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UPDATE: UCF To Sever Ties With John Hitt Over Misspent Funds

Trevor Coulbourn Hall was built with state money that, by law, can't be used for new construction. (Nick Leyva, UCF)
Nick Leyva
Trevor Coulbourn Hall was built with state money that, by law, can't be used for new construction. (Nick Leyva, UCF)

The University of Central Florida Board of Trustees has agree to sever ties with former president John Hitt.

Hitt, who retired last year, was being paid about $300,000 annually to help with fundraising while in retirement. He asked to be removed from that contract after an investigation into misspending on a construction project he signed off on during his tenure.

Additionally, the current UCF president says he will accept a recommendation that he not be paid performance bonuses for two years over the same scandal. Dale Whittaker could forfeit hundreds of thousands of dollars if the move is approved.

Whittaker said he hopes it will help improve trust, and increase ethics and accountability at UCF.

Auditors discovered last year that the $38 million used to build the new Trevor Colbourn Hall came from state money that specifically can’t be used for new construction. What’s worse, in total, the university illegally spent or planned to spend nearly $85 million on Trevor Colbourn Hall and other projects.

That led UCF to request the resignation of Chief Financial Officer Bill Merck last year and hire an outside firm to investigate. Bryan Cave Leighton Paisner released their report Thursday (check here to read the full report).

The report found no one profited from the misuse of funds, and that leaders were often misled about where the money was coming from. There was no evidence that leaders at the school, or board members, were directly told the money couldn't be spent on new construction.

Four UCF employees are expected to be fired for their role in the illegal use of state funds for construction. The four employees being fired are: Associate Provost for Budget, Planning, and Administration, and Associate VP for Finance Tracy Clark; Associate VP for Facilities & Safety Lee Kernek; Associate VP for Debt and Revenue Management John Pittman; and Assistant VP, University Controller Christy Tant.

Several employees knew the funding source was illegal and asked Merck about, but he downplayed the risk, saying it would just lead to a comment in an audit. Both Tant and Clark told investigators they feared challenging Merck would end their career.

State funding typically used for new construction at universities had plummeted after the recession. Merck has said he believes the decision was justified because the old Colbourn Hall presented an imminent health and safety risk to its occupants.

"We find both of these claims to be rooted in legitimate concerns that Merck and other University officials faced at the time of the decisions," investigators wrote. "However, the evidence does not support a conclusion that Colbourn presented an imminent health or safety risk requiring emergency action, nor does it support the claim that there was no other alternative but to use E&G funds."

President Whittaker, in a memo to university staff, said he was "embarrassed" by what happened. Whittaker signed off on the construction, but told investigators he didn’t know using the funds was inappropriate.

He also announced the creation of a new position at UCF: Chief Accountability Officer.

Update: A previous version of this story did not make clear that Trevor Colbourn Hall is included in the total amount of misappropriated funds or planned misappropriations.