blaming Sharp for not informing him of the problem and trying to “mask” it by moving money around from one account to another. In her own written response to Gearhart, Sharp took the blame and apologized for any mistakes.
“I acknowledge that I did not provide budget reports to [Choate] and unit heads in a timely and appropriate manner due to my workload,” she wrote to Gearhart on Nov. 2. “I did not monitor the revenue correctly. When the revenue decreased, I did not adjust my projections accordingly. … I deeply regret that through my lack of performance I have caused this problem.”
Schook concluded that Choate should have known what his employee was doing and should have more closely monitored the division’s financial situation.
“I don’t think she was deliberately doing it,” Gearhart said in an interview with the Democrat-Gazette last month. “I think maybe she got a little over her head. That’s probably what happened. … She got confused. … There was pressure to get the campaign up and running. … I think she didn’t have as much help monitoring the budget.”
Gearhart said that when he headed the Advancement Division, “I was probably on top of the budget to a greater extent.” THE CHAIN OF EVENTS
Gearhart spearheaded UA’s last major fundraising push, the seven-year Campaign for the 21st Century, which raised $1.046 billion in cash, in-kind gifts and pledges, thanks in large part to a $300 million donation from the Walton Family Charitable Support Foundation.
Gearhart’s success propelled him to being named chancellor in 2008. When looking for a replacement to head the Advancement Division, Gearhart thought of his old friend and associate Choate.
Since the interview last month, Gearhart has stopped talking to the Democrat-Gazette about the Advancement Division deficit. He didn’t return an e-mail or text message seeking clarification of a statement he made earlier.
On Nov. 6, Gearhart sent Choate a letter saying he was relieving Choate of his administrative duties to manage the Advancement Division, but Choate would be given other duties and could work there until June 30, the end of the fiscal year, unless he left before then for a new job. Gearhart temporarily took over the administrative duties of the division and didn’t cut Choate’s pay, which was more than $400,000 this year including fringe benefits.
On Feb. 1 3, Gearhart named Chris Wyrick, executive director of the Razorback Foundation, to replace Choate as head of the Advancement Division.
Wyrick will begin his new job April 1. Choate will work with Wyrick “to ensure a smooth transition,” a UA news release stated. Itindicated that Choate’s current assignment is as a capital-campaign adviser and development officer.
Beginning April 1, Choate’s compensation will be paid completely through private funds, the release stated.
Sharp was demoted and reassigned to UA Human Resources, which can retain her as an employee when the next fiscal year starts on July 1, according to a Nov. 16 e-mail from Gearhart. Her salary was cut from $91,086 to $68,314.
Initially, UA refused to release Schook’s internal review, saying it amounted to personnel records for Choate and Sharp, but after a lawsuit was filed by the Democrat-Gazette, the two employees gave permission for the records to be released to the newspaper.
On Feb. 5, about eight months after he first learned of the deficit, Gearhart asked for an independent audit by the state Legislative Audit Division, whose auditors who will be assisted by the UA System auditors.
Last month, when explaining why he considered Schook’s report to be a personnel record, Gearhart was adamant that he hadn’t been lenient on Choate and Sharp but said “it behooves me as a leader to do what’s appropriate to protect them.”
“There’s a person behind that name, a family behind that name,” said Gearhart. “These are people who are good people. They overspent their budget.”
Gearhart said what has happened at UA will haunt Choate for years. Considered one of the best college fundraisers in the country, Choate is now looking for a new job.The UA deficit has gotten a considerable amount of media attention.
“I’m sure it’s a terrible embarrassment for him,” Gearhart said. “I try to have some human decency when I deal with these people. Joy Sharp [is] a 40-year employee, she’s never worked anyplace but here. This is her only place of employment. You try to do what you think is fair. I tried to do what is fair. So, because I knew them, were we more lenient? No.”
Dan Saftig, who worked for Choate for 15 years, first at Pennsylvania State and later at the Minnesota Medical Foundation, had good things to say about him.
“Brad has an incredible track record of success over 30 years,” said Saftig. “The people that work for him, so many say he’s the best boss they’ve ever had, including myself. Solid and ethical and empathetic, which are not only the qualities of a good leader, but the qualities of a good fundraiser as well. He enjoys a tremendous reputation across the country in our field. Everything I know of Brad is aboveboard, hardworking, ethical, with no questions asked about any wrongdoing.”
Sharp has not answered several requests for comment.
A former employee of University Relations sent two letters to the Democrat-Gazette defending Sharp.
Bonnie S. Powell of Springdale, who worked at UA for six years until 2004, said Sharp had meticulous knowledge of the budget.
“She’s immaculate and very zealous when it comes to doing her job properly, especially in the private funds vs. the public funds and overseeing foundation accounts for different departments in the Advancement Division,” said Powell, who was assistant to the associate vice chancellor and research project analyst.
Powell said Sharp would notify other employees if they were just a few dollars off in their accounts.
“She kept excellent records on the funding,” said Powell. “I cannot believe there would be a $3.37 million shortfall, much less $3 with her. … I do not see her as a person doing things like that and trying to cover it up. … I don’t believe that she would have this kind of budget shortfall unless she was doing things she was told to do.”
Several people who worked directly under Choate at UA were asked if they would like to comment for this article. None responded. Choate responded to some questions by e-mail if they pertained to things other than the budget.
On Feb. 1, UA announced that fundraising was up 15 percent in the first half of fiscal 2013, compared with the first half of the previous year. UA raised $61.8 million during the first half of fiscal 2013.
Front Section, Pages 1 on 03/17/2013