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Wednesday, May 30, 2007

A&T audit finds financial abuse

Misuse of funds. Forgery. Nepotism. Widespread overspending and poor oversight.

These were among the findings of internal auditors called in to investigate financial irregularities at N.C. A&T, according to a report obtained by the News & Record on Friday.

About $2 million has been misappropriated, overspent, illegally solicited or misused in recent years, auditors allege. Among the report's recommendations: an investigation into possible criminal conduct.

Velma Speight-Buford, the chairwoman of the A&T Board of Trustees, said some of the report's findings reflect on former Chancellor James Renick's "management and leadership style," but the board ultimately is responsible for the problems.

"I personally take responsibility for the board not doing its job," she said Friday. "The board was not asking questions."

Among the audit's key findings:

* Employees in the Division of Information Technology and Telecommunications (ITT) misappropriated $87,514 between May 2004 and February 2006 by diverting IBM rebates into an account at the A&T Foundation.

* The report alleges that Rodney Harrigan, the former vice chancellor for the division, misused rebate funds and approved spending on "highly questionable purchases," including a beach cottage rental, holiday celebrations, tickets to athletic events and theater memberships for him and his wife.

Harrigan was arrested in December and charged with obtaining property by false pretense and embezzlement of state property.

* The mother of Harrigan's executive assistant received a vendor contract after the vice chancellor "assisted the Bid Committee with evaluating the vendors." The committee originally ranked the woman third for the job, but after the vice chancellor's input, the assistant's mother was bumped to the top spot and selected.

The mother was later prepaid $18,000 for work that she hadn't performed, a claim supported by falsified documents, the report says.

* Employees in the ITT Division solicited and accepted money from vendors in violation of state law and university policy, the report alleges, with nine vendors giving $1,750 over an eight-month period.

* The former program manager of a naval research grant for the College of Engineering misused as much as $500,000, approving large stipends for tuition, travel and fees that benefited herself and family members.

The manager paid a $66,733 stipend to her husband for the 2005-06 academic year — triple the highest stipend paid prior to his entry in the program.

She told auditors her husband's costs were higher, in part, because "he found the housing arranged by the Navy to be inadequate."

He instead stayed in a Courtyard by Marriott for $5,500 a month, "almost three times more than the amount of the next highest fellow's lodging," the report states.

The report alleges that the program manager, who was fired, also forged the signatures of the dean and assistant dean of the College of Engineering and used grant money for one or both of her daughters to attend conferences in Jamaica and California.

And, according to the report, the manager overspent the grant's budget for a symposium by $17,000, including buying 200 laptop bags, 192 embroidered golf shirts, 500 Aster pens, 150 duffel bags and other items. Some of the items were recovered from her home after she was terminated.

Computer equipment and other electronics bought with grant money, worth $11,583, remain missing.

The university has started a criminal investigation into the manager's actions.

* Throughout the university, numerous grant funds were overspent or not spent for their designated purpose. A large number of A&T's 500 grant funds had incorrect balances.

"During our review we observed the deterioration of sound operating process and the lack of sufficient management oversight and review necessary for strong institutional research compliance," the report says.

* A sample review of 12 state operating funds found $896,588 in excess expenditures in 49 accounts.

* Employees allegedly used procurement cards to charge a variety of prohibited items, including Phil Chang Golf Tournament clothing for $1,053.

* $240,000 in proceeds from a Pepsi contract were improperly deposited into the Chancellor's Discretionary Fund in 2003 and 2004.

* $55,142 in pay increases were given to five administrators near the end of Renick's tenure at the university. One employee received a $17,250 raise in violation of UNC system policy.

The News & Record obtained the report, dated May 18, from the UNC system after A&T officials refused to release it to the newspaper.

The university, in a response to the audit report, said it has already taken steps to correct some of the failings, including:

* Requiring all signatures be made in writing, not with a signature stamp.

* Providing comprehensive training for staff members who work with grants and contracts.

* Putting policies in place to ensure that no one person has control over all aspects of a financial transaction.

* Providing regular updates on polices regarding conflicts of interest, the use of procurement cards and the acceptance of gifts and favors.

The A&T Foundation also has developed new policy guidelines and documentation for the use of unrestricted funds.

And the Board of Trustees plans to "place a considerable amount of attention on governance, board ethics and fiduciary effectiveness" during its retreat in August.

