Legislative auditors who uncovered serious financial mismanagement at Morgan State University want to broaden their investigation to more construction contracts at the public Baltimore campus, a key lawmaker said yesterday.

Del. John L. Bohanan Jr., a St. Mary's County Democrat, said he spoke with auditors before a contentious three-hour hearing he chaired yesterday. During the hearing, legislators sharply criticized Morgan officials for lax financial oversight of public money and raised the possibility that the General Assembly could rescind Morgan's hard-won authority to manage its own construction projects.

"Autonomy is granted and autonomy can be taken away," Del. Norman H. Conway warned Morgan President Earl S. Richardson during the hearing. Conway, a Wicomico County Democrat, is chairman of the powerful Appropriations Committee, which granted Morgan State construction autonomy in 2006, removing it from the purview of the state Department of General Services.

Yesterday's hearing was scheduled to be a routine annual review of Morgan's operating budget, but much of the focus was on a recent audit of the historically black college in Northeast Baltimore that revealed multiple "deficiencies" in Morgan's procurement practices.

Among the auditors' findings was that the state school padded a construction contract with a $3.1 million cushion, then used those funds to pay the same contractor, Baltimore-based Whiting-Turner Contracting Co., for different work without getting state approval.

Investigators found that Morgan spent $2.4 million of the $3.1 million in "questionable payments" to Whiting-Turner and could not explain where some of the money went. The college also appeared to artificially divide some projects into smaller pieces to avoid the scrutiny of the Board of Public Works, according to the auditors.

The Office of Legislative Audits has referred several of the findings to the criminal division of the state attorney general's office, which does not comment on open criminal investigations.

Richardson and the head of Morgan's governing Board of Regents, Dallas Evans, apologized repeatedly yesterday for "mistakes" uncovered by auditors and tried to convince lawmakers that the college has taken steps to avoid future incidents - but even key supporters of the university indicated that they were not satisfied.

When asked after the hearing whether letting Morgan cut its own deals with contractors was the right decision, Del. Adrienne A. Jones would only say: "I'll reserve judgment right now."

Jones, a Baltimore County Democrat, sponsored the 2006 legislation that granted Morgan construction autonomy, over the strong reservations of some of her colleagues on the Appropriations Committee.

During the hearing, Jones asked Richardson: "I want you to tell the committee why another bill shouldn't be put in to remove" Morgan's autonomy. "I'm cutting to the chase."

"Let's cut to the chase, madam," Richardson responded curtly. "This is not the first incident of an audit exception at a university. And there are other institutions around the state who also have independent authority."

Budget hearings typically do not generate much audience interest, but yesterday's event was standing-room-only. About 30 Morgan staff members, alumni and students - some of them had arrived on a university shuttle bus - packed the hearing room.

Bohanan's six-member subcommittee was augmented by several other Appropriations members: Conway, vice chairman James E. Proctor Jr. and Del. Talmadge Branch. Also attending was Del. Steven J. DeBoy Sr., who is House of Delegates chairman of the legislature's joint audit committee.

Richardson blamed most of the problems on the school's former director of construction management, who resigned in January. But he acknowledged that when Morgan was granted construction autonomy in 2006, it decided to hire a "lean and mean" staff in order to save money.

"It now appears we need to at least beef up the core staff ... for checks and balances, reviewing and overseeing," Richardson said. "We're committed to doing that."

Evans, chairman of Morgan's governing board, told lawmakers he was satisfied with the oversight systems Richardson has put into place and promised close oversight by the board.

"Rest assured," Evans said, "we will hold the president and his team accountable."

Morgan is not a part of the University System of Maryland, which is governed by a different Board of Regents.

Galen R. Clagett, a Frederick County Democrat who runs a property management firm, suggested to Evans that the board require Morgan to hire a third-party construction manager to oversee building projects "because there may in fact be criminality involved" on the part of Morgan's administration.

Evans demurred, saying: "There has been, quite frankly, no finding of fact that any criminal activity took place."

Evans asked the committee for help in hastening the attorney general's investigation.

"I am very anxious for something to come back to us from the attorney general's office," Evans said. "If you can in fact help move that process forward, we would ... appreciate it."

After the hearing, Bohanan said that rescinding Morgan's construction management autonomy remained "an option" that the Appropriations Committee might consider but expressed doubt that any action would be taken this year.

But he said legislative auditors probably will want to investigate more construction projects at Morgan not covered in the recent audit.

"I know they have further interest," Bohanan said. "I'm sure they want to go back and look at additional contracts."

gadi.dechter@baltsun.com