System trustees advised of audits at UA, UAPB

FAYETTEVILLE — A procurement audit of the University of Arkansas, Fayetteville took place after allegations of misappropriation that are now under Arkansas State Police investigation, a trustee and auditor said Friday. Also, a separate audit uncovered a potential liability of $1.6 million related to federal grant management, they said Friday.

The chief auditor for the University of Arkansas System told trustees at a board meeting that audit reports linked to ongoing investigations would be withheld from release.

The 10-person trustees board approved the reports at the meeting, and the Democrat-Gazette on Friday filed a request for both reports under the state’s public disclosure law.

The technology procurement report was a “requested audit,” Laura Cheak, chief audit executive for the UA System, told trustees at a meeting held virtually for most participants.

“There were allegations regarding misappropriation of university assets,” Cheak said. “We had 11 recommendations in this audit to strengthen the controls over technology procurement and surplus property. All of these recommendations have been

implemented at this time.”

Cliff Gibson, chairman of the board’s audit and fiscal responsibility committee, said information had been presented to trustees at a previous meeting.

“It is, I understand, being investigated by the state police now, and we await the results of that,” said Gibson, an attorney from Monticello and one of 10 members of the governor-appointed trustees board.

UA-Fayetteville spokesman Mark Rushing, when asked about the audit and if action had been taken by the university against any employees, said “the employee resigned and has not been employed with the university since January.” Rushing added that all of the audit report recommendations have been implemented.

A separate requested audit discussed by Cheak involved a report examining what she referred to as the “Student Support Services” grant.

“There were allegations regarding the mismanagement of the program documentation for federal grants,” Cheak said.

Student Support Services typically refers to a federal grant competition open to colleges “to provide opportunities for academic development, assist students with basic college requirements, and to motivate students toward the successful completion of their postsecondary education,” according to the U.S. Department of Education’s website.

Cheak told trustees that the audit included five recommendations, “including referring the audit to the Department of Education for determination on the liability.”

Gibson said “documents are not there to support all the grant services supposedly performed. And there’s also information about banker boxes after hours and being removed from the office.,”

Gibson said “it’s really one of the strangest things I’ve seen, and just, from my view, this is more of the university being a victim of someone.”

Rushing, when asked about the services grant audit and if action had been taken by the university, said “the employee resigned and has not been employed with the university since August 2019.” He added that UA is “in the process” of implementing the auditors’ recommendations.

Also being withheld Friday was an internal audit report on University of Arkansas at Pine Bluff activity that “identified a potential loss of $24,000,” Cheak said.

Law enforcement officials are investigating in relation to the audit of UAPB’s MISRGO subgrantee program, Cheak said, an apparent reference to the university’s Minority Initiative Sub-Recipient grant office.