President silent about forensic audit
BY THE FLORIDA COURIER STAFF
DAYTONA BEACH – Bethune-Cookman University presented its highest honor, the Dr. Mary McLeod Bethune Leadership Award, to Florida Gov. Rick Scott Wednesday night despite a public outcry that prompted the school’s president to churn out a response to “allay all fears” about the university’s future on the eve of the event.
The morning of the Legacy Awards Gala held at Daytona Beach’s Ocean Center, B-CU President Edison O. Jackson addressed the award flap and other issues relating to the university in a long letter to stakeholders.
‘Shadows of doubt’
“Over the last 60 days, various media outlets have circulated news that cast “shadows of doubt” on the administration’s ability to effectively manage and lead the University. To address these allegations, I decided to write you directly in an effort to dispel these rumors and allay all fears, so that you can celebrate all we have accomplished over the last 111 years,” Jackson wrote.
Much of Jackson’s letter referred to a scathing six-page letter dated Sept. 15 by Johnny L. McCray, Jr., a Pompano Beach-based attorney and longtime member of the Bethune-Cookman University Board of Trustees.
In his letter, McCray issued an ultimatum demanding that his fellow board members bring in forensic auditors to probe the school’s finances for fraud and fiscal mismanagement – or he would file lawsuits against individual board members and request a state and federal criminal investigation.
In an Oct. 7 article, the Florida Courier highlighted McCray’s letter. McCray, a 1978 B-CU graduate, also had concerns about a $72 million residence hall project and the purchase of a facility in Deltona.
‘The truth is’
Jackson stated in his response, “All of these concerns were discussed, debated, voted and ratified by the B-CU Board of Trustees, under the leadership of immediate past Chairman Rev. Dr. John Harrington in the early part of 2015.
“Regarding the residence Hall project, in Spring 2015, thirty-nine trustees voted 36-3 to approve moving forward with the residence hall project, citing inadequate living conditions, aging infrastructure, and increasing enrollment as critical reasons to support the development of quality living spaces for our students. The truth is, more than 1,200 new beds and more than 300,000 sq. ft. will be added to our campus,” Jackson continued.
“Trustee McCray’s letter alleges that $5.6 million of the University’s resources were spent and lost on the project. The truth is $5.6 million was part of a service agreement for soft costs. The truth is the developer, TG Quantum, under that same agreement, consented to reimburse the University for all soft costs.
“The truth is $2 million of the $5.6 million was reimbursed at the financial closing of Phase I of the project; and the remaining $3.6 million will be reimbursed at the financial closing of Phase II. The truth is the residence hall project over the forty-year term will generate more than $240 million in profit, of which the Board has directed the University to build a much needed student union.”
In a response to money spent on a Deltona campus, the president stated that the university wanted to expand its influence and brand into West Volusia County as a way to diversity its student population.
“With his letter, Trustee McCray indicated the Board was unaware of the purchase; however, the truth is the purchase was approved at the October 2014 Board of Trustee Meeting and official purchase of the property took place on October 30, 2014.” Jackson said the property was purchased for $1.5 million.
“After fiscal year (FY) 2013-14, the property generated a $120 thousand profit and in FY 2014-15 generated a $180 thousand profit from long-term lease agreements,” he added.
No direct response
Jackson’s statement did not directly respond to McCray’s demand for a forensic audit. Instead, he pointed to the university hiring an accounting firm to review its procedures.
“When questions pertaining to the fiscal management of the residence hall project developed, the truth is the Board engaged Ernst and Young, LLP (E&Y) for the purpose of conducting agreed upon procedures,” he wrote. “…When questions surrounding fiscal mismanagement under former CFO (sic) arose, the truth is, once again, the Board engaged E&Y, and they reported finding no unusual items supporting a claim of fraudulent activity.”
A forensic audit is an intensive, specialized review of financial records that attempts to find the source of transactions with an eye toward revealing and prosecuting fraud, financial malfeasance and economic crimes. It is different from the regular yearly audit that many non-profit educational institutions generally undergo.
Jackson didn’t indicate that B-CU’s E&Y review of its procedures included a forensic audit.
Opposition to Scott
The Daytona Beach-based HBCU, which is celebrating its homecoming this week, had also caught flak for weeks from supporters over the award decision, citing what they allege is Scott’s long record of anti-Black initiatives – including cuts to HBCU funding – as reasons he wasn’t qualified to receive the award.
Vocal opposition against Scott receiving the award named after B-CU’s founder including a statewide letter-writing campaign, an online petition that garnered about 800 signatures, and an outcry of injustice lodged by the state and Volusia County-Daytona Beach leaders of the NAACP.
“There has been much excitement around the selection of Governor Rick Scott as the 2015 Mary McLeod Bethune Leadership Award recipient. As stated by the Chairman of the B-CU Board of Trustees, Dr. Joe Petrock, B-CU is a non-partisan private small research driven university,” Jackson explained.
“As such, it is essential for us to engage public and private entities to support the University’s mission. Our government relations activities have resulted in more than $15 million dollars appropriated to support student success over the last three (3) years.”
According to the school, the 2014 Legacy Gala raised $2.5 million, including a $1 million donation from the B-CU student body as a consequence of a referendum approved by the students to add a $30 endowment fee to their fees.
In addition to Scott, other awardees Wednesday night included Daytona Beach-area hospital administrator Jeff Feasel; Florida Blue executive Tony Jenkins; B-CU graduate and published author Lucille O’Neal, the mother of NBA All-Star Shaquille O’Neal; and Dr. Gerald Lord, a former United Methodist Church leader.
Jackson concluded his letter by saying, “It is my hope that these truths will evaporate the fog that dims the light shining bright at B-CU! Together, we will celebrate Homecoming 2015 for what it is, a one hundred eleven year testament that faith in God still works. I have learned from our students, the power of having a handle on situations.”