Copyright © 2016 Albuquerque Journal
Two University of New Mexico employees have been disciplined and a third could face a one-day suspension in the wake of a May audit report detailing the potential embezzlement of $63,000 by a former member of the Lobo men’s basketball staff.
That former member, Cody Hopkins, had been on leave from December through the end of March, when his contract expired.
Lobos head coach Craig Neal is not among those disciplined or facing possible future discipline, said athletic director Paul Krebs.
The audit itself, meanwhile, cost the university more to investigate than it alleges was fraudulently taken.
On Tuesday, through the main campus’ media relations director, UNM reiterated in a statement to the Journal that the audit “found no indication that any employee other than former Basketball Operations Director, Cody Hopkins, was involved in the (purchasing card) misuse that resulted in over $60,000 in unreconciled cash withdrawals and expenditures.”
The Bernalillo County District Attorney’s Office confirmed the case has been referred to its office for review for possible criminal prosecution.
UNM says Hopkins is the only person believed to have potentially committed a crime, but current employees still face discipline based on their roles in either policy oversights or other negligence that may have been a contributing factor in at least five months of potential fraud.
Krebs told the Journal last week “there will be some discipline” for existing staff members, but declined to name them or provide details of the discipline.
On Tuesday, the university released the names of two individuals who have been disciplined and said discipline is pending in another case. According to the UNM statement:
• A letter of admonition was issued to Bruce Cherrin, chief procurement officer for the university’s purchasing department. A letter of admonition is for employees in “a position of authority” and means their department “has demonstrated deficiencies in adhering to policy,” according to a UNM spokesperson.
• A letter of reprimand was issued to Kaley Espindola, a human resources administrator in the athletics department. A letter of reprimand is a written warning of not adhering to policies, the spokesperson said.
• A letter of “notice of contemplated action of a one-day suspension” has been issued to a current, unnamed athletic department employee. Because the employee has the right to appeal the possible suspension, UNM did not disclose that name.
• Also, a letter of expectation was issued to Michael Marcelli, the athletics department’s chief financial officer hired after the alleged fraud began. Marcelli is responsible for overseeing or implementing many of the corrective actions suggested in last month’s audit report.
Krebs on Tuesday said he would not comment further on the matter beyond what he told the Journal last week.
“Craig is not involved in any suspension or discipline,” Krebs wrote in a text message.
The audit report stated “detailed reviews” of Hopkins’ “P-card” activity was being conducted by an employee in the athletics business office “who did not know sufficient detail about men’s basketball activities and events,” which led to suspicious activity not being flagged long before the amount of potential fraud grew north of $60,000.
Per an audit report recommendation, Neal “should, at a minimum, complete a ‘high level’ review of monthly P-card activity before signing off on the P-card reconciliation.”
Neal and Marcelli, according to the audit report, have agreed to a corrective action plan that states: “The head coach will receive monthly briefings from the athletics business office on the expenditures made by staff. The coach will be kept apprised of the timeliness and accuracy of the submissions by P-Card users within the program.”
The recent discipline to university employees was not mentioned by Krebs on May 6, when he acknowledged several systemic failures allowed the unaccounted funds to grow to a large number over several months. Asked whether he was the subject of any discipline as a result of the case, Krebs said no.
“But in the end, I oversee the athletic department and it’s my responsibility to make sure we follow process and procedures,” Krebs said. “I have to insist that my staff and those involved are accountable and take responsibility in these situations.”
Hopkins and his Albuquerque-based attorney Paul Kennedy have declined comment to the Journal since the audit was being investigated. Kennedy again declined comment for this story.
The audit findings, presented to a Board of Regents committee last month, concluded Hopkins fraudulently used the team’s “P-card” – similar to a credit card – for personal use over at least five months, including $63,418 in “unallowable” activity. The vast majority of that included cash withdrawals from ATMs without documentation showing how the money was used.
The basketball team’s “P-card” is primarily used for travel purposes for the team during the season and for coaching staff in season and during offseason recruiting.
Hopkins was named as the target of the audit in December. The university says he was on leave from mid-December until March 31, when the yearly contract for his $76,500 job with the team expired.
According to an email obtained through an Inspection of Public Records request by the Journal, UNM Internal Audit director Manu Patel submitted an invoice to the state’s Risk Management Division as part of an insurance claim showing the university’s “cost of this investigation for reimbursement.”
The invoice states eight employees worked 1,354 hours in some capacity on the audit at a total cost of $64,960.77.