UA trustees updated on fundraising division audit

LITTLE ROCK—University of Arkansas leaders on Thursday said they are taking steps, including implementing new procedures for hiring and accounting, to correct millions of dollars in overspending in the school’s fundraising division.

UA system trustees, meeting in Little Rock, didn’t ask the Fayetteville campus leaders for details about the list of fixes they presented.

But the trustees said they want more information when they convene again in January.

Trustee Ben Hyneman of Jonesboro noted that the board will have greater oversight over university finances going forward.

“One of our new internal auditors is going to be based on the Fayetteville campus,” Hyneman said.

Former U.S. Sen. David Pryor, also a trustee, asked university officials to provide for the January meeting a breakdown on the roles of the 120 to 130 people who work in the Division of University Advancement, the formal name of the school’s fundraising arm.

Pryor said having the job descriptions would enable the board to better understand the overall scope of the division’s work.

Prosecutors and legislators are working to get to the bottom of exactly how the division overspent its budget by $4.2 million in the 2012 fiscal year and had deficits dating back at least until 2008.

The audits, conducted by the Legislative Audit Division and the University of Arkansas System’s internal audit section, show that the division hired new employees without yet having the revenue in place to cover their salaries.

The division was $2.1 million over its budget in 2011. Some of that deficit carried into the 2012 budget year.

University officials didn’t know about the overspending until the June 30, 2012, close of the fiscal year. The school is covering the shortfall from its reserves.

The report also criticized top university officials’ accounting, budget oversight and failure to disclose certain issues to auditors.

And the report noted that auditors “experienced difficulty” obtaining financial records, “which potentially the limited scope of this review.”