Monday, December 12, 2016

Auditor: Leath’s uses of Iowa State University aircraft 'enter shades of gray’ ● Leath said Iowa State University looking to sell the Cirrus SR22 he damaged last year

ISU Office of Internal Audit - ISU Flight Service and University Owned Aircraft by Anonymous TNZCj8 on Scribd

Board of regents audit report:

Iowa State University, Cirrus SR22, N176CF:

Steven Leath, president of Iowa State University, and Bruce Rastetter, president of the Iowa Board of Regents, answer questions Monday concerning Leath's use of university aircraft.

The Iowa State University Foundation spent nearly $600,000 upgrading a $2.88 million airplane it purchased two years ago and gifted to the university, according to new information released by the university Monday, Oct. 24, 2016.

The Iowa Board of Regents' chief auditor announced Monday that some uses of aircraft by the president of Iowa State University "enter shades of gray" as to whether they violate regent and university policy.

The board president, however, said that ISU President Steve Leath has admitted that mistakes were made, has reimbursed the university for any questionable flights and deserves the board's continued backing.

"President Leath's acknowledgment that he takes full responsibility for the issues identified in the audit and that he should have been more transparent about the use of the plane reassures this board — and I hope all Iowans — that the president deserves our continued trust and support," Bruce Rastetter, president of the board, said Monday during a meeting in Ankeny.

Since ISU officially confirmed in September that Leath had damaged the university's Cirrus SR22 in a hard landing, additional 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.

The regents met Monday to discuss their internal auditors' examination of four years' worth of flights taken by Leath and other ISU administrators. The board also met in closed session to evaluate Leath.

“As you are all aware, we do report whenever we determine whether there is a clear violation of university or board policy," Todd Stewart, chief audit executive, told the board Monday. "Many times these are clear-cut, black-and-white determinations. In still other cases, they enter shades of gray. President Leath’s use of university aircraft in at least a few instances falls within this category, while most were entirely business related.”

The regents voted unanimously in October to direct the board's internal auditors to expand their earlier review of travel and equipment policies into a broader independent audit.

Stewart said the report presented Monday did not include any assessment of whether the flights in question violated state law, but the auditors did include several policy recommendations for the board to consider moving forward.

Officials with the Office of the State Auditor are waiting on the results of the regents' internal audit before deciding whether to move forward with any additional audit of their own, Stewart said.

In open session, the regents offered nothing but praise for Leath's public admission of having made mistakes and his willingness to learn from them.

"If we can make something that we regret and you regret be a better thing for the university in the future — glory hallelujah! Because I'll be right there supporting it," said Regent Larry McKibben. "And the fact that you have said what you said today really impresses me. That you are that kind of a leader that will acknowledge (what) all of us ought to do when we have these kinds of circumstances arise."

Regent Subash Sahai, who has been publicly critical of Leath in the past, was absent from Monday's meeting due to illness.

Cloudy skies ahead for ISU Flight Service

Although the regents offered Leath their continued support Monday, the future for ISU Flight Service is uncertain. The board has called for a comprehensive evaluation of whether the service continues to offer the best use of state-owned resources.

"There's no doubt that Flight Services has benefited the university in the past," Leath told reporters after the meeting. "The question actually is: Is there an alternative delivery service that makes sense at this time?" … There is no doubt that in the world we live in — especially in athletics, who are the primary users for recruiting and other things — private aircraft play a hugely important role in large universities."

Regent auditors described Flight Service as a fee-for-service unit that does not depend on external funding to operate. The budget for the service has more than doubled during Leath's time at the university — from $394,000 in fiscal year 2012 to $880,000 in fiscal year 2016.

Leath, who has a pilot's license, said in September that he no longer will fly any state-owned craft. He added Monday that, without regular time in a cockpit as part of his job, he probably will not have enough time in the air to keep his skill level adequate and his certification valid.

With only two pilots left certified to fly the Cirrus, Leath said the university will be looking to sell the aircraft. The plane, which had a price tag of nearly $500,000, was paid for by funds that ISU Foundation officials have said were under the university president's discretion.

Leath's office and the Greater University Fund accounted for 28 percent of the miles flown by ISU Flight Service from January 2012 to October 2016, according to the report. The rest of the miles flown came through the Athletics Department (43 percent), academics (11 percent), the ISU Foundation (8 percent), administration (6 percent) and Flight Service (4 percent).

