ETSU audit reveals questionable expenses by former professor

Back in February, East Tennessee State University officials opened an internal investigation into “possible inappropriate purchasing practices” by a former Department of Art and Design professor at the school.

According to a statement from ETSU, “the majority of the questionable purchases involved funds designated for international travel, which are funds from non-state supported sources.”

The total amount of questionable expenses were over $21,000.

Joe Smith with ETSU University Relations said the professor was using money in an agency account for the university’s study abroad program.

“An agency account is money that comes from outside sources that we have designated for certain purposes, and in these situations, most of the money that was designated was designated for international travel funds,” Smith said.

A summary document of the investigation by the university said additional issues were discovered during the course of the review, which include overpayments and/or personal purchases.

An audit revealed four questionable expense concerns.

The first concern surrounded two check requests from the professor for professional services at his home and recent purchases had been shipped to his home.

While being interviewed, the professor said two check requests — totaling $4,375 — were submitted for services at his personal home.

“The Professor was attempting to build a kiln at his residence using state funds,” according to the document. “While these two check requests were not honored, kiln material and supplies totaling $3,663.78 were paid using a procurement card (procard) and shipped to the Professor’s home.”

The second concern was raised over possible overpayments made to the professor for expenditures he acquired while teaching a course in Italy. The review said travel reimbursements paid to the professor from various state-funded accounts when he returned from Italy “appeared to be made for expenses previously paid from the Italy agency account, rather than out of pocket expenses of the Professor.”

The professor was over reimbursed teaching during the summer of 2009,2010, 2011 and 2013.

According to the review document, the professor was overpaid $5,667.04 for business-related travel expenses.

He also reportedly claimed expenses, such as airfare, hotel cost and meals on his travel reimbursements, which were reportedly previously paid from the Italy agency account and were not out-of-pocket expenses.

A third concern brought up during the investigation surrounded personal expenditures of the professor, his family and a family friend, which appeared to be paid using the Italy agency account procard.

“During the Summer of 2010, the Professor used the Italy agency account to fund some of his personal expenses, including airfares for his wife, son, and son’s friend, meals, hotel rooms, and rental car costs, while vacationing in Italy after the course was over,” according to the review. “Other questioned costs during 2008 and 2010 included cash withdrawals to pay for lawn mowers and dog sitters and undocumented travel reimbursements. In total, there was $9,185.04 in expenditures paid on the Italy agency account procard that were questioned.”

The final concern listed in the review was about the professor’s procard transactions, which indicated that foreign currency exchange and visa debit card expenditures while abroad were not supported by proper documentation.

“We determined that there were some inappropriate purchases made, we determined that some travel claims had been reimbursed twice.  The professor has made restitution, the professor’s paid all the money back to university and has since retired,” Smith said.
The review concluded that some of the documentation was provided by the Professor for the audit for the 2013 and 2014 courses in Italy.

“Documentation from the summer 2013 trip revealed $1,120. 20 in personal expenses was paid using euros/AAA debit cards,” according to the review. “In addition, the AAA preloaded debit cards/euros were used prior to the student’s arrival while the Professor was conducting research in Italy. Expenses paid while conducting research totaled $1,682.35 in 2013 and $456.85 in 2014. Even though the Professor was approved to travel to Italy prior to the course for research purposes, these expenses should not have been paid using the Italy agency account.”

The following is a breakdown of the questioned costs in the review:

– $3,663.78- Kiln materials

– $5,667.04- Over reimbursement of travel

– $9,185.04- Personal/Vacation/Questioned expenses

– $3,259.40- Personal and Research time expenses

Total Questioned Costs – $21,775.26

– Recoveries- $744.98

– Anticipated Recoveries- $3,663.78

– Net Questioned Costs/Potential Recoveries- $17,366.50

The ETSU news release said “All money and materials have been returned, and the professor is no longer employed by the university. As a result of the investigation, the Tennessee Board of Regents Finance Committee will be reviewing procedures for these types of funds for all TBR institutions.”

Going forward, ETSU officials say they will make adjustments on how they keep track of agency account spending.

“We have some controls in place on how that money is monitored and watched.  We’ve put some new ones in place, but I think from this investigation we’ll look and ask the question, ‘Do we need to put more controls in place on how that money is monitored?’  And that’s what we’ll be doing from this point forward,” Smith said.

Copyright 2015 WJHL. All rights reserved.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s