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Lawmakers Delay Hearing into Univ. of Arkansas Fundraising Unit

LITTLE ROCK Ark.—A Washington County prosecutor has asked Arkansas legislators to postpone their inquiry into overspending by the fundraising division of the University of Arkansas while his office interviews witnesses in connection with possible criminal offenses.

The Legislature’s wider-ranging hearings into the division’s deficit—and accounting and management by top university officials—will be postponed until November, The Arkansas Democrat-Gazette reported.

State Sen. Bryan King, co-chairman of the Legislative Joint Auditing Committee, which is examining auditors’ findings, says deputy prosecutor David Bercaw wanted more time to interview some of the people involved and lawmakers did not want to interfere.

“But there are still going to be questions and a desire to hear the other side of this story,” King said.

Bercaw, who is in charge of the investigation for Washington County prosecutor John Threet’s office, said he is interviewing witnesses.

Prosecutors and legislators are examining issues raised in a 48-page investigative report released Sept. 10 by the Legislative Audit Division and the University of Arkansas System’s internal audit section. Performed at the request of UA Chancellor G. David Gearhart, the report found $4.19 million in overspending by the University Advancement Division in fiscal 2012 and $2.14 million in 2011. Some of the 2011 deficit carried over into 2012’s total.

Auditors found deficits going back to at least 2008. The report said the problem involved escalating spending by the fundraising division even though revenue remained flat.

The report also criticized top university officials’ accounting, budget oversight and failure to disclose certain issues to auditors. And the report noted that auditors “experienced difficulty” obtaining financial records, “which potentially limited the scope of this review.”

When the auditors’ report was first presented to legislators Sept. 13, two top university officials also hurled conflicting charges under oath regarding purported destruction of documents.

The university’s former top spokesman, John Diamond, said Gearhart ordered Advancement Division officials on 14 January to destroy and stop creating budget-related documents. Gearhart said he had never ordered anyone to destroy documents and described Diamond as a “disgruntled” employee.

At least six other school administrators who were in that January meeting have refused to answer the newspaper’s questions about what happened or could not be reached.

Only one, Advancement Division budget officer Denise Reynolds, responded through a university spokesman. Reynolds said Gearhart had never asked her to destroy documents or to refrain from creating them.

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