Audit turns up much broader fraud pattern by UT law school official

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An audit by the University of Texas at Austin found that a facilities director for the law school, indicted for felony fraud, cost the school more than $1.5 million, several times the original estimate made by investigators.

The fraud will cost the UT School of Law another $110,000 to continue the audit of all its business operations for another year, according to a report by the Office of Internal Audits.

“Serious failures in the oversight of law school operations” allowed Jason Shoumaker from January 2013 through August 2017 to take island and casino vacations paid for by falsified timesheets, questionable and inflated purchases and use of vendors with whom he had personal relationships, the report said.

Shoumaker, who remains free on a $100,000 bail pending trial, was originally charged in May 2018 with six felony counts of tampering with government records, The Texas Monitor reported. 

In December a Travis County grand jury added felony counts of money laundering, theft, and abuse of his official role with the university.

If convicted, Shoumaker could receive a sentence of life in prison and up to $10,000 in fines for each count.

Perry Minton, Shoumaker’s lawyer, did not return a message left by The Texas Monitor requesting comment on Monday.

Investigators identified at least $850,000 in payments approved by Shoumaker to vendors with insufficient documentation to prove that services had actually been rendered.

They also identified inflated payments to several vendors, including payments to a moving company that added $700,000 to the estimated correct billings. He made a practice of splitting up payments to avoid drawing attention to the totals, according to the report.

In addition to falsifying his timesheets, Shoumaker failed to notify the university he was running his own business while he was the facilities director, the report said. He also violated university policy on political activity by running for and being elected to the Lago Vista City Council, a post he resigned from in May 2016.

University officials began looking into Shoumaker’s business dealings in July 2017 when they were presented with procurement for $80,000 in purchases over a two month period to vendors they suspected had personal ties to Shoumaker, the report said.

The law school put Shoumaker on paid administrative leave and he resigned in November 2017.

At the time of Shoumaker’s indictment, investigators set a cost estimate of $300,000 for the purpose of charging him with felonies. The audit, begun several months after the criminal investigation started, revealed the broader scope of his activities.

The audit recommended 17 improvements in project management, procurement and spending that should be made not only by the law school but other departments in the university.

The law school agreed to the recommendations in a statement included in the audit report. “We believe that the director was aware of the rules that he violated,” the statement from school officials read. “We believe [there] are steps worth taking to address an essential overall issue: maintaining and fortifying a scrupulous culture within the school.”

The audit also included a stern rebuke of Dean Ward Farnsworth, in a letter from Provost Maurie McInnis. “Your employee carried out a significant fraudulent misappropriation of law school funds,” McInnis wrote. “You did not respond effectively to signs of trouble. The lack of oversight allowed the employee to continue a pattern of misappropriation of funds resulting in significant loss to the university.”

When asked for comment, Farnsworth forwarded to The Texas Monitor an email he sent to law school officials and employees.

“One important conclusion of the audit is that I myself did not establish adequate controls over this employee,” Farnsworth wrote. “For this, I have apologized to the university, and I apologize to you. I am sorry that the school has suffered as a result of this employee’s actions and my failure to stop him.

“The report includes multiple recommendations on how the law school can ensure that nothing like this ever happens again. These recommendations are in the process of being implemented or already have been. We are also considering additional measures beyond the report’s recommendations.

“An ethical workplace is our most important priority.”

UT spokesman Gary Susswein told the Austin American-Statesman on Sunday that “The university takes these findings and the charges against Mr. Shoumaker extremely seriously and is continuing to cooperate with the ongoing criminal investigation.  As a public university, we must always be good stewards of our budget and earn the public trust. We will work to prevent this type of behavior from occurring again.”

Mark Lisheron can be reached at [email protected].

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