Originally published September 17, 2009 at 04:39p.m., updated September 17, 2009 at 05:52p.m.
Read more on the management review of financial accounts of Kansas University and the relationship between the school and various affiliated corporations.
Topeka An audit of financial dealings at Kansas University and its affiliated groups found no major problems, but did question an $18,000 per-year contract between KU Athletic Director Lew Perkins and a private company that does business with Kansas Athletics Inc.
The review determined university leaders should evaluate “for appropriateness” the contract between Perkins and Ceebrook Creative Concepts, an Overland Park advertising and marketing company.
Ceebrook is a vendor that also does business with Kansas Athletics Inc., the corporation that operates KU’s varsity athletic programs.
KU officials said the contract will be considered at the November meeting of the Kansas Athletics board of directors to determine whether it complies with KU and Kansas Athletics policies.
The audit said that Perkins stated his business relationship with the company had nothing to do with its business with Kansas Athletics. The report noted that Perkins listed the company on his state-required Statement of Substantial Interest.
Jim Marchiony, associate athletic director, said Perkins is paid $18,000 per year by Ceebrook for consultations he has with the company’s president, Jim Badzin, on issues such as leadership, strategic planning, motivation and community service.
Marchiony said Ceebrook is a vendor that bids on work supplying promotional items, such as license plate frames or calendars.
Overall, the Kansas Board of Regents members said they were pleased by the audit of KU and another one that was released Thursday on Pittsburg State University.
“Both of these institutions did very well,” Regent Chairwoman Jill Docking said after the board met in closed session to discuss the reports.
The audit, conducted by BKD, LLP, covered the final six years of Robert Hemenway’s tenure as chancellor of KU. Hemenway stepped down earlier this summer. The auditors reviewed management of all non-public accounts administered or controlled by Hemenway, and the dealings between the university and KU-affiliated groups, such as Kansas Athletics, the KU Alumni Association and KU Endowment Association. The audit included KU Medical Center, too.
“Based upon our work and interviews we conducted, the Chancellor has been successful in instilling a sense of responsibility and accountability throughout the organization,” the report stated. “BKD procedures resulted in no identification of inappropriate disbursements of unrestricted funds by the University, including KUMC, or affiliated corporations of the University and KUMC.”
The audit followed one released in June of Kansas State University, which raised numerous questions about how employees in the athletic department there were paid and detailed conflicts of interest in the operation of a business incubator.
The audits of KU, Kansas State and Pittsburg State University were ordered by the regents following the retirements of Hemenway, Jon Wefald as president of Kansas State, and Tom Bryant as Pittsburg State’s president.
But the findings of the KSU review, which was the first one completed, prompted Gov. Mark Parkinson to write the regents, calling for a broader policy of audits of regents institutions to maintain the public’s trust.
The regents complied, saying they will institute a more regular schedule of outside reviews.
The KU report was a far cry from the KSU report, which cited numerous questionable financial dealings.
Other findings in the KU report said conflict of interest policies should be reviewed and extended to a new KU-affiliated business incubator facility, called Breidenthal. KU officials said they intend to do just that. And it said the Student Union Corporation of KU Med Center should find a second person to reconcile bank statements.