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Higher Ed Board Committee reviews audit of Mike Bellotti separation agreement, U of O athletics department procedures

Contact: Di Saunders, Office: 503-725-5714; Cell: 971-219-6869

PORTLAND, April 29, 2010 – The State Board of Higher Education’s Governance and Policy Committee (the “Committee”) met today to, among other items, review the preliminary results of the Oregon University System’s internal audit of the $2.3 million separation agreement for Mike Bellotti, the athletic director, and former football coach, for the University of Oregon, whose last official day in this position is April 30. Earlier this month, the Board Committee charged the OUS Internal Audit Division to conduct an audit into the circumstances surrounding the agreement. When Bellotti and UO president Richard Lariviere agreed that Bellotti would leave his position at the UO, it was discovered that Bellotti had been working as athletic director without a written contract defining the terms and length of his appointment and any provisions for early separation.

Chancellor of the OUS, George Pernsteiner, and Board president Paul Kelly asked that the scope of the audit focus on three objectives: (1) determine if Oregon laws, rules, and Board policies were followed in the employment agreement between the university and Mr. Bellotti, in the process of development the separation agreement, and in the separation agreement itself; (2) determine whether tuition revenue or state appropriations were or will be used to pay obligations under Mr. Bellotti’s separation agreement; and, (3) determine if the UO is employing best practices in athletic employment and separation agreements within public higher education nationally.

Based on its preliminary work, which will lead up to a final audit report to be presented to the Board in May, the Internal Audit Division presented the following conclusions to the Committee:

  • Instances were noted by the auditors where the Board and UO rules, policies, and procedures were unclear and in some circumstances not followed, resulting in a lack of internal controls at UO over athletics employment contracting practices;
  • The audit confirmed that $3 million in private donor funds, specifically designated for the Athletic Department, is available and will be used to fund the separation payments as outlined in the agreement, and that no state funds or tuition revenues were used to cover the separation package; and
  • The audit noted several opportunities to improve the control structure and implement best practices related to employment contracts in the UO’s athletics department.

Board president Kelly said, “We’re satisfied that the scope of this audit fully examined employment related processes and contracts at the University of Oregon athletic department, and that the university is fully prepared to implement the recommendations of the audit. In fact, it’s important to note that some of the recommendations have already been put into practice with the hiring of the new basketball coach.” Kelly added, “The Board believes it’s critical to ensure that all campuses are thorough and transparent in their contracting practices and procedures, and strive for best practices to ensure integrity in all of their operations.”

Based on the audit conclusions, the OUS Internal Audit Division made multiple, far-reaching recommendations for the Board, the OUS, and the UO specifically. These included: updating the Board policy structure to enhance accountability over athletics and employment contracting; re-evaluating and documenting university-level responsibilities over athletics; and ensuring the timely completeness of formally agreed upon terms and conditions for university employees with multiple-year employment agreements.

Patricia Snopkowski, executive director of the OUS Internal Audit Division, noted during the meeting that a final report on the audit, including written responses to the reports and its recommendations, will be issued to the Board at its May meeting. She also said that Internal Audit will continue to work with UO and system administrators—assisting the new UO senior associate athletic director for finance and administration—to obtain a better understanding of the finances and overall employee costs associated with the UO Athletic Department. 

After the audit presentation, the Board’s Governance and Policy Committee voted to formally direct the Chancellor’s Office to immediately begin action on Internal Audit’s recommendations to thoroughly evaluate relevant system policies and procedures and to present proposed revisions to the Board at the full Board meeting on May 14th.

Oregon University System comprises seven distinguished public universities, reaching more than one million people each year through on-campus classes, statewide public services and lifelong learning. The Oregon State Board of Higher Education, the statutory governing board of OUS, is composed of twelve members appointed by the Governor and confirmed by the Oregon State Senate. For additional information, go to www.ous.edu

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