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Thursday, March 14, 2019

Florida House panel recommends stricter scrutiny in wake of UCF financial scandal

Posted By on Thu, Mar 14, 2019 at 2:28 PM

The Florida House’s top investigative committee adopted a series of recommendations on Thursday that would reform spending practices in the state university system after finding University of Central Florida officials ignored state rules when misspending $85 million in state funds.

Seeking to address a systematic problem, the House Public Integrity and Ethics Committee wants more training for university trustees and is recommending changes to practices and rules of the Board of Governors, which oversees the state university system.

“The personalities and relationships overtook checks and balances and controls and I think that was part of the problem that led to the issue here today,” Committee Chair Tom Leek, R-Ormond Beach, said.

The House panel also called on the BOG to further investigate complaints of “waste, fraud and mismanagement” at universities. The committee now is turning its focus to the University of South Florida, which last year self-reported misusing $6.4 million on construction project.

“An investigation in the size and scope of what had to take place with UCF took all of our personnel time and bandwidth, so now with the end of this chapter we can turn to some of the other things we need to look at,” Leek said.

For now, the only set of recommendations pushed by the committee is in relation to UCF’s problems, which stem from the misuse of $38 million in leftover operating money, which cannot be spent on construction, to build Trevor Colbourn Hall.

The misappropriation of funds quickly snowballed, leading to the resignation of university leaders, including President Dale Whittaker. Whittaker, who had served as UCF’s provost and executive vice president before becoming president July 1, said he would step down in part to repair the rift between the school and the Legislature.

Thad Seymour, the university’s interim president, promised to use the financial scandal as an opportunity to do better. “I promise we will make things right and we will make you proud,” he said.

Committee members also heard from Lee Kernek, who played a key role in the panel's probe of UCF.

Kernek, the university’s associate vice president for facilities and safety, said she is one of four UCF employees who were targeted to be fired after she reported what she considered wrongdoing.

“I was targeted because I did report things that I knew were suspected or wrong, not because I was responsible for the misspending or for failing to report the misspending of funds,” Kernek told the panel Thursday.

When asked if he would reinstate Kernek, Seymour sidestepped the question, saying only that a decision would be made “in the near future.”

State Rep. Cord Byrd, R-Neptune Beach, said he wants the House to delve into how state lawmakers can better help whistleblowers come forward.

“Just want to let anyone out there know that the Public Integrity & Ethics Committee is open for business and we will help in any way we can,” he said.

Kernek testified on Thursday that she had to learn how to do her job while on the job, because neither the university nor the Board of Governors provided training manuals about spending rules.

She also asked House investigators to scrutinize the external investigation UCF conducted last September through the Atlanta-based Bryan Cave Leighton Paisner law firm, which she said protected university leaders.

“The House report needs to call into question the Bryan Cave report, which white-washed the roles of the leadership who made the decisions and covered up their actions,” Kernek said.

The committee’s recommendations, which do not address the law firm’s investigation, are focused on ways to prevent systematic problems in the university system, according to Leek. The suggestions are “not unnecessarily harsh or inappropriately lenient,” he added.

If the Legislature does not approve those recommendations this year, Leek said he believes the public exposure to the issue will likely push the Board of Governors and other universities' boards of trustees to take corrective action on their own.

“I want to close the book on this unfortunate chapter of UCF’s history and I look forward to turning our attention to improving the state university system for students and for the staff,” Leek said.

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