President Eric Kaler is recommending a new financial oversight group for the University of Minnesota athletics department following Tuesday’s audit revealing hundreds of thousands of dollars of improper spending.

“The people of Minnesota have a right to expect better of all of us,” Kaler told the Board of Regents on Friday as he released an “action plan” to address sexual harassment and tighten financial oversight of Gopher Athletics.

Kaler said that many of the problems disclosed Tuesday, including tens of thousands of dollars spent on alcohol, parties and other luxuries in violation of U policy, “already have been addressed” by Beth Goetz, the interim athletic director. She replaced Norwood Teague, who resigned in August in the wake of a sexual harassment incident at a senior leadership retreat.

Kaler said the new financial oversight group would “strengthen the culture of financial compliance” in athletics. The new group will be chaired by Vice President Richard Pfutzenreuter, the U’s chief financial officer.

Kaler also asked Kathy Brown, the U’s vice president for human resources, to determine whether any current employees should face disciplinary action. He said he would make a progress report to regents in February.

Tuesday’s audit criticized the athletics department for, among other things, improper spending on alcohol, expensive hotels and parties during Teague’s tenure. It also found that senior leaders bypassed the U’s checks and balances when filing expense reports, hiring acquaintances, collecting unauthorized payments for radio interviews and other arrangements using university funds. The U says it has ended those arrangements.

“No matter who it was who made bad decisions or who violated and circumvented established policies, this university failed to live up to the standards Minnesotans set for us,” Kaler said.

Since the audit, a spokesman said, six unidentified employees have reimbursed the U a total of $2,566 for questionable expenses. The U also is seeking $6,668 from Teague.

Kaler acknowledged that the recent trouble in athletics “has been a black eye for the university.” But he defended his handling of the situation. “When we found out we had a problem, we very aggressively tackled it,” he said Friday. He noted that Teague “was gone in two weeks” after he was accused of sexually harassing two senior administrators at a July leadership retreat. That incident, which Teague admitted, led the U to fast-track the financial audit and commission an external investigation. The investigation concluded that there was no widespread culture of sexual harassment in the athletics department.

Kaler said that he was “gratified” by that finding, but he’s also taking steps to improve the U’s handling of such cases. “We must continue to be diligent in recognizing sexual harassment and assault when it occurs, and act quickly to respond,” he said.

Confidence in Kaler

Dean Johnson, chair of the Board of Regents, acknowledged that it’s been a rough time, but he had only praise for Kaler. “We have complete confidence in President Kaler’s leadership,” he said Friday. “Any time you’re at the top of the ladder, it’s easy for the critics to take potshots.” But he noted that Kaler has “led the university to new heights” in such areas as graduation rates, fundraising and research.

On Friday, the university foundation reported a record $351 million in donations and pledges last year. The total, from more than 78,000 donors, is $62 million more than the previous high, reported in 2008.

“He’s in solid standing with the 12 members of the board,” Johnson said.

Kaler’s statement outlining his plan can be found at