The University of Arkansas System released Monday audit findings and the names of four UAPB employees fired Feb. 21 in connection with $736,880 in payments that did not go through the proper accounting channels, $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 University of Arkansas System released Monday audit findings and the names of four UAPB employees fired Feb. 21 in connection with $736,880 in payments that did not go through the proper accounting channels, $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 fired employees are: Rita Ticey, director of the Harrold Dorm Complex; Desiree C. Ticey, administrative specialist in the Department of Public Safety; Eugene Butler, director of public safety; and Rickey Ticey, security officer and maintenance employee.

As director of the University of Arkansas at Pine Bluff Harrold Complex, Rita Ticey oversaw the employment of her husband, Rickey Ticey, and her daughter Desiree Ticey. Rita Ticey was also assistant to Chancellor Lawrence A. Davis Jr., and the audit report notes many occasions when Rita Ticey signed financial and hiring documents on behalf of the chancellor.

Ticey family

The internal audit found that Rita Ticey’s husband, sister and daughter worked at the Harrold Complex and that her approval of time sheets for her family members appears to be in non-compliance with Arkansas Code 25-16-1001, the University of Arkansas Board of Trustee’s Policy 410.1 and UAPB guidelines that restrict employment relationships with relatives.

The internal audit found that of the 25 time sheets processed for Rita Ticey’s spouse, Rickey Ticey, six were appropriately approved by his supervisor (Butler), two were approved by Rita Ticey and 17 were signed with Butler’s name without authorization from Butler.

Davis informed the auditors that Butler stated he authorized other employees to sign his name to time sheets.

During a review of the top 11 hourly rates paid to extra help labor positions at the Harrold Complex for fiscal year 2010, the auditors found that Rickey Ticey and two other employees were paid $13 per hour, which is above the set wage policy of $9.07 an hour.

Rickey Ticey was reported to have been paid the highest total compensation — $19,068 — of all extra help labor employees paid by the Harrold Complex for fiscal year 2010.

Auditors also found that Rita Ticey signed the forms to hire her husband and sister in July 2009 on behalf of Davis, who, questioned by auditors, said he had hired both employees.

Contacted Monday, Davis declined to comment on the audit findings or the firings any further than the statements he made in response to the audit report.

“Nepotism was not intended,” Davis said in his Feb. 24 response to the report. “However, individuals apparently did not follow organizational lines. This error will not be repeated.”

Unverified expenditures and actual losses

The auditors reviewed financial records from July 1, 2008, to June 30, 2010.

They were unable to verify payroll expenses totaling $497,532 and vendor disbursements totaling $239,348 because the payments did not go through the proper accounting procedures.

The auditors used alternative methods in an attempt to determine if the funds had been spent properly, resulting in a list of 31 different kinds of issues they discovered, 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 by auditors, vendors paid differently for the same job, vendors selected without going through the proper competitive bid process, a payment made to the Athletic Department that Ticey could not explain and other issues.

In general, the audit found that the number of employees and the amount of money spent on payroll at the Harrold Dorm Complex and Living Learning Center was much greater than at other dorms on campus. For example, during the fiscal year 2010, there were 919 students at the Harrold Dorm Complex compared with 723 students at the next largest dorm. During that same time period, Harrold Dorm employed 67 employees compared with seven at the next largest dorm and spent $332,254 on payroll compared to $85,765 at the next largest dorm.

Auditors requested documentation and did not receive it for seven items totaling $4,219 in personal reimbursements and vendor payments made to Rita Ticey. The funds came from the university’s Title III Endowment Agency Account and were processed by the bank at the request of Davis or requests from Ticey on behalf of Davis. The auditors concluded the funds were a loss to the university.

Auditors recommended the $4,219 be repaid to the account. Davis responded that it would be done by June 30.

Payroll issues

The internal audit reviewed extra help labor payroll expenses for the Harrold Complex for the time period July 1, 2009, through June 30, 2010, including a review of 1,007 timesheets totaling $497,532 in gross wages.

Of the 1,007 timesheets reviewed, 585 timesheets were not signed by the actual employee, but were signed and initialed by another employee for that employee, according to the audit.

This represents $275,971, or 55 percent, of the total gross wages paid during fiscal year 2010, according to the audit findings.

A review of payroll timesheets for the Harrold Complex for fiscal year 2010 found that the supervisory line for certification of the hours worked by the employee was not signed by the supervisor responsible for approving the hours in 853 instances — or 85 percent — of the 1,007 timesheets reviewed, which represents a total payroll of $414,121.

Payroll for the Harrold Complex consisted mostly of extra help labor employees hired as dorm and student coordinators, security guards, janitors, assistants and tutors during the audit period, according to the report.

The internal audit found that between July 1, 2008, and June 30, 2010, disbursements from the Title III Endowment Agency Account totaled $338,783, of which $256,783 — or 76 percent — represented payments for expenses related to the Harrold Complex.

In Davis’ Feb. 24 response letter, he said UAPB supporters made donations to match the Title III grant over many years and the federal body administering Title III funds had indicated that UAPB had discretionary power over the funds.

Davis said that UAPB had been in discussion with U of A System legal staff since 2006 over the operational guidelines surrounding the Title III funds.

“As the chancellor 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.

Background

In previous articles, U of A System officials have said the audit began in 2010 after tips to the system’s fraud hotline.

Arkansas State Police officials confirmed last week that a criminal investigation into alleged fraudulent activity related to the contents of the audit findings has been opened at the request of the Prosecuting Attorney’s Office.

The Harrold Complex at UAPB consists of four dormitories for female students at the university.