Fundraising scandal at Bowie State – Bowie State University, Bowie, Md

Bowie, Md.

A financially troubled fund-raising organization for
Bowie State University (BSU) is being temporarily handed over to the
University of Maryland system amidst criticism that the organization
sapped its administrative funds and then dipped into other money
earmarked for scholarships and campus activities to cover further
operating costs.

A January 1998 audit found that the foundation overspent its 1997
fiscal year operating budget by $63,869. The foundation, which operates
as a distinct not-for-profit organization, has since gone further into
debt, according to University of Maryland System officials.

A Bowie State official confirmed that among the financial
commitments the organization could not afford were the purchase of more
than $40,000 worth of furniture for the offices of fund-raising
employees and a $12,650 contract to buy Washington Redskins season
tickets.

While most of the foundation’s debts occurred before interim
director Russell A. Davis took office in February of this year, he was
removed from the foundation post on May 12, 1998 by state university
officials. The next day, amidst accusations that he lied about his
academic credentials, Davis resigned from his position as a vice
president of student affairs at BSU, according to news reports.

Davis’s firing and resignation both occurred after The Baltimore
Sun reported on May 12 that a court found he had improperly taken
$3,873 from another non-profit organization he once headed that meets
on campus. The newspaper also reported that Davis had a history of
troubled personal finances.

However, BSU spokeswoman Carolyn Mills-Matthews said that Davis
resigned when he failed to verify his Ph.D. credentials to university
officials.

Mills-Matthews said that oversight of the fund-raising foundation
was handed over to the University of Maryland Foundation — which
currently manages Bowie State’s endowment — in order to fill the void
that came up when Davis resigned.

The foundation’s chairman, Ira Moss, indicated in a written
statement that an aggressive fund-raising campaign would be launched on
be half of the university. In April, the BSU foundation, under Davis’s
leadership, launched a high-profile campaign to raise $10 million in
donations for scholarships and campus programs.

“We are deeply concerned by deficits that were incurred in the BSU
Foundation’s unrestricted accounts and by practices that allowed those
deficits to accumulate,” Moss said. “In keeping with our fiduciary
responsibilities, we have initiated a series of steps to eliminate the
deficits and insure proper account management as we move forward.”

According to the 1998 audit, on June 30, 1997 the BSU Foundation’s
permanently restricted asset base totaled roughly $1.8 million. At that
time the asset base in scholarship and program funds, which falls under
the temporarily restricted net assets category, totaled $467,100.

Alfred Chavez, Jr., the University of Maryland system’s chief
auditor, says the accumulation of the spending deficit of $63,869 in
the unrestricted net assets account meant that funds were borrowed from
restricted net asset accounts to cover foundation expenses.

In fiscal 1997, the foundation awarded a total of $420,249 in
scholarships and direct assistance to Bowie State students, according
to the audit. The University of Maryland Board of Regents requires
annual independent audits of fund-raising foundations affiliated with
Maryland public colleges and universities.

Chavez, who launched another audit of the Bowie State University
Foundation in May, said his report should have more details about how
monies were spent.

“The [University of Maryland Board of Regents] want a clearer
picture of the full relationship between the university and the
foundation,” Chavez said, adding that his audit should be complete by
the end of July.

Problematic Leadership

Avis Pointer, who was executive director of the foundation during
the period examined by auditors, told news reporters that she had no
knowledge of misspending during her tenure.

“I don’t know anything about that. I’ll have to read the audit myself,” she told The Baltimore Sun.

Auditors have cited problems at the foundation for some time.
Audits for fiscal years 1996, 1994, and 1993 reported that the
organization had inadequate internal controls over money. The January
1998 audit was conducted by the Baltimore accounting firm of King, King
and Associates.

The foundation’s board removed Pointer last January from the
executive director’s position, after contributors and trustees started
inquiring about how the organization was handling money. Dr. Nathanel
Pollard, president of Bowie State University, then named Davis as
interim director of the foundation.

In May, University of Maryland system officials announced that
Davis could face a state investigation over whether he lied about his
academic credentials when he applied to work at the university.
According to The Baltimore Sun, Davis told BSU officials that he had a
master’s degree and doctorate in education from the University of
Maryland-College Park.

University of Maryland System spokeswoman Chris Shreeve says there
is no record of Davis earning those degrees. The Baltimore Sun reported
that in 1982 Davis earned a master’s degree in the arts from Hampton
University in Virginia.

Davis was hired by BSU on November 11, 1988, as a counselor. From
there, Davis was promoted to a succession of administrative and
teaching jobs. He was appointed the permanent vice president for
student and academic affairs in 1994, according to news reports.

Fund-Raising Concerns

Founded in 1865, Bowie State University has an enrollment of 5,067 students, the majority of whom are African American.

Vaughn Evans, the outgoing president of the Bowie State University
national alumni association, said he was “surprised” to find out about
the $63,869 spending deficit found in the fiscal 1997 audit of the BSU
foundation. He is confident, however, that overall fund-raising efforts
will not suffer.

“I think it’s a minor setback for us. I was glad to see that the
foundation board has taken steps to remedy problems with the
foundation.”

COPYRIGHT 1998 Cox, Matthews & Associates



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