Auditors: TSU president improperly took gifts from vendor
NASHVILLE (AP) — State auditors said Thursday that Tennessee State University President James Hefner “exploited his position” to get free Super Bowl tickets from a big vendor and initially lied when asked about it.
Local prosecutors said they are reviewing the audit, which was prompted in 2001 by allegations from fired athletic director James Smith of kickbacks, thefts and improper gifts.
A separate audit released Thursday found mishandling of funds at the school’s foundation.
Auditors said that ARAMARK Corp., which holds the contract to provide food service at the university, paid for Hefner to attend the 2001 Super Bowl in Tampa. But they determined the gift was not a kickback because Hefner was not directly responsible for granting ARAMARK its contract.
“Instead, the auditors concluded that Dr. Hefner exploited his position, the university’s relationship with ARAMARK, and his familiarity with ARAMARK officials to obtain an improper benefit for him and his family,” state Comptroller John Morgan said in a letter to the governor and top lawmakers that accompanied the audit report.
Hefner did not return phone calls Thursday. At a press conference called by the university, Hefner’s executive assistant, Hollis Price, read a statement that, in part, said: “The president has an illustrious career as a college administrator with high integrity and moral character. At no time has his character ever been questioned.”
The auditors said Hefner tried to cover up the free tickets by saying he had paid ARAMARK $200 for them. Auditors say that story changed a few times after Hefner was confronted.
ARAMARK told the auditors that one of its former officials paid $5,000 for the four Super Bowl tickets and never expected to be repaid. The vendor said Thursday that the employee who gave Hefner the tickets no longer works for ARAMARK and such gifts violate company policy.
Tennessee law requires state employees to cooperate with an audit and to be truthful with auditors, auditor Art Hayes said.
District Attorney General Torry Johnson said he received the audit but hasn’t decided about criminal charges and likely will wait to see how the Board of Regents reacts.
“It’s premature at this point. (The auditors) raise several different allegations and we want to go through it,” he said.
Board of Regents Chancellor Charles Manning said he was not ready to comment and wouldn’t speculate about Hefner’s future.
“They are serious issues, and they do not reflect well,” he said.
Clay Harkleroad, TSU’s vice president for business and finance, also received tickets to big sporting events, including the 1996 Olympics in Atlanta, the auditors found.
ARAMARK, which had its most recent contract approved in 2001, donated $250,000 last year to the TSU Foundation.
Auditors said they didn’t substantiate the most serious of Smith’s claims.
“Overall, the voluminous nature and seriousness of Dr. Smith’s issues … were indicative of a power struggle between Dr. Hefner and Dr. Smith for control of the athletic department’s resources and spending,” the auditors wrote. “Clearly, Dr. Hefner and Dr. Smith distrusted each other.”
University presidents have come under increased scrutiny since last August when John Shumaker resigned as UT president amid questions about lavish spending and his relationship with the UT Foundation.
The separate audit looking into TSU’s foundation said that the nonprofit agency ran a negative balance of $2.7 million last year because of inadequate monitoring of a scholarship fund.
Some students received honors scholarships they weren’t qualified for while the foundation was unable to cover scholarships for eligible students.
The auditors said that Hefner improperly tried to fix the negative balance without getting permission from the Board of Regents to use taxpayer money.
But Price, in the prepared statement, said that Hefner does not recall being told scholarship accounts were running negative balances.
Tennessee Board of Regents vice chairman Stanley Rogers said Hefner is ultimately responsible for the dealings of TSU and its foundation.
“It is apparent there is a lack of control on the financial side,” Rogers said.
He said the Board of Regents needs to digest both audits, totaling more than 200 pages, before deciding what to do.
“There will be a response by the board, what form that takes, I don’t know,” Rogers said.