CCSN acts in response to audit

Tuesday, June 20, 2000 | 11:13 a.m.

RENO -- The administration of the Community College of Southern Nevada has been shaken up in response to audit findings that the school overspent its budget on projects, ignored state policies and kept shoddy records on its presidential host fund.

The financial examination covered the period from July 1, 1999, to Jan. 14, 2000, and was billed as a presidential exit audit for Richard Moore who left that job to become president of the proposed state college in Henderson.

Allen Ruter, vice president for finance and administration at CCSN, said many of the problems noted in the audit occurred under the supervision of the Department for Planning and Administrative Services, which was headed by Orlando Sandoval, who has joined Moore in Henderson.

The planning and administrative services department has been abolished since the audit and the functions have been consolidated under Ruter.

Ruter's letter of May 26, answering many of the criticisms in the internal audit, was released at a meeting Monday of the audit committee of the regents of the University and Community College System of Nevada.

The audit found that a program to provide students free classes was overspent by $600,000. Other money had to be used to close the gap but the deficit is expected to reach $439,351 for this fiscal year.

Moore, speaking for himself and Sandoval, said today that no money is missing -- it is just an accounting snafu for which he takes the blame. He also said the program was a worthy one from an education standpoint.

"I am pleased that they did a thorough job on the audit and if there was an error, I take responsibility," Moore said, noting that overall the audits that were conducted "found things in good shape."

Moore said he initiated a plan to provide free classes, which included shifting money at the end of the fiscal year on June 30 to cover the costs. He left in January to take the state college post and the funds were never shifted.

"The results (of the program) were that about 700-1,000 people got to take at least one free class, and many of them were Clark County School District employees working to become teachers," Moore said, noting that the program was paid for in part by profits from the college bookstore and vending machines.

The audit performed by John Love and Mark Nash under the direction of Sandra Cardinal said such a plan to shift funds is not a good idea.

"When an account is overspent the account should go through the proper budgeting process to readjust the budget," the audit said. "Charging of expenditures for one account to another is contrary to good accounting procedures."

The audit recommends CCSN follow the accounting procedures established by the chancellor's office.

Ruter said during the time of the audit findings, the control for financial aid was under the department of planning and administrative services which as been eliminated. In the future, he said the "budget office will ensure that financial aid will adhere to the budgeting procedures established by the chancellor's office."

CCSN, according to the auditors, did not notify or get approval from the regents for seven projects, three of which cost more than $25,000. Expenditures were consistently charged to incorrect accounts. That made it difficult to determine whether the charges were within the budget amounts.

After some reconciliation, some projects over the budgeted amount were approved.

Ruter said the planning department had oversight of these projects and the authority is now in his office. In addition, he said, "The controller's office will directly manage this area and is well aware of the Board of Regent's policies." He said policy will be followed in the future.

The policy of the Board of Regents was also ignored when the college shifted funds to pay maintenance workers. The college used $239,281 from capital improvement fees instead of from state funds. "Since the state pays for the salaries of the maintenance employees we believe it is not proper to reclassify the salaries to capital improvement accounts," said the auditors.

The shift in the payment plan was supposed to be approved by the regents but it was never submitted to the board.

Ruter said the problem over the labor maintenance charges has been cleared up.

Presidents at the various campuses have a host account. Auditors said these expenses must be documented with the amount spent, date, time, place, business purpose and business relationship of those attending the function. They reviewed 90 expenditures at CCSN.

"Based on the available documentation on 53 host expenditures, we could not determine whether the expenditures were proper," said the auditors. "We recommend that all host expenditures follow the guidelines set forth in the chancellor's memorandum."

Ruter said there was no formal approval of the chancellor's memorandum and the school followed IRS guidelines in areas such as meals and entertainment reimbursement.

"The college believes it was following existing Board of Regents' policy contained in the Board of Regents' handbook," Ruter said. But he said backup documentation will be given in the future.

The audit said eight computers were purchased by CCSN but only seven were accounted for in the inventory. It recommended the school search for the missing unit. Ruter said the computer has never been found and it was reported stolen. Again, he said, it was under the planning department.

He said the controller's office has retrained the staff that receives the merchandise and it has stressed the importance of protecting college property.

In another financial examination release Monday, auditors said they conducted an inventory of equipment at the College of Hotel Administration at UNLV.

"An audit sample of 71 items with a total cost of $236,464 was selected for review. We were unable to locate 17 items with a total cost of $48,291," auditors reported. Included in the missing items were two laserjet printers, which cost a total of $2,170. Two other items costing $9,000 had been stolen.

The college said a further investigation of the complete inventory list found all but $4,396 in inventory, which is seven-tenths of one percent of the total college inventory.