Audit finds nearly $700,000 misspent at Fayetteville State University
Findings being forwarded to the State Bureau of Investigation
Two former employees and one current employee in Fayetteville State University's communications office improperly spent nearly $700,000 of university money, the N.C. Office of the State Auditor reported on Tuesday. The findings have been forwarded to the State Bureau of Investigation to determine if crimes were committed.
Further, it says two of those employees plus two others had outside businesses that were paid a total of more than $165,000 to do work for the university. This may have put the employees in violation of the university's conflict of interest policies regarding their outside financial interests, the report says.
The former employees cited in the audit include Joy Cook, who, as Fayetteville State's former Associate Vice Chancellor for Strategic Communications, was head of the communications office. She reported to the chancellor's chief of staff. Cook announced on May 8 she was newly hired as the director of communications for the Democratic lawmakers in the state House of Representatives.
Cook has since resigned from that role, the executive director of the state House caucus said in a statement on Tuesday afternoon.
Efforts to contact Cook on Tuesday were unsuccessful.
Cook's salary at Fayetteville State was $110,000, the university said on Tuesday.
In a letter in response to the audit report and its recommendations, university Chancellor Darrell Allison told State Auditor Jessica Holmes that Fayetteville State agrees with the audit's findings. He said the university has been implementing new policies and practices to prevent these types of problems from happening again.
"We have a high degree of confidence that implementing these corrective actions coupled with stringent and on-going monitoring will sufficiently address the recommendations provided," he wrote.
Credit cards for purchases and travel misused
The audit says the employees used university-issued credit cards to make $692,239 in purchases that were not permitted under university policy or not properly documented per university policy, or both not permitted and not properly documented. This happened from Jan. 1, 2022, to Aug. 31, 2023, it says.
Cook was hired permanently to run the communications office in February 2022, according to a university news release, after serving in an interim role since May 2021.
The audit says the employees involved with the credit card purchases were Cook, former Director of Digital Strategy Morgan Osley-Pratt, and Assistant Vice Chancellor for Marketing and Creative Services Tina Raines, who is still employed at Fayetteville State.
Some of the findings:
- 148 purchases totaling $464,627 were payments to individuals, consultants, or employees.
- 26 purchases totaling $91,340 were for payment of invoices.
- 17 purchases totaling $13,650 for computer equipment or software, travel, or gifts.
- 17 purchases totaling $5,506 were payments made for purchases on Amazon.com
Employees are not allowed to use the university-issued credit cards, known as Purchasing Cards or Procurement Cards, for these purposes, the audit says.
The university on May 30 told CityView that Raines made one inappropriate transaction on her Purchasing Card, and it was an invoice generated by another employee (whom it would not identify) who had their own Purchasing Card.
She was not supposed to use her car for the other employee, the university said, and expenses for which the university receives an invoice are not supposed to be paid for with the Purchasing Cards.
"When the University evaluated its findings, we discovered that Tina Raines, assistant vice chancellor for marketing and creative services, adapted to using her purchasing card to pay invoices for expenses she did not incur, totaling approximately $12,000 of the $692,239," it said in a statement.
"As noted in the University's response to the audit, one of the corrective steps FSU took to address this was to provide the AVC for Marketing and Creative Services individual counseling on procurement card usage, retraining on procurement card policies, and participation in compliance training provided by the Office of Risk and Compliance," the statement says.
Travel Card troubles
Fayetteville State issues other credit cards, known at Travel Cards, for employees to pay for travel expenses.
The audit says Cook and Osley-Pratt made Travel Card purchases that were not allowed under Fayetteville State travel policy:
- $71,792 for 26 payments to consultants.
- $1,276 for five payments via the CashApp mobile phone payment system.
- $5,395 for 20 purchases for lodging within 35 miles of the university. Employees aren't allowed to purchase lodging unless their work activity is more than 35 miles away.
- Osley-Pratt bought a $299 roundtrip airline ticket for her son to travel with her to Orlando, Florida.
The report says an employee — it doesn't specify which one — incurred $1,843 in unnecessary travel expenses while visiting New York for a work-related conference:
- $270 to change the airline flight in order to arrive two days early.
- $739 in hotel and food expenses accrued by arriving two days early. These were paid with two university credit cards assigned to Cook.
- $368 to fly first-class to New York and return in premium economy class.
- $287 for a ride-share trip to and from a spa.
- $179 for a ride-share trip for a dinner.
Lack of record-keeping for purchases
Even when the employees made valid purchases with their Purchase Cards and Travel Cards, the audit says, they often didn't keep receipts or records to show that the purchases were for "valid university purposes," the audit says.
It cites Cook, Osley-Pratt and Raines with these lapses.
It says there were 279 purchases that totaled $322,743 that didn't have documentation that they were for a valid university purpose, or didn't have a receipt, or lacked both a receipt and proof they were for a university purpose.
And, the audit says, $290,096 of those purchases without proper documentation were not allowed under Fayetteville State University policy.
Conflict of interest with side businesses
The university paid private businesses operated by four former employees — Cook, Osley-Pratt, former Digital Content Coordinator Ashley Moore, and former Copywriting Assistant Alta Braxton — a total of $165,570 while they also paid employees of the university, the audit says. Moore and Braxton were temporary employees, Fayetteville State told CityView.
This put them in a potential conflict of interest, the audit says. According to university policy, the audit says, a conflict of interest occurs when an employee's performance of her job duties could be influenced by her financial interests.
The audit says:
- Cook's business was paid $5,600.
- Osley-Pratt's business was paid $48,733.
- Moore's business was paid $54,287.
- Braxton's business was paid $56,950.
The audit doesn't name the businesses that received the money.
What is Fayetteville State doing about this?
In his letter to the state auditor, Chancellor Allison said Fayetteville State is taking steps to address the problems the auditor's staff uncovered.
"The University agrees with the findings and recommendations presented and remains fiercely committed to conducting business in an ethical manner to retain public confidence," he wrote.
Allison said two of the three permanent employees cited in the audit no longer work there. These are Cook and Osley-Pratt.
He listed other steps including hiring new people to oversee purchasing and contracts, and more monitoring of payments, among other efforts.
"The University has conducted a campus-wide retraining on purchasing and travel card policies; conducted meetings with division units on Office of Human Resources processes which included a review of the University's Conflict of Interest policy and procedures; and improved our overall internal controls," Allison wrote. "In collaboration with the UNC System, the plan moving forward includes a continuous culture of training and educating its employees and making ongoing process improvements."
This report has been updated to add additional comments that Fayetteville State University issued on May 30.
Senior reporter Paul Woolverton can be reached at 910-261-4710 and pwoolverton@cityviewnc.com.
This story was made possible by contributions to CityView News Fund, a 501c3 charitable organization committed to an informed democracy.
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