Archive for Sunday, June 28, 2009

Audit rocking Kansas higher ed

June 28, 2009


— It was one of the strangest situations in Kansas politics in recent years, and that’s saying something.

On Friday, the Kansas Board of Regents was showering three longtime university chiefs with praise, a video homage, plaques, heartfelt words and even joking farewell gifts as they stepped down from their positions.

Applause and laughter from higher education officials filled the room as they said good-bye to Kansas University Chancellor Robert Hemenway, Kansas State University President Jon Wefald and Pittsburg State University President Tom Bryant.

Minutes later, the regents — with urging from Gov. Mark Parkinson — ordered audits of its universities, specifically to shine a light on the frequently shrouded workings of alumni associations, big-time sports corporations and inner-circle business deals.

Exit analysis

And one of the main reasons for the action was right in the meeting room getting heaped with accolades — Wefald.

A 23-year tenure as president that was marked by huge growth in critical areas at KSU was suddenly crashing under the weight of a 34-page “exit analysis” that has raised alarms.

The recently released report found that under Wefald’s final years, numerous questionable transactions occurred at the juncture of fundraising, sports and business investments.

In speaking briefly with reporters, Wefald seemed to downplay the report’s findings, saying the problems were “very fixable” and pointed to the need to have more people involved in the decision-making process.

The audit found 13 undocumented payments totaling $845,000 to Kansas State football coach Bill Snyder, former athletic director Tim Weiser, former vice president and athletic director Bob Krause and others. Weiser and Snyder have issued statements that they did nothing wrong. Krause has not spoken publicly.

The audit recommended that Snyder’s new contract, reported at $1.85 million, be reviewed to ensure it complies with accounting and tax laws.

The audit also detailed a no-questions-asked $500,000 loan between the Athletics Department and Weiser and raised numerous questions about the dealings of a golf course management foundation and cited conflicts of interest within a business incubation group related to KSU that held investments from top school officials.

The audit also follows news reports that Krause signed an agreement to pay fired football coach Ron Prince more than $3 million.

Political fallout from the audit continues to plague KSU. New KSU President Kirk Schulz will be host to a meeting Monday to field questions about the audit and what KSU is doing to correct problems outlined in the report.

The regents had already ordered similar reviews for KU and PSU as part of the transition of administrations. But on Friday, the regents ordered audits also for Wichita State University, Emporia State University and Fort Hays State University.

In a politely worded letter, Gov. Parkinson, who most likely will have to start making budget cuts soon because of dropping state tax revenues, told the regents to broaden the audit process to maintain the public’s trust.

The regents also said they wanted to implement a regular schedule of these kinds of reviews instead of waiting for the departure of chief executives.

Regent Gary Sherrer said the purpose of the audits was not “to bayonet the wounded” but to “have another pair of eyes” on the policies and processes of these university-related entities.

Kansas law requires entities such as alumni associations, athletics corporations, endowments and foundations to annually submit financial audits to the Legislative Division of Post Audit. But these additional audits will analyze transactions between the entities related to the universities, the regents said.

And Regent Donna Shank said the audits will be made public — which is a far cry from the regents’ earlier position.

The regents agreed to release the KSU audit only after a newspaper filed an Open Records complaint with Kansas Attorney General Stephen Six.


Orwell 8 years, 12 months ago

Contrary to Wefald's comment, having more people involved in the decision making process won't necessarily solve anything. If there are more "go along to get along" types, like the corporate boards of directors who routinely support bazillions in executive compensation, not much will be accomplished. If you fill the Athletic Corporation board with twice the number of rah-rahs, you'll get only amplification of the view that the university exists solely to field teams.

Tom McCune 8 years, 12 months ago

If the Athletic Corporation were part of the University, then it would be subject to the rules and regulations for state entities. If it were an investor-owned corporation, it would be subject to SEC regulation and shareholder oversight. However, in the current situation, it is a hybrid essentially subject to no meaningful regulation at all from anyone. Guess what usually happens in that situation? Waste, fraud, and abuse.

If these teams are functions of the university, they should be fully part of the university and managed as such. If they are professional sports franchises, they should pay taxes and should be measured by the profit they generate for their owners. The "middle ground" is bogus.

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