The University of Central Arkansas Board of Trustees Endowment Fund was created by the board to provide long-term support for scholarships and other operations of the university, according to the minutes of the Aug. 11, 1995, meeting.
President Lu Hardin recently received a deferred-compensation payment of $300,000 from this auxiliary fund after the board's decision in May to speed up a 2005 incentive contract, according to Jack Gillean, vice president of administration.
Although the approval of that payment was left off of the minutes from the board's May 2 session, the board is responsible for approving the funds that come out of and go into the fund, the 1995 resolution states.
The primary source of this money comes from excess profits generated by the campus book store, housing and food service and those totals usually equal about $300,000 annually, according to Paul McLendon, vice-president for financial services.
"We're about to make an adjustment, and we do that at the end of the year after we close out our records," McLendon said Thursday. "But we won't close them out until August, and that's when we'll know all the results."
However, other streams of money have been poured into the trustees' fund as well, he said.
"I think in previous years there were some gifts that were actually given that were complete and private money, but that has not been in the last few years," McLendon said.
Even though money has been made available by private donors in the past, McLendon said if a private donor sent a check to the financial affairs office to be deposited into that fund, he would still have to approach the board about authorizing it.
"If it meets something already mentioned in the resolution, like auxiliary transfers, we have an okay to do that," McLendon said. "If it's money from the bookstore, we have okayed that already, but if it's something we don't know for sure where it came from, we would have to get them to authorize it. We would have to make sure that was where it was supposed to go and the board knew it was going to go there."
Gillean said although the expenditures from the endowment fund must be authorized by the board, there is one exception to the rule.
"Three or four years ago the board authorized the board chairman who is sitting at any given time to authorize expenditures up to $5,000 from the fund without board approval," Gillean said. "If the board chair becomes aware of a particular need on campus, he or she is authorized to award $5,000 payments."
Although the Board of Trustees is the body responsible for authorizing the flow of money to and from the account, it's McLendon and the financial affairs office that do the actual check writing, he said, after receiving the board's authorization or written approval.
As of Thursday afternoon, McLendon said he has not received any authorization to make a deposit into the account to reimburse the $300,000 given to Hardin.
As for past transactions made using this money, Gillean said he has seen instances in which the board authorized expenditures from the fund to award money to the Student Government Association for various projects, to the staff senate for the endowment of a book scholarship, to support the Oxford American, the magazine published on campus, and to assist the cost of the 2007 centennial festivities.
Gillean also mentioned Hardin's deferred-compensation payment was not the first one to be paid out of the endowment fund.
"One specific thing is that when President (Winfred) Thompson, who was the president before Hardin at UCA, resigned, he had received a deferred-compensation plan from the board of trustees as well and this was used to pay that fund to him when he separated from the university in December 2001," Gillean said.
(Staff writer Jessica Bauer can be reached by e-mail at jessica.bauer@thecabin.net or by phone at 505-1236. To comment on this and other stories in the Log Cabin, log on to www.thecabin.net. Send us your news at www.thecabin.net/submit)
