UVM to investigate improper contract

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(Host) A top administrator at the University of Vermont has resigned. And an investigation is under way into how a five million dollar consulting contract was agreed to – without proper approval.

J. Michael Gower was the university’s chief financial officer. His resigned on Thursday just after the contract problems were disclosed.

University President Dan Fogel says he can’t discuss personnel issues. But he says UVM policies were not followed in awarding the consulting contract.

(Fogel) "The issue is that this has been essential and mission-critical work, but the proper internal authorizations were not obtained, nor were the costs disclosed.”

(Host) Huron Consulting Group was hired in 2006 to help the university with a series of problems related to a new, computer-based financial accounting system.

The computer program was designed to keep track of grants and contracts.

Shortcomings in the university’s old accounting system were slowing payment of some of those grants. That was a problem because they make up a quarter of UVM’s $500 million budget.

Huron Consulting has helped work out many bugs in the new system. It has reported regularly to the trustees’ audit committee about its progress.

But neither the board, nor Fogel, was told that the bill for Huron’s work was adding up. Fogel says the cost is more than $5 million.

Any contracts worth more than $250,000 have to be approved by Fogel and trustees.

Fogel says an independent company will be hired to find out what went wrong in the university’s internal controls – and to find out if there are other problems.

(Fogel) “We are determined to identify any other problems that exist and to address and resolve them. And there is no indication at all to date, pending further investigation and an external review, that any of these problems extend beyond noncompliance with internal procedures.”

(Host) Gower was responsible for finances at the university. He did not respond to requests for an interview. But he says in a statement that he accepts responsibility for – quote — “escalating costs, implementation obstacles, and communication problems” with the data management system.

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