Questionable flights

Auditors found that Leath had flown on a university-owned aircraft 181 times since 2012 — 72 times on the Cirrus SR22, 65 times on the university’s King Air 350 and 44 times on the King Air 200, which the university owned before buying the 350.

Leath said he recently reimbursed the university for more than $19,000 to cover the costs of several of the flights flagged by the auditors. The check was made out to the ISU Foundation, he said, so that the money eventually could be distributed to the appropriate university accounts.

"I recognize that I used the university planes more frequently than was absolutely necessary and should have been more transparent about my use," he said. "Moving forward, I will be more thoughtful, and I will work to ensure that any time the university planes are used, it is in the very best interest of Iowa State."

Leath said he reimbursed the university for a March 2014 flight in which he picked up and dropped off his brother in Elmira, N.Y., en route to the NCAA basketball tournament. Flight Service had scheduled a refueling stop in Elmira in advance of the trip, but the auditors found the return stop in Elmira would not have been necessary other than to drop off passengers.

“Even though there was no additional cost incurred by the university, I understand why inviting my brother and his partner on the plane could be perceived as inappropriate," he said. "As a result, I have paid for the amount that Flight Service would have attributed to my brother and his partner."

Leath said he is planning to reimburse the university for the multiple training flights ISU's insurance carrier required for his certification on the Cirrus. Although Leath had a pilot's license when he became ISU president, his training on the Cirrus took place during his time at the Ames-based university.

“I see why my use of the Cirrus for training may be viewed as a personal benefit,” he said. “I have since asked Flight Service for a bill for the Cirrus and paid that bill.”

Leath said he also reimbursed the university for two of the seven trips to the Mayo Clinic in Rochester, Minn., for medical visits.

“At the time, I believed it was appropriate because I had to get back to Ames for important university commitments,” Leath said. “Even though this was within policy, I told (Regent Executive Director Bob Donley) that I would feel more comfortable if I paid for those flights myself, which I have done.”

The auditors said that the regents do not have a policy concerning an annual physical for university presidents or whether any associated travel expenses would be covered by the university.

Read more here:

Iowa State University President Steven Leath apologized Monday for using school airplanes for personal flight training and out-of-state medical appointments, announcing he has paid back costs of dozens of flights and would be more careful going forward.

Leath's remorse and decision to reimburse the university more than $19,000 for 55 questionable flights appeared to save his job leading Iowa's largest public university. Leath also pledged to sell the university's Cirrus SR-22 airplane, which he purchased for $498,000 with private donations in 2014 and used extensively for flight training and some trips to his North Carolina home.

The Board of Regents, which governs the school, met for 90 minutes in closed session to consider whether to retain Leath. Afterward, Board President Bruce Rastetter said he was disappointed and that "we can and must do better." But he commended Leath for taking responsibility, saying his corrective actions "eliminate any questions about the personal benefit that he may have received by using the university aircraft."

"The president deserves our continued trust and support," Rastetter said.

An audit released Monday found the university and its private foundation spent millions buying and flying planes during Leath's five-year tenure.

Leath, a pilot, announced that he paid back the university for 52 local flights related to the training, proficiency and certification required for him to be covered under the university's aviation insurance policy. He said he thought it would benefit the university to have him be able to fly himself, but can now see how it would be considered a "personal benefit."

He said he also refunded costs for two trips to Rochester, Minnesota, for medical appointments at Mayo Clinic. He said he took a university plane to save time, but the audit questioned whether the flights were appropriate and said the board should seek a refund if not.

Leath said he also paid back some costs of a 2014 trip in which a plane twice landed in Horseheads, New York, to pick up and drop off his brother and sister-in-law on the way to and from an Iowa State NCAA tournament basketball game. Leath said the stops didn't add costs, but it was inappropriate to invite his brother along. The audit found the plane didn't need to stop to refuel there on the way home, as Leath initially claimed.

Leath apologized for problems detailed in the audit, which found the annual budget of the university's flight services department shot up 125 percent to $880,000 during his tenure.

"I recognized that I used the university planes more frequently than was absolutely necessary, and should have been more transparent about some of the use," Leath said, vowing to be a "better, more conscientious president."

Leath previously said the university was considering shutting down the flight services department, which employs three pilots. In addition to buying the Cirrus for $498,000, the university's foundation spent $3.4 million to acquire and upgrade a larger King Air in 2014 used for athletic recruiting and fundraising.

The audit revealed the university spent $35,000 for Leath to take charter flights on private planes, including two flights home from business trips when commercial flights were cancelled.

