South Carolina State University’s internal auditor has raised questions about the university’s Lowcountry Classic scholarship fundraiser, saying it lacked sufficient oversight and internal control over financial assets.

An audit of the game shows $273,775 in donor pledges made over a three-year period were either unaccounted for or not collected. In addition, revenue from the event has only been used to give out a single $4,000 scholarship to one student, according to the audit.

But the chairman of the Classic, Maurice Washington, says he can explain the issues raised by the audit. There’s no missing donations, he says, the auditor confused donations of airtime and food with cash. And the university was trying to save enough money to build a scholarship endowment, not spend the money all at once.

But S.C. State Board Chairman Lumus Byrd said enough is enough. He believes it’s time to permanently pull the plug on the Classic.

He wouldn’t comment further, saying the State Law Enforcement Division is investigating the Classic.

The Lowcountry Classic is a series of fundraising events culminating in a football game in Charleston. The Classic’s goal is to raise money for need-based scholarships. The Classic started in 2006 when university officials decided to move a home game to Charleston because the installation of artificial turf at Oliver C. Dawson wasn’t complete.

The board initially approved a forensic audit of the Classic in February, only to opt for a less-expensive internal audit two weeks later. The audit was completed June 16 and released this week.

Washington says the audit’s figures misrepresent the event and every dollar can be validated.

“There is no $273,000 missing,” he said.

He contends most were in-kind contributions of items and services that were mistakenly treated as unaccounted for cash donations by auditor Evelyn Anderson. Anderson wouldn’t comment for this story.

Washington said he attempted to approach Anderson to correct her, but was warned by S.C. State attorney Charles Boykin that could be construed as interfering in the SLED investigation.

Washington said more scholarships haven’t been given out because money from the Classic was going toward starting a $500,000 endowment. He says scholarships would be paid for with interest generated from the endowment.

“It was never going to be a money-in, money-out scholarship,” Washington said.

State Rep. Gilda Cobb-Hunter, D-Orangeburg, called on Washington to back his claims up with written proof. And she says it’s time to end the controversy by bringing the game back home.

“I want to see Orangeburg County benefit from the big home games. ... We need to have as much revenue generated in Orangeburg County as possible,” she said.

She said the audit validates the Southern Association of Colleges and Schools’ concerns regarding the Classic. SACS warned the institution earlier this year, claiming in part that trustees overstepped their bounds in running the Classic.

Cobb-Hunter also asked, “Why is it taking three years to create an endowment?”

The audit reports there is only $75,849 in the bank from profits generated by the Classic.

It asserts that Washington authorized spending $122,500 in S.C. State Foundation and university Advancement Foundation funds to entice recording artist Mary J. Blige to perform at the 2008 Classic.

The university paid Blige a total of $250,000 using canteen funds, which are not regulated by the state procurement code. It reimbursed the foundations for what Washington signed off on with those funds.

The concert earned $26,152 for scholarships after all the expenses were paid.

“Yes, it’s cost money. Did we make money? Yes,” said Washington, a trustee and former board chairman.

Combining game receipts, donations and in-kind contributions, he contends the Classic has positively impacted S.C. State to the tune of $1.1 million.

“I find that to be a good thing. I’ll have this argument with anyone, anytime, anywhere,” he said.

S.C. State President Dr. George Cooper canceled the Classic this fall, citing state funding cuts.

State Rep. Jerry Govan, D-Orangeburg, an S.C. State alumnus and frequent critic of Washington, stopped short of saying S.C. State should permanently end the Classic. He said the audit raises some red flags but doesn’t necessarily suggest anything illegal or improper occurred.

“It would be prudent for the university to clear up these concerns before they resume play of the Classic in it’s present format,” Govan said.

One main concern the audit raised was that the university needed a policy to account for in-kind gifts.

More than $250,000 in donations couldn’t be located in the audit. However, S.C. State and its two foundations told auditors “all sponsor and contribution collections have been included.”

Washington said that is the case.

During a phone interview, Washington went through the pledges listed as unaccounted for by the audit, dismissing the notion that a single one was missing.

For example, Washington says Harris Teeter donated $4,000 in food for a 2007 tailgating reception. He said media outlets donated free advertising.

Washington said $60,000 in donations from Charleston governmental entities the audit cited as missing actually went to the athletic department in 2006. He said the Classic was just a football game then, not a fundraiser.

An audit document detailing 2006 donations to the athletic department confirmed Washington’s assertion.

Additionally, he claims $50,000 in pledged donations haven’t been collected yet.

Senior Vice President of Finance John Smalls said that provides some explanation to the missing donations, noting that advertising for the Classic was extensive.

“There were a lot of in-kind contributions,” he said.

Smalls went so far as to say the Classic’s in-kind contributions may exceed $273,000. Other than that, S.C. State’s chief financial officer claimed he didn’t know much else about Classic finances.

Cobb-Hunter questioned why Washington was the only one with definitive answers regarding the Classic.

“Why does no one seem to know anything?” she said.

Smalls was on the 2008 Classic’s executive committee. But he said he didn’t play a large role in running the event. According to the audit, he wasn’t alone in saying that.

“Overall, most responders appeared to know very little and tended to minimize their individual involvement,” the audit said. “Financial reporting was haphazardly prepared. A significant amount of expenditures related to the events were not identified.”

It also said, “(From) what we were able to determine there was no effort to reconcile pledges, sponsorships and contributions.”

Cooper said in a statement missing data has led to inconsistent financial conclusions regarding the Classic.

“I am confident that the SLED investigation will bring clarity to these issues,” Cooper said.

He declined a request for an interview.

The audit came after some trustees questioned Washington’s financial reporting of the Classic because it didn’t include expenses.

Washington’s attorney sent a letter to two trustees, alleging they sought to slander his client. Washington says that letter was not sent in response to board inquires into the event’s finances, but because he believes some trustees made false comments that he had $30,000 in the vault of his hotel room the weekend of the 2007 Classic.

The university and the S.C. State Advancement Foundation put $114,849 in its coffers during the Classic’s three-year history, according to the audit.

S.C. State has spent $39,000 of that money to date. The university used $35,000 to produce a promotional show that airs in Charleston-area media markets.

Right now, the Advancement Foundation has $67,546 in cash resulting from Classic activities. S.C. State has the remaining $8,303 in Classic profits in a discretionary fund.

The audit said “there is a disconnection between the stated use of proceeds and what has actually happened.” It noted donors were not informed the money was being redirected to serve purposes other than scholarships.

Washington defended the television show, saying it expands the university’s image.

The audit claims Washington controlled 617 complimentary tickets with a face value of $33,029 and didn’t provide documentation on how the tickets were used.

Washington rejected that notion, saying “I didn’t have 617 complimentary tickets.”

University auditors also couldn’t account for complimentary tickets given to event sponsors and organizers. In addition, they were unable to confirm $840 in student concert ticket sales had been deposited.

The audit also questioned why some sponsor checks received by the university were written to the “Lowcountry Classic,” with a Charleston address. The address belongs to Mass Mutual Financial Services, Washington’s former employer.

“Not a single check was sent to that address,” Washington said.

Since he lived in Charleston, Washington said he gave Charleston County his business address to send him an application related to sales tax money for the Classic.

“I ended up picking up the application,” he said.

The audit recommended developing a policy to address sponsorship checks that are written to entities other than the university. It said S.C. State should request that donors write checks directly to the university.

T&D Staff Writer Lee Tant can be reached by e-mail at ltant@timesanddemocrat.com or by phone at 803-534-1060. Discuss this and other stories online at TheTandD.com.

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