Letter delves into funds lost to fraud

FAYETTEVILLE — A financial loss of $118,971 incurred by the University of Arkansas 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 UA System.

The letter from Laura

Cheak, addressed to UA 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 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 was done after UA alerted auditors of the suspected payment fraud.

A University of Arkansas Police Department report states UA employees told investigators about an email received in September 2018 telling them 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 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 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 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.”