TOPEKA, Kan. — The University of Kansas is hiring a new auditor and considering changes in the athletic department's board of directors to prevent future problems like a massive ticket-scalping scam recently uncovered there, the school's top administrator told her bosses Thursday.
Chancellor Bernadette Gray-Little also told the state Board of Regents that the university is improving the accounting for sports tickets before and after they're sold and has separated athletics department duties to divide the control over tickets. She said the university may sue five former employees and a contractor allegedly involved in the scheme, which may have cost the university $3 million in ticket revenues.
She promised that the university will make the "points" system for determining which donors get the best football and men's basketball seats more transparent to the public. But she said after reporting to the regents that she will not abolish the system, established by athletic director Lew Perkins and criticized by some longtime fans and donors.
According to an independent investigation, five Kansas athletic department employees and one part-time consultant conspired to acquire tickets to always sold-out Allen Fieldhouse, sold them and pocketed the money. Counting a lesser number of football tickets and parking permits, the scam involved nearly 20,000 tickets altogether from 2005-2010.
The FBI is investigating, and Perkins testified earlier this month before a federal grand jury. Perkins isn't implicated, but some of the employees who are were top lieutenants, and his oversight of the department has been questioned.
"I'm glad the chancellor had an opportunity to talk with the regents about our efforts to strengthen our system," Perkins said in a statement. "We're focused on moving forward."
The regents, who oversee the state's higher education system, had directed Gray-Little to report on the university's response to the ticket-scalping scandal. Board members said they were pleased with her handling of athletic department issues but also told her to report back in September on the university's progress.
"I think we're headed in the right direction," Regent Ed McKechnie, a rail company executive and former Kansas House member from Arcadia, told Gray-Little. "The cultural issues are being addressed."
Gray-Little said it will take the university at least a few weeks to hire the new auditor, who will report to the university administration and not the athletic department. She said most other changes, overseen by a group she'll appoint, should be in place within three months.
"I think we will have addressed the specific steps within in the next couple of months. We will have changed some policies. We would have separated duties. We will have made some hires. The employees who were directly involved are no longer there," she said. "If it is the case that there is a cultural issue, that will change over time, and I can't tell you how long that will take."
Perkins also faces a state ethics commission review for accepting thousands of dollars worth of exercise equipment in 2005 from a medical supply company. A separate university investigation found no evidence to back up a former employee's claim that Perkins took the gift in exchange for preferential treatment on tickets. Perkins paid a $5,000 earlier this year for rent, after the equipment had been removed from his home.
Perkins has announced that he'll retire in September 2011. As for the points system he devised, Gray-Little said she's comfortable with having one.
"I think most athletic programs have a points system. I think it's reasonable, given that the resources that are needed will usually exceed the face value of the tickets," she said. "It's here to stay."
McKechnie told Gray-Little that he hopes in addressing the issues within the athletic department, the university considers adding members to its board of directors from outside the university. Gray-Little said discussions about the athletic department's board — and the boards of other groups affiliated with the university — have been under way since the spring.