NEWS

CHAPEL HILL – The University of North Carolina at Chapel Hill fired three employees and a fourth resigned from the School of Medicine’s department of radiology as part of an internal review that uncovered financial mismanagement involving more than $300,000, officials said. Two of the ex-employees face criminal charges, and the university has taken immediate action to correct the management problems.

Chancellor James Moeser announced the disciplinary measures and results of the university-initiated probe. In a rare move, Moeser said he was exercising his legal right under state statute to release confidential personnel information to protect the university’s integrity.

"The university immediately notified the State Bureau of Investigation after learning of potential problems in radiology," Moeser said. "Our internal audit department has just completed a thorough review. We believe this is an isolated case. The university is seeking prosecution of these individuals to the fullest extent the law permits."

Moeser said the university was correcting all deficiencies identified in the audit review in the radiology department as well as with central operating processes. "We expect and demand strong fiscal accountability in all of our departments and units," he said.

Fired were James L. Foster, clinical academic department administrator IV; Cassandra Clementine Greene-Hines, computing consultant III; and Ronnie A. Tyson, facilities maintenance coordinator I. Wesley Hall, university administrative manager I, resigned.

A UNC police criminal investigation has produced pending arrest warrants for Greene-Hines and Tyson. Greene-Hines faces two felony embezzlement charges for misapplying and converting to her own use kickbacks (gifts cards and gratuities) totaling $3,100 as well as software valued at $179 while using department purchasing cards, according to UNC police. Tyson faces two criminal misdemeanor charges involving conflict of interest in connection with $198,061 of billings. Tyson administered contracts on behalf of UNC while serving as a partner or an associate with two different companies, police said. The police investigation is ongoing.

When Tyson came to the campus mail center to pick up checks that were to be mailed to an outside vendor, employees recognized that as a sign of possible fraud and reported it to radiology, said Phyllis C. Petree, director of internal audit. Then the internal audit department was notified, contacted the proper authorities, including the SBI and campus police, and began an extensive review.

That probe included employee interviews, analysis of operating procedures and an inventory of computers and other equipment. The review’s findings focused on conflicts of interest, fiscal controls, equipment and excess costs. Petree’s report concluded that the department’s operating procedures were inadequate to ensure that transactions were reasonable or followed policies and procedures. The lack of proper departmental controls allowed inappropriate expenses to occur without proper intervention by management.

Said Dr. Matthew A. Mauro, vice chair of radiology, "Our department is already following up on each and every recommendation in the internal audit review report. We are implementing sound fiscal management practices to correct these regrettable problems as quickly as possible."

Over a four-year period ending last September, radiology paid relatives and companies owned by relatives of Tyson or by Tyson himself, according to the audit. In many cases, Tyson made contacts to arrange for services from these companies, approved invoices and received checks paying for the services. Tyson’s supervisor, Greene-Hines, and the top fiscal manager, Foster, were aware of a family relationship between Tyson and principals of the company retained to provide moving services but did nothing to stop the arrangement, according to the report and university officials. Such practices violate university policy and state law.

Campus units or an independent off-campus vendor could have performed services such as moving. Radiology paid $105,500, $104,250 over the cost of using campus movers. Other bills for services ranging from cleaning to painting to floor installation totaled $93,610 -- $86,125 over the estimated cost if internal or other approved sources were used, the report said. Auditors could not determine if all services purchased were either needed or received.

Together, those excess charges totaled approximately $190,000, according to the report and officials. Auditors discovered another $112,750 in excess charges involving information technology activities, cleaning services and billing practices. Total excess charges were approximately $303,000, Petree said.

Examples of these excess charges included unauthorized purchases of 100 toner cartridges at a cost $43,000 higher than if they were bought from approved suppliers. Greene-Hines received about $3,100 in gift certificates and merchandise from the unauthorized supplier, the report and officials said.

Petree said internal audit would continue to monitor actions taken by radiology to correct problems and would also re-evaluate the department’s procedures in future follow-up reviews.

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News Services contact: Mike McFarland, (919) 962-8593

School of Medicine contact: Karen McCall, (919) 966-4752