By Victor Skinner | The Center Square contributor
A recent audit of the University of New Orleans uncovered unauthorized purchases, missing cash and incomplete employee time and attendance records.
Louisiana Legislative Auditor Mike Waguespack issued an audit report for UNO last week that analyzes the school’s finances and internal controls over financial reporting and compliance for fiscal year 2022.
The report found UNO management “deliberately circumvented university policies and procedures for public works projects by using a pre-existing maintenance and repair contract” for the purchase and installation of a $214,979 boiler.
“The Facilities Services department did not prepare a project manual and did not provide a list of three contractors to the Purchasing department to obtain quotes, as required by university policies,” the report read. “Instead, UNO management allowed the existing maintenance and repair contractor to request the quotes; receive unsealed quotes; recommend a winning contractor, which was accepted by UNO; and buy and pay for the boiler,” auditors wrote. “In addition, UNO did not record the boiler as a capital asset in its financial records.”
University policy requires the facility services department to prepare a project manual with drawings, technical specifications and other information for public works projects costing between $30,000 and $250,000. The policy requires the purchasing department to provide the information to at least three contractors to solicit sealed quotes, which are to be opened publicly by the purchasing department.
The procedure then requires the facilities services department to select the most favorable quote for approval from the associate vice president. Policies also require equipment costing $5,000 or more to be capitalized and depreciated.
Auditors also uncovered “several instances of theft” that resulted in $3,600 missing from two different secure locations within the UNO Athletics Department.
“The exact amount of the thefts could not be determined because management could not locate the supporting documentation for the collections that were stolen,” auditors wrote.
The thefts occurred in October and November 2021, despite attempts by university officials to limit access to cash and repeated reports to the UNO Police Department.
“Athletics Department management completed its investigation and concluded that the thefts were likely committed by an employee with knowledge of the controls and access to override those controls,” the report read. “The employee was subsequently terminated.”
The other major issue highlighted in the audit involves UNO’s repeated failure to certify and approve time and attendance records, a problem detailed in two prior audits.
“In a test of time and attendance records for pay periods ending in fiscal year 2022, two (6%) of 33 employees who were required to certify their time did not do so for the time period reviewed and therefore the supervisor was unable to certify the accuracy of the time charged by the employee,” auditors wrote. “In addition, UNO’s payroll policies and procedures do not require salaried employees to certify their time prior to the disbursement of payroll.
“A review of the time certification report covering all of fiscal year 2022 disclosed that an additional 738 (4%) of 16,677 Time Calendars were not certified by employees.”
The LLA offered a series of recommendations to rectify the issues and UNO President John Nicklow responded to the report in three letters to Waguespack in November and December.
UNO fired its vice president for business affairs responsible for overseeing the boiler purchase, updated university policies and improved communication between the purchasing and facilities services departments, Nicklow wrote.
UNO also terminated the employee suspected of stealing athletics department funds and updated cash handling policies to prevent similar issues in the future. In addition, UNO updated its policy language for attendance and leave records, as well, though Nicklow contends “it is not possible to require the certification and approval of time and attendance records prior to payroll being disbursed.”
“For this to happen, it would take a major overhaul of our current time entry system, at major cost and potentially convert salaried employees into hourly for compensation purposes,” he wrote. “Because of this, UNO’s management does not foresee a reason to revise the policy to include making the certification process a requirement before the disbursement of payroll.”