Compensation of top UA administrators underreported

The University of Arkansas has significantly underreported the compensation of Chancellor Gearhart, athletic director Jeff Long, and Vice Chancellor Chris Wyrick.

State law requires Arkansas universities to prepare an annual report detailing the compensation of top administrators. Uark Transparency has made all editions of the Administrators Compensation Survey available on its web site (see The Proliferation of Administrators in Higher Education). Comparison of the reported data with the UA’s expenditures database reveals significant discrepancies:

  • Jeff Long's FY 2013 salary

    Jeff Long’s FY 2013 salary

    Athletic Director Jeff Long received a total of $1,140,000 in cash payments during fiscal year 2013 (July 2012 to June 2013) but the survey discloses only $865,000. A $275,000 bonus payment in July 2012 is not disclosed in the survey. The University has declined to comment.

  • The Chancellor house provided by the UA to Gearhart is a benefit worth $21,788 per year but was omitted from the fiscal 2012 and 2013 surveys. UA spokesperson Mark Rushing acknowledged the mistake, stating: “The tables are put together by Human Resources Payroll Office. Since the Housing under IRS rules is not a taxable compensation for a chancellor required by the BoT to live on campus, it is not in their data base and has to be added manually. The lack of this data was simply an unintentional omission. We will add it in the future.”
  • Chancellor Gearhart also received a payment labeled “Special (retirement,etc.)” of $22,986.68 in 10/2012. This doesn’t seem to be disclosed in the FY 2013 survey. The University has declined to comment.
  • Vice Chancellor Chris Wyrick, who became head of the Advancement Division in April 2013, receives a $12,000 per year car allowance in cash that was omitted from disclosure in the FY 2013 survey. Vice Chancellors Gaber, Pederson and Robinson also receive the allowance.

Arkansas law ACA 6-63-316 requires state-supported universities to file the Administrators Compensation Survey with the Arkansas Department of Higher Education (ADHE) by July 15 of each year. The law was enacted in 2009 as “AN ACT TO INCREASE SALARY TRANSPARENCY FOR ADMINISTRATORS IN STATE-SUPPORTED INSTITUTIONS OF HIGHER EDUCATION” (Act 321 of 2009). According to ADHE director Shane Broadway, so far no corrected report was submitted.

The reports are posted on the ADHE web site. In addition, state law (ACA 25-1-118, Act 742 of 2011) also requires all state entities to post mandatory reports, including the Compensation Survey, on their own web sites. The University of Arkansas so far does not comply with that requirement and many reports remain unavailable that by law should be accessible online.

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Gearhart, Choate, Diamond to testify before Legislature

UPDATE II:
Arkansas Blog relates this tidbit from the hearing:

There was a five-minute break during which Gearhart, Schook, and Pederson huddled up with fellow well-dressed persons and seemed in good spirits. Much of what Choate and (especially) Diamond said painted top UA officials in an ugly light, but little if any of it can be substantiated as unethical or illegal.
One man in the group of UA officials said to Gearhart and Schook, “after they finish asking all these questions, what are they going to do? I mean, what can they do?”

“Nothing,” someone else replied, “they have no authority.”

That’s the attitude.

UPDATE:
Full audio from the committee meeting
Brad Choate: Says UA ‘snookered’ legislative auditors. John Diamond describes Gearhart anger and freeze-out of newspaper
6 tell their sides of UA unit woes

All the main players in the saga of the University of Arkansas Advancement Division budget trouble are scheduled to appear and testify before the Legislature’s Joint Performance Review Committee today at 1 pm (agenda, meeting documents, press coverage here, here, and here). The meeting will give Brad Choate, who says he was scapegoated by Chancellor Gearhart, the chance to finally present his side of the story. This is significant because Choate signed an agreement with the University barring him from discussing these matters in public, except to assist an official investigation. The Legislative Audit Committee, at its December meeting, declined to hear Choate’s testimony. Choate’s prepared statement (actually, two versions of it) still found its way to the press (for a full list of related documents, see previous post). He says that he was “thrown under the bus” by Gearhart, contending that he merely continued practices that he inherited from his predecessor (Gearhart). His statement might be dismissed as self-serving but does make some plausible points. It is hard to understand why the Legislative Audit (DLA) never interviewed him, or several other officials with intimate knowledge of the Division, during their investigation. DLA also failed to interview Chancellor Gearhart and the time period under investigation was restricted to the years 2009-2012, excluding Gearhart’s own tenure as head of Advancement. DLA adopted many of the conclusions blaming Choate from treasurer Schook’s report despite her own (and finance chief Pederson’s) implication in questionable practices.

