Holding state college fund-raisers to account Oversight lacking: Bowie State, Salisbury State troubles point to need for centralized control.

August 24, 1998

REGENTS for the University System of Maryland have been slow to react to problems at two of its campus fund-raising foundations. Indeed, the regents and Chancellor Donald K. Langenberg ignored critical audit reports until embarrassing stories about these troubles appeared in The Sun.

Merely dousing the firestorm that articles by Sun reporters Tom Pelton and Ivan Penn produced isn't enough. Oversight of campus fund-raising at Bowie State and Salisbury State has been sorely lacking. Most troubling have been the ineffective responses by the two institutions' presidents.

Bowie State's fund-raising foundation regularly has been hit by critical audits during the tenure of President Nathaniel Pollard Jr. Nothing ever seems to come of this criticism, though. Indeed, his response to the last batch of audit exceptions was to turn the foundation over to a college official with a history of embezzlement, failure to pay taxes, bad debts, bounced checks and a defaulted student loan.

Thanks to The Sun articles, that official was forced to quit. When the UM regents finally sent in someone to check the books, the auditor discovered $12,000 spent on Redskins football tickets, a boat cruise, questionable consulting contracts and $41,000 in new furniture. To cover expenses, the foundation dipped into funds meant for student scholarships and campus activities.

The situation at Salisbury State underscores the lack of centralized control of campus fund-raisers. On that Eastern Shore campus, Robert M. Gearheart Jr. had been given a free hand to solicit money for the school. So he bent the rules and used university credit cards to buy boat equipment and get cash for wagering; funneled non-bid contracts to a company where his son works; and forced employees to work for his private consulting company on state time.

When auditors finally started nosing around, he ordered employees to shred documents.

Even worse, when Salisbury State's new president, William C. Merwin, was apprised of the situation last year, he worked out a deal so donors wouldn't become upset, giving Mr. Gearheart a $36,000 consulting contract through this November -- even though he had taken a full-time job as a university fund-raiser in South Carolina.

All this is deeply troubling. These private foundations have become important fund-raising vehicles for the university system as it attempts to raise $700 million over the next five years. That money is essential to make up for the sad decline in state funding for these campuses, which now has dipped below 30 percent of the system's budget.

And yet UM's foundations aren't subject to normal government controls. The groups don't seem to get much oversight from the university system's central office, either. Campus presidents are supposed to be supervising these fund-raising units, but some have fallen down on the job.

It is time to rein-in affiliated fund-raising groups and fold them into the giant University of Maryland Foundation. That's the only way the regents can be assured of stronger accountability. The regents also must require more frequent audits and more public airing of foundation activities.

Additionally, state legislators should consider setting up their own oversight system to make sure these foundations are not misspending money donated to improve state college campuses.

As the University System of Maryland expands its fund-raising endeavors, the need for more and better accountability becomes imperative. The regents should act quickly to safeguard the integrity of its money-raising appendages.

Pub Date: 8/24/98

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