NAU President Rita Cheng and her spouse’s travel to conferences, athletic events, donor meetings and other university events were the subjects of a state audit in November 2019, which found that Cheng spent upward of $40,000 on travel expenses that did not comply with university travel policies or lacked proper documentation.
Cheng’s spending included business- and first-class airfare to Russia, as well as multiple hotel bookings, valet parking, room service and early check-in fees. In the 2019 fiscal year, Cheng was reimbursed nearly $65,000 for her travel, leaving 62% of her spending in question, as reported in the audit.
“Please note that while the auditor general does characterize the travel reimbursement as ‘inappropriate,’ this word was used solely because the auditor general found that documentation was insufficient — importantly, the report does not question the legitimacy of the travel itself,” Cheng said in an email exchange with NAU Faculty Senate President Gioia Woods.
NAU reimbursed Cheng $30,641 for both business- and first-class tickets to Russia, as well as two replacement business-class tickets. NAU also purchased a $5,862 round-trip business-class ticket for Cheng’s husband, Tom Cheng, to attend a conference in Israel with her, despite a sponsor offering reimbursement for either two coach tickets or a business-class ticket.
After receiving the results of the audit in October 2019, the NAU Foundation reimbursed the university $37,785 from the Foundation President’s Fund to cover the airfare to Russia, Tom Cheng’s airfare to Israel, Russian visas and early check-in fees, according to the audit. Financial statements reported the total assets of the foundation to be $216,346, as of June 30, 2018.
In an interview with The Arizona Republic, Cheng said she would reimburse the Northern Arizona University Foundation for the difference between coach and business-class tickets.
“I need to take responsibility for the lack of documentation pertaining to the ticketing of my travel, and I’ll be repaying the foundation for the cost of difference between the business and coach travel,” Cheng said.
The audit also called Cheng into question regarding five business trips, which included personal travel, of which university employees were unable to provide required documentation. Among the required documentation is a cost analysis discerning whether personal travel increased the accommodation cost, which was not provided by NAU.
Cheng and her spouse’s hotel bookings were noted in the audit, which found that 13 of the president’s hotel stays were reported to have exceeded the allowable state government rate, costing the university an additional $1,751. Documentation management failed to provide evidence supporting public purpose for excess spending.
“The president’s travel expense summaries she signed as correct and proper did not include required documentation of the public purpose and benefit, or any justification and approval for deviating from university and ABOR policies,” according to the audit of the 17 expense summaries and two purchasing card payments, which were reviewed.
According to the report released by the Arizona Auditor General, Cheng is not exempt from university and ABOR travel policies that apply to all employees. The university staff failed to request advanced approval or provide justification for the spending, which was greater than the amount allotted. Additionally, the university did not include the required public purpose justification.
“NAU firmly believes no employee deliberately did not comply with applicable policies,” a required response signed by NAU Chief Financial Officer Bjorn Flugstad stated. “The president’s staff … believed they were complying with all travel policies when preparing and approving the travel expense summaries for the president’s signature.”
The official NAU statement provided details pertaining to the expenses reviewed in the audit and claimed that staff carefully reviewed the “appropriateness of both travel and the expenditure of each trip noted” in line with the process of review for university travel. The statement also noted that spousal travel was approved for Cheng in 2014 and did not require preauthorization.
Addressing the trip to Russia, NAU responded with a written justification for the business- and first-class flights, noting the length of the international flight and the overall schedule of the trip. NAU is also aware that the trip was not properly documented. Additional fares were purchased because of “carrier-caused delays” to ensure that the trip was successful.
Regarding the 13 hotel stays mentioned in the audit, nine were in Phoenix. Rates in Phoenix can exceed the allowable government rate, according to the NAU statement, specifically during the spring season, which coincides with the Arizona Legislative session. However, the university lacked proper documentation to justify paying a higher cost.
“Each example [in the audit] resulted in demonstrable results, which benefitted the university, from the enrollment of new students to establishing new visiting scholar’s exchanges,” Flugstad wrote.
Moving forward, NAU will look to handle Cheng’s travel expenses with more diligence. In addition to the reimbursement from the NAU Foundation, the university plans to move travel reimbursement claims to the Chief Financial Office and will include separate travel expense summaries for each individual trip. Staff will also undergo training to ensure that Cheng’s spending is documented correctly, according to NAU’s statement.