An audit of the University of Colorado’s fundraising arm will expose embarrassing recordkeeping practices but no scandal or “smoking gun,” sources said Tuesday.
The audit, ordered almost a year ago after accusations of improper spending, will criticize the CU Foundation for irresponsible spending on travel and inadequate expense reporting, sources familiar with the audit said. It did not uncover anything illegal, they said.
But others, also speaking on condition of anonymity, said CU officials were trying to downplay the significance of the audit before it is made public Nov. 8.
Only a handful of people have seen parts of the audit as it has gone back and forth among the state auditor’s office, CU and the foundation. The audit will include details that the foundation and the university are “not all proud of” but will not be scandalous, one source said. Another said “there’s no smoking gun of sorts.”
One of the main problems identified in the audit is that the foundation, a private entity that raised $83 million for CU last fiscal year, does not have to follow state rules regarding travel and alcohol expenditures, a source said.
CU President Hank Brown said Tuesday that he is working on a written agreement with the foundation that will require it to follow state fiscal rules in reimbursing university employees for expenses.
The university does not pay for employees to travel first class and requires documentation of meal expenses. One of Brown’s new policies says CU will not use state money to buy alcohol and can use private money for alcohol only when the donor designated it for that purpose.
“Every penny that comes to the university ought to follow state fiscal rules. Period,” Brown said. “It’s not that somebody did something illegal. It’s that we can do a lot better.”
Brown didn’t link CU’s new agreement with the foundation directly to the pending audit, saying the agreement is part of his effort to make the university “as clean as possible in every aspect.” He said he has not seen a copy of the foundation audit, but he is aware of the documents auditors requested from CU.
“It certainly confirmed that instinct or feeling” that there have been problems with expense reporting, Brown said.
CU Foundation president Michael Byram said the new agreement makes it the university’s responsibility to reimburse an employee, not the foundation’s.
Byram refused to talk about the pending audit specifically.
“Any time any group or organization goes through scrutiny or evaluation, you’re going to find things that could be improved,” he said. “It’s healthy.”
Regents would not discuss the audit.
“I haven’t seen a copy with my own eyes, and I don’t think it’s widely distributed,” Cindy Carlisle said.
Former CU president Betsy Hoffman requested the foundation audit and an audit of the athletic department in November.
State Auditor Joanne Hill said she expects to finish the athletic department audit in December.
“These are complex audits, and we wanted to make sure that we had everything together and that the university and the foundation had an opportunity to fully respond,” Hill said.
Staff writer Jennifer Brown can be reached at 303-820-1593 or jenbrown@denverpost.com.
Staff writer Jim Hughes contributed to this report.
