A routine internal audit found that travel and purchasing polices were not always followed by University of Arkansas, Fayetteville athletics employees and family.
"I did not see fraud," said Jacob Flournoy, chief audit executive for the University of Arkansas System, speaking to the 10-person University of Arkansas board of trustees about the athletics audit and two others.
He added that he did see "areas where we could strengthen some controls."
Flournoy spoke Wednesday, but trustees meeting in Little Rock did not approve the audit until Thursday.
The 20-page report described more than a dozen "issues" that took place from July 1, 2016, through June 30, 2017, including two charges "totaling $2,846 related to the payment of airfare for spouses of employees traveling on Athletics business."
The report stated the amounts had been repaid before the audit, but recommended changes to a policy relating to travel-related transactions.
In a response included in the report, UA stated: "Athletics management has discontinued the practices noted in this recommendation and has communicated to the specific travelers identified in the audit that these practices are not allowed." UA also agreed to the policy change, which involved changes to a particular travel payment method.
The report included eight recommendations for changes relating to travel expenses, three relating to purchasing expenses and two relating to how UA accounts for contract revenue from advertising and licensing. UA agreed to implement all the recommendations by June 30, with most already implemented, according to the report.
Another trip that did not follow existing internal policies involved travel on UA-owned or leased airplanes. The report described how two planes were used to take 11 people to the "annual SEC Chancellor, Athletic Director, and Head Coach meetings," a reference to the Southeastern Conference.
But of the 11 people traveling, "six were employees and five were family members and guests," and a second plane was used to accommodate the extra passengers.
The UA System policy allows such guests to travel if there is unused seating space. Auditors noted that following the existing policy "will not require that another flight be scheduled."
In response, UA stated that it agreed to comply with the policy for future trips on university or Razorback Foundation airplanes. The Razorback Foundation supports UA's intercollegiate athletics through fundraising and other efforts.
Along with the recommendations, the report included some financial details for UA's athletics program such as revenue from the SEC.
A review by auditors found that, taking into account various sources of information, conference revenue "for overall reasonableness" amounted to $44,075,465 in fiscal 2017.
"Revenues from the SEC included, but were not limited to, conference distributions of $10,992,512, media rights of $29,750,489, and bowl revenues of $1,538,124," the report stated.
Citing data reported to the NCAA, the audit stated that UA athletics in fiscal 2017 had revenue of $132.2 million and expenses of $116.1 million and transferred $3.2 million "in support of academic programs and initiatives."
The audit stated that revenue had increased by 32.5 percent over the most recent five-year period, from $99.8 million in 2012-13, while expenses had increased by 24.5 percent during the same time frame, from $93.2 million in 2012-13.
The audit did not cover ticket sales or donor gifts, described as "two significant revenue activities."
Metro on 05/25/2018
Print Headline: Auditors flag UA athletics on guest travel