UK says internal audit revealed two former employees misused more than $250K

(WKYT News)
Published: Nov. 13, 2020 at 3:46 PM EST|Updated: Nov. 13, 2020 at 4:12 PM EST
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LEXINGTON, Ky. (WKYT) - A University of Kentucky internal audit has revealed more than $250,000 in misused funds by two former employees in the College of Education.

UK says the investigation uncovered an administrative support associate in the College of Education’s STEM department Stephanie Carpenter “misappropriated $256,198.16 in Apple devices and other high-tech equipment, travel expenses and various personal items over her three years with the department.” That included more than 80 iPhones.

“We’re going to actually manage the finances and financial operations of the department until we see they’re ready to make the right reforms. We’re going to have the appropriate training put in place,” UK spokesperson Jay Blanton said.

The audit adds she also used $6,625.52 in purchases that had “insufficient documentation to validate the appropriateness of the expenditures.”

UK also confirmed a second employee in the Educational Leadership Department, Derita Graves, accrued $972.54 in personal expenditures of her own.

According to a press release, UK Internal Audit was contacted in March after a desktop computer and files of Carpenter’s were reported missing. That computer and files were reported missing by Carpenter one day after college administration officials inquired about inappropriate activity on her university credit card.

The press release says Carpenter was suspended within days after the review began. She resigned from the college days later and is permanently ineligible for rehire by the university.

Graves was terminated from her position in July and had previously been suspended when the audit uncovered questionable expenses. Graves is also permanently ineligible for rehire by the university.

The audit found three reasons that both Carpenter and Graves were able to make these unauthorized purchases:

  1. The college’s primary business officer failed to enact proper business internal control procedures
  2. Preapproval from a supervisor for making university credit card purchases was not required
  3. and approval documents, including signatures for purchases, were often forged.

“At the college administrative level, there weren’t the internal procedures and controls that were in place to find something like that quickly and correct it,” Blanton said.

In an email sent out to students, Dr. Eli Capilouto says he is directing Provost David W. Blackwell to directly oversee all financial and business operations within the College of Education for the foreseeable future.

"We’re going to actually manage the finances and financial operations of the department until we see they’re ready to make the right reforms. We’re going to have the appropriate training put in place,” Blanton said.

The investigation has been turned over to the police.

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