Former budget director Joy Sharp will for the first time testify in public to her role in the fiasco. She was the only UA employee punished with a pay cut. Both Sharp and Choate ultimately lost their jobs but Choate kept his $350k salary.

Former PR chief John Diamond will also testify, for the second time. His allegations that financial documents were destroyed were confirmed by investigations and other witnesses. Nevertheless, assistant prosecuting attorney Dave Bercaw chose to find that no laws were broken. The statement by Gearhart, confirmed by several witnesses, to “get rid” of Advancement Division budget documents was redacted out of the prosecutor’s final report. The prosecutor states that the document in question did not fall under a Freedom of Information request of the Arkansas Democrat-Gazette (failure to comply with FOIA is actually a criminal violation). Diamond and the newspaper dispute that. Diamond’s frustration about this “significant error” is palpable – he blew the whistle on outrageous behavior (albeit only after he had been fired), only to find that investigators are going out of their way to not see anything.

Legislators have also been unhappy with omissions in the prosecutor’s report and have demanded further investigation of CFO Pederson. And the Pulaski County prosecutor is reviewing whether Gearhart committed perjury when he denied, at the September meeting, ever having ordered the destruction of documents.

Chancellor Gearhart alleged to have directed destruction of documents

If this is true it would be a bombshell.

Benji Hardy at Arkansas Times reports (full report) from today’s Legislative Auditing Committee meeting about the University of Arkansas Advancement Division:

Diamond praised the report released this week by Legislative Audit, which delivered a less-than-glowing review of both the university’s lack of transparency surrounding this episode and accounting practices at the Division. Still, said Diamond, the Legislative Audit team “could not do its work as well as it needed to” because key documents were unavailable. (…) But Diamond says that at least some documentation may have been destroyed under verbal directives from Chancellor David Gearhart and another university officials. Diamond says that there are multiple witnesses who can corroborate this accusation and who will testify under oath if asked by the committee. When asked by Rep. Kim Hammer why those individuals weren’t here today, Diamond said that most still have jobs at the university and feared reprisal from administration. Diamond also faulted university officials for maintaining a “culture of secrecy” around the issue and for not consulting himself and other senior staff when compiling a previous internal investigation into the fiscal trouble at Advancement (long before the external legislative audit work began).

As a result of this testimony, the Committee voted to reopen the report and to refer Diamond’s testimony to the prosecutor. In consequence, the audit team now has to continue its work and investigate the matter further. One question will certainly be whether Diamond’s testimony will be corroborated by other witnesses – in which case Chancellor Gearhart will be in trouble. The reopening of the audit also has the unfortunate consequence that the records gathered by the audit will remain closed to the public. Arkansas Code 10-4-422 specifies:

“All working papers, including communications, notes, memoranda, preliminary drafts of audit reports, and other data gathered in the preparation of audit reports by the division are exempt from all provisions of the Freedom of Information Act (…) After any audit report has been presented to members of the Legislative Joint Auditing Committee, the audit report and copies of any documents contained in the working papers of the division shall be open to public inspection

Although the report was presented to the Auditing Committee, the Committee voted to “accept this report as not presented”.

Update: The Arkansas Democrat-Gazette reports in more detail on Diamond’s allegations:

Diamond said: “Members of the Advancement Division leadership team and staff received directives from key individuals that resulted in the destruction of documents relevant to the audits and to Freedom of Information Act requests.
“This occurred both before and after [Gearhart’s Feb. 5] request” that the Legislative Audit Division and the UA System Internal Audit staff review the Advancement Division’s spending, Diamond said.
“These two reasons are in part why auditors could not find documents they sought, and that’s why so few responsive documents were given to the media during the past several months,” Diamond said.
Diamond said Reynolds also directed employees to carry out a “housecleaning” of financial records early this year. Employees were asked to shred boxes of financial records days after Gearhart called in state auditors on Feb. 5, Diamond said.
Reynolds said Friday in an email that the allegations “are false. I did not order a ‘house cleaning’ of documents, and no one ordered me to do so.”

Diamond’s prepared statement (pdf)

Update:
UA-unit auditors: Review 3 items
Prosecutors to look into UA record-purge claim
Prosecutor looks into claims files destroyed at UA
‘Delete after reading,’ UA budget officer emailed