Critics say institute trying to shift heat

Thursday, Aug. 3, 2006 | 7:57 a.m.

As UNLV's troubled Institute for Security Studies braces for some tough questions from the Board of Regents on Friday, it has gone on the offensive against some of its detractors.

One of those critics, former institute subcontractor Bill Gault, charged Wednesday that the counterterrorism agency has been encouraging reporters to get their hands on an internal university audit critical of his dealings with the UNLV Division of Educational Outreach, which has had a bitter falling out with the institute.

"This is a ploy on the part of the institute to divert attention away from them," Gault said. "Instead of trying to fix their own problems, they're trying to shine the light on someone else."

Former Nevada Homeland Security Director Jerry Bussell, an ex-institute consultant who also has worked for Gault, shares Gault's view, calling what is occurring "nothing but a distraction."

Bussell charged that the "smear campaign" is evidence that the institute, which has come under fire for failing to meet its promised academic goals, is not interested in righting its course.

"All they want to do is attack someone else," he said. "The university should step in and clean this up. They let this mess fester for too long. The entire homeland security effort here is suffering because of this."

Mark Rudin, interim vice president for research and Graduate College dean, could not be reached for comment Wednesday.

Gault, who owns Qualifying for Success, an educational support services firm, acknowledged that the UNLV audit, completed in April, is scathing, not only toward his company but the Outreach Division, as well.

"It's harsh," he said. "Mistakes were made, but I have worked with the UNLV purchasing department to correct many of the issues they've had with my company. And they're in the process of issuing me another contract for initiatives involving Defense Department funding."

But Gault stressed that bringing this audit to light does not explain "why the institute arbitrarily changed its mission without informing the regents or their funding agency," the U.S. Energy Department.

"I didn't advise the institute to lie to the regents and exaggerate their accomplishments," he said. "I didn't advise them not to inform the Energy Department about critical changes in their objectives."

Those allegations were detailed in a June 18 Sun story that raised questions about the institute's dealings. Bussell was quoted in the story, suggesting that the institute had strayed from its academic mission.

The audit was requested by Richard Lee after he took over as vice provost of the Division of Educational Outreach in June 2004, but did not get under way until a year later.

At the time of the request, the Outreach Division had entered into an agreement with the UNLV Research Foundation, a nonprofit fundraising arm of the university that runs the security institute, to work together on homeland security projects.

Two months later, the institute and the Outreach Division began collaborating on a $500,000 contract to develop a security training program for a "New York client." Although the institute has not publicly named the client because of a confidentiality agreement, the Sun has previously identified the firm as the Walt Disney Co.

Gault's firm, which was consulting for the Outreach Division, was eventually hired by the institute as a subcontractor on that project.

In late February 2005, in the middle of the contract, the institute abruptly informed both the Outreach Division and Qualifying for Success that it was terminating its relationship with both of them.

That led to a dispute between the institute and Qualifying for Success over money still owed to Gault's company.

During that dispute, in which the institute hired accountants to question some of the invoices that Qualifying for Success had submitted, Gault said he first learned that the institute was not under the university's direct control.

"My concern was that people working with the institute were being misled into thinking that all of their money was being poured into the university, when in fact it was going to a private, nonprofit corporation," he said.

Eventually, Gault settled his financial differences with the institute, but he remained one of its more open critics within university circles.

Then came the damning April audit results, which forced Gault to defend his own dealings with the university.

The Outreach Division was hit particularly hard for its overall failings.

"This department has a significant lack of management oversight with respect to all aspects of its financial operations," said the report, put together by lead UNLV auditor Rhett Vertrees. "In each area examined (cash receipts, expenditures and business practices), the department operates without written procedures, and the explanations provided by different department personnel varied to the point of being unusable."

The report concluded: "The business practices of the department are not in compliance with reasonable standards of the practice of a public entity."

It also chastised the Outreach Division for maintaining cozy ties with Gault's company, making a broad range of recommendations to put that relationship on a more conventional business footing.

Lee said there are some "overstatements" and "inaccuracies" in the report that he intends to address in his formal response to the auditors, but he conceded that the results do not make his department look good.

"Things need to be improved," he said. "We're taking aggressive proactive steps to put our fiscal house in order."

Gault said he has worked hard to answer the concerns about his company's dealings and is willing to cooperate with anyone looking to improve things.

The words of both men were backed up by Gerry Bomotti, vice president of finance at UNLV, in an e-mail circulated this week at the university.

"It was not a good audit report by any stretch of the imagination," wrote Bomotti, who oversees all auditing. "But most of the items can be fixed, and the department has committed to doing that (and has recently hired a professional financial manager to assist them), so I expect all items will be addressed in the near future."

Meanwhile, Lee, who is not regarded as a fan of the Institute for Security Studies, joined Gault and Bussell in questioning the timing of the effort to disparage his division.

"I find it very curious that of the hundreds of internal audits conducted by the university, the one involving the Division of Educational Outreach becomes a point of interest to the media," he said. "We intend, however, to fully cooperate with any media requests."