UK employee spent over $250,000 on 84 iPhones, other purchases, audit finds
A University of Kentucky employee spent $256,000 on the unauthorized purchase of 84 iPhones, other high-tech equipment, travel expenses and other personal items over the course of three years, an internal audit found.
Stephanie Carpenter, a former administrative support official in the College of Education, made the purchases on university procards. Carpenter and Derita Graves, a member of the college’s Educational Leadership department who also accrued nearly $1,000 in personal expenditures, are both no longer with the university, UK said in a release Friday. The audit findings have been turned over to law enforcement.
“Their conduct would not have been possible, however, were it not for demonstrably poor business practices in the (College of Education) that allowed this activity to proceed, without suspect for nearly three years — essentially (Carpenter’s) entire tenure,” a portion of the audit stated.
To work to prevent future abuse of its procard system, university officials will look to make a wide degree of changes including temporarily moving the College of Education’s business office under direct oversight of the university provost’s office, which manages all of the colleges. Training for all of the university’s business officers will be re-evaluated and expanded.
According to the university, both employees were able to make the purchases because within the college, pre-approval from a supervisor was not required for making procard purchases, as university policy dictates. Approval documents for the purchases were often forged and not monitored.
Additionally, the college’s primary business officer “failed to enact proper business internal control procedures despite a number of previous reviews that recommended operational reforms,” UK said in the release.
In total, Carpenter spent nearly $243,000 on 84 iPhones, 55 MacBooks and 22 iPads. According to the audit, Carpenter sought to resell some of the technology purchases for personal gain. The first unauthorized purchase was made in November 2017.
Carpenter also spent almost $10,000 on travel expenses including airfare, car rentals and tolls, plus $555 on Amazon items shipped to her house, as well as $3,300 on “hard drives, web cams, Chromebooks, a Dell laptop, Garmin watches, cameras, wireless speakers, etc,” the audit stated.
In early March, College of Education administrators asked Carpenter about inappropriate activity on her procard and planned a meeting with her and a department chair. The day of the meeting, Carpenter reported that her desktop computer and relevant files were “missing,” according to a timeline in the audit.
The university’s Internal Audit office began investigating the same day — March 11. Two days later, Carpenter was suspended, then on March 17, she officially resigned.
In the course of the investigation, the internal audit office found that some of the purchases were in some ways linked to the college’s Educational Leadership department. That department’s administrative support person was Graves — who also happened to be trained by Carpenter. The audit moved to investigate Graves.
Over three years, Graves made $972 in unauthorized procard purchases, half of which was spent on a flight last year. The rest of the purchases were books, jewelry, supplements and a Bose speaker. Graves was terminated in late July.
Both Carpenter and Graves “were keenly aware that oversight was inadequate, and they exploited this vulnerability to their advantage,” the audit stated.
Purchases “with no apparent business purpose” were shipped to the pair’s homes and both Carpenter’s and Graves’ home addresses were linked to their departments’ Amazon accounts.
According to the audit, the college had a purchase approval process in place, “but it was not consistently followed.” Further, department heads in the college were not able review “basic reports and monitor expenditures” and had to fully rely on Carpenter and Graves to explain any issues in their accounts. The audit also presents samples of cut-and-pasted signatures of Carpenter’s approving supervisors.
“The University of Kentucky is a nearly $5 billion enterprise. We are the largest employer in the region by far and one of the largest in the state,” said Provost David W. Blackwell in a statement announcing the findings of the audit. “We must demonstrate to each other and all those we serve that we will be responsible stewards of the resources we generate and those with which we are entrusted. In those rare circumstances when that trust is violated, we must move swiftly — and communicate transparently — about where problems occurred and how we are moving to correct them. That is what has happened here. It is what will — and must — occur as we move forward as Kentucky’s university.”
The College of Education’s fiscal management will be re-structured and a new assistant dean for finance and administration will be hired and will report to the provost’s office, UK said.
Blackwell will work with Julian Vasquez Heilig, the college’s dean, on the financial transition. According to the university, Vasquez Heilig was not the dean when much of the unauthorized purchases were made, but has “pledged his commitment to the reorganization.”
Business officers within each of the college’s unit will be further trained to insure that processes will continue to be followed closely.
The larger university’s administrative units will also be implementing additional monitoring steps in business functions, said Eric Monday, the executive vice president for finance and administration. Monday will also be meeting with business officers in each college, department and unit on a monthly basis to greater insure compliance with the university’s regulations.
“When someone does not perform to the standards we expect and demand, there will be consequences. Further, we will move in a transparent and comprehensive fashion to ensure that the behavior is not repeated,” Monday said in a statement. “The vast majority of people in our community are committed to practices consistent with our policies and procedures. We cannot allow the actions of a few people to tarnish the work and commitment of an entire community.”
This story was originally published November 13, 2020 at 3:28 PM.