Internal Audit Criticized Rutgers Athletic Department's Money
A Rutgers Univ. (RU) internal audit issued in February warned school officials that "no one was watching the money flooding into" the school's athletic department, five months before "revelations of hidden deals and no-bid contracts sparked two investigations," according to Margolin & Sherman of the Newark STAR-LEDGER. The audit criticized the athletic department's "control over its finances -- including hundreds of thousands of dollars in off-the-books spending that never appeared in Rutgers' budget." The audit "challenged the accuracy of some of those expenses, which auditors said were not accompanied by any explanation or documentation," and it also "cited gaps in the athletic department's oversight and recommended new hires and an overhaul of financial controls." Though RU officials refused to release the 23-page audit, calling it an "internal, advisory document," a school source gave the document to the Star-Ledger. The document "describes a department suddenly flush with additional sponsorship money and soaring revenues following the rise of the once-hapless" RU football team." Simultaneously, it details how the department "eagerly tapped into those resources with seemingly little oversight." Former NJSEA President & CEO and RU BOG member George Zoffinger, who serves as Chair of the audit committee, said that the board has "authorized an outside audit of the contract" the athletic department signed with Nelligan Sports Marketing (NSM). Zoffinger said that sponsorship deals were "structured by the athletic department in such a way to deliberately keep the money out of university coffers." Zoffinger: "They're basically diverting funds that were sold as sponsorships to pay for other things that are not on the books of the university. This is not the right way to spend public money. The money should come to the university and then be allocated from there. It's inappropriate." Margolin & Sherman note much of the audit "focused on the university's partnership" with NSM, which "essentially created an off-the-books fund that was used at the athletic department's discretion, enabling [RU AD Robert] Mulcahy to supplement his program with hundreds of thousands of dollars outside the university budget." NSM Chair & CEO T.J. Nelligan declined to comment on the matter (Newark STAR-LEDGER, 8/20).
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