"Audit uncovers long list of financial issues," the February headline stated.

“Audit uncovers long list of financial issues,” the February headline stated.

Below the headline was a story quoting audit findings and naming four University of Arkansas at Pine Bluff employees fired Feb. 21 in connection with more than $700,000 in payments that did not follow the proper accounting methods, $4,219 in funds to an individual who could not provide supporting documents, violations of state nepotism codes, general disregard for payroll and vendor procedures and other financial issues associated with the Harrold Dorm Complex and Living Learning Center.

The story was not the first involving the university’s financial woes over the years. It was published at about the same time Dr. Lawrence A. Davis Jr. announced his plans to retire as chancellor, effective Friday. When Davis was appointed chancellor in November 1991, the college faced a $2.9 million deficit, left there by the previous university administration.

University of Arkansas System auditors said a review of UAPB financial records from July 1, 2008, to June 30, 2010, were lacking in documentation, noting they were unable to verify payroll expenses totaling $497,532 and vendor disbursements totaling $239,348 because the payments did not follow the proper accounting procedures.

Davis has said expenditures were made in the Harrold Complex to correct problems that existed at the time.

The auditors identified 31 different types of issues, including student workers who were overpaid or underpaid, students reporting working 12-hour days or work days without lunch breaks, a student worker who reported working 110 hours in one week, duplicate payroll payments to the same employee, payments made to vendors whose existence could not be verified, vendors paid differently for the same job, vendors selected without going through the competitive bid process and a payment made to the Athletic Department that couldn’t be explained.

Documentation was missing for seven items totaling $4,219 in personal reimbursements and vendor payments Of the 1,007 time sheets reviewed for the Harrold Complex, 585 time sheets were not signed by the actual employee, but were signed and initialed by another employee for that employee, according to the audit. That represented $275,971, or 55 percent, of the total gross wages paid during fiscal year 2010, the audit indicated.

Eighty-five percent of the time sheets for the Harrold Complex were not signed by a supervisor.

Davis in February said UAPB had been in discussion with UA System legal staff since 2006 to resolve the operational guidelines surrounding the use of Title III funds cited in the audit.

“As the chancellor, I considered the money expended to be discretionary as indicated in the attached documents and verified several times by the director of Title III and federal representatives, and because of the urgency of the program, usual procedures were bypassed,” Davis said in his response to the audit findings.

He told faculty members in late February that the decision was made to repair the Harrold Dorm Complex because of unsanitary conditions that included dead vermin, clogged toilets and dirty shower stalls, as well as safety issues that included exposed wiring in student rooms. Davis said the conditions constituted an emergency and allowed him to override normal purchasing procedures. “Nobody has mismanaged anything,” Davis said. “There is no money missing. It was spent on what you just looked at. We had six weeks to rehabilitate these dormitories.”

The Arkansas State Police is conducting a criminal investigation into the audit findings at the request of the Prosecuting Attorney’s Office. A state police spokesman confirmed last week that the investigation is still ongoing.

Davis has acknowledged that proper procedures were not followed in some cases, adding he has ordered university personnel to document records questioned by the auditors. A UA System financial officer has had an office on campus for a number of years.

There were also financial problems in the late 19th and early 20th centuries when whites took control of the finances at what was then Branch Normal College and the Legislature apparently appropriated school funding by race, with frequent vetoes of funding legislation from then Gov. Jeff Davis.

It was not the first time the institution would feel legislative wrath. Martin Luther King Jr., a rising star in the civil rights movement, was invited by President Lawrence A. Davis Sr. to give the commencement address at what was then Arkansas AM&N College in 1958. The all-white General Assembly responded by cutting the college’s appropriation from $900,000 to $850,000 and keeping it at the lower level for several years.

Allegations of mismanagement have been raised by state officials regarding a number of UAPB leaders over the years.

In the spring of 1971 — prior to AM&N’s merger into the UA System — House legislators voted to appropriate $1.8 million to bail the college out of a debts incurred in excess of its authorized budget. It represented $1.3 million to pay off past due debts and $500,000 to take the institution through the remainder of the fiscal year.

A Jefferson County grand jury indicted four men in connection with the budget excesses, including two for violating the state statute that forbids expenditures in excess of appropriations.

The former head cashier at the college was indicted on one count of forgery and one count of embezzlement. The latter stemmed from $2,000 in credit given to various students on their college ledger cards without the approval of the college.

Davis has said that because many UAPB students come from lower income backgrounds, the demands for the university to reach out and help those who are in need of aid can be misunderstood.