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UA must fill $4 million gap in advancement budget

Posted by Leslie Newell Peacock on Mon, Dec 3, 2012 at 12:48 PM

G. David Gearhart
  • G. David Gearhart

University of Arkansas Chancellor David Gearhart released a message to the UA community today saying that the Division of University Advancement ended its fiscal year June 30 in arrears by $3.1 million and that the division's head, vice chancellor Brad Choate, and budget director, Joy Sharp, have been reassigned to positions outside the division and will no longer work for the university when their contracts end next June. Gearhart said he will manage the advancement division "for the foreseeable future."

The advancement office's budget was $10 million; half of its funding comes from interest on University of Arkansas Foundation assets and the other half from state dollars and tuition (Education & General Funds). Associate Vice Chancellor John Diamond said the division had been drawing down funds from the University Foundation, which provides half its funding from interest on the corpus, in advance of quarterly distributions for two or three years to keep the advancement office running. Gearhart has determined the office, which is properly staffed given the upcoming capital campaign, is underfunded by about $4 million; no malfeasance was discovered.

"... the division filled staffing needs while miscalculating the funding levels necessary to support those positions. The resulting imbalance was not detected because the division’s budget officers did not carefully monitor the flow of revenues and expenditures. This was not, and is not, an acceptable practice.

Diamond said that Choate notified the university immediately after discovering the shortfall. He also said that Gearhart would have funded the growth in the division had he been informed that its legitimate expenses were outpacing revenues.

The University will make up the shortfall from its emergency reserves fund with the understanding that the division will eventually repay the money. The division will also, starting Jan. 1, have a new revenue source: A cost recovery assessment fee of 10 to 15 percent on gifts to the university for such things as campus construction projects. "That will become part of the funding formula to keep the advancement division whole," Diamond said.

Choate will spend the remaining months on his contract working on the university's "long-term strategic plan for an upcoming capital campaign," Diamond said, and Sharp has been reassigned to the human resources office. Denise Reynolds, who works for Vice Chancellor for Finance and Administration Don Pederson, will handle the division's budget.

Diamond said no budget overruns of "this scope" had ever occurred at the university. "It's not uncommon for a division or unit to find itself toward the end of the fiscal year running short. But the natural thing to do is for the budget officer or whoever else is in charge to let the people higher up know there is a problem on the horizon."

Comments (9)

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Hmmmm....how much did they pay Petrino to go away? And how much did I see Frank Broyles get from the U of A last year? 390 million for a stadium overhaul? Tuition going up every year? Houston (Nutt)...we have a problem...

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Posted by DeathbyInches on 12/03/2012 at 2:42 PM

What exactly does the Division of University Advancement do? Neither the post nor the newswire message answer that question.

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Posted by TM on 12/03/2012 at 5:36 PM

I have insider knowledge about this. They have thrown Joy Sharp under a bus. She is the most above-board, by the book person I know. If the news media lets the UA sweep this under the rug, then shame on them. Choate is an egomanic. He is universally hated by a lot of people who work at the University for his arrogance. My information is that he was warned by Sharp about this but he ignored it and ordered her to do as he said. Something criminal is going on here and a woman who gave it her all for 30+ years leaves in disgrace. She deserves better. And I think the buck should stop with Dave Gearhart who brought Choate to the university. Please keep looking at this and do not be distracted by a new coach being named. I suspect that will happen sooner rather than later so as to deflect attention away from this matter. That's how the university rolls. In the meantime, Choate will continue to collect his $350,000 a year salary until the end of June. Smells like someone higher up is doing whatever to protect this person. Donors, keep them in check.

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Posted by Lady Liberty on 12/03/2012 at 7:01 PM

How in the world could a fund-raising office spend $10,000,000.00 a year, let along the almost-4,000,000.00 extra it spent? What are "legitimate expenses" in the fund-raising business?

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Posted by plainjim on 12/03/2012 at 7:39 PM

Careful, dbi, the last time I called for a complete accounting and justification for UAFootball expenses, the jockstrap sniffers got mighty perturbed. Once they get on your case you'll be signing in as DBY (death by yards).

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Posted by YossarianMinderbinder on 12/03/2012 at 10:10 PM

I have no insider knowledge but I agree with the statement: "If the news media lets the UA sweep this under the rug, then shame on them."

Are the FOIAs already filed?

