FSU financial, travel cards misused, thousands spent on gifts, trips and Amazon, state audit shows

FAYETTEVILLE, N.C. (WTVD) -- An investigative report released Tuesday, May 28 by the North Carolina Office of the State Auditor (OSA) shows nearly $700,000 was misused by some Fayetteville State University (FSU) staff members.

The audit and investigation started when the auditor's office received several tips reporting that employees within the Office of Strategic Communication (OSC) had made impermissible purchases on their university-issued credit cards.

"We received anonymous tips from seven different complainants regarding misuse of funds at FSU," Holmes said.

The auditor is pushing the SBI to explore whether criminal charges should be filed.

The audit said $692,239 in Purchasing Card (P-card) and Travel Card (T-card) were unallowable and/or did not contain sufficient documentation.

State Auditor Jessica Holmes says it reviewed employees' misspending at FSU from January 2022 to last August, spending that included gifts, purchases on Amazon and travel out of state.

Here's a breakdown from the state auditor's report

• $575,123 in P-card purchases which were unallowable per University policy.

• $84,469 in T-card purchases which were unallowable per University policies.

• $322,743 in P-card and T-card purchases which did not contain sufficient documentation to support that they were for a valid University purpose.

In these three findings, the report states that $290,096 of purchases were unallowable per University policies and did not contain sufficient documentation.

The first three findings of the report state that university employees used cards for unauthorized purchases and travel. Some of them weren't backed up with documents or receipts.

A fourth misuse of the cards detailed in the report says, $165,570 was paid to businesses owned by employees who had not disclosed a financial interest in the business, creating a conflict of interest.

"The fourth finding is specifically related to employees paying businesses that they either owned or were involved in, and thereby those employees did not disclose their financial interest, which is a conflict," Holmes said.

FSU says it's started responding to the situation by hiring a new internal auditor, reviewing its policies, and retraining employees on those policies.

The university issued a statement to ABC11 saying:

"We were devastated to learn about the misuse of departmental purchasing and travel cards at Fayetteville State University. As soon as we became aware, in concert with the UNC System, we moved quickly to realign processes and implement tighter financial controls. With these immediate steps in place, FSU is continuing to provide additional corrective measures in its business processes, implementing enhanced campus-wide training, and enforcing budgetary and HR policy improvements as an ongoing practice. This isolated incident does not reflect the principles and values of FSU or its employees. As a university community, we are committed to being responsible and trustworthy stewards of FSU resources."

"This isolated incident does not reflect the principles and values of FSU nor its employees. As a university community, we are committed to being responsible and trustworthy stewards of FSU resources."

"I hope this sends a message to all of our universities and all of our university employees that the funds that they receive are for the benefit of the students, and if there is misuse, it is very likely that we will find out," Holmes said.

ABC11 has reached out to those accused in the audited activity but they have not responded to our request for comment at this time.