The university's response to the report acknowledges that the breadth and magnitude of the findings "threatens its viability."

"Early on, we realized that we had a serious problem of ethical behavior...," the response states. "It is abundantly clear that the condition we are trying to rectify here developed over time and reflects failures at several specific levels."

Attempts to contact Renick and interim Chancellor Lloyd V. Hackley on Friday were unsuccessful.

Transparency and clean audits will be key to regaining any trust that has been lost among A&T's constituencies, said Jeff Davies, the chief of staff for UNC General Administration.

"Clearly there are some serious things noted in the audit that needed to be addressed," Davies said Friday.

"The important thing here in my mind is that people have come forward and identified the problems, and once they are identified they can be fixed."

Speight-Buford said she hopes the university can get back on track.

"There are some things in there that shouldn't have happened," she said. "Well, none of it should have happened."


Anonymous said...

That is very sad, we will never change. when are we going to be responsible people if we can't even run institutions dedicated to advance our own people.We are responsible for our own destruction in this country, and i see why we are not trustworthy. The miseducation of Negro: the more educated ones are making worst danage to our people's image the the uneducated ones...very sad

Anonymous said...


Anonymous said...

Many "Aggies" came to admit that the (Ed) Fort days (former A&T Chancellor) were the "dark days" in Aggie administrative history; and thus "welcomed James Rennick with open arms, a blank check and high expectations". Unfortunately, just like our present U.S. President, he amounted to little more than a "sound bite and a photo opt". Very articulate (so are most of our preachers) with a great smile and never missed an opportunity to kiss a baby or greet a student.
Additionally, they mistakenly associated his arrival and tenure with the massive building construction taking place on campus (and every other State supported university in the NC system of colleges and universities). But that had nothing to do with his efforts or effectiveness as an administrator; rather it had to do with NC citizens voting in favor of a $2.4 billion university construction package throughout the NC 16 college university system. Thus, all state supported universities experienced massive construction and renovation projects.
In other words, our schools were on "steroids". The "outside" or physical looked impressive and muscular--yet the mind-set and inner workings was slowly falling apart. Rennick bought in personal "incompetent" friends and associates like, David Hoard, Vice Chancellor for Corporate/Community Relations and a person who got his business and people ethics from "Dallas" and J.R. Ewing and who personally, helped to destroy A&T's rich history of athletic achievements--basketball, football and the AD department; and he kept a number of incompetent people, like Leslie Renwick, Legal Counselor, from the Fort Administration, whose legal incompetency could only be matched by her arrogance and non-commitment to Aggieland. Yet, he continued to receive "large pay increases"! What was that about?
So all you "Aggies" who sold your soul for a smile and a "season ticket" to a backward's sliding, 0-11 football season and praised this very "articulate" man as your "saviour"--YOU GOT EXACTLY WHAT YOU DESERVED! Don't act surprised. You are "reaping" the same chrop of S--- that the Bush people have come to harvest.

Anonymous said...

When the "so-called" Educated Negro understands that "PhD" DOES NOT mean "GOD". "These people" do not have ALL the answers--Yet, they conduct themselves as if they have a monopoly on "the truth" and answers. What they REALLY have a monopoly on is their tremendous "EGOS".

Anonymous said...

Renick was pushed out of his previous chancellor position and was known for some creative financial practices there as well -- like the vending machine money being moved into his discretionary fund. He also cut academic programs so he could increase the size of the athletic field house to "appeal to the community." Didn't make any difference to the community and the academic programs never made up for those cuts. We were glad to see him leave Michigan. Sorry he didn't work out better there.

Anonymous said...

So Ed Fort's tenure constituted "Dark days in Aggie administrative history"? Please.

Were you there when Dr. Fort first came to A&T? When the financial books were so disheveled that they were deemed "un-auditable" by the auditors? When the nursing school's sores were so low that it was preparing to lose its accreditation? When there were no PhD programs of any kind? During those "dark days", the books were cleaned up such that the University became financially sound, PhD programs were begun in engineering for the very first time, plans were drawn up to build those buildings that you referred to in your post (bonds or no bonds, buildings don't just spring up from nowhere with no planning), and the nursing school scores shot up and were top notch during his entire tenure. Fort's decisions weren't always popular with the same alumni who were so keen to see Rennick brought in later on, but they got results.

Yeah, if those were "dark days", I'd like to see what your definition of "light days" are.

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