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Auditor expands probe into UNM athletics fundraising

Copyright © 2017 Albuquerque Journal

It’s not just about a 2015 golf junket to Scotland any more.

The Office of the State Auditor informed the University of New Mexico on Wednesday it will conduct a larger, broad scale “special audit” of the fundraising and spending habits of the UNM athletic department.

State Auditor Tim Keller

State Auditor Tim Keller

“The Office of the State Auditor has received information raising concerns related to athletic fundraising activities and expenses of the University of New Mexico and its component units,” State Auditor Tim Keller wrote in a letter addressed to UNM Interim President Chaouki Abdallah.

The letter goes on to say that it has designated “UNM and its component units” for a special audit or examination in order to evaluate the concerns.

The Lobo Club is a nonprofit organization that is the fundraising arm for UNM athletics.

The auditor’s office says it must have “unrestricted access to all documents pertaining to the issue as well as access to UNM staff that may have knowledge and information about the areas of concern.”

The letter also says it expects UNM to “bear any costs” of the audit pursuant to the state’s “Audit Act” overseeing governmental agencies.

The athletic department operates annually on about a $33 million budget. It has posted deficits in seven of the past nine fiscal years, projects that to be eight of 10 at the end of this month, and owes the main campus an estimated $4.4 million.

The letter was copied to all regents and two members of the UNM Foundation, which is the overarching fundraising arm of the university. The Foundation did not respond Thursday to an email from the Journal seeking comment.

Abdallah, however, did.

“As a public institution, The University of New Mexico welcomes the oversight of state offices charged with protecting taxpayers’ interests,” Abdallah said. “We will cooperate fully with any and all reviews by the State Auditor’s office.”

The special audit is in addition to New Mexico Attorney General Hector Balderas last week announcing his office is opening an investigation directly relating to the June 2015 Scotland golf trip and whether Paul Krebs, UNM’s athletic director, violated any laws in his decision to spend public money to take boosters along.

Last week, Krebs admitted that UNM spent about $25,000 in public money to pay for portions of the trip – which included six nights and rounds of golf on five historic courses – for three boosters.

He said the trip was successful in strengthening relationships with donors for fundraising purposes.

Initially, Krebs said UNM spent about $39,000 for his trip, the golfing package of former men’s basketball coach Craig Neal and of Lobo Club executive director Kole McKamey and $13,625 in penalties for not having the contractually agreed upon number of golfers (24).

That was the extent of the spending of UNM money, Krebs told the Journal in late April. And an April 13 Inspection of Public Records Act request from the Journal seeking documentation of all spending by UNM for the trip netted heavily redacted records that failed to reveal any spending on the private boosters.

Last week, Krebs admitted UNM also footed the bill to pay for three boosters. He said it was a mistake he overlooked initially, and that a donation of $25,000 to the UNM Foundation had recently been made to reimburse the school for the boosters’ portion of the trip.

The UNM Foundation won’t comment on private donors, contending it is an independent nonprofit and not subject to the same state transparency and public records laws as UNM.

“We feel it is important to do a deep dive and get to the bottom of questions that have been raised regarding expenses, compensation and perks for senior staff in the athletics department and donors,” Keller wrote in a statement to the Journal on Thursday. “In light of the conflicting responses we’ve seen to the allegations, the public deserves some sunshine on what’s going on at our state’s flagship sports program.”

He later posted on Twitter, “Additional concerns, whistle-blowing lead to broader scope 4 Special Audit on Lobo athletics. Call 1-866-OSA-FRAUD if you have specific info”.

Last week, the auditor’s office announced it had received an anonymous tip on a fraud hotline related to the Scotland trip. A spokesman confirmed to the Journal on Thursday the special audit is a broader scale investigation.

Calls for a deeper look into the finances of the department aren’t new.

During the 2015-16 season, a UNM internal audit accused a former men’s basketball staffer, Cody Hopkins, of embezzling about $63,000 from the team. The case was forwarded a year ago to the district attorney’s office, but no charges have been filed. He since has notified UNM of counter claims related to his case, in which he has steadfastly denied stealing money.

Krebs, who is the longest tenured athletic director in the Mountain West after 11 years on the job, is paid an annual base salary and compensation package of $419,000. He is under contract through 2019.

While rumors swirl about his possible retirement, he has told the Journal only that if he retires, it will be on his timetable.

Abdallah has not said whether Krebs will be disciplined for the recent revelations about the 2015 Scotland golf trip.