An email sent Feb. 6 to two administrators of the deficit-plagued fundraising unit of the University of Arkansas at Fayetteville told the recipients to “Please delete after reading,” records show.
The sender, the Advancement Division’s budget officer, Denise Reynolds, said Friday that the electronic message had nothing to do with a disputed January meeting at which Chancellor G. David Gearhart is accused of directing officials to destroy and stop creating budget documents.
In an email to the Arkansas Democrat-Gazette on Friday, Reynolds, who serves as the division’s chief financial officer, also denied that Gearhart directed her to destroy or stop creating budget documents during a Jan. 14 meeting, or ever.
Former chief university spokesman John Diamond and Gearhart have given conflicting testimony, under oath, to legislators about the Jan. 14 meeting of top-level staff members of UA’s Advancement Division. Reynolds was among the administrators who were present.
At a Sept. 13 Legislative Joint Auditing Committee hearing, Diamond testified that Gearhart became angry in the January meeting over a budget document presented by Reynolds. Diamond said the chancellor pounded a table and told the group to get rid of budget documents and stop creating them.
Gearhart told lawmakers that he had never told anyone to destroy documents. Gearhart went on to clarify that he meant documents that had been requested under the state Freedom of Information Act.
He also called Diamond a “disgruntled” employee. Chris Wyrick, vice chancellor for university advancement, fired Diamond, Aug. 24, effective Sept. 30, citing insubordination. Diamond has said he was fired because he disagreed with his bosses over their responses to requests for Advancement Division records from news organizations.
Diamond and Gearhart’s remarks are part of investigations by state legislators and the Washington County prosecutor’s office into the division’s $4.19 million deficit for fiscal 2012. The prosecutor’s office has issued subpoenas for auditors’ working papers and said the investigation will take several weeks.
Reynolds said she doesn’t know why she started her two-paragraph Feb. 6 email with the words “Please delete … I feel like Bond, James Bond 007 after saying that.”
But Diamond, who was one of the two recipients, said that when he received it:
“There was no doubt in my mind that she was referring to the Jan. 14 directive from the chancellor not to maintain documents about the Advancement Division’s budget problems,” he said last week.
The other email recipient, former Associate Vice Chancellor Bruce Pontious, has not returned repeated calls and emails seeking comment.
Issues about document destruction and creation are significant because state auditors who examined the division’s deficit, at Gearhart’s request, have said their audit was limited because of insufficient records.
Diamond told legislators he believed Gearhart’s order at the Jan. 14 meeting was one reason auditors found fewer documents than they needed.
State law also forbids anyone from destroying a public record requested under the Freedom of Information Act. The Democrat-Gazette and other organizations and individuals have submitted dozens of document requests since December regarding the Advancement Division’s overspending.
And the document testimony is important because Gearhart has long asserted that the state’s largest university, which receives public money to operate, is open and transparent in its actions.
DEFICIT REVIEWED
Questions about overspending by the division have dogged university officials since July 6, 2012, a few days after the end of 2012 fiscal year, according to university documents and emails.
That’s when the University of Arkansas Foundation refused a request to transfer $225,000 in deferred compensation for Gearhart to the division’s account “due to lack of availability of funds.”
UA officials announced the deficit to the news media Dec. 3. Gearhart described it then as a “$3.1 million shortfall” and said the division’s then-vice chancellor, Brad Choate, had been reassigned and budget director Joy Sharp had been demoted.
Gearhart said that the university had found no fraud, but that “those with ultimate budget oversight did not follow campus policies and inadequately monitored finances.”
Choate and Sharp left the university June 30.
In January in an interview with the Democrat-Gazette, university officials set the final Advancement Division deficit for fiscal 2012 at $3.37 million.
The newspaper sued the university Feb. 11 to obtain the university treasurer’s report about the overspending. The university had refused to release the report, saying it was a personnel matter. Four days after the lawsuit was filed, on Feb. 15, UA officials said they had obtained permission from Choate and Sharp and made the report public.