The board's chief auditor, Todd Stewart, said some of Leath's flights fall into a gray area where it's not clear whether they would be allowed by university policy. He said the university should approve a policy spelling out clearly when it is appropriate to use a university plane or private charter.

Before Monday, Leath had already reimbursed $17,500 for damage resulting from a hard landing in the Cirrus, and $4,600 for four trips to North Carolina that had major personal components to them. Leath has argued that those trips were justified because he performed some university meetings during each. But the audit found that one meeting was cancelled for an August trip to North Carolina.

The board ordered the audit in October after The Associated Press revealed that Leath made the hard landing in Illinois while flying home from a North Carolina vacation. Leath didn't inform the university's risk management office about the landing as required by policy, and that office wasn't involved in the decision to pay for repairs rather than file an insurance claim, Stewart said.


Timeline of Events in Iowa State President's Planes Scandal

 The governing board of Iowa's public universities is expected to decide Monday whether to take action against Iowa State University's president for his use of school planes. The Board of Regents will hold a special meeting in which it will get the summary of an audit of Steven Leath's use of the planes during his five years as president. It is then expected to go into closed session to review Leath's job performance.

Here is a timeline of key events:

— Jan. 1, 2012: Leath, a former University of North Carolina System vice president, starts as president of Iowa State University. A pilot and flight enthusiast, he makes quick use of a university fleet that consists of a 1977 King Air and a small 1978 four-seat Piper plane.

— 2012-mid-2014: Leath flies the Piper around the state to official meetings and travels in the King Air flown by the university's pilots. On five occasions, the university also pays to rent a newer, faster 2004 Cirrus SR-22 for Leath to fly to business meetings.

— March 2014: The university's King Air stops in Horseheads, New York, and picks up Leath's brother and sister-in-law on the way to watch Iowa State compete in the NCAA basketball tournament at Madison Square Garden. The plane drops them off afterward. Leath later contends university pilots made the decision to stop there both times to refuel.

— Spring 2014: The university's foundation uses donations to buy a 2002 King Air for $2.8 million and then spends $600,000 installing upgrades to its safety, electronics and entertainment systems.

— Summer 2014: Leath uses his discretion with unrestricted private donations to buy a 2011 Cirrus SR-22 for $498,000. As part of the deal, the university trades in the Piper for $28,000.

— August 2014: Leath damages a private plane while making a hard landing. This comes to light months later when he has to disclose it as a loss on a university aviation insurance application.

— October 2014 through January 2015: Leath continues to train on the Cirrus and earns an instrument rating, which allows him to fly by himself in all conditions. His flight instructor is Jim Kurtenbach, who offers his services free of charge.

— November 2014: The university announces that Kurtenbach, a former Republican lawmaker and longtime university professor and administrator, has been named its chief information officer, cancelling a nationwide search that had been planned.

— July 2015: Leath damages both wings on the university's Cirrus in a hard landing at the airport in Bloomington, Illinois. He and his wife had flown to their mountain home in Jefferson, North Carolina, for an 11-day vacation, and were returning to Ames at the time. The university covers the $14,000 in damage and sends the King Air to pick up the couple. Leath does not tell the Iowa Board of Regents about the incident.

— August 2015: The Board of Regents votes to extend Leath's contract through June 2020. The contract gives Leath $1,500 per month for a car allowance but doesn't mention what access he'll have to the school's planes.

— Fall 2015: Leath tells the board's president, Bruce Rastetter, about the hard landing, which resulted in him having to take a Federal Aviation Administration check ride to keep his license. Rastetter doesn't share this with the full board.

— September 2016: The Associated Press breaks the news about Leath's hard landing in Illinois. Leath says he will repay the university $17,500 for accident-related costs and stop flying himself. Leath acknowledges that he had taken the Cirrus on at least four trips that mixed business and personal uses, and that he previously reimbursed the university $4,600 for doing so.

— September 2016: The university removes an online database that listed the names of passengers, costs and destinations of flights taken through Iowa State's flight services program. Several of the flights had taken Leath to and from the North Carolina town where he owns a home. Passengers had included Leath's best friend, Bill Dougherty, and professional bow hunter John Dudley.

— October 2016: The Board of Regents orders an audit into every flight Leath and others have taken on university planes during his presidency. Rastetter says that several trips appear to be questionable.

— December 2016: The board receives the results of the audit and schedules a special meeting to discuss Leath's performance.


Internal audit released, meeting held on Leath plane usage

Iowa State President Steven Leath said during a special meeting Monday afternoon that he was "terribly sorry" and that "he should have done things differently" in reference to his university plane usage.

