Report reveals Hilton
College policy violations
Dean: Proposed changes will be made
By Ken Fountain
Daily Cougar Staff
A University review of alleged administrative
improprieties in the Conrad N. Hilton College of Hotel and Restaurant Management
found violations of
internal policies and contracts, but cleared
Dean Alan Stutts of any criminal wrongdoing.
The conclusions were published in a June
25 report by Don Guyton, director of the UH internal audit division, more
than 18 months after hotel and
restaurant management professor Stephen
Barth made the allegations to University administrators and Guyton's office.
The investigation reviewed four separate
• Expenditures and fund transfers of more
than $500,000 to and from a $5 million account donated by the private Hilton
Foundation for renovation of
the college's Hilton Hotel, which the
IA report said "were not expended in accordance with donor restrictions."
The report states that HRM management,
with the approval of Associate Vice Chancellor/Vice President for Finance
Randy Harris, made journal
entries to restore the renovation account
prior to the close of the University's books and records for fiscal year
Harris reportedly noticed the questionable
transfers in FY '98.
• Payments totaling $46,000 from Chartwells,
the hotel's food and beverage vendor, to a New York public relations firm
on behalf of the Hilton
The report states Stutts' 1999 retention
of the firm, M. Silver Associates, should have been done within the University's
protocol, which provides that contracts
be processed through UH's Office of Contracts Administration and approved
by the general counsel.
The policy also stipulates that "professional
service or consulting" contracts for more than $10,000 must be reported
to the Board of Regents and that
such contracts in excess of $1,000 must
be reported to certain state agencies.
The investigation found that the purchase
vouchers submitted to M. Silver by Chartwells were improperly certified
by HRM management because the
PR services were provided to the college,
not the food service vendor.
The report recommended the contract between
HRM and Chartwells be amended by the end of the month to require that "any
and consummated by HRM be paid directly
"After discussing this matter with (Stutts),
we believe that (he) now shares our opinion," the report says.
• Also under investigation were "questionable
expenditures" paid by the college through Chartwells as a severance package
for the hotel's former
head food services chef, Jacques Fox.
Fox, who was a Chartwells employee, was
given a $34,188 severance package based on a December 1999 agreement between
Resident District Manager Nick Iula and
HRM General Manager Rodolfo Casparius, according to the report. The IA
review found that was an
improper amendment to the original contract
between HRM and Chartwells.
• Finally, the investigation looked into
whether a Hilton College faculty member, K.S. "Kaye" Chon, was an instructor
on record at the college in fall
1999 -- the same time he was teaching
at a Hong Kong university.
The review found that "HRM management followed
university protocol in obtaining (Chon's) release from teaching responsibilities
for the Fall 1999
semester." During that semester, the report
states, Chon was conducting a research assignment in Hong Kong as part
of HRM's Asian Initiative.
The report says auditors asked Stutts whether
Chon was a faculty member at another institution during the 1999-2000 academic
year. "We were
informed by (Stutts) that he was unaware
of any dual employment or agreement between the university and any foreign
institute (during that period),"
the report states.
In addition to those points, the review
found HRM and Chartwells did not follow the original contract in the settlement
process by which HRM pays
Chartwells for food and beverage services.
It recommended the contract be amended so that it reflects the settlement
In an interview last week, Stutts said
the audit "was not a positive experience, but it was an informative one."
He declined comment on the specific circumstances
of the renovation account expenditures, but said the IA office "very appropriately
some of the funds had been inappropriately
charged" and that the problems had been corrected.
"The audit defined certain changes that
need to be made to the Chartwells contract, and I'm perfectly willing to
go through those procedures," Stutts
The IA office said in April it expected
to release the report at the end of that month, but e-mails between Guyton
and Barth show Guyton sought new
information later that month and into
The Daily Cougar was unable to confirm
the reason for the delay.
While Barth said he was gratified by the
report's confirmation of many of his concerns, he lamented how its findings
reflect on the college.
"Although it brings a measure of satisfaction
that the audit confirmed the concerns that were raised about the Stutts
administration, it is by no means a
happy occasion," he said.