UNM Keeps Overpaying its Coaches by Accident

By Daniel Libit

In 2012, then-ESPN.com reporter Andy Katz wrote a story about then-UNM men’s basketball coach Steve Alford and his well-compensated skipper, Craig Neal.

“I pay him too much,” Alford jokingly said of Neal, who made $300,000 at the time as the Lobos’ top assistant.

Said Neal: “(Alford) does pay me too much and it makes it hard for me to leave.”

The funny thing (if heedless public spending is your kind of humor) is that when Alford left to UCLA, and Neal was promoted as his replacement, UNM actually did overpay him. By quite a lot.

While Neal was supposed to have been hired for $750,000 a year, pay stubs obtained by NMFishbowl.com show that he actually accrued $900,647.91 in non-incentive compensation over the first 12 months on the job.

That means UNM gave Neal $150,000 more than he was entitled to earn, per the terms of his contract. According to five sources who worked in the Lobos’ Athletic Department, the overpayment was the product of gross human resource error. And it apparently took the school more than a year before anyone noticed.

On Thursday, confronted with these findings, a UNM spokesperson acknowledged the bungle while declining to explain how it all came to happen.

“There was an unintentional overpayment to Craig Neal, which was repaid in full some time ago through payroll deduction,” UNM’s Steve Carr told NMFishbowl.com in an email.

You might think this kind of payroll snafu would serve as a giant wakeup call for an athletic department in need of every penny. But, sure enough, almost the exact same thing happened recently with UNM’s head baseball coach.

“A similar unintentional overpayment was made to Ray Birmingham, which is also being recouped through the same payroll deduction process, and will be paid in full by (June 30),” Carr said.

Birmingham and Neal did not respond to requests to comment for this story. Neither did embattled UNM Athletic Director Paul Krebs. Carr declined to answer questions about how these discrepancies occurred, how they went so long undetected, and who was responsible for them. At this point, NMFishbowl.com cannot independently verify their statuses of resolution. (We’re in the process of requesting more documents that will hopefully provide clarity.)

But Athletic Department sources say that the overpayments underscore deep-seated problems with the school’s human resources mechanism, both in the department and at main campus. The case of Neal is particularly alarming, given how much extra income he was earning over such a long period of time.

According to his first head-coaching contract, signed May 1, 2013, Neal was initially slated to receive a total compensation package of $750,000, plus incentives. Included therein was his base salary of $300,000; $100,000 for promoting the program and Athletic Department; $250,000 for radio and television work; and $100,000 for the university’s shoe and apparel deal. Accordingly, Neal should have earned an average of $62,500 per month, as opposed to the $74,500 he started grossing from the start.

Beginning in July 2014, 15 months after he was hired, Neal’s pay stubs show a withholding line-item for “payroll accounts receivable”. Carr said this notation indicates the start of the recoupment process for the excesses of his pay. The actual amounts of these deductions are redacted in the documents. However, based on the visible information borne out by the pay stubs, it appears that if the school was recouping overpayments from him, it was doing so at a glacial pace.

The pay stubs reveal four-percent increase in Neal’s withholding from 2013 to 2014. If that difference owed entirely to money being returned to UNM’s accounts receivable, the most Neal would have ‘paid back’ to the school in 2014 was $35,000. At that rate, it would have taken him over two years to return the total amount he had been overpaid in his first year. NMFishbowl.com does not know whether the amount of the withholding increased after 2014.

According to UNM’s Administrative Policies and Procedures Manual, the “full repayment amount must be received within the same calendar years as the overpayment.” Because Neal’s overpayments stretched over the course of two calendar years, it is unclear how long he was entitled to recoup the university.

Here’s another wrinkle: the same month UNM began the process of recouping Neal’s overpayments, the coach was reportedly given $200,000 raise. This contract revision was supposed to bring Neal’s annual, non-deferred compensation to $900,000. Carr insisted that, despite the timing of the two, Neal’s raise was entirely unrelated to the “overpayment issue”. There was much public debate at the time about whether Neal deserved a boost in pay following his inaugural season, in which the Lobos lost in the first round of the NCAA Tournament. As it turns out, that discussion was fairly moot: Neal had been earning that higher salary all along.

As NMFishbowl.com was first to report Thursday, the New Mexico State Auditor’s office notified UNM this week that it had commenced a Special Audit investigation into the financial activities of the school’s Athletic Department. Presumably, incidents of overpayments for Athletic Department employees would fall within its broad purview.

In April, Neal was bought out of the remainder of his coaching contract at UNM. He is due to be paid a total of $1 million, in monthly increments, over two years. Perhaps this time, someone will take an earlier look at the pay stubs.