Ben Eckstein catches UO’s VP for Finance cheating students on overhead charges

Update: Steve Duin of the Oregonian wrote some good stuff supporting Lariviere’s New Partnership. But he’s not so happy with UO on this issue and has some great quotes.

4/17/2012: The short version: UO’s VP for Finance Frances Dyke raised student overhead to cover a subsidy for the jocks, got caught by student government president Ben Eckstein, and the new VP Jamie Moffitt had to repay the students.

This Becky Metrick story in the ODE explains part of the story:

“At the end of last year, we had a 5 percent assessment rate. There was a discussion that the rate was actually going to be 6, percent but there were people who weren’t in agreement with that,” Eckstein said. As a part of the change, he hoped to be assessed differently than the rest of the campus groups. “In the process of those negotiations, it came to my attention that we had been overcharged by 1 percent this year.”

so,

The difference between the original 6% rate and the updated 5% rate for this year that will now accrue back to the ASUO

6% X 13,217,538 = $793,052
5% X 13,217,538 = $660,877

Difference:  $793,052 – $660,877 = $132,175

Which UO’s new VPFA/CFO Jamie Moffitt had to repay back to the students. This all came to light during an effort started by the Senate IAC to understand how much the academic side was subsidizing UO sports. OUS rules require that “auxiliary enterprises” pay overhead to the institutions:

As Laura Hubbard, associate VP for Budget & Finance, noted at the time, those changes were necessary to meet Oregon University System “guiding principles” in allowing indirect costs that are “reasonable, properly allocable, auditable and applied consistently across campus.” 

The assessment on the student government ASUO expenditures (Incidental Fees) has been increasing from 2% to 7%. Athletics pays 3%, nominally. Their effective rate is more like 2%, because many of their expenditures are exempt.



Steve Duin’s column in the Oregonian
in November covered the basics of how athletic’s low rate was the result of a secret deal between Frohnmayer and Kilkenny, signed two weeks before Frohnmayer retired. That contract is here and is full of unusual things, amounting to several million dollars in subsidies for athletics. The overhead rate is a clear violation of OUS rules. I wonder what Frohnmayer got in return for signing it? It was so secret even UO’s VP for Finance Frances Dyke never saw it – or so she claims.

Jamie Moffitt had been in charge of athletic department finances, presumably she knew. But now that she’s the new CFO she needs to redo the overhead rate setting process to try and follow the OUS rules that rates be “reasonable, properly allocable, auditable and applied consistently across campus.”  I love that word “auditable”.

So, I wonder if Moffitt will include the athletic department’s unusually high legal costs, set-asides for future MTBI liabilities, their portion of public records costs, legal costs, Johnson Hall time, the $200,000 or so for NCAA representative Jim O’Fallon’s salary and office costs, the $2 million jock box subsidy, and a fair proportion of the $1.6 million UO Police budget increases will show up in her calculations?

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