Facing $4M Deficit, Gearhart Requests Audits of University's Advancement Division

University of Arkansas Chancellor G. David Gearhart has requested a pair of independent audits of the university's advancement division, which was on track to overspend its budgeted revenue by more than $4 million in the current fiscal year.

Gearhart said Tuesday that he's asked auditors for the Arkansas General Assembly and the UA System office to review advancement's overspending, which Arkansas Business first reported in December. UA Spokesman John Diamond said the scope of the audit is up to the auditors. 

The university has not released the results of its own internal audit, saying the audit is part of personnel records. But Gearhart said those documents will be available for review by the independent auditors.

"The university has been transparent and accountable about this situation," Gearhart said in a news release. "I believe these audits will demonstrate that performance while still respecting the legal protections afforded public employees under Arkansas law."

Gearhart made the audit requests to UA System President Donald Bobbitt and Arkansas legislative auditor Roger A. Norman.

As Arkansas Business first reported, officials discovered a shortfall in June. UA Advancement overspent by $3.1 million in 2011-12 and was on track for a deficit of more than $4 million in 2012-13.

Advancement, which houses fundraising, communications, marketing, special events and the World Trade Center in Rogers, includes 154 employees. That total has grown by 16 since 2009. 

Already, the budget mishandling has resulted in the reassignment of Joy Sharp, who had budget oversight and human resources duties in advancement, and Vice Chancellor for Advancement at University of Arkansas Brad Choate.

Sharp is now in human resources and has no budget oversight. Choate continues to work in fundraising, but does not have day-to-day management responsibilities. Gearhart, who made fundraising a priority of his time at Arkansas, is now handling those duties. Gearhart led the advancement division before becoming chancellor in 2008.

Gearhart and UA officials reviewed several possible plans for covering the deficit in 2013. They used transfers from within the university to cover the 2012 deficit and have implemented a plan that includes the use of unrestricted gifts, a hiring freeze and budget cuts to cover the projected overspending this year.