The University of Texas School of Law is working to boost its financial oversight after an internal audit found that an ex-employee embezzled nearly $1.6 million.

Former facilities director Jason Shoumaker resigned in 2017 after questions arose about questionable spending at the law school. He was arrested in May of 2018 and indicted later that year on charges of of theft, money laundering and abusing his official capacity. An audit conducted by the university and an outside law firm found that the law school ignored warning signs, failing to flag unusually large payments to vendors or tracking whether paid services were actually delivered.

Law dean Ward Farnsworth apologized to the law school community in a Sept. 13 email, saying the school is in the process or has already implemented the 17 recommendations issued in the auditor's report, as well as some additional steps.

"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. The well-being of this wonderful institution has always been my highest concern as your dean."

University of Texas Provost Maurie McInnis did not mince words in an Aug. 30 letter to Farnsworth, writing that the dean missed opportunities to stop Shoumaker's alleged fraud.

"You did not respond effectively to signs of trouble," the letter reads. "Instead, when you were alerted of concerns regarding your employee's procurement and accounting practice irregularities, you did not ensure his compliance with our policies regarding essential documentation and appropriate processes. The lack of oversight allowed the employee to continue a pattern of misappropriation of funds resulting in significant loss to the university."

It's not the first time the Austin law school has faced public scrutiny over its finances and spending. Former law dean Larry Sager resigned that post in 2011 amid a scandal over stipends and forgivable loans intended to recruit and retain faculty members. The law school's foundation issued $5.5 million in such loans, with Sager obtaining one for $500,000.

Nor is it the first time that law school employees have been accused of defrauding their campuses. Jennifer Ihns, a former clinic staffer at the University of Notre Dame Law School, was sentenced to two years in prison in 2018 for embezzling nearly $200,000 from the school. A former controller at New England Law Boston—Douglas Leman—pleaded guilty in 2011 to stealing more than $173,000 from the school.

According to the University of Texas audit, the law school's chief business officer spurred the investigation in 2017 by raising concerns about significant moving expenses Shoumaker authorized in 2014. That payment was $700,000 more than the estimated cost of the services required. The audit concluded that Shoumaker made personal purchases with law school funds.

"Also, there were financial losses because of an elaborate pattern of payments to the director from outside vendors for work purportedly done at UT," the report reads. "Additionally, these outside vendors received a considerable markup for the payments from UT, as directed by the director."

The audit includes 17 recommendations for the law school to improve its financial oversight. Among them:

–Ensure employees only retain the services of approved vendors.

–Expand controls over the use of law school procurement cards.

–Verify that projects are completed to satisfaction before submitting payment documentation.

According to the letter from McInnis, the law school is also funding an ongoing audit of its internal business operations for the next 12 months.

"While these management failures are serious and concerning, I believe that with your commitment and cooperation with internal audit, we can work collaboratively to ensure we achieve excellence," she wrote.