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GREENSBORO — Officials at N.C. A&T said a "misinterpretation" was the reason $380,000 that was supposed to be deposited in university coffers was instead put into the Chancellor's Discretionary Fund in the N.C. A&T Foundation.

A report by the Office of the State Auditor found that the money was spent on things not allowed by UNC System policy, including commissioned art work, an annuity for a faculty member and travel for the wife of former Chancellor James Renick.

"A misinterpretation of the vending policy resulted in the transferring of the funds to the foundation," said Mable Scott, the university's spokeswoman.

Mark Kiel, A&T's vice chancellor for development and university relations, said the beverage vending contract was complicated.

"One could, when you review the details of the transaction, you could see that one could misinterpret and make that mistake," Kiel said Monday.

Messages left Monday at Renick's Washington office were not returned.

According to the audit report, the vendor paid A&T $140,000 a year.

Allowable expenses would have included scholarships, student financial aid and other student activities as authorized by the chancellor.

Kiel declined to name the beverage company and the faculty member who received the annuity. He said he didn't know if the commissioned artwork was one of the works on campus.

The audit report has been forwarded to numerous law enforcement agencies, including the Federal Bureau of Investigation's Charlotte office, the State Bureau of Investigation and the Guilford County District Attorney's office, said Chris Mears, the director of public affairs with the N.C. State Auditor's office.

The audit report, released last week, was the regularly scheduled audit of the university.

The state's audit also provided more details on the investigation into an Office of Naval Research grant that was reportedly misused in an internal audit released earlier this year.

The Office of Naval Research and A&T have agreed that $422,415 of the questioned program expenses — which had totaled about $500,000 — were for legitimate expenses, including stipends, tuition, travel insurance and laptop computers, according to the report.

"The University recognizes that control over expenditures activity is strengthened by obtaining written agency approvals or amendments before enacting transactions," the university said in its response to auditors.

Kiel reiterated Monday that the university is focused on moving past the audits. "The university is not in danger of collapsing because of these one, two, three allegations," he said.

"We are now focusing on correcting these allegations and moving the university forward."

Contact Lanita Withers at 373-7071 or lwithers@news-record.com