Auditors explore U of M athletics
School says process is ‘common and routine’
A year of leadership transition for the University of Memphis athletic department has coincided with a series of closer inspections of the department’s business practices, both by auditors at the school and the Tennessee Board of Regents, according to documents obtained by The Commercial Appeal.
University officials say the ongoing audits are normal. No wrongdoing has been alleged.
“It is common and routine for Internal Audit to perform audits when there has been a significant administrative change,” U of M spokeswoman Linda Bonnin wrote last week in an e-mail. “It is part of our business improvements process.”
The scrutiny comes in the same 12-month period that saw R. C. Johnson depart as the school’s athletic director and Tom Bowen come on board. Johnson announced his departure on Nov. 29. Johnson termed it a “retirement;” the school later said it was a “mutual decision.”
Bowen was hired from San Jose State in April and assumed the job in June as Johnson transitioned out of it.
Four athletics-specific audits are currently being conducted by the U of M’s internal audit staff, according to an audit plan included in TBR documents. The four audits are described as “coaches & AD contracts,” “financial aid student athletes — books,” “Tiger Fund donations (courtesy cars, etc.)” and “travel expenses (team & employees).”
Estimated completion dates range from April of this year to March 2013, but it’s likely that the April 2012 completion date for the financial aid audit is a misprint and the actual completion target is April 2013.
But that’s not the only scrutiny the U of M athletic department has recently encountered.
In late 2011, an internal exploration into athletics expenses and business processes had a threepronged objective: 1) to review a newly minted team travel documentation process, 2) to assess department procedures in light of NCAA compliance and 3) “review selected expenses and reimbursements submitted by management.”
The audit concluded that the new policy was working but also raised questions about some financial transactions. Among the findings: “Various department expenditures and reimbursements were not carefully reviewed by financial managers, which resulted in double payments and inaccurate or incomplete expense reports.”
In a follow-up report, which is to be presented to the TBR audit committee on Tuesday, an auditor concluded that the findings had been resolved. But he also discovered that there were “several instances of missing receipts or no documented review” of some procurement cards.
In the wake of those initial findings last year, the department also underwent what is termed a “consulting review” by the TBR’s auditors at the direction of chancellor John Morgan. “The President (Shirley Raines) also had concerns about these operations because of the anticipated change in the Athletic Director since the current Athletic Director had announced he planned to retire before the end of the fiscal year,” the report read.
The review’s findings were largely recommendations about the reporting structure of the department as it pertains to financial management and NCAA compliance. It recommended streamlining duties in the athletic business department and modifying the reporting structure of some senior personnel there.
The review also suggested that the U of M needs a larger compliance department, indicating it has three full-time employees and a graduate assistant, and that the assistant athletic director for compliance should directly report to the athletic director.
Better communication in the department was also suggested, including more performance reviews. Interviews with employees revealed some said they hadn’t had an annual review in years, despite a policy in place that specified just that.
The review also made one last finding that it hoped to correct: that “large amount of cash are used for meals and incidentals during team travel.”
Bowen’s arrival has brought movement toward the review’s recommendations: Stacy Martin was hired from Kansas State in September to be senior associate athletic director for finance and business administration. The position will dually report to Bowen and the university’s vice president for business and finance, which was one of the audit’s recommendations.
And then there was this: The U of M’s auditors conducted what was termed an “investigation” into unspecified allegations within the athletic department recently but found nothing wrong. “The recent allegations involving Athletics were investigated, but no evidence was found to substantiate the reports,” Bonnin wrote. “That investigation has been closed by Internal Audit, given the lack of proof.”
University attorney Sheri Lipman said there is a document that confirms the lack of findings, but that document is considered to be part of audit work papers that are not subject to release under Tennessee’s open records law. The school would not release the document and would not answer questions about the topic of the investigation.