FSU Audit | A state audit finds that some Fayetteville State University employees misused about $700,000 on university-issued credit cards

FAYETTEVILLE, N.C. (WTVD) — An investigative report released by the North Carolina Office of the Auditor (OSA) on Tuesday, May 28, revealed that some Fayetteville State University (FSU) employees misused approximately $700,000.

The audit and investigation began after the auditor's office received multiple tips that an employee in the Office of Strategic Communications (OSC) had made unauthorized purchases on a university-issued credit card.

“We received anonymous tips from seven complainants regarding the misuse of FSU funds,” Holmes said.

The auditors have asked the SBI to consider whether criminal charges should be filed.

According to the audit, $692,239 in purchasing cards (P-Cards) and travel cards (T-Cards) were improper, did not include sufficient documentation, or both.

State Auditor Jessica Holmes said the investigation looked into improper spending by FSU employees from January 2022 through August of last year, and the expenses included gifts, Amazon purchases and out-of-state travel.

The state auditor's report breaks down as follows:

• $575,123 in P-Card purchases that were not permitted under University policy.

• $84,469 in T-Card purchases that were not permitted under University policy.

• The $322,743 purchase of P-cards and T-cards did not include sufficient documentation to support that it was for legitimate university purposes.

Of those three findings, the report said $290,096 worth of purchases were disallowed under university policy and did not include sufficient documentation.

The report's first three findings state that university employees used the cards to make unauthorized purchases and travel, some of which were not supported by documentation or receipts.

A fourth fraudulent use of the card detailed in the report involved a payment of $165,570 to a company owned by an employee who had not disclosed a financial interest in the company, creating a conflict of interest.

“The fourth finding relates specifically to employees making payments to companies they own or are involved in and therefore not disclosing their financial interests, which is a conflict of interest,” Holmes said.

FSU says it has begun responding to the situation by hiring a new internal auditor, reviewing policies and retraining employees on those policies.

The university released the following statement to ABC11:

“We are heartbroken to learn of the fraudulent use of departmental purchasing and travel cards at Fayetteville State University. As soon as we became aware of this, we worked with the UNC System to recalibrate our processes and implement stricter financial controls. With these immediate steps, FSU is continually delivering additional corrective measures in our business processes, implementing enhanced training across campus and making ongoing improvements to our budget and human resources policies. This isolated incident does not reflect the ideals or values ​​of FSU or its employees. As a university community, we are committed to being responsible stewards of FSU resources and being a trusted presence.”

“This isolated incident does not reflect the philosophy or values ​​of FSU or its employees. As a university community, we are committed to being responsible and trustworthy stewards of FSU resources.”

“This sends a message to all of our colleges and university employees that the funds they receive are for the benefit of the students, and if there is misuse, there is a good chance we will find out,” Holmes said.

ABC11 has reached out to those accused of activities that were the subject of the audit, but they have not immediately responded to requests for comment.