UA nonprofit’s $7M topped off ’17 athletic payroll

While the University of Arkansas, Fayetteville sends wire transfers to the nonprofit Razorback Foundation, a lot of the money flows the opposite direction.

Of more than $20 million in direct transfers to the UA in fiscal 2017, the foundation sent $7 million to cover athletic department wages — an arrangement that allows the university to hire employees at salaries higher than caps set by the General Assembly.

The UA board of trustees has authorized more than five dozen athletic department staff members to earn more than the Legislature set as their positions’ salary limits. Private money covers the salaries above which the school is allowed to pay. For the athletics department, the Razorback Foundation provides the difference.

Those salary payments don’t include the $477,000-per-year combined in side deals that the foundation has directly engaged with nine athletic department employees for work beyond their public jobs, according to documents provided by the university.

Such “personal service contracts” have long been known to exist for athletic coaches — to pay for their presence at foundation functions or radio shows and to set their severance terms. Head basketball Coach Mike Anderson and head baseball Coach Dave van Horn earn a combined $375,000 per year from the foundation though such arrangements in addition to their salaries.

But the side deals also extend to some administrators and administrative assistants. For example, Julie Cromer-Peoples, associate vice chancellor for athletics, is paid $10,000 per year from the foundation. Athletics spokesman Kevin Trainor, who has answered this newspaper’s questions about the university’s relationship with the foundation on the UA’s behalf, gets $1,200, records show.

Both Cromer-Peoples and Trainor are paid salaries in exchange for “appearing and speaking at Razorback Club functions and other public relations.”

The deals are “null and void immediately” if their university employment ends “for any reason whatsoever.”

Head football Coach Chad Morris, hired in December, will not sign a side agreement with the foundation, Trainor said, calling it a “mutual agreement.” Morris’ offer letter said he would sign a personal services agreement.

The Razorback Foundation will still back Morris’ contract buyout — which, at $14.7 million this year and $12.3 million next year, declines annually — should UA fire him for convenience, according to Morris’ offer letter.

The coach’s contract has “not yet been finalized for signature (which is not unusual at this point),” Trainor said. UA anticipates that the contract will include language allowing Morris to make Razorback Foundation-related appearances and speeches for a fee, a practice that has typically been covered by the side agreements.

Copies of the personal services agreements reviewed by the newspaper include language that says the employees can perform foundation work only while off the university’s time clock.

The Razorback Foundation spent $1.2 million with third parties on behalf of UA last year, according to records obtained from the university that provide a glimpse of the nonprofit’s outside spending. About $496,000 was for printing, postage and shipping, and about $206,000 was on equipment, including a sound system at the basketball arena.

The booster club also covered more than $100,000 in travel, entertainment and special events costs, sometimes reimbursing UA and sometimes directly paying third parties, a ledger shows.

Three payments dated Jan. 4, 2017, on the ledger for “holiday gathering,” “staff holiday gathering” and “holiday event” totaled $10,000.