State Audit Reveals Nearly $700,000 in Unallowable Purchases by Fayetteville State University Employees

The North Carolina Office of the State Auditor has recently completed an investigation into historically Black Fayetteville State University and substantiated allegations regarding the making of unallowable purchases by former employees via university-issued purchasing cards (P-cards) and travel cards (T-cards).

According to the audit report, former employees from Fayetteville State University’s Office of Strategic Communication (OSC) made purchases totaling $692,239 using P-cards and T-cards that were unallowable and/or did not include the proper documentation. The purchases were made during the time period of January 1, 2022 through August 31, 2023.

Over the review period, three OSC employees, the former associate vice chancellor, the former director of digital strategy, and the former assistant vice chancellor for marketing and creative services, spent $619,124 with their university-issued P-cards. The investigators found that 93 percent of these purchases ($575,123) were unallowable per Fayetteville State University policy. Some of the unapproved purchases included payments to individuals, consultants, and employees; invoice payments; items such as IT equipment, travel, and gifts; and over $5,000 in expenses.

The investigation also found the former associate vice chancellor and former director of digital strategy made unallowable purchases with their T-cards. These two employees spent a combined $118,619 in T-card purchases over the audit review period, 71 percent ($84,469) of which were unallowable according to university policies. These unallowable purchases included $73,068 in expenses unrelated to travel, including payments to consultants and CashApp transactions. The investigation uncovered numerous non-business-related travel expenses as well, including first class air travel tickets; ride share expenses to and from a spa; and $299 for a roundtrip airline ticket for the former director of digital strategy’s son to accompany her to Orlando, Florida.

During the review period, 44 percent of P-card and T-card purchases made by the aforementioned employees were not accompanied by a receipt and/or the university’s required documentation. Furthermore, the investigation revealed the university had paid $165,570 to businesses owned by four former OSC employees, potentially creating a conflict of interest.

The Office of the State Auditor recommended that Fayetteville State University’s administration should determine if they need to seek reimbursement from the cardholders for any previous unallowable purchases, as well as review their compliance with company expense policies. The report also contains a footnote stating the findings have been referred to the State Bureau of Investigation to determine if there is sufficient evidence to pursue criminal charges.

In a letter response to Office of the State Auditor, Fayetteville State University Chancellor Darrell T. Allison acknowledged all findings from the investigation and agreed to follow through on the report’s recommendations. According to Chancellor Allison, “the plan moving forward includes a continuous culture of training and educating its employees and making ongoing process improvements.”

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