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No crime in UA deficit case, prosecutor says

By Bill Bowden

This article was published December 12, 2013 at 1:36 p.m.

— Prosecutors found no evidence of criminal activity in connection with a multimillion dollar deficit in the fundraising division at the University of Arkansas at Fayetteville.

David Bercaw, deputy prosecutor for Washington County, issued a 14-page summary of his investigation today.

"This is a very unfortunate situation of a breakdown of internal control within the Advancement Division," he wrote.

The division had a cumulative deficit of $4.2 million as of June 30, 2012, according to an investigation by the Arkansas Division of Legislative Audit. UA officials said the cumulative deficit was reduced to $3.2 million a year later, after $4 million transferred from reserves in January was used both to augment the division’s budget and to pay down the deficit.

Legislative auditors found four issues of concern and referred to the prosecutor: a duplicate expense payment to Brad Choate, former vice chancellor for Advancement, for $2,052, which Choate later repaid; an improper deposit by former budget officer Joy Sharp of $1.35 million; two “accounts receivables” entries by university treasurer Jean Schook’s office that “partially obscured” deficits, according to the audit; and contradictory testimony Sept. 13 under oath about the alleged shredding of documents by Chancellor G. David Gearhart and former university spokesman John Diamond.

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Displaying 1 - 5 of 5 total comments

RBBrittain says... December 12, 2013 at 4:45 p.m.

What about Chancellor Gearhart's covering up the deficit & framing Choate??? If this is all the prosecutor's gonna look at, it's a WHITEWASH!!!

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NoUserName says... December 12, 2013 at 5:24 p.m.

Sure looks that way, doesn't it?

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arkda3 says... December 12, 2013 at 7:11 p.m.

White wash is right......this should have come to Pulaski County. No one in Washington County is going to say anything about the UofA unless it is about a studend caught doing something wrong.

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rememberthealamo says... December 12, 2013 at 9:49 p.m.

I'm interested in some type of second investigation by an independent third party. Otherwise, it looks like Senor Gearhart is going to get a free pass.

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tlucas8000 says... December 13, 2013 at 2:57 a.m.

I love the University of Arkansas as much as the next 3rd generation Razorback, and I appreciate the intention behind Bo Renner’s message, but he is wrong. It is not the students who were “attacked” by the Democrat Gazette. The impact of their reporting on the value of my degree is almost too low to even appreciate. Despite the accurate statistics Renner cites, Gearhart, Long, and Bielema are not the source of any of those numbers (except perhaps the fundraising stat, which looks very pretty on paper until it becomes clear that a significant portion of that fundraising specifically benefits about 425 student athletes and the vast number of non-student football fans. I appreciate the fact that Renner took a stance he believes in and stood up for students to a degree, but his article does more harm than good in that it leads many students to overlook the true obstacles to our university’s success.

We cannot have a football coach paid $3M per year while teachers are moving to other schools and entire departments are disappearing for those which are most popular (and therefore most profitable). Frankly, UA athletic spending needs to be significantly curtailed. Since 2011 there have been annual budget discrepancies in athletics of over $11M; and until very recently, the university has had to answer to no one as to how it chooses to spend the money it keeps in the unrestricted accounts of the Razorback Foundation and the Division of Advancement.

As much as Gearhart and Long may like to pretend otherwise, this is a public university, not a private corporation where a small group of cronies can make their millions while posting unaccounted for deficits. The headlines yesterday stating that the prosecutors found no criminal activity in these account discrepancies is almost more embarrassing than if they had uncovered some semi-advanced conspiracy. The auditors have found that no criminal activity occurred in the recent multi-million dollar deficits—basically saying that our leadership is really just that ignorant when it comes to institutional financial management. I wouldn’t have thought a full-on audit necessary to reach that conclusion though…just look at the salaries of Gearhart, Long, and Bielema.

Yes, the University of Arkansas is soaring right now. We are seeing great improvements and significant accomplishments arising across campus. But in my opinion that has much more to do with federal grants and the fact that many potential students consider higher education an economically feasible option due to the Arkansas Lottery Scholarship…not the policies of current UA financial leadership.

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