Prosecutor: No Criminal Activity, But Breakdown of Controls in UA's Advancement Division

by Lance Turner  on Thursday, Dec. 12, 2013 4:38 pm  

* Choate's former budget director, Joy Sharp, moved $1.35 million that was supposed to be spent specifically on the Jean Tyson Child Development Study Center into a general account, but prosecutors concluded that the transaction was an error and discounted suggestions that she did it to disguise the deficit. They also found that Sharp was inexperienced and insufficiently trained in some of the budgeting and spending matters with which she was intrusted.

"We are not persuaded that this transaction was an intentional effort to cover the deficit in the Advancement Division or any type of fraud," Bercaw said.

In another part of the findings, Bercaw said investigators don't believe "there was any criminal intent to commit fraud by any one person or group of persons." He said there is no evidence that funds "were expended for inappropriate or fraudulent purposes," and that "all expenditures were valid and there were no missing funds."

* Finally, prosecutors said they found no evidence that any records under Freedom of Information Act requests, relevant for prosecutors' investigation or needed for the audit were destroyed, as alleged by Diamond in the September hearing.

Prosecutors did find that for one type of document, Foundation Payment Authorization Forms, the university had no records retention policy and likely should have retained those forms for a certain period. Still, prosecutors allowed that those forms might be owned by the private, nonprofit University of Arkansas Foundation, and possibly not subject to the FOIA.

New Procedures

And during a meeting of its board of trustees last month in Little Rock, school officials said they are implementing new procedures for hiring and accounting. At the recommendation of auditors, officials now have to have written documentation and a revenue source to cover any new hires. The division's computer system is to be set up to prevent anyone from being hired without an identified revenue source to cover the costs.

The school also has stopped letting employees share computer login credentials.

The document notes the university set up a system so that it now records expenditures in the appropriate accounts and ensures that contributions are deposited into the accounts where they belong.

(The Associated Press contributed to this report.)



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