Copyright © 2017 Albuquerque Journal
It turns out some Lobo basketball fans with the best seats in the house were getting an even better deal than you thought.
The University of New Mexico on Monday announced it had recently discovered payment for use of 24 suites in the Pit had gone uncollected, some since the 2010-11 basketball season, to the tune of $432,000. The discovery came amid a pair of state investigations into spending and fundraising for the UNM athletics department, and thanks in part, the school says, to recent records requests from journalists.
It is just the latest in a string of recent revelations of questionable financial dealings with Lobo athletics that prompted interim President Chaouki Abdallah on Monday to appoint Chris Vallejos, associate vice president for institutional support services, to temporarily oversee finances in the athletics department.
“In continuing to review the business practices in UNM Athletics, and to assure that it is operating efficiently and responsibly, I am taking immediate action to institute stronger internal controls and more thorough oversight of the department’s financial operations,” Abdallah wrote in a prepared statement.
Interim athletic director Janice Ruggiero on Monday said that through a combination of “end of the (fiscal) year accounting,” inquiries by state auditors investigating the department and because of recent Inspection of Public records Act request from journalists, the uncollected money was discovered.
Ruggiero asked that Lobo fans hearing of the latest issues “give us a chance to fix it. … I can’t go back, but I can go forward.”
She said that two suite holders have already paid $44,000, bringing the deficit for Pit suites to $388,000 with one other suite holder having told UNM it will pay this week. Others are in the process of being contacted by the Lobo Club, the independent fundraising arm of Lobo athletics that handles the marketing, sales and collections for the Pit suites.
The money then is transferred annually to UNM athletics, and goes toward paying off the 2009-2010 Pit renovation.
Ruggiero said it is her understanding many of the donors owing money have not even been invoiced for use of those suites.
“Several of them (contacted recently have) said give us a bill and we’ll pay you,” Ruggiero said.
Lobo Club Executive Director Kole McKamey cites turnover for “some inconsistencies in suite records and payment processes dating back to 2010.”
He said recent changes have been made regarding documenting suites, and the Lobo Club will work with UNM on any other possible improvements to the billing and record keeping process.
No names of suite holders owing money have been released by UNM. McKamey suggested filing an IPRA request, which the Journal has already done and is awaiting a response.
The Lobo Club falls under the umbrella of the UNM Foundation, which maintains it is independent of the university and not subject to open records laws that apply to state entities.
The cost of suites ranged from $40,000 to $45,000 per season, but has been reduced to $30,000 to $40,000 or less this season. Last year, about half of the 40 suites were rented out.
A news conference held Monday discussing the main-campus intervention and oversight and the revelation of uncollected Pit suite dues was held in the Lobo Club Board Room of the Colleen J. Maloof Administration Building for Lobo athletics. Nobody from the Lobo Club was on hand to answer questions about how or why this happened.
Asked if the Lobo Club independently came forward with the information about the suites or if Ruggiero was made aware of the issue because of the IPRA requests, she said, “I really can’t answer that.”
Vallejos said discipline could come if any employee knowingly allowed boosters to continue using the suites knowing they owed money, though it is also unclear how much of the uncollected money has to do with deals with donors that were never written into contracts or otherwise loosely comped or given to donors who were supporting the department in other ways.
“That’s a culture shift and that’s what I’m here to do, to help invoke change for the better to have our athletic department be in the black and have fiscal accountability, transparency,” Vallejos said. “I think that’s how we get even better.”
UNM athletics finished with a deficit in eight of the past 10 fiscal years. It is unclear how many of those years would not have finished in the red had all of the suite money been collected.
At one point, Vallejos said a possible solution could be to have the Lobo Club continue selling the suites while the UNM ticket office was tasked with collecting.
Asked whether the UNM Foundation would object to relinquishing suite payment collection duties to the UNM Ticketing Office, UNM Foundation spokesman Mario Lara said in an email the organization “is looking forward to working with UNM to streamline processes.”
McKamey said suite holders with outstanding balances are not allowed to maintain suites.
“As of January 2016, when I took over as Executive Director, we have attempted to collect past delinquent accounts,” McKamey said in an email. “Invoices are sent out in January/February and then again in April. After that, phone calls are made to follow up.”
A special audit from the New Mexico Office of the State Auditor and an investigation by the state Attorney General’s Office were launched in May after news reports of a 2015 Scotland golf junket revealed public money was used to pay for boosters to attend the trip.
After 11 years on the job, athletic director Paul Krebs retired June 30 (he announced his retirement June 1 and was on vacation for the final 30 days).
In recent weeks, the Journal has asked about uncollected suite sale revenue in the Pit.
Abdallah’s statement added: “To the extent that our efforts to rectify discrepancies have resulted in embarrassment to our fans, we sincerely apologize.”
Journal staff writer Jessica Dyer contributed to this report.
Interim President Chaouki Abdallah’s full statement can be read here:
“In continuing to review the businesses practices in UNM Athletics, and to assure that it is operating efficiently and responsibly, I am taking immediate action to institute stronger internal controls and more thorough oversight of the department’s financial operations.
Effective today, a top administrator for main campus operations – Chris Vallejos, associate vice president for Institutional Support Services – will lead efforts to evaluate and improve the financial management of the Athletics department. He will work in partnership with Janice Ruggiero, acting director of Intercollegiate Athletics, who has been reviewing and updating the department’s operations since taking the position last month.
Part of this process includes reexamining all records of suites purchased for the Lobo men’s and women’s basketball seasons since the suites became available. This process has revealed inconsistencies in contracts, invoices and payments for certain suites, and we are in the process of contacting current and former suite holders to rectify our records and accounts. We will seek to collect on any past due amounts.
UNM Athletics has already updated its management of suite purchases and collections for this past season, which has resulted in more accurate accounting and more timely payments.
UNM is committed to transparency and fiduciary responsibility, and we take responsibility for the confusion that may have resulted from inconsistent business practices. To the extent that our efforts to rectify discrepancies have resulted in embarrassment to our fans, we sincerely apologize. Efforts are underway to make sure that this situation won’t be repeated.
UNM is cooperating fully and assisting with an audit of the Athletic Department’s finances currently underway by the State Auditor’s Office, and will continue to review and update our business practices going forward.
– Chaouki Abdallah, Interim UNM President”