State audit critical of former CFCC president’s spending
WILMINGTON, NC (WWAY) — An investigative audit of Cape Fear Community College by the Office of the State Auditor is critical of former CFCC President Ted Spring’s spending, who auditors say spent more that $35,000 in discretionary funds for personal expenses.
The Office of the State Auditor conducted the audit to investigate complaints about improper travel reimbursements paid to Spring and allegations about violations of college and state policies related to the performance of his duties as president, the report released today says. Spring resigned in January, but he has sued CFCC’s Board of Trustees to get his job back claiming they improperly forced him out.
The report includes three key findings:
- Spring gave raises and promotions without board approval
- Spring used vending funds for personal expenditures
- Spring was reimbursed for mileage above actual out-of-pocket expenditures.
Auditors found Spring spent at least $35,993 in vending funds for personal expenditures, which “reduced the amount of money available to benefit students.” According to the report, “(a) vending fund is a type of institutional fund the College can use at its discretion, within appropriate limits, for the College’s mission.” Examples of what the Office of the State Auditor deemed “inappropriate fund expenditures” include:
- Vehicle leases for the former President and the athletic department ($21,549)
- Hired a public relations firm in response to negative media coverage concerning the expenses of the former President ($7,500)
- Memberships to unauthorized organizations and clubs ($2,925)
- Travel for spouse of former President ($1,461)
- Convention registration for spouse of former President ($500)
- Meals for spouse of former President ($348)
- Travel upgrades for former President ($430)
- Meals for former President above per diem and/or inappropriate ($845)
- Mileage reimbursement paid to former President for travel from home to College-sponsored events ($435)
The report identified six senior administrators who Spring either promoted, gave a raise or hired in 2013 without the Board of Trustees’ approval, which the report said “undermined the ultimate authority of the Board of Trustees, hinder the Board’s ability to control and monitor expenditures.” According to the report the raises totaled $48,036, which the report said had to come from other areas of focus at the college and flew in the face of the governor’s directive in March 2013 to limit raises to help cover a state budget shortfall. According to the report, Spring failed to follow policies on communicating with trustees regarding senior administrators, but said it “was due to his lack of knowledge and incorrect interpretations of College procedures.” The investigation found Spring did follow proper procedures for raises and new hires in 2014.
Investigators also found CFCC overpaid Spring about $2,900 for expenses related to his use of a leased vehicle. The investigation found he personally spent about $900 on gas for the car, but was reimbursed $3,863 for mileage from July 2012 to December 2014. According to the report, the college’s former Senior VP for Business and Institutional Services said she thought reimbursement using the IRS standard rate of 56 cents per mile instead of reimbursing for gas receipts was the appropriate method.
In the end the report recommends CFCC’s Board of Trustees should provide thorough orientation and training on policies and duties and adopt policies and procedures for the appopriate use of vending funds. It also suggests the college should adopt a policy that appropriately reimburses out-of-pocket expenses for a leased vehicle and that the school should consult an attorney to see if it should pursue legal action to recover misappropriated funds.
Spring’s attorney Gary Shipman called the audit more like a report from TMZ than an independent report.
“This is not the first time that the State Auditor’s office has issued a report or engaged in conduct that looks more politically correct than factually correct,” Shipman said in a statement. “There were no amounts ever paid or reimbursed to Dr. Spring that he was not otherwise entitled to receive. Any suggestions that Dr. Spring “misappropriated” funds is blatantly false, scandalous, and downright ignorant.”
Click here for the full response to State Auditor’s report
In a response to the report, which they received in June, CFCC Trustees earlier this month said they concurred with the Office of the State Auditor’s findings, except that they believe “the total expenditures that were either misappropriated or made deceptively are estimated to be $87,891.” The Board of Trustees also said in the response it is working to follow the recommendations made within the state report.
Spring’s lawsuit against the CFCC Board of Trustees moved to federal court this spring. His attorney amended the suit with more claims in May.
WWAY has learned Spring and his wife are in the process of selling their Wilmington home.
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