Campus Corner

MU audit exposes a $7,600 strip-club charge

Updated: 2012-10-24T05:53:15Z

By TEREZ A. PAYLOR

The Kansas City Star

— A recent audit of the University of Missouri’s athletic department finances uncovered dozens of questionable personal charges made to university credit cards, including two totaling more than $7,600 at a Las Vegas strip club.

Department spokesman Chad Moller said director of video operations Michael Schumacher has since repaid a total of $7,605.50 for charges related to a visit to Olympic Garden, a Las Vegas strip club, on May 5, 2011. According to documents obtained by The Associated Press, one of the strip-club charges included a $2,000 tip on top of a $4,400 bill.

“He was attending a national conference with people who do his job in athletics,” Moller said of Schumacher. “He was the only representative there for Missouri, and when Mike got back from his trip, he paid everything back.”

Moller said disciplinary action was taken against Schumacher, who is still employed by the university, but did not divulge what that was.

“He showed very poor judgment and is very remorseful,” Moller said. “He immediately made amends. I know he’s grateful to have a chance to make up for it.”

Noting that all of the personal charges flagged by the routine audit were repaid by the employees who made them, Moller said the school has since taken a number of steps to curtail unauthorized spending. The audit was performed in August by Pricewaterhouse Coopers.

“The vast majority of (flagged charges) were personal, small and minor in nature,” Moller said. “Every charge that was flagged that was personal was reimbursed to the university, so there’s no issue there … It’s just the fact that you’re not supposed to make any purchase with a university card, whether it’s a stick of gum or a movie ticket, even if you do pay it back.”

The Associated Press also reported that the audit flagged expenses from January 2011, when former men’s basketball director of operations Jeff Daniels billed the school for two charges of $1,489.54 apiece at the Vince Young Steakhouse in Austin, Texas.

Moller said those charges were for a team dinner — “something that happens on every trip by every athletic team in the country,” he noted — and estimated some 30 players, coaches and staff members were in attendance. Those charges were flagged because together they exceeded the $2,500 limit for single transactions.

“That’s why he split it into two charges,” Moller said. “However, you’re not supposed to do that.”

According to The Associated Press, most of the remaining 85 flagged purchases involved much smaller amounts, from Federal Express invoices to three-ring notebooks. There was also a $77.83 purchase of flowers for athletic director Mike Alden.

In response to the audit, Moller said, the department has already taken steps to remind employees about what constitutes improper purchases. Through emails, meetings and notices, he said, the department has tried to hammer home the fact that personal charges — repaid or not, and as small as they might be — are not allowed.

Moller said the department has also reduced the number of credit cards held by athletic department employees from 120 to 88.

“In the end, we’ll reduce the number of cards out there by about 40 percent,” he said. “We’re not quite then yet, but it is a process.”

Moller pointed out that the flagged charges represent a small percentage of the total number of charges made by athletic department employees during the audit period. While there’s room for improvement, he said, department leaders such as Alden are comfortable with the findings.

“Not to make light of what was not done properly, but overall, when you consider there were 14,000 charges made over that time period, you have to feel good things that things are being done right,” Moller said. “But when you find mistakes like we did, you correct them, tighten procedures and be mindful of everything you can do better. An audit is a healthy process to go through.”

The audit also suggested the school tighten up its procedures for giving away free tickets and accounting for unused tickets to campus sporting events.

The audit summary and documents related to the improper charges obtained by The Associated Press revealed that while Alden and his compliance office do oversee ticket giveaways, an independent review is optimal if the school wants to protect itself from a scandal similar to the one that unfolded in 2010 at the University of Kansas. In that situation, seven KU athletics officials were convicted for profiting from the unlawful sale of Jayhawks football and basketball season tickets to ticket brokers.

“They (the auditors) felt like there needed to be more independent verification of ticket ledgers, just outside of the ticket office,” Moller said.

In response, Moller said the school’s business office will now conduct a review after every sports season in conjunction with the MU ticket office.

“This was being done before,” Moller said, “but now it’s (a matter of) making it more consistent to help with accountability.”

The Associated Press contributed to this report. To reach Terez A. Paylor, call 816-234-4489 or send email to tpaylor@kcstar.com. Follow him at Twitter.com/TerezPaylor.

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