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An independent financial review shows questionable accounts and undocumented spending involving private donations to support the Chadron State College football program that did not go through the school or the Chadron State Foundation.
The Nebraska State College System hired the independent accounting firm BKD in late September to review all records on the issue, with CSC later placing head coach Bill O’Boyle on what is essentially administrative leave after self-reporting possible NCAA rules violations.
The BKD report is the first detailed information released on the O'Boyle-CSC football fundraising case, and it says inquiries began in September when the college administration became concerned that money from fundraisers for football wasn’t showing up on the school’s books.
A three-year old golf tournament ... the Last Chance for Glory ... had been organized by a group of ex-players to help support football, but none of its proceeds went into CSC or foundation accounts.
Further concerns were raised when several individuals contacted about donating to fundraisers for the college or its athletic department said they'd made donations on behalf of the school, but neither CSC or the foundation had any record of such contributions.
The report says the college administration met with O'Boyle and Athletic Director Brad Smith to discuss whether any bank accounts had been set up outside the oversight of the college or foundation to handle football donations, and to find out what had happened to the money raised by the Last Chance for Glory. Administrators said O'Boyle initially denied any knowledge of such bank accounts or where the golf tournament proceeds were deposited, but later told Smith an account had been set up for the tournament money, and he prepared a written statement saying it was the only such outside account.
After the written statement was prepared, though, a second outside account was found ... set up by O'Boyle to handle money from athletic event concession sales. BKD was brought in after the disclosure of the second account, and identified four football-related accounts outside the college and foundation.
The first ... the CSC C Club account ... had been set up in 1974 to buy letter jackets and sweaters for athletes, but over the years had evolved into a general purpose account for virtually any football-related need. Smith was the listed sponsor and only authorized account signer from 1989 until the account was closed two months ago.
The "Special" account was set up by the head coach in February 2009, to deposit donations from the Last Chance for Glory, with about $30,000 received and $22,000 spent as of the BKD review that began last month.
The third account was a new "Concessions" account set up by O’Boyle in January 2010 to handle money previously going to the C Club account, while the Last Chance for Glory account was the operating account for the event. According to the BKD report, O'Boyle said he set up the Special account so he and his staff had immediate access to the funds that had been going to the C Club account ... which had more limited funds, listed Smith as the only authorized signer, and required written requests approved and submitted prior to payment.
O'Boyle said the Special and Concession accounts were used much the same as the C Club to fund various operational costs of the football program, but admitted he didn't make Smith or other athletic department staff aware of their existence.
The report lists 56 payments from the various accounts totaling nearly $22,000 made out to cash. Half of the payments totaling about $13,000 corresponded with specific football-related requests by O'Boyle, but the only documentation such as receipts or invoices on how any of the money was spent were credit card statements consistent with six of the requests.
BKD concluded that O'Boyle set up the Special and Concessions accounts to provide his staff with immediate access to funds without the college or foundation requirements for support documentation for expenditure, which made it impossible to determine if the $22,000 payments listed as cash were used for their described purpose.
The report also found that neither the athletic department or other parts of the college properly monitored deposits or disbursements from the original C Club account, and did not follow up after ordering the account closed to make sure it actually was closed and the money transferred to college or foundation accounts.
The report says a lack of documentation raises questions about 18 payments totaling $1,500 made to players on the CSC active roster at the time of the payments since there's no way to confirm the money went to them in ways or for activities approved by the NCAA.
Another 13 payments totaling over $3,100 were identified as possibly in violation of NCAA rules and regulations ... based on the description of the items ... but again with the lack of documentation making it impossible to track the money.
BKD said determining if there were NCAA violations was outside its duties in the review.
As for the Last Chance for Glory tournament, the report says the event is not a tax-exempt organization as defined by the IRS and donations to it are not tax-deductible ... contrary to what BKD says was implied by the tournament organizers and coach O'Boyle.
The report makes four recommendations for Chadron State in the area of fundraising.
Two deal with expenses: continued strict enforcement by the school and foundation of the documentation requirement and additional employee training on policies and procedures for keeping documentation such as invoices and original receipts.
Another recommendation is that the college implement a new policy limiting fundraising activities benefiting the college or its athletic program to only officially-recognized college events and that all donations go through the foundation.
The final recommendation is that the college and foundation consult an expert on not-for-profit income to help determine possible tax impacts on those who donated to the Last Chance for Glory tournament and claimed deductions on their federal taxes.
The report was sent to the Nebraska State Patrol and the state Attorney General, Auditor, and Accountability and Disclosure Commission ... all of whom could choose to conduct further investigations on where any state laws or regulations were violated.
It also went to the NCAA, which is already conducting its own investigation into whether any of its rules or policies were violated.
The NCAA has given no indication how long the process might or what type of penalties or sanctions might be by incurred by Chadron State, O’Boyle, any other CSC staffers, or any CSC athletes.
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