Monday, July 9, 2001 Volume 66, Issue 151


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 areas:

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 1999.

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 standard procurement
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 transactions initiated
and consummated by HRM be paid directly by HRM."

"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 Chartwells UH
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 practices.

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 found that
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 May.

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.

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