A report released today by the office of the state auditor cites four illegal or questionable transactions by officials at the Mountainland Applied Technology College, one of them involving the Utah Republican Party.

Financial practices of the college, with campuses in Orem, American Fork and Spanish Fork, were called into question by an employee. The audit reports it found multiple expenditures between May 1, 2006, and June 30, 2007, that violated state law and the rules set by the governing boards of directors.

Earlier this month, two officials, including Utah College of Applied Technology President Robert O. Brems and MATC President Clay Christensen were placed on paid administrative leave while the results of the audit and the auditor's recommendations could be considered. Today's report includes a response from Brems apologizing "for any mistakes I may have made."

"I at no time had any intention or belief that my actions were in any way improper or violated any law or policy," Brems stated. He added that he is willing to right any wrongs and correct policies found to be askew.

"I acted with a good faith belief that my conduct was entirely legal, proper and well-intentioned," he said.

The transactions in question include an expenditure of $416.14 for supplies used to create a parade float requested by the Republican Party.

Rep. Becky Lockhart, R-Provo, told the Deseret Morning News today that she personally offered, both before and after the float was built, to pay for the cost of the work.

"I offered to write Clay a check," said Lockhart, whose husband, Stan Lockhart, is chairman of the Utah Republican Party.

Rep. Lockhart said that she was told when she first offered to pay for the work before it was done, to wait until the work was finished, as the cost wasn't known. But when she later offered to write a check after the float was finished, Christensen told her that an anonymous donor had taken care of it. At no time did she learn how much the work cost or who paid for it, the representative said.

Senate Majority Leader Sen. Curt Bramble, R-Provo, was also involved in MATC's construction of the float. He said that there would be no ethics investigations by the Legislature because no rules were broken. "There was no expectation of any favors and no expectation of any state money" being spent on the work, Bramble said.

Using MATC money to pay for float materials goes against Utah law, which states, "a public entity may not make expenditures from public funds for political purposes." According to the report, Christensen went against the advice of the state auditor and attorney general and used campus funds for an additional $694.87 toward the float.

Both Bramble and Lockhart said that last spring, Utah County GOP leaders thought it would be nice if the county party had a float that could be in a variety of summer parades, not only this year but in the future. The question then came up, where to get a "beat up old car" to be the chassis of the float, said Rep Lockhart. After that car was donated free, said Lockhart, "then we had to figure out how to build" a float. The idea came up that maybe it could be a class project for an MATC welding class.

"That was all I did," Bramble said. "I simply asked if they (MATC) ever did a class project. ... I saw it as a potential for a welding project for the class."

Rep. Lockhart said she and Bramble told state auditors that they offered to pay for the work. Rep. Lockhart said she never expected or wanted the work to be done for free. "I told Clay no discounts, no favors, we'd pay the total, full cost ... and I personally offered to write a check both before and after" the work was done, she said.

Labor costs were billed to the college, but it was found the college did not pay for the 29 hours of instructor work on the project. In his response, Brems says the costs were paid by a private donor and not the college, but the audit cited Christensen for a "disregard for the law."

The audit report says a second material weakness found within the MATC pertains to a "questionable transition package" offered to Brems when he left MATC to become UCAT president. The early retirement package, totaling $157,782, was approved by the MATC Board of Directors even though Brems didn't qualify for early retirement, the report says.

According to a response by Rich Kendell, commissioner of higher education, Brems had worked nearly 28 years in state employment, mostly as a career and technical education teacher and administrator in the public K-12 system, with his last four years as campus president of the MATC. Kendell said when the UCAT president job was offered to Brems, he was told retirement was handled through an entirely different system and benefits previously earned would no longer apply.

Brems also contributed nearly $40,000 of his transition package payment to a campus foundation to establish an endowment in his name, providing scholarships to students meeting criteria set by Brems and his wife. Since this third transaction, made in the form of a check paid by the campus to the foundation, two students have been awarded money from the endowment that was used at an institution other than MATC. Both students were family members of Brems, the audit report says.

A fourth discrepancy states a conflict of interest involving purchasing agreements at the college. A program director had been buying supplies from her husband, who is employed as a sales representative. Several of the purchase orders were not approved by a single department head, which is required by campus purchasing policy.

State Auditor Auston Johnson made several corrective recommendations to the campus board of directors, including:

• Establish procedures that disallow illegal transactions and ensures ethical behavior by all employees.

• Ensure reasonable control of public funds and how they are spent.

• Work with management to establish policies that minimize the risk of conflicts of interest.

• Adjust job assignments where appropriate.

He said his office explored other internal controls pertaining to MATC and UCAT in general, but only addressed findings resulting from noncompliance of certain procedures.

"By its nature, this report focuses on exceptions, weaknesses and problems," he said.

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