Two campus officials have been reassigned following a multi-million-dollar budget shortfall at the University of Arkansas caused by improper money management, the school’s chancellor said Monday.
Chancellor G. David Gearhart released a statement saying Brad Choate, the vice chancellor for University Advancement, and the division’s budget officer have been reassigned to other duties for the remainder of the fiscal year.
Gearhart said the division had been meeting its budget by using anticipated revenue to meet current budget obligations. Miscalculations in the anticipated revenue led to a $3.1 million shortfall for the Division of University Advancement’s $10 million budget, according to the statement.
The money was properly used for the division’s activities, but the division officials’ management of the money was “imprudent and unacceptable,” Gearhart said.
The division used money to fill staffing needs “while miscalculating the funding levels necessary to support those positions,” according to Gearhart.
“The resulting imbalance was not detected because the division’s budget officers did not carefully monitor the flow of revenues and expenditures,” Gearhart said.
The university will cover the shortfall using reserve funds, but plans to have the division repay the shortfall amount.
“Like many of you, I am deeply disappointed by what occurred,” Gearhart said in the statement. “The steps we have taken and will take will ensure the sound and prudent operation of the advancement division while also maintaining its high level of productivity. I ask that you continue to work with me and with your colleagues to perform the important work that we all do to support our students and our state.”
Gearhart will assume management of the advancement division “for the foreseeable future,” he said.