Former University of Michigan CAAS administrator and his son face charges in stolen computer cases

The two cases are linked, said Diane Brown, U-M police spokeswoman. But thus far, authorities aren’t saying how.

She said campus police have been working with officers at Detroit Public Schools and other police agencies on the two cases after receiving a tip about the possible fraud at U-M.

Washtenaw County Chief Deputy Assistant Prosecutor Steve Hiller declined to comment on the local case and any links between the cases. Wayne County Prosecutor’s Office spokeswoman Maria Miller declined to comment on the Washtenaw case and “whether there is any link to our case.”

On Tuesday, Wayne County prosecutors charged 10 people, including Dion Lewis Sims, a Michigan State University football and basketball player from Ypsilanti. He and the others are accused of stealing 104 computers worth $158,000 from Detroit schools and reselling them. Sims faces charges of receiving and concealing stolen property.

His dad, Donald Lewis Sims Jr., is accused of fraudulently purchasing at least 75 computers and 14 computer-related items valued at nearly $74,000. It was part of his job to buy equipment for CAAS, which is a unit of the College of Literature, Science, and the Arts, Brown has said.

Donald Lewis Sims Jr. also is accused of making about $14,000 in other fraudulent purchases, for which the university was not reimbursed, Brown said when he was charged. According to court records, those purchases were made on a U-M credit card.

Sims’ attorney couldn’t be reached for comment.

The alleged criminal activity occurred between Jan. 1, 2008, and Feb. 11, court records show.

Donald Lewis Sims Jr.’s employment ended March 22, university officials said, but would not specify if he was fired or resigned. He had worked at U-M since 1990 and earned $66,868.

Sims Jr. was criminally charged in June.

At the end of June, the University Audits office issued an audit report of the center that found problems.

“The audit was initiated when irregularities were brought to the university's attention during the investigation that led to the arrest of Mr. Sims,” U-M spokeswoman Kelly Cunningham said.

Cunningham said it’s regular practice to initiate an audit in such situations.

“Allegations of financial mismanagement are rare at U-M,” she said. “However, we treat any incident as an opportunity to strengthen financial oversight. A (police) investigation and an audit were initiated as soon as this situation was brought to our attention. Those are exactly the steps that should have been taken.”

Several issues surfaced in the audit, which was included in this month’s Board of Regents packet.

“This assessment determined controls within CAAS are ineffective at preventing or detecting inappropriate or fraudulent activity,” the report said.

So far, no other employees have been implicated in any wrongdoing at the center, Cunningham said.

“It does, however, remain an active investigation,” she said. “Regardless, we would not discuss personnel actions.”

Among the findings in the audit were financial statements not being reconciled for at least one year; “unusual trends” in purchasing card activity that weren’t looked into; and “excessive expenditures with no business purpose.”

The audit went on to list 36 areas university auditors targeted for improvement.

Included were:

• Making sure that all purchases were being made for the center. “Purchases in certain categories, such as computer equipment, travel and hosting should be pre-approved by the director.”
• Making sure all travel is for a "legitimate business purpose.”
• Making sure travel records for staff and faculty are reviewed regularly, “so unexpected increases/decreases can be reviewed in further detail.”
• Making sure conflict of interest forms were filled out properly. “Preliminary reviews by University Audits identified several situations not reported as a (conflict of interest), such as CAAS employees who are also CAAS vendors in areas of catering, construction, or interior design.”

Cunningham said the center and the university have taken the audit report to heart.

“CAAS is well on its way to addressing all of the points raised in the audit report,” she said. “A new key administrator started work this month, and CAAS joined the School of Literature, Science and the Arts' shared services program for financial and human resources management. These changes apply ‘best practices’ to the CAAS procedures.”

The audit said the scrutiny of the center isn’t over.

“A detailed follow-up review will be performed in the second quarter of fiscal year 2011,” the report said. “This should allow management sufficient time to design and implement new operating routines. During the follow-up, testing will be performed to determine if a strong control environment has been established and validate controls are operating as intended.”

David Jesse covers higher education for AnnArbor.com. He can be reached at davidjesse@annarbor.com or at 734-623-2534.