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MU Releases Internal Investigation of Southwest Research Center

MU administrators are working with federal law enforcement officials

June 6th, 2016

Story Contact: Mary Jo Banken, 573-882-6212, BankenM@missouri.edu

COLUMBIA, Mo. ­— Thanks to the efforts of administrators at MU’s Southwest Research Center in Mt. Vernon, Mo., the university was able to detect suspected fraudulent activity by one of its employees. MU administrators then began working cooperatively with federal and state law enforcement officials to conduct a full investigation, and today, University of Missouri Interim Chancellor Hank Foley released the results of an internal audit of the Southwest Research Center, which found evidence that the now former employee had misappropriated nearly $750,000 during a 15-year period.

The employee was terminated and entered a guilty plea in Greene County, likely facing a federal prison sentence.

“The University of Missouri has a fiduciary obligation to be responsible stewards of the resources under our control, and we take any unethical action – criminal or otherwise – with the utmost seriousness,” Foley said. “While we have terminated the individual responsible and filed an insurance claim, we will continue to work with authorities to ensure that the individual is held accountable.”

The improprieties were discovered when a newly hired supervisor became concerned about the employee’s financial transactions and a full investigation was launched. After initially detecting several suspicious financial transactions at the center, including payments to fictitious vendors, personal purchases from vendors, unauthorized cash withdrawals and potential timesheet manipulation, an audit was launched by the University of Missouri Division of Internal Audit and Consulting Services. The results of that audit were provided to federal and state authorities.

The university’s insurance carrier is expected to reimburse approximately $650,000.

Both campus and system administration have developed a comprehensive plan to address the issues that kept the financial improprieties from being detected initially within the College of Agriculture, Food and Natural Resources. New policies and procedures have been instituted, including:

  • Obtaining pre-approvals for all CAFNR procurement orders.
  • Completing mandatory fiscal training and annual financial certifications for all CAFNR supervisors.
  • Requiring quarterly financial reviews for all CAFNR divisions and departments.
  • Performing on-site visits to inspect financial processes and transactions for all remote locations.

For additional information, please see audit, which includes Action Plan Summary:
https://uminfopoint.umsystem.edu/media/fa/audit/cafnr-investigation-audit-final-report.pdf

The university audit also determined that several other factors also helped contribute to the fraud, included limited staffing in a remote location, lack of an onsite superintendent for an extended period of time, weak internal controls and a failure to adhere to university policies. The former employee’s immediate supervisors have since retired from the university.

“We are very grateful for the efforts and assistance of the U.S. Attorney’s Office, Missouri State Highway Patrol and the FBI in the criminal investigation,” Foley said. “We will continue to strengthen and reinforce all of our financial systems and oversight processes that we instituted as a result of this investigation.”

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