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Legislators: Prosecutor should review UA official's statements

By Bill Bowden

This article was published December 18, 2013 at 12:54 p.m.

Fourteen state legislators want the Washington County prosecutor to "carefully review" whether the chief financial administrator at the University of Arkansas at Fayetteville lied to state auditors during a routine audit of the campus’ finances before it was publicly known there was a multimillion-dollar deficit in UA's fundraising arm.

In the letter sent Wednesday to Proseuctor John Threet, the legislators note that neither Don Pederson, vice chancellor for finance and administration, nor Treasurer Jean Schook mentioned an internal investigation into the deficit to auditors from the Arkansas Division of Legislative Audit during an Oct. 25, 2012, interview.

Schook had completed an investigation on Oct. 19, 2012, and sent a letter to Pederson referring to the "likelihood of conflict of interest violations, intentional effort to disguise, misdirection of funds, risk fraudulent activity, deliberate efforts to disguise," according to the legislators' letter.

Pederson signed a letter on Oct. 25, 2012, stating "We have no knowledge of any allegation of fraud or suspected fraud affecting the entity involving management, employees who have significant roles in internal control or others where fraud could have a material effect on the financial statements."

Threet said he hadn't received the letter as of noon Wednesday and has no comment until after he reads it.

The first signature on the legislators' letter was that of Rep. Nate Bell, R-Mena.

State auditors determined that the cumulative deficit in the university's Advancement Division was $4.2 million as of June 30, 2012. UA officials say the cumulative deficit was reduced to $3.2 million as of June 30, 2013, but they're still dealing with annual operating deficits in the division.

Read Thursday's Arkansas Democrat-Gazette for full details.

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