Skip to comments.Seven Years, Six Scandals (North Carolina's Scandal Plagued University System)
Posted on 01/22/2010 9:16:07 AM PST by SeekAndFind
The January 8, 2010, press conference announcing the new N.C. State chancellor, William Randolph Woodson, was upbeattoo upbeat, perhaps. Yes, its great to have a respected person from a major university head the schools second flagship, but his accession doesnt mean that everything is going to be rosy.
At the press conference, UNC president Erskine Bowles took exception to a reporters reference to N.C. States tarnished reputation. He said that the schools image is not tarnished, that the school has been moving forward since the interim chancellor arrived on the scene, and that no one is thinking about the past.
I would respond that we should be thinking about the past, and not just about N.C. State but the entire University of North Carolina system. Since 2003, high-level financial indiscretions have been discovered at six UNC campuses. In all cases, they were serious enough to contribute to the resignations of chancellors (although two chancellors had already left).
Here is an overview of those cases, in chronological order. My purpose is simple: to remind us that complacency is not an option.
East Carolina University
In September 2003, Chancellor William Muse resigned from East Carolina University, ending a career that included leadership at three universities. Although health was a factor, Muse admitted that two financial problems led him to step aside to let someone else handle them.
One was evidence of financial mismanagement involving a $4.6 million federal grant from the National Library of Medicine.
The second was the discovery of embezzlement by an associate vice chancellor who also headed student housing. Emanuele Amaro was convicted of the crime, returned $84,000 to the university, and received a suspended sentence.
Although the theft did not implicate the chancellor, Amaro had ingratiated himself with the chancellors wife by helping with entertainment at their home, running errands, and falsely claiming to be undergoing treatment for terminal cancer.
UNC School of the Arts
In a routine audit, the state auditor found sufficient red flags to instigate a special investigative review. That October 5, 2004, review found that:
The vice chancellor for finance and administration had violated UNC policies in receiving more than $90,000 in consulting and expense payments over 13 years. The controller of the North Carolina School of the Arts Foundation admitted that she had misled auditors about these payment.
The vice chancellor made unauthorized transfers of land held by the foundation to a nonprofit corporation he controlled. According to the audit, he misapplied over $285,000 from the sale of the land.
The vice chancellor and the dean of the filmmaking school received payments from a nonprofit corporation, the NCSA Unity Development Corp., in violation of UNC regulations.
Money from the N.C. School of the Arts Foundation was diverted to administrators discretionary accounts; excessive overtime pay was made with insufficient documentation (for example, $69,112 over 29 months to an employee who earned about $40,000 per year); and the rules of the employee loan program were disregarded. The special audit resulted in three resignations. Then, Chancellor Wade Hobgood, who was not directly implicated, resigned in May 2005. The problems were serious enough for UNC President Molly Broad to ask the Board of Governors to increase its oversight duties, including reviewing system-wide financial statements, prepared for the first time.
Fayetteville State University
On July 9, 2007, Chancellor T. J. Bryan resigned from Fayetteville State University. In November, the state auditors office revealed an array of financial deficiencies during the year ending June 30, 2006. Specifically:
Accounting was chaotic. Cash was understated by $831,825, accounts payable understated by $657,926, and student tuition and fees revenue by $2,224,826. Too many people had access to the entire purchasing and payment process.
The university had overpaid financial aid refunds to students by $163,577. Eleven out of a sample of 81 students were not meeting the standards for academic progress required for the financial aid. These students were in the appeals process, the university said, but in six cases the university could not come up with documentation confirming the appeal. The university had also credited 100 students accounts with a total of $180,255 under a debt forgiveness program that had no eligibility criteria.
Equally devastating was a development outside the financial sphere. In 2005, Fayetteville State started a bachelor of nursing program. But in 2007, 24 out of 31 students failed to graduate because they had failed a standardized exam, and the Board of Nursing put the school on probation for a number of violations. The nursing program did not improve the next year, and in May 2009, James Anderson, the new chancellor, suspended the program so that it can be completely revamped.
N.C. Agricultural & Technical State University
In June 2007, the state auditor reported severe financial mismanagement at N.C. A & T. This followed an internal audit that had identified $2 million in mismanaged funds. Among the problems:
Questionable payments of about $500,000 were made from a program funded by the federal Office of Naval Research. Some were payments for excessive travel expenses for family members of the program manager. An administrative assistant in the Natural Resources and Environment Design Department made $101,000 in unauthorized payments. That person pled guilty to misusing funds.
