Friday, Jan. 7, 2005 | 11:01 a.m.
CARSON CITY -- Legislative auditors uncovered several instances of misspent funds and problems with travel documents during a review of the University and Community College System of Nevada, lawmakers learned Thursday.
The misspent money came from host funds, which are used to promote good will or programs for the system and can include meals, beverages and small gifts when "conducting necessary business activities," Deputy Legislative Auditor Shannon Ryan said.
But a legislative audit of 200 of those expenditures in fiscal year 2003 showed that about 50 purchases, or 25 percent of the sample, had violated the system's policy requirements and were inappropriate. The misspent funds on that small sample totaled $7,800.
The university system spent more than $3.2 million on host accounts in fiscal year 2003, pulling money from more than 600 different accounts at the eight institutions.
UNR spent the most on hosting at $1.6 million in fiscal year 2003. UNLV spent $1.1. million and the Community College of Southern Nevada spent $179,922.
System policy requires that all host account spending come from non-state subsidized accounts, but the audit found that at least $2,500 in state money was spent.
Other spending violated university system policy, auditors said. There was spending on holiday party supplies for employees including flowers, decorations and alcohol; excessive gifts such as two $500 leather jackets given by UNLV's athletic department to visitors from another university's athletic department; parking fees were paid; lunches and bottled water were purchased for the staff; and golf green fees totaling $680 in lieu of honorariums were given to two speakers at UNLV.
Spending on employees from the host fund is limited by policy to refreshments at special events or meetings that run through normal meal or break time and include workers from different offices or units.
The problems arose, the audit said, because of "insufficient guidance and a breakdown in the approval process." It said there should be clearly defined policies and proper approval for all host expenditures.
Buster Neel, UCCSN vice chancellor for finance, agreed, noting that the Board of Regents has done its own audits of both host and travel accounts, and had instituted new policies to restrain usage of those funds. But he said this audit showed that the university system needs to further refine its policy and better train employees to make sure that everyone understood what could and could not be spent under a host account.
"The real issue is that we just don't have good guidelines, and what is there is unclear," Neel said.
Neel said he has set up a committee of finance officers from the state's institutions to review and strengthen the system's host account policy.
The audit recommended improved controls over the travel expenditures of employees. In fiscal 2003, $1.7 million was spent on travel with 59 percent of it on out-of-state trips.
About 45 percent of the travel claims reviewed by auditors did not meet the system's rules. Some resulted in "inappropriate payments" and in other cases employees did not get the proper approval or they were late in submitting their claims.
Neel said the university system needs to better train its employees on the travel requirements but that it also needs to refine its policies because some of the turnaround times are unrealistic.
The audit also examined the cost of administration in the system which it found to be "reasonable when compared to the increase in total expenditures, student enrollment and cost per student during fiscal years 1999 to 2003."
It found that UNLV spent 11 percent of its budget, or $35 million, on administrative costs in fiscal 2003, down from the 13.5 percent in 1999.
The audit said the amount of funding going to direct instruction is generally high.
As of June 30, 2003, 119 administrative personnel earned salaries exceeding $100,000 in the system with 34 of those at UNLV and 31 at UNR. Most of those salaries were for chancellor, vice chancellor, presidents, vice presidents and deans and were "comparable to peer institutions," the audit said.
The audit also looked at the workload of professors and instructors. It noted that the Board of Regents developed guidelines last August that requires a professor or instructor at the two universities to teach nine units per semester and 15 units per semester at the community colleges.
Sen. Bernice Mathews, D-Reno, challenged those numbers. She said those involved in the nursing program at the community colleges usually teach 22 units, not 15.
"People are putting in increased time but are not getting more money," Matthews said. "They don't qualify for merit raises because most of them are women."
Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said he wanted to see a policy that where a person works more hours, he or she gets higher pay. "We need to reward those people who spend more time in the classroom," he said.
Mathews indicated there would be more questions about teaching guidelines during the Legislature. Sen. Bob Coffin, D-Las Vegas, told his subcommittee colleagues he would have preferred to have more time to review the auditors' report prior to being asked to vote in favor of accepting it. UCCSN officials need to spell out their plans for correcting the deficiencies, beyond the responses attached to the audit, Coffin said.
"I'm a little uneasy about accepting the report ... without further study," Coffin said. "I'm uneasy with what they (the auditors) discovered and whether a simple agreement is enough to effect change."
UCCSN officials will have that opportunity when the subcommittee meets in February, said Assemblyman John Marvel, R-Battle Mountain. And there will certainly be additional opportunities for discussion, Marvel said.
"You're going to hear a lot of questions in budget hearings during the session," Marvel told Neel. "You might do well to brush up on the issues raised here."
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