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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2000-10
February 24, 2000
The following problems were discovered as a result of a review conducted by our office of the State Distributions to Community Colleges.
Missouri's public community college districts are funded through a combination of local district taxes, tuition and fees, and state aid. Chapter 163.191(1), RSMo 1994 makes public community colleges eligible for state funding in an amount up to 50 percent of their planned operating expenditures. In Missouri, twelve community college districts support seventeen campuses. The Department of Higher Education (DHE) and the Department of Elementary and Secondary Education (DESE) are the main distributors of state monies to community colleges.
During fiscal years 1999 and 1998, the DHE distributed monies totaling $135 million and $117.2 million, respectively, and the DESE distributed monies totaling $25.6 million and $26.3 million, respectively, to community colleges for various programs. Although some funding is provided for general operating expenses, other monies are for restricted purposes such as maintenance and repair, capital improvement, and technical education. Some programs are funded by advance payments to the community colleges while other programs are funded on a reimbursement basis.
Our review found that the DHE does not perform formal on-site monitoring for any of the monies that it distributed to community colleges. Without periodic on-site monitoring procedures, the DHE can not ensure that the items on expenditure reports are accurate and monies are used for their intended purpose.
We also noted instances where the DHE advanced postsecondary technical education funds in excess of expenditures reported by community colleges. DHE allows these entities to carry over the excess funds from one fiscal year to the next. These carryover amounts were approximately $1.1 million and $1.5 million for fiscal years 1999 and 1998, respectively.
While DHE personnel indicated that they were aware of the carryover monies, the DHE did not adequately monitor these carryover balances or require detailed final expenditure reports of the carryover monies. As a result, the DHE has no assurance that the carryover funds were properly spent.
Allowing schools to retain funds from one year to the next weakens the DHE's control over those funds. To better control these funds, the DHE should require all unused funds to be returned or if the schools are permitted to keep unused funds, then adequate documentation supporