UT Arlington President Resigns After Investigation Into OPM Dealings

Vistasp Karbhari disputed the third-party report, which found an improper relationship between the university and an online program management company.

March 23, 2020
 
PR Newswire
Former UT Arlington president Vistasp Karbhari

Vistasp Karbhari, president of the University of Texas at Arlington, announced Thursday that he would resign from his role, effective immediately.

His resignation follows the release of an investigation into financial dealings between Karbhari and a university vendor, first reported by the Dallas Morning News. The report about the investigation does not disclose the name of the vendor. But in a response to the investigation, Karbhari names Academic Partnerships, an online program management company.

Karbhari had previously announced in a letter earlier this month that he would step down in late August.

Teik Lim, provost and vice president for academic affairs, is serving as the administrator in charge of the university, effective March 19.

The report on the investigation into Karbhari's dealings, conducted by Protiviti, a management consulting company, substantiated claims that the university was accepting unqualified students into its nursing program through a program called Direct Admit. That program immediately admitted online transfer students before evaluating their academic credentials, despite several concerns raised by admissions officers. Vendor executives “significantly influenced” admissions processes and decisions, the report states.

It also details two international trips Karbhari took with vendor executives, says that he allowed a senior associate dean to continue her salaried work with the vendor despite conflicts of interest and also says that the university allowed the vendor to reimburse admissions employees for overtime so they could process more applicants.

Academic Partnerships declined to comment. 

Online program management companies are often paid a percentage of net tuition income, according to Larry Ladd, a senior consultant at AGB who specializes in governance, strategy and finance​. Therefore, higher enrollments typically lead to a greater chunk of change to the OPM.

“Don’t outsource academic quality control, don’t outsource admissions standards and make sure that the processes of the OPM are consistent with the institution’s core values,” Ladd said.

Karbhari “categorically denies” the allegations in a seething letter to Mike Peppers, chief audit executive for the UT system.

“We hoped to provide a short response, but the investigation report is so flawed due to lack of evidence, insufficient fact gathering, use of factually inaccurate data, and mischaracterizations, that it is impossible to give it any credence and should be rejected outright,” Karbhari wrote.

In a letter to UT system chancellor James Milliken, Peppers wrote that Protiviti considered Karbhari’s response and that it made “some edits and provided further clarification of certain points; however, none of their conclusions were changed.”

Ladd said that an unvarnished reputation is critical for a university president to be effective, even if allegations against them are disputed.

“Even if the allegations are not completely true, they create questions about the integrity of the president,” Ladd said. “The appearance of integrity is important … the president is a symbolic leader.”

The University of Texas System issued the following statement in response to the investigation.

"In response to an anonymous complaint to the state auditor, the UT System retained an outside firm to conduct an investigation of UT Arlington’s internal business operations with respect to its online education programs. As a result of the investigation, the UT System required changes in UT Arlington’s admissions policy."

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