ASU chancellor resigns amid controversy related to wife’s job with the university

Arkansas State University Chancellor Tim Hudson resigned late Tuesday night after an internal audit revealed he attempted to hire his wife, Dr. Deidra (Dee Dee) Hudson, as the school’s full-time studies abroad director, according to an audit obtained by Talk Business & Politics.

It was also revealed that students, under the leadership of Dee Dee, had placed money into a private PayPal account and a private checking account for trips abroad that was not an authorized account managed by the university.

When Tim Hudson was told she couldn’t take the position because she was related to him, and it would be a violation of state law, he attempted to have the job removed, which would have allowed her to continue to direct the program in a part-time capacity, documents show.

ASU President Chuck Welch accepted Hudson’s two-sentence resignation letter. Welch, who was chancellor since 2012, was not available for comment Wednesday, ASU Communications Director Jeff Hankins told Talk Business & Politics. ASU provost and vice-chancellor Lynita Cooksey has been appointed as the interim chancellor. A timetable to appoint a permanent replacement has not been set, Hankins said.

“I want to thank Dr. Tim Hudson for his service to Arkansas State University. A-State experienced many significant milestones during his tenure,” Welch said in statement.

Attempts to contact Hudson were unsuccessful. He also resigned as a professor in college’s business department. School officials didn’t say if the resignation was tied to the internal audit.

Tim Hudson will not receive severance pay and will only get his accrued vacation time, Hankins said. His annual salary was $360,000 per year, according to his contract. The former chancellor and ASU have entered into a legal agreement that states he is still in good standing with the university, but he may never apply for an administrative post or any other job with ASU in the future.

“Dr. Hudson’s personnel file will reflect that he is eligible for rehire … in a non-administrative, non-supervisory position. However, Dr. Hudson and ASU mutually agree that he will not seek future employment with Arkansas State University,” the agreement stated.

The former chancellor also denied he committed any illegal acts while working at the school, according to the agreement.

What possible legal ramifications may result from this audit are still unknown. Another audit in this matter is expected to be released Friday, Hankins said.

Dee Dee Hudson has also resigned her post, according to the university. She was paid $123,848.12 from July 1, 2013 through April 30, 2016 for the part-time, temporary director’s position, according to figures released. Dee Dee Hudson also took numerous, expense paid trips to London, Lanjaron, Spain, and other locations for work. Each was connected to the study abroad program, Dee Dee Hudson told auditors.

She applied for the permanent director’s job Feb. 11. Auditors discovered that in November 2015, Tim Hudson pushed for the job to become a full-time position that paid more than $50,000 per year. Once he learned his wife was disqualified from the job, he asked Cooksey to terminate the full-time director’s position even though 14 applicants had already submitted resumes. The position was terminated Feb. 17, according to the audit, and the other applicants received an email stating this.

The audit revealed chronic disorganization in the studies abroad program under the leadership of Dr. Dee Dee Hudson. Many fees were not collected, and money from various programs was placed in numerous accounts. Former ASU employee Marko Korkeakoski was slated to lead a studies abroad trip to several Nordic countries earlier this year. In March, it was learned that Korkeakoski asked students planning to make the trip to make payments to his personal PayPal account and checking account. When asked by officials on March 14 why students were paying into personal accounts, and not ones sanctioned by the university, Dee Dee Hudson emailed this response.

“We are working on this. It should have been setup through an A-State account. Will talk to professor and see where we are and get back with you,” she stated.

That same day Korkeakoski also responded by email to the query.

“The reason why I asked students to use either my PayPal, (which is very secure and it has insurance against fraud) or send the check to my bank  was that there around 30 entities that I need to pay and many of them do not accept credit card payment,” he said.

About $19,100 in payments were made by 10 students into Korkeakoski’s PayPal account, according to audit findings. The money was ultimately placed in an account specifically for the trip, according to information released. It was also revealed that he no longer has a contract with ASU, and that’s a potential infraction, too.

The audit report also showed that Dee Dee Hudson contracted a third-party vendor, Multisense, in Lanjaron, Spain to aid with the studies abroad program there. The vendor does not have a written contract with the university, the report stated.

In response to the audit, ASU administrators have decided to hire a full-time studies abroad program director, and that position will be filled by Aug. 22. According to ASU, the director and the universities’ legal council will ensure that all policies, procedures, and others will be followed in the studies abroad program, and Multisense will not be used unless a written contract can be established.