Message From Chancellor Gearhart Regarding University Advancement

For the past few months, the university’s Division of Finance and Administration and Division of University Advancement have been working to identify factors that caused a significant imbalance in the advancement division’s budget for fiscal year 2012, which ended on June 30. That process involved reviewing the advancement division’s financial records and budget management practices.

The review determined flaws in the division’s budget management process at the senior level. Those with ultimate budget oversight did not follow campus policies and inadequately monitored finances.  Consequently, the division lacked the financial resources sufficient to support the personnel growth it experienced in recent years in preparation for an upcoming capital campaign.

The division, which receives roughly half of its $10 million annual budget from investment revenues, had been using anticipated investment revenues to meet current budget obligations. Under that practice, the combination of over-commitments and the use of future revenues to close the division’s end-of-year budget gap compounded quickly.  With the ability to access future revenues exhausted, the advancement division finished the 2012 fiscal year on June 30 with a $3.1 million shortfall. Although the funds were properly used for advancement activities, this manner of budget management is imprudent and unacceptable.

The financial review found that while the practice should not have occurred, there was no indication of inappropriate expenditures or uses of funds. Rather, the division filled staffing needs while miscalculating the funding levels necessary to support those positions. The resulting imbalance was not detected because the division’s budget officers did not carefully monitor the flow of revenues and expenditures.  This was not, and is not, an acceptable practice.

The university had sufficient reserve funds to balance the division’s 2012 fiscal year deficit but the advancement division will have to restore those reserve funds over time. Along with that expectation, I am imposing a series of actions to ensure that the advancement division has the resources to sustain its important work and that it operates within its means. Those actions include the following:

  1. I have assumed direct management of the advancement division for the foreseeable future.
  2. The division’s budget will be managed directly by the Division of Finance and Administration and will include heightened monitoring of fiscal operations.
  3. 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 when their appointments conclude.
  4. I am working with Provost Sharon Gaber, Vice Chancellor for Finance and Administration Don Pederson, and the university’s deans to develop a funding plan that will financially sustain the advancement division’s vital work in ways that continue to generate the resources our students, faculty, and staff need to be successful. Be assured that we will not be reducing campus budgets to address this situation. Instead, funds needed to close the gap between the advancement division’s current resources and needs will involve establishing a cost recovery assessment on certain types of future non-endowment cash gifts. This is a common and widely utilized practice for supporting — and reinvesting in — the cost of advancement work.

To be clear, the Vice Chancellor for University Advancement promptly notified me at the end of the 2012 fiscal year when he became aware of the shortfall in his division. In his new role, he will concentrate on completing plans for our upcoming capital campaign, a major project he has been focusing on for some time. His work should be completed within the next few months.

Like many of you, I am deeply disappointed by what occurred. 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.


Study Finds Discreet Shipping Used to Sell E-Cigarettes to Minors

Researchers at the U of A found businesses on TikTok are circumventing local, state and federal laws that restrict the individual sale of tobacco products.

Pat Johnson Named Bess Lomax Hawes National Heritage Fellowship Recipient

The U of A Libraries’ Arkansas Folk and Traditional Arts will host the 2024 Bess Lomax Hawes National Heritage Fellowship celebration on Thursday, June 13.

Monika Szakasits Retiring From the Law Library After 20 Years

Szakasits, associate director of the Young Law Library, is retiring at the end of May after 20 years of service. A reception will be held at 11 a.m. Friday, May 31, at the Six Pioneers Room of the Law School.

USDA-NIFA Grant Supports Microwave Tech to Zap Weed Seeds

Scientists and engineers with the Arkansas Agricultural Experiment Station are investigating the use of 915 MHz microwaves to neutralize weed seeds underground, including those that are herbicide resistant.

Political Science's Bayram Named a Leader for the International Studies Association

A. Burcu Bayram, professor of international relations for the Department of Political Science, has been elected as the vice president and section chair of the International Studies Association.

News Daily