Tax officials begin audit of Barnett's camps

Updated: December 14, 2005, 8:13 PM ET
Associated Press

DENVER -- State tax officials on Wednesday began reviewing a highly critical audit of the University of Colorado and football camps run by former coach Gary Barnett to determine whether anyone owes taxes.

State auditors said this week that football camp records were in such a mess that they couldn't be sure whether more than $400,000 worth of transactions broke any rules. The audit also cited repeated examples of financial carelessness inside the athletic department and said some state taxes may not have been paid.

Members of the Legislative Audit Committee voted Tuesday to ask the state Department of Revenue to examine the audit report.

"We're concerned that there was some taxes that weren't paid," said committee member Sen. Deanna Hanna, D-Lakewood. "We want to know what can be done and whether they broke any laws. We think they did, but maybe they didn't."

Barnett's attorney, John Rodman, was in court and did not immediately return a phone message.

Violations of state tax law can result in criminal or civil penalties. Michael Cooke, executive director of the Revenue Department, said the agency usually does not pursue criminal sanctions.

She said she did not know how long the tax review might take.

Kristen Hubbell, spokeswoman for the state attorney general's office, said the office would communicate with the auditor's office and others to determine whether any follow-up is needed. She declined further comment.

She said earlier that the audits did not turn up any new information.

The audit of the university and the camps, run by Barnett's company High Hopes from 2002 to 2004, raised a number of tax questions. Auditors said in a report released Monday that vendors failed to assess an estimated $1,300 in sales taxes on about $16,900 in camp purchases. The report did not conclude whether vendors mistook the camp as tax-exempt or whether deception was involved.

Camp staff told auditors no sales taxes were paid on concession sales, according to the audit report. Auditors said incomplete records made it impossible to tell how much sales tax might be owed.

Some football staff members underreported a total of $68,000 in income from the camps from 2002 to 2004, the audit said. Coaches also received tax-deductible gift receipts for $30 monthly payments toward insurance on courtesy cars that were recorded as donations to the CU Foundation, the university's private fundraising arm, rather than payments to offset insurance costs, the audit said.

Barnett told auditors he was working with the Internal Revenue Service regarding the football camps and income tax reporting, the audit report said. The IRS has said it could not comment.

The university took control of the camps this past summer.

Barnett was forced to resign from CU last week after an embarrassing string of three losses and received a $3 million settlement. Athletic director Mike Bohn has said there was no tie between the announcement of Barnett's departure and the release of the audit results.

Copyright 2005 by The Associated Press