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Audit: UAMS budget adopted before layoffs had incorrect info

November 16, 2018

FORT SMITH, Ark. (AP) — A budget adopted by the University of Arkansas for Medical Sciences before nearly 260 employees were laid off included revenue projections unsupported by calculations or health care trends, according to a recent audit.

The academic medical center’s internal audit report was made public Thursday, the Arkansas Democrat-Gazette reported.

UAMS officials had incorrect financial information throughout the last fiscal year, which auditors believe is because of a financial “misstatement” regarding the school’s Myeloma Institute, said UA System Chief Audit Executive Jacob Flournoy. There’s a pending audit of the institute.

There’s a gap of more than $20 million between audited finances and information reported during fiscal year 2018, according to a risk assessment report. The budget used a 6.7 percent increase in the revenue growth rate for the fiscal year 2018, instead of the historically reported 2 to 3 percent growth rate.

“The strategic issue with that is it’s difficult to make good decisions when the numbers aren’t correct,” Flournoy said.

The audit findings come after UAMS announced hundreds of job cuts earlier this year as a way to trim a budget deficit that was almost twice what officials originally expected.

UAMS Chancellor Dr. Cam Patterson said that a lack of documentation for the unsupported revenue projections didn’t directly result in the layoffs. But Patterson acknowledged that it likely accounts “in part for why in the middle of the year the process toward meeting the budget wasn’t as on point as it had been predicted to be.”

“I think looking back, whether the numbers were supported or not, the revenue and expenses were what they were,” Patterson said. “I think the work action would have happened regardless.”

Auditors have recommended that UAMS start creating a detailed manual for the budget development process by Feb. 29.

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Information from: Arkansas Democrat-Gazette, http://www.arkansasonline.com

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