- Associated Press - Thursday, January 23, 2014

LITTLE ROCK, Ark. (AP) - University of Arkansas System trustees agreed Thursday that administrators at the Fayetteville campus are making sufficient changes to ensure that the decisions that led to a $4.2 million deficit in the college’s fundraising division won’t be repeated.

The board’s audit committee devoted fewer than 10 minutes to discussing 16 findings from two separate audit reports that outlined problems in the advancement division.

The reports say the deficit developed when the division hired about 20 fundraisers but didn’t have the revenue dedicated to pay their salaries. The revelation led to the dismissal of a vice chancellor and the division’s budget director.

Trustee John Goodson asked the UA’s top financial officer, Don Pederson, a series of questions about how the changes are being implemented.

“Have you encountered any resistance … whatsoever?” Goodson asked.

Pederson said he hasn’t and later added that the staff has been fully cooperative. He also pledged to alert the board if other problems develop.

Pederson said six of the audit recommendations have been implemented and the rest are under development.

The changes should all be in place by the start of the next fiscal year on July 1, Pederson said. He said his staff is working “as quickly as we can in order to have all the bugs worked out.”

Thursday’s discussion contained none of the criticism that was heaped on administrators during a lengthy legislative meeting on the topic earlier this month.

Unlike the trustees, legislators heard from former fundraising division head Brad Choate and former division budget officer Joy Sharp, who both lost their jobs over the deficit.

Choate argued that the deficit developed because of mistakes by the finance department and not his office, though UA Chancellor David Gearhart disagreed and said Choate lost control of his budget.

A prosecutor in northwest Arkansas reviewed the matter and found no criminal wrongdoing but questioned whether he had jurisdiction to have brought charges. Officials have since referred the matter to the Pulaski County prosecutor.

In addressing legislators, Gearhart stressed that internal auditors and the Office of Legislative Audit found there was no fraud, misappropriation of funds or anyone who was personally enriched.

Goodson acknowledged Thursday that the deficit marked a “painful” episode for the university but said the system benefited by enacting stricter guidelines for all campuses within the UA system.

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