UH task group report: Procedures not always followed

Published On: Nov 15 2012 10:25:03 AM HST   Updated On: Nov 16 2012 06:58:59 AM HST
KAHULUI, Hawaii -

According to an Operational and Financial Controls Advisory Task Group's report Thursday on how to prevent the future loss of University of Hawaii funds, procedures were in place to determine the legitimacy of outside contracts, but those procedures were not always followed.

Click here for the full report.

The independent task force was created by the university after the so-called "Wonder Blunder" in which the university lost $200,000 to a bogus company, Epic Entertainment, that purported to represent R&B icon Stevie Wonder.

Task force member Larry Rodriguez also stated it remains unknown who authorized the printing and selling of tickets for the Aug. 18 concert that was to benefit the UH Athletics Department.

Rodriguez, an independent business consultant, said he asked Stan Sheriff Arena manager Rich Sheriff if it was he who had authorized the ticket printing, but Sheriff replied, 'It must of have come from higher ups.'

"That's a little baffling, but there's nothing where someone takes responsibility for authorizing those transactions to occur," added Rodriguez .

Rodriguez also pointed out that the UH Athletics Department did not ensure a deposit for the Stan Sheriff Center, as was required in the contract with concert promoter Bob Peyton, of Bob Peyton Entertainment Corporation.

Moreover, the report said a lack of cancellation insurance, also a requirement of the contract with Peyton, resulted in the loss of the $200,000 that had been generated through ticket sales for the bogus concert.

When UH officials discovered they had been scammed, the university was forced to expend all of the funds that had been generated through advance ticket sales to would-be concert goers.

The Advisory Task Group's report was presented to the UH Board of Regents at the University of Hawaii's Maui College in Kahului at 8 a.m. Thursday.

Regents  conducted another meeting at 9 a.m. where they accepted the Advisory Task Group's report.  The report was made public soon afterward.

Regents were also expected to discuss the future of UH President MRC Greenwood behind closed doors.

Greenwood has become embroiled in the concert fiasco that prompted an investigation by the state Senate after Jim Donovan was relieved from his position as athletics director.

Donovan was exonerated of any wrongdoing after it was found he had no direct role in the wiring of funds to Epic Entertainment.

Donovan was then offered, and accepted, a public relations position within the office of the UH Manoa Chancellor Tom Apple at an annual salary of more than $211,000 for the next three years.

Sheriff was also suspended from his duties as arena manager, but was allowed to resume his role after he was cleared of any direct involvement in the promotional concert.

However, the report by the independent panel placed blame for the concert fiasco back on Donovan, Sheriff, Associate Athletic Director Carl Clapp, and Assistant Athletic Director for Business Tiffany Kuraoka.

"There was a series of, we describe it (as) multiple situations, where policies and practices either were not followed, or there weren't policies and practices for the people to exactly perform their duties," said Rodriguez.

Still, University of Hawaii Professional Assembly Executive Director JN Musto believes ultimate responsibility for the concert fiasco rests with Greenwood, even if the UH president had no role in organizing or authorizing the event.

"I'm sure that (Greenwood) may have not been aware of any of this going on," Musto told reporters. "However, to be the chief executive officer of an organization, as Harry Truman said, 'Means the buck stops here.'" 

Meanwhile, it was revealed this week that Greenwood's attorney wrote a letter to the Board of Regents that demanded a $2 million payout to Greenwood, partly because of undue pressure from Gov. Neil Abercrombie to reinstate Donovan as athletics director.  Her attorney said the UH president was not able to function independently, was severely defamed and her contract was breached.

The letter from Greenwood's attorney, Jerry Hiatt, was later withdrawn.  Hiatt said the UH president has been doing her job to protect the independence of the university, and she expects to keep doing that for the rest of her contract, which extends through 2015.

Gov. Abercrombie's press secretary said the governor did not place any undue pressure on President Greenwood.  Instead, Abercrombie only offered his advice.


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