The special meeting, held by the Iowa Board of Regents, was to review and assess an internal audit of ISU Flight Services, conducted by Chief Audit Executive Todd Stewart. 

The meeting comes after months of questions regarding Leath's plane usage, after it was revealed in September that the university president was involved in a hard landing in July 2015 with ISU's Cirrus SR22 single-engine plane.

After further investigations, it was also revealed that Leath used the two university planes, both the Cirrus and a twin-engine Beechcraft King Air, for mixed use of personal and business.

One of these trips included a stop in Elmira, New York to pick up Leath's brother Ken and sister-in-law while on the way to watch the Iowa State men's basketball team play Connecticut in 2014. 

The plane's reason for stopping was to refuel, which the internal audit report found to be accurate, and that the stop was planned well before the flight took off.

However, a return stop in Elmira would not have been necessary other than to drop off passengers, according to the audit report.

During a prepared statement by Leath at the regents meeting, he said that while he "did not violate any policies or break any laws," he realizes that it is not enough to simply apologize and that he did use the university planes more often than he absolutely had to.

According to audit report findings, the president's office and the greater university fund used the Cirrus SR22 72 out of the 76 trips recorded. The president's office used the King Air 200 41 out of the 178 trips recorded and the King Air 350 79 of the 302 trips recorded.

In total, the president's office and greater university fund used the three university planes 192 out of the 556 flights logged since Leath's arrival at Iowa State. 

The flight records from the Piper Warrior were unavailable as ISU Flight services did not retain any flight records.

Six auditors, including Stewart, compiled the audit report, where they reviewed the sale of the King Air 200, flight records, insurance policies, Cirrus funding, the King Air 350 billing and rate calculation and university-owned aircraft policy, among other things. 

In the audit report, Stewart and his team offered recommendations to the Regents moving forward. 

"[The] purpose is to stick to the facts without making judgements to the appropriateness to the facts," Stewart said.

He also noted to the Board that the cooperation from Iowa State was good and they were able to provide all the information when asked. However, Stewart mentioned to the regents that several instance of Leath's plane usage entered "shades of gray."

"Many times these are clear-cut, black-and-white determinations, in still other cases, they enter shades of gray. President Leath’s use of university aircraft in at least a few instances fall within this category, while most were entirely business related," he said.

Other highlights from the 12-page audit report include information regarding Leath's travel to Rochester, Minnesota seven times between May 2013 and August 2016. 

On three occasions, Leath said the sole purpose of the trip was a medical appointment, but the use of ISU Flight Services was necessary for him to return to campus to meet university obligations.

Noted in the report, Leath's employment contract "does not address the necessity or requirement for an annual physical, nor does it address whether any associated travel expenses would be covered by the university for medical appointments."

Leath has also come under fire recently on whether or not he violated the university’s firearms and weapons policy. Leath told the regents that he fully complied with the guidelines, however, including a full inspection by the police chief.

Iowa State’s weapons policy prohibits “the unauthorized transportation, use or storage of any firearms, weapons and/or explosives,” but does allow for a request to be submitted to allow for the transportation of weapons. The request is submitted in writing and approved by either The Office of Risk Management or The Department of Public Safety.

Following nearly 40 minutes of presentation by Stewart and a statement by Leath, the Board moved into closed session to evaluate Leath. 

"I take seriously my responsibility to adhere to university policy," Leath said.

Leath also announced during the special meeting that due to the fact that one of the three university pilot's is retiring, the university will be selling the Cirrus SR22. Leath announced in September that he will no longer fly university-owned aircraft.

"I learned a great deal from this experience and I believe it will make me a much better president and a much more conscientious president," Leath said.

During the open session portion of the meeting, the regents expressed gratitude for Leath, specifically Regent Larry McKibben who said, "If we can make something that we regret and you regret be a better thing for the university in the future — glory hallelujah! Because I'll be right there supporting it."

Following the closed session, the Board reconvened and in a prepared statement, said "we have all learned from this, and we must continue to move forward to ensure the success of the institution is ensured."

The regents decided that they believe the audit and policy review confirmed that "while the [plane] use did not violate existing board policy, we agree with President Leath that we can and must do better."

The regents said Board staff and university administrators, moving forward, will work to create clearer policies, and will review if ISU's Flight Services are in the best interest of the university through a comprehensive review currently in progress.

While the regents noted that Leath should have been "more transparent," the audit should put to rest any questions regarding the university president's aircraft usage.


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