- Associated Press - Tuesday, March 24, 2015

ARKADELPHIA, Ark. (AP) - Henderson State University Foundation officials say they’re confident no money is missing after an accounting firm uncovered errors in donor accounts.

But foundation board Chairman Johnny K. Hudson told the Arkansas Democrat-Gazette (https://bit.ly/1GOKjQ7 ) that officials aren’t sure how much of an effect the inaccuracies could have on student scholarships or operating costs.

The foundation announced last week that interest accrued from endowed gifts went to other accounts it shouldn’t have. As a result, some accounts were understated while others were overstated. According to Hudson, officials are sure no money was missing because the individual accounts added up to the amount in the general ledger.

Hudson said mismanagement had led to the misallocation. Officials say the former executive director, who wasn’t identified, retired in February 2013 before the board learned of the irregularities. The foundation sent more than 6,000 letters to all of its donors, informing them of the misallocated money. Hudson said Monday that the former director would not be named because the situation is a personnel matter.

“We are disappointed in the management of foundation funds by its former long-serving executive director, and we have corrected the previous irregularities,” Hudson said last week. “Also, it is important to note that the former executive director is no longer employed by nor has any formal association with the foundation or Henderson State University.”

Hudson also says that there was no criminal wrongdoing, and that the former official is sorry the errors occurred.

The foundation’s current executive director, Jennifer Boyett, said an accounting firm that had been contracted by the school only did annual audits and did not look at day-to-day financials. An audit committee is searching for a new firm, which Hudson hopes to have in place by May. According to last week’s news release, the foundation also plans to hire a “credentialed staff accountant to oversee day-to-day financial activities.”

To ensure more transparency with donors, annual reports will be sent to them that will include the account’s activities for that year.

The foundation, which was formed in 1982, awards about 300 scholarships annually and receives about $1 million a year from donors. According to Boyett, the current endowment, on average, is $15 million.

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Information from: Arkansas Democrat-Gazette, https://www.arkansasonline.com


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