UA Works to Correct $4M Advancement ‘Miscalculation'

by Chris Bahn  on Monday, Dec. 3, 2012 12:00 am  

Brad Choate

University of Arkansas officials confirmed last week that they are working to correct a multimillion-dollar deficit in the school’s Division of University Advancement for the second consecutive fiscal year.

Brad Choate, vice chancellor for Advancement, has been stripped of day-to-day management responsibilities and will lose his job at the end of the fiscal year, Chancellor G. David Gearhart told Arkansas Business. Gearhart, who led the Advancement Division before his promotion in 2008, is managing the division in the meantime.

Choate will continue to collect his $350,000 salary and can stay on staff to assist Gearhart until June 30, unless he finds another job before then. He wasn’t fired, the chancellor said, because “there was nothing that showed that funds were misappropriated or misspent. The funds were all spent on things we needed,” including additional fundraising personnel for an upcoming capital campaign.

Choate declined an interview request, so Gearhart also offered the vice chancellor’s side of the story.

“Brad was being told by his budget person that there were funds to cover it, when clearly there weren’t,” Gearhart said. “You could debate the issue of what his knowledge should have been. I think he would claim that he was getting bad information from his budget person.”

That budget officer, 38-year UA employee Joy Sharp, has been reassigned to the university’s human resources office until her appointment also runs out on June 30. She is paid $68,314 a year.

Interviews with UA spokesman John Diamond and Gearhart revealed that a $3.1 million budget shortfall in the Advancement Division that had built up over two to three years was discovered in late June and was covered by tapping into reserve funds. Gearhart said the division had a surplus of about $500,000 when he left it to take the top job on the Fayetteville campus.

The Advancement Division is funded by a mix of “educational and general” funds from the university and private money from the University of Arkansas Foundation. The division was able to settle up with the university using foundation funds until that account was essentially overdrawn and frozen, Gearhart said. That’s when the university became aware of what Diamond described as a “major miscalculation.”

An investigation after the June discovery determined that Choate thought he had millions more to spend each year than the $10 million in total revenue that the university’s Division of Finance & Administration projected. The shortfall was projected to grow to $4.37 million in the current fiscal year.

Last week Gearhart presented a plan to UA college deans outlining how the shortfall could be covered and the budget balanced going forward. The plan calls for a combination of additional university funding and expense cuts.

“We’re sorry this happened. We’re sorry for Brad. As I said to the deans the other day, this doesn’t mean that Brad’s a bad person. ... But you really can’t amass this kind of deficit and survive it,” Gearhart said.

The Advancement Division, which has grown to about 150 employees, should have been allocated more money from the university for the past couple of years, Gearhart said. “And we would have done so if Brad had requested it.”



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