Auditors find more policy violations by top Kennesaw State officials

Story so far:

  • Kennesaw State University president Dan Papp announces his retirement May 10, after 10 years leading the university.
  • Three weeks later, University System of Georgia auditors release a report citing financial policy violations by Papp involving compensation, annual leave and car-allowance payments. Two additional reports find additional policy violations by top administrators in the university's Auxiliary Services and Operations division responsible for dining services.
  • Papp has until July 2 to submit to the University System of Georgia a formal, written and electronic response to each observation identified in the draft audit report on that division.
  • Papp is set to retire June 31. Houston Davis, the University System's executive vice chancellor and chief academic officer, is set to begin as interim Kennesaw State president July 1.

Read the reports:

Source: University System of Georgia, Office of Internal Audit and Compliance

University System of Georgia auditors have found more policy violations by top administrators at Kennesaw State University — this time conflict-of-interest and ethics breaches in the division responsible for “the nuts and bolts of campus life,” including food for more than 33,000 students.

The reports, dated June 2 and received by The Atlanta Journal-Constitution through an open-records request, come as a separate report auditors' released Friday cited Kennesaw State president Dan Papp for violating financial policies involving compensation, annual leave and car allowance payments.

The additional violations, some dating back to 2012, occurred during Papp's tenure, putting a stain on his 10-year presidential tenure. Papp abruptly announced his retirement from the university earlier this month.

The additional reports, addressed to Papp, found that Kennesaw State’s administrator over the school’s dining halls and food services vendors violated policies in numerous cases.

A special review of Randall Shelton, assistant vice president for Auxiliary Services and Programs, found that he:

  • did consulting work for one of the school's current vendors, Ballard Brands;
  • traveled to conferences for the company but charged Kennesaw State for the trips;
  • interfered in the bidding process for companies competing for a dining contract, which resulted in an annual donation to the department he supervised;
  • authorized the former dining director to use a vendor's truck to move personal belongings
  • used his position to get family and friends hired.

The University System, through a spokesman on Monday, declined to comment on personnel matters, including whether Shelton was still employed with Kennesaw State. A photo and welcome message from Shelton was still included on the division's website Monday. The auditor's report involving Shelton has been referred to the state attorney general's office, the spokesman said.

The University System got its first complaint against Shelton in November, according to the review. Another tip in January, on its ethics hotline, claimed he revived one of Ballard Brands' franchises, WOW Wingery, on campus and that likely cost KSU more than $430,000 in building improvements, fees and lost revenue.

The allegations in the hotline tip were largely corroborated by system auditors, the report said.

Shelton’s Auxiliary Services division is responsible for university stores, student ID cards and parking permits, campus copy and print services, dining halls, parking, student health and campus postal services. The division addresses “the nuts and bolts of campus life,” according to its website. Each unit in the division operates as a business, and as mandated by the Board of Regents, pays for its own salaries and payroll benefits, facilities, systems, equipment, all other operating costs, and debt service out of money generated from sales and student fees.

In auditing the Auxiliary Services division, state auditors also found several management problems in the division. The most egregious related to long-running investigations of Kennesaw State's former dining director, Gary Coltek. Auditors found that top-level officials at the school failed to notify the university system of alleged misdeeds by Coltek, who resigned from Kennesaw State in late 2015, and has been accused of misusing state resources, conflicts of interest nepotism and other ethics violations. Coltek is being investigated by the Georgia Bureau of Investigation.

Kennesaw State conducted three investigations — criminal and legal investigations in 2012 and a third management investigation in 2015 — into Coltek’s actions. But school officials only reported one investigation to the University System, violating policies. The issues identified in the investigation “clearly warranted” punishment beyond a letter of reprimand, which Kennesaw State officials gave to Coltek, the report states.

The report also found that six of the seven dining outlets on the main campus in Kennesaw operated at a loss in fiscal 2015, and noted an overly costly outsourced dining provider’s contract and weak expense controls for dining.

To fix the problems, auditors recommended future malfeasance investigations be conducted by the University System's audit office, rebidding the current dining contract, revising the department's organizational structure and eliminating the controversial mandatory commuter meal plans.

Papp has 30 days to submit a response to the University System responding to the draft audit of the auxiliary services division. The final audit report, including the recommendations and his responses, will then be issued.

Papp is set to retire from Kennesaw State June 30. During his time leading the university, Papp has overseen the consolidation of Kennesaw State with Southern Polytechnic State University in Marietta, led the school in starting a football program, and almost doubled the number of academic programs.