The report by UA Treasurer Jean Schook, which was dated Oct. 19, said the division’s deficit for fiscal 2012 was $4.3 million.
Another fiscal 2012 estimate of the deficit came out this month, when state auditors reported it as $4.19 million.
In addition to criticizing Choate and Sharp’s handling of the fundraising division’s finances, the state auditors’ report also found questionable or incorrect accounting by top UA finance officers, including Vice Chancellor Don Pederson and Schook; failure to provide written budget policies and procedures; and approval of an improper relationship for handling financial transactions between Sharp and her sister, also a university employee.
Auditors sent their findings, along with Gearhart and Diamond’s conflicting testimonies, to Washington County Prosecuting Attorney John Threet. His office is looking into whether any state laws were violated.
NO ‘DESTROY’ ORDER
Reynolds, who had not responded to questions about the Jan. 14 meeting from the Democrat-Gazette until Friday, answered the newspaper’s questions last week via emails delivered through university spokesman Mark Rushing.
At that meeting of the fundraising division’s leadership, Reynolds said, she shared “a single document” with others in attendance.
Asked if Gearhart ever told her to get rid of budget documents or stop creating them, Reynolds responded: “The chancellor has not directed me to destroy and/or stop creating budget documents.” The issue of document creation did come up at the meeting, she wrote in response to the newspaper’s questions.
“John Diamond advocated creating documents for the media, and the chancellor stated that the law did not require us to create documents in order to help the media understand our budget.”
Contacted Friday evening, Diamond disputed Reynolds’ account.
“There would be no reason for me to advocate creating new documents,” he said.
Asked if she saw Gearhart lose his temper, pound or slap the table, or walk out of the meeting, Reynolds said through spokesman Rushing “that she doesn’t feel it’s appropriate to respond to the rest of the questions while this [investigation] is going on.”
The Jan. 14 meeting was chaired by Gearhart and attended by Diamond, Reynolds the division, which oversees fundraising and other outreach efforts. Gearhart assumed control of the division on an interim basis after reassigning Choate.
Documents show he chaired the leadership meetings of the group known as the University Advancement Committee during December and early January.
At least seven top administrators - in addition to Gearhart and Diamond - regularly attended. Except for Reynolds, those officials haven’t responded to repeated calls, texts and emails from the Democrat-Gazette.
Those still listed on the university’s staff directory include: Mark Power, associate vice chancellor for development; Graham Stewart, associate vice chancellor for alumni; Melissa Banks, executive director of donor relations and special events; and Laura Villines, senior executive assistant to the vice chancellor of advancement.
Two others have left the university or no longer appear on the university’s directory: Pontious and Kristine Macechko, former director of constituent relations.
ATTEMPT AT HUMOR
Reynolds also provided more information to the newspaper about her Feb. 6 email to Diamond and Pontious.
The Democrat-Gazette obtained the email Friday from the university through a Freedom of Information Act request.
After the “Please delete after reading” opening line, that email went on to say in its entirety:
“Anyway, have you had a chance to look at the ‘calculated encumbrance’ number on the spreadsheet that we discussed at the last UAC [University Advancement Committee] meeting? I would like to finalize my work on that this weekend, if at all possible. Thanks! Denise”
Reynolds on Friday described the email as a request “to determine their estimated expenses for the remainder of the fiscal year. … My email is referring to a monthly worksheet, showing end-of-year projections, that I periodically update over the course of the year.”
Asked why the electronic message opened “Please delete after reading,” Reynolds responded by email: “I don’t specifically recall, but I was attempting to gather information for a monthly spreadsheet that was routinely updated.”
Asked about the reference to James Bond, she wrote: “This was simply an attempt to be humorous.”
Asked if she had deleted her own Feb. 6 email or saved it, Reynolds responded: “I deleted it.”
Front Section, Pages 1 on 09/29/2013