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Posted by TM on 12/04/2012 at 12:02 AM

Brad Choate earned his nickname "slimeball" for a good reason. He's willing to let an absolutely honest, valued employee take the rap for his bad management and his arrogance. He is a poison that has slowly seeped across campus, affecting many a good and worthwhile employee there. And he gets paid how much for that??? How can the chief advancement officer NOT know about such an enormous deficit? At the very least, it points to his utter incompetence. Why should any donor trust the university after such a tale of gross mismanagement of funds??

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Posted by Ricky Booby on 12/05/2012 at 10:34 AM

Re "Just a little shortfall", ADG editorial, December 6, 2012 (http://www.arkansasonline.com/news/2012/de…)

Transparency and oversight needed

The University of Arkansas' Division of University Advancement has mismanaged $3.1 million - a story that cries out for in-depth journalistic research and critical analysis. Unfortunately, all the Arkansas Democrat-Gazette has to offer is a cheap diatribe laden with anti-academic resentment.
The blame heaped on Brad Choate, the administrator at the center of the scandal, is clearly deserved but the editors' attempt to use his case as an ideological attack on public service in general is dishonest. If you believe the editors, financial mismanagement would never happen at a private for-profit corporation and if it did, the people responsible would be immediately fired. This fairy-tale version of capitalism - tough but fair - would have been laughable ten years ago. Today, after the financial meltdown caused by the reckless mismanagement of trillions of dollars by Wall Street's failed financial wizards, the editors' world view is outright grotesque. They must live in a parallel universe where they have never heard of multi-million dollar golden parachutes for incompetent corporate managers, not to mention "bonuses" paid out to executives at financial companies saved from bankruptcy by a massive tax money bailout. The editors must have been too busy lambasting "big government" to pay attention to the news of a two billion ($2,000,000,000) dollar loss caused by a single JP Morgan Chase trader earlier this year, unnoticed by a host of accountants and managers at the mega corporation.
The editors have it exactly backwards: the University doesn't need to become more like a corporation - it needs to act more like a public University dedicated above all to academic integrity and the common good and governed with transparency and openness. The recent tendency of chasing after the money of super-wealthy donors and hiring ever more ever higher-paid administrators (not to mention athletic directors) is not a healthy one.
As for the Arkansas Democrat-Gazette, it needs to act like a newspaper offering journalistic reporting instead of ideological rants. It could start by researching the University's pay structure. This year, when the University awarded merit pay raises, most faculty members got about $2,000 per year more, based on a performance review. Yet dozens of individuals, including Mr. Choate, were awarded raises in the tens of thousands, according to the openUA portal (http://openua.uark.edu/Default.aspx). While this may still be a far cry from the most outrageous corporate practices, the question must be raised whether there is adequate oversight over these disbursements of public money.

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Posted by TM on 12/09/2012 at 7:18 PM

Don't think for a moment Joy Sharp is innocent. While she may have done some good things for the UA, she also helped cover-up a staff on students sexual harassment case (see below). Neither does this stop at Choate, whom Gearhart hand picked to replace him upon him being nominated and selected as the new chancellor back a few years ago. First Hand knowledge to all this, as during Gearharts transition, there was a little well know division that falls under the specter of University Advancement Division, whom "one" Dave Gearhart ran and Joy Sharp was his "right hand". This little division under Gearharts watch had a "major" incident of a grad student sexually harassing female students: touching, kissing on the cheek, groping (breasts, under the pretext of tickling), using personal info to look up phone and addy's (to include stalking), and showing sexual content via his cell. Students reported this and this was all reported and sent to Dave Gearhart and Joy Sharp. Subsequently it was "swept" under the rug and the employee, who reported, put under a microscope for derilection of duties assigned (though previous 2yrs had above stellar performance reviews), while job duties from others where giving to this employee to silence and run them off. All while Dave Gearhart looked squeaky clean and became chancellor without a blemish on his record or those under his watch. Thing is, this first hand knowledge is accessible as said employee still has all the documentation and actual recordings from Dave Gearharts underlings who verbally admit and intimidate to "sweep" it under the rug. Nice thing pocket recorders are. Now if any reporter wants to break open a real story that was white washed and swept into the closet with other skeletons, well feel free to message ;-)

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Posted by talmor12 on 07/11/2013 at 9:55 PM
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