An investigative report issued Tuesday by the Arkansas Legislative Audit found multiple violations at the Center for Language Proficiency at Henderson State University, including excessive and inappropriate spending on items such as olive oil, steam irons, electronics, umbrellas and snack foods.
The center -- which oversaw the English-as-a-second-language programs -- was closed in October, and HSU officials declined to renew the contract of its former director, Julia Correia. Her last day at the university was Oct. 3.
University officials said they have reassigned the language programs to the teachers college, pending a decision by the Arkansas Department of Education about the language center's future at Henderson.
At the request of Henderson President Glen Jones, auditors combed through hundreds of documents related to the language center, finding improper expenditures, a lack of oversight regarding the spending of grant funds, missing equipment and violations of state procurement laws, according to the audit report.
In an emailed statement Tuesday, Jones said, "The university responded swiftly to this situation and has developed an effective strategy to remedy the issues revealed by the audit.
"While I am saddened by the audit findings, I am confident that these strategies will improve the manner in which the university conducts business moving forward."
Auditors also found numerous violations of Arkansas Code Annotated 19-11-705, which prohibits a university from conducting business with an organization in which an employee or any member of the employee's immediate family has a financial interest.
The audit found more than $58,000 in transactions that violated this law. Among them were:
• More than $9,000 for music CDs, on which Correia's son performed as a band member, were given to participants in the graduate academy of the language program.
• More than $28,000 for e-books and DVDs edited by Correia's husband and son were given to academy participants.
• More than $17,000 in payments by the Southeast Arkansas Education Service Cooperation were made to Correia's husband for conducting presentations at the academy and providing other technology-related support.
• More than $2,800 in posters were purchased from former language center Assistant Director Christine Smart's daughter and given to academy participants. Smart resigned Oct. 20.
In its response to auditors, university officials said "new employee orientation is in place and is now operational ... the university will also create education programs for existing employees ... with an emphasis on effective oversight of these transactional areas for supervisors and managers."
The audit report also questioned several other language center expenditures. Items included:
• $990 in postage stamps, which, the audit notes, "were not needed by the center because center mail is processed through the HSU campus post office."
• More than $3,000 for a new oven and dishwasher for the center's office.
• Nearly $40,000 for ink and toner cartridges.
• More than $30,000 for snack food.
• More than $3,000 for DVDs.
• More than $2,600 for batteries.
• More than $42,000 for other office supplies.
"The Center also purchased several items for which a business purpose could not be determined, including luggage, olive oil, fabric steamer, groceries, and cookware," according to the audit report.
The audit also found hundreds of office supplies and other items that were deemed excessive, including 635 boxes of paper clips, 470 batteries, 308 shirts, 108 umbrellas, 14 electric pencil sharpeners, five televisions, unopened boxes containing leather office chairs and folding tables, an unopened box containing a new iPad and unused, new laptop computers.
Additionally, audit workers found more than 150 items missing from the language center that were reportedly found to be in Correia's personal possession. According to the audit, "HSU provided a list of 154 items to the director for her to return. On July 4, 2014, the director supposedly returned 154 pieces of media-related equipment."
Items included camcorders, equalizers, microphones and stands, camera lenses, cable reels, digital mixers, numerous cables and power supplies, office chairs, a three-piece luggage set and laptop computers.
"Subsequently," the audit notes, "HSU received a letter from the director's attorney [Carl Crow Jr. of Hot Springs] on July 18, 2014, indicating that the director had discovered additional HSU property in her possession. Following HSU's receipt of the letter, the director supposedly returned an additional 117 items."
Crow said Tuesday that he had not yet talked to Correia about the audit's release.
Among the items returned were a digital camera, a desktop computer, a projector, a portable steamer, two steam irons, six books of stamps and two containers of olive oil.
"According to HSU legal counsel, neither lot of equipment and supplies, totaling 271 items, that the director returned was verified; therefore, [Legislative Audit] staff were unable to determine if all items on either list were returned to HSU," the audit said.
In a response to auditors, HSU officials said that they are currently working to take a complete inventory of items and "reconcile its inventory list to the items returned by the director and determine action to be taken."
Also, HSU officials said they are "eliminating blanket purchase orders, hiring an external accounting firm to review the university's internal procedures and guidelines and to conduct annual inventory reviews and establishing a third-party hotline for employees to report fraud, waste and abuse."
HSU also plans to hire an internal auditor next year, officials said.
"As a state agency, we are accountable to the people of Arkansas and we all have a role to play in ensuring state resources are managed properly," Jones said in an emailed statement. "Though the circumstances are disconcerting, I do not believe they reflect the overall character of our institution and the people within it."
State Desk on 12/17/2014