Letter delves into funds lost to fraud

FAYETTEVILLE — A financial loss of $118,971 incurred by UA-Fayetteville when vendor payments were routed in 2018 “to an apparent fraudulent recipient” was highlighted in a Jan. 29 letter from the chief audit executive for the University of Arkansas System.

The letter from Laura Cheak, addressed to the UA board of trustees, summarized Arkansas Legislative Audit comments regarding the previous fiscal year. The letter and the Arkansas Legislative Audit comments were presented during a Jan. 29-30 board meeting.

An internal audit by the UA System “found that one vendor’s banking information was altered through a domain not belonging to the vendor, resulting in 15 unauthorized” payments, the letter stated. The payments totaled $132,079 but a bank recovered $13,108, the letter states.

The audit took place after UA alerted auditors of the suspected payment fraud.

A University of Arkansas police department report released to the Democrat-Gazette states that UA employees told investigators about an email received in September 2018 telling them that the vendor’s account had been closed, leading to payments being sent to a new account.

As part of an investigation, UA’s chief information security officer at the time, Alan Greenberg, reviewed the email, the police report states. Greenberg told a police investigator that the email came from a computer server in the Netherlands and was of Russian origin, with no way to gather evidence leading to a suspect, the report states. The police investigation was placed on inactive status in January 2019.

UA spokesman Mark Rushing said no employee lost their job or was suspended. Rushing said in an email that in addition to “extensive” employee training, “the University has taken multiple steps to prevent such an occurrence from happening in the future but it would be counter to their purpose to describe these means of preventing access to the University’s computers, networks, and data.”