Friday, October 21, 2016

Regents call for audit of every flight since Leath came to Iowa State

Cirrus SR22, N176CF, Iowa State University:

The Iowa Board of Regents has called for an audit of each individual flight offered by Iowa State University's Flight Service since the university's current president came to campus in 2012.

The regents voted unanimously Thursday to direct the board's internal auditors to expand their current review of travel and equipment policies into a broader independent audit. The review was sparked by questions over the use of university-owned aircraft by ISU President Steven Leath, who has a pilot's license.

The audit also will consider whether having ISU continue to operate the flight service is the best use of university, state and donor resources. The university has been offering the service since the 1950s.

Since ISU officially confirmed last month that Leath had damaged the university's Cirrus SR22 in a hard landing, further questions have been raised about Leath's use of that plane, his passenger use of the university's larger King Air and the 2014 purchase of both planes.

“In light of recent events regarding Iowa State, and frankly I’m extremely disappointed,” Bruce Rastetter, president of the board, said at the start of Thursday's meeting in Cedar Falls. "We at the Board of Regents take the use of university resources very seriously. In more than just a few instances, the decision to use the plane appears to be questionable at best.”

Rastetter described Leath as “a successful president” but said the issue surrounding Leath's use of university aircraft “has taken focus away from us being able to move our public universities forward. We need to return to devoting all of our time and resources to making the public universities the best they can be.”

Todd Stewart, the board’s chief auditor, said internal audits typically require two or three months. The recent review, however, was completed as quickly as possible — requiring auditors at all three universities to be diverted from other projects.

The review found that the 2014 purchase of the King Air for $2.875 million did not violate regent policies at the time that required all equipment purchases of $1 million or more to receive board approval.

The plane was purchased by the ISU Foundation and gifted to the university. It is the only such gifting arrangement at any of the foundations serving Iowa’s three public universities.

The university's purchase of the Cirrus SR22 for $470,000 was under the threshold for requiring regent approval, but Leath's frequent use of the aircraft has raised questions whether the university had bought it specifically for him.

The initial review did not include any recommendations concerning the purchase of the planes. Rastetter told reporters after the meeting that board staff will bring additional recommendations as part of the broader audit process.

Leath has pledged to no longer pilot any state-owned aircraft and to curtail his passenger use of such planes. He said the majority of his travel has been on commercial airlines, but the use of ISU's planes helped him travel to meet with donors and supporters of the university.

“Clearly there are areas in which I and Iowa State can improve, and I want you to know that I am pledging to do that,” Leath told the board during his scheduled report. “We will improve and we will do better.”

Leath also pledged to be “wholly supportive” in the upcoming comprehensive audit.

Late Thursday night, in a posting on ISU’s website, Leath offered the following:

“I am committed to adhering to all university and Board of Regents policies. I welcomed the Board of Regents initial review of travel policies and the use of state equipment.

“As the Board’s review shows, my use of university aircraft and the university’s purchases of the King Air and Cirrus did not violate policy; however, there are clearly things I can improve with regard to my use of the planes and there are things we can do as a university to clarify our policies and improve record-keeping and billing practices,” he said.

“To that end, I fully support the Board’s decision to expand their review and perform a comprehensive audit of all flights by all users of ISU Flight Service since I started at Iowa State in 2012.”

Regent Subhash Sahai reprimanded Leath after the report for having described Rastetter as “my boss” in various interviews about whether Leath notified the regents about the $15,000 in damage to the plane during his hard landing last year in Bloomington, Ill.

"I think it’s important for all the presidents to realize that your bosses are not just one board member,” Sahai said. “All nine of us sitting up here are your bosses.”

Regent Larry McKibben, who chairs the board’s Audit/Compliance and Investment Committee, said the full audit would provide a “deep dive” into the data to provide more openness and transparency.

McKibben said the board is likely to require a special session in which to discuss the full audit results when completed.

The initial review audit released Thursday looked at the three universities’ policies on private aircraft, university-owned or chartered aircraft, approval of exception and off-campus use of university equipment. Auditors also reviewed the presidents’ travel records, the 2014 purchase of two aircraft at ISU, insurance policies for university-owned aircraft and Leath’s reimbursements to ISU for use of the planes.

“While these trips did not conflict with university policy,” the report states concerning Leath’s reimbursements, “we recommend more complete documentation of business purposes and recommend a greater distinction between business versus personal travel in the future.”

ISU officials say Leath was not required to reimburse the university for the damage, just as he would not be liable if he damaged a university car while on a business trip.

“The President and Mrs. Leath decided to make a donation equal to the costs because they wanted to move forward in a positive way — not because they were obligated to reimburse the university or Foundation,” Megan Landolt, Leath’s assistant for communications, said via email last week. “Just because a donation is provided to the ISU Foundation does not mean that it has to be taken as a charitable deduction on one’s taxes.”

Leath told reporters after the meeting that it was never his intention to claim a deduction for the donation.

The report released Thursday further recommends that each president's travel should be approved at the vice presidential level and be reviewed either quarterly or semiannually.

Original article can be found here:

1 comment:

  1. Attorney-At-Law at Neiderbach LawFriday, October 21, 2016 at 1:28:00 AM EDT

    An "audit" by Regents staff is not acceptable. We need an independent special audit by the State Auditor. Tell your legislators you want them to request a Special Audit of the use of Iowa State University airplanes.