The former vice chancellor for information technology and telecommunications misappropriated $87,000 in funds from rebates on computer purchases. He also directed a contract to his executive assistants mother.
Revenues of $380,000 from a beverage vending contract were transferred to the chancellors discretionary fund and used for purposes such as artwork, travel for the former chancellors wife, and foundation or alumni events.
These findings, which surfaced publicly after Chancellor James Renick had resigned, were sent to the district attorney in Greensboro. He declined to file criminal charges, and a local newspaper reported that Renick and the manager of the federal program had been vindicated. But Leslie Merritt, the state auditor, said in a recent interview that the fact that there is no prosecution does not vindicate the individuals involved.
North Carolina Central University
A month or two before he became chancellor, Charles Nelms learned that N.C. Central was operating an unauthorized satellite campus at a church in Lithonia, Georgia.
The school, which had been in operation since 2004, had enrolled 126 students. It had started with a memorandum of understanding signed by Chancellor James Ammons, Nelms predecessor, and the chief operating officer of the New Birth Missionary Baptist Church, which was headed by a trustee of N.C. Central.
Neither the University of North Carolinas president, Erskine Bowles, nor the Board of Governors knew about the school, although university policy requires approval of any off-campus program. Furthermore, the school was not accredited. Schools without accreditation cannot accept federal financial aid, yet the school had received over $500,000 in Pell grants and $2.5 million in federal grants and loans. A UNC report made clear that Chancellor Ammons must have been aware of the rules regarding accreditation, but ignored them.
N.C. State University
The most recent scandal, at N. C. State, is probably the best known. In 2005, through intermediaries, North Carolina governor Mike Easley pressured the university to hire his wife, Mary Easley, primarily to run a seminar series. At the time, the hire didnt cause a stir.
What kicked off controversy was the 88 percent increase in Easleys pay that took place on July 1, 2008. That increase, discovered by the investigative newspaper Carolina Journal, set off a wave of reporting about N. C. States policies. It revealed both political pressures and an on-campus culture of privilege among faculty and administrators. In the end, three university officialsthe provost, the chair of the board of trustees, and the chancellorresigned, and Mary Easleys job was terminated.
All these scandals were sizable, significant, and telling.
On the positive side, none of the transgressors had been hired by Erskine Bowles, who moved quickly to reduce the fallout when the problems were uncovered. But unless he is a magician, Bowles cannot change the pressures on a large public university systempolitical, ethical, and financial. Temptations are powerful inside a government bureaucracy, as is the sense of entitlement felt by many faculty and administrators. There is no reason to believe that any UNC school is immune from poor behavior. For the university system, that means more transparency and more internal auditing; for the public, it means greater vigilance.
Either give us less corruption, or more opportunity to participate in it.
From here in Missouri, I always thought North Carolina was a great state, and a wonderful place to live. Natural beauty combined with southern courtesy and civility.
Away from talentless academics, corrupt politicans and immigrants from the diseased northeast, it probably still is.
Erskine Bowles clintoon crook.
I’m trying to figure out what Irksome Bowles has to do with NC State. Sidenote: Am I the only one who thinks he looks like he is in a constant state of constipation?
I remember when I first posted that name, well no exactly, but it was many moons ago.
That's why I always refer to NC State as "UNC-Raleigh."
That, and it ticks off Staters enormously.
The University System in NC has been and is simply a jobs program for Democrats, starting with Bowles who failed in his attempts to become a Senator from NC.
Obviously, it is also a haven for cheats, criminals, and corruption - but then that can be said for ALL of the Democratically run government agencies in NC, the most heavily taxed and the most corrupt State in the South.
Today we learned that NC’s unemployment rats is 11.2%
Just last year the current Dem Governor got a tax increase passed in the midst of this horrendous recession, depression.
Every day there is new information revealed about the latest in corruption / crimes coming from the nest of thieves imbedded in the NC Dem party.
Today, Former Gov. Easley’s right hand man was indicted on 51 corruption/crimial charges by a Grand Jury that is also looking into crimes by Easley himself. (Easley claimed today he knew nothing about his chief lieutenant’s criminal shenanigans...)
Come on, North Carolina! It is time to totally clean HOUSE!!! And to turn this state around!!!
The education system is way too top heavy. Makes it fertile ground for corruption. It’s time to cut the bureaucracy. Actually, it’s way past time.