The University of Arkansas Board of Trustees audit committee will meet Saturday morning in Fayetteville to discuss the Division of Legislative Audit’s financial review of the University of Arkansas’ Advancement Division which had deficit cash balances of $2.14 million in 2011 and $4.19 million in 2012. The audit report was released today.
The audit revealed:
∙ Deficit cash balances of $2.14 million at June 30, 2011 and $4.19 million on June 30, 2012;
∙ the treasurer’s office posted account receivables of $2.1 million on June 30, 2011 and $2.5 million on June 30, 2012, which partially obscured the deficits in the financial statements;
∙ the Vice Chancellor for the Advancement Division (Brad Choate) did not exercise proper fiscal oversight and did not comply with University policies and procedures; and
∙ Advancement revenues remained relatively constant over the four-year period reviewed, while expenditures increased significantly, from $7.94 million to $13.23 million, resulting in an overall decline in the combined Advancement and Foundation cash balance.
The audit report outlined several factors that contributed to the cash deficits including, lack of oversight by Choate, inadequate and inaccurate accounting and reporting of the Advancement Division’s financial status by the budget director, failure to appropriately budget and account for direct payments to vendors by the Foundation on behalf of the Advancement Division, increases in Advancement Division personnel and other operating expenses without an increase in funding sources, and inaccuracies in Advancement Division financial statements relating to accounts receivable prepared by the treasurer’s office.
The full audit report, including the University’s response to report, can be found here: Audit Report