Former University of Arkansas Officials Testify About Deficit At Hearing

Jan 7, 2014

Current and former University of Arkansas officials testify before the Joint Performance Review Committee Tuesday. From left to right, Vice-Chancellor for Finance and Administration Don Pederson, Associate Vice-Chancellor for Financial Affairs Jean Schook, Chancellor David Gearhart, former Vice-Chancellor of Advancement Brad Choate, former Associate Vice-Chancellor of University Relations John Diamond (behind Choate) and former Advancement Division Budget Director Joy Sharp.
Credit Michael Hibblen / KUAR

As Arkansas lawmakers probe a $4.19 million deficit at the Fayetteville campus of the University of Arkansas, current and former officials testified Tuesday at the Capitol, offering contradictory accounts about who was at fault.

Former employees who were not allowed to testify at a hearing last month, got to give their side of the story to members of the Joint Performance Review Committee.

Brad Choate, who ran the University of Arkansas’s fundraising division, suggested there’s a “culture of cover up” by school officials.

“Frankly, this is another example of a pattern of shameful behaviors designed to protect themselves rather than be honest and accountable. Ladies and gentlemen, something is rotten in Fayetteville.”

He testified that he was not to blame for overspending in the department, leading to the deficit.

“We worked with numbers we were given and did not exceed that budget. As it turns out, and the budget has shown, we were given bad numbers as a result of poor financial staffing at the top of the organization and the university’s own highly questionable accounting practices," Choate said.

"Folks I didn’t wake up stupid or lazy one day after 32 years. We built a top notch program for the University of Arkansas that produced outstanding results. Unfortunately the financial affairs staff and procedures we relied upon let us all down.” 

Choate called himself the fall guy for problems that he said had been building since Fayetteville Chancellor David Gearhart ran the Advancement department.

“When Jean (Schook, Associate Vice Chancellor for Finacial Affairs) told me there was no way Dave (Gearhart) nor I could have known the true condition of the division’s finances I thought Dave would be happy because it showed he and I both were misled. But instead, Dave panicked when his own financial people told him the problem began when he was the division’s vice-chancellor.”

Gearhart disputed that.

“The simple truth is that Mr. Choate failed to carry out his duties and responsibilities as vice-chancellor by ignoring his duty to manage and supervise budgetary matters,” Gearhart said.

Choate would lose his job, as would university spokesman John Diamond and fundraising Budget Director Joy Sharp.

She took responsibility for not catching the deficit as additional employees were hired.

“In the spring of 2012, I began to see that the revenue was not coming in like I had projected that I thought it would," Sharp testified.  "I was still thinking that with the next income that might be coming in, it might offset because the market was beginning to do better.”

Diamond, who handled freedom of information requests from the media, claims Gearhart then ordered the destruction of documents at a meeting a year ago.

“He questioned why we were creating documents that could be (requested through the FOIA) and went into a loud and angry rant about the advancement situation, the news media and Brad Choate. During this outburst he launched what politely could be called an F bomb, slamming his hand on the table and saying quote ‘Brad f***** up.' He then shoved the papers Denise had distributed back across the table to her and said quote ‘get rid of these and don’t create anymore.”

Diamond and Choate suggested Gearhart might have perjured himself when he testified that he did not order the destruction of requested documents.

Gearhart noted that investigators in Washington County decided not to file charges.

"They also determined that absolutely no theft, no fraud or no misappropriation of funds occurred. The prosecuting attorney also found no wrongdoing with regard to the issues referred by Legislative Audit, nor did they substantiate any of Mr. Diamond’s claims,” Gearhart said.

Diamond said Gearhart felt the news media, and in particular the Arkansas Democrat-Gazette, were out to get him, filing repeated requests for documents.

The legislative hearing did little to satisfy lawmakers.

“I have been very confused here to figure out how it is you can have this much money floating around and there are all these people who have not a clue about what the budget is or what the projections are,” said Sen. Jane English, co-chair of the committee.

The meeting was requested by Representative Mark Lowery who suggested this isn’t the end of the matter.

“We’ve heard from a number of members and a number of different directions that, I think the exact phrase is ‘we need to move past this.’ I think one thing that has come out in the last four hours is that there is certainly enough smoke to indicate that there’s some fire and I’m going to do everything I can to stoke the fire to make sure these are not the end of these hearings.”

In the interest of disclosure, it should be noted that KUAR is licensed to the University of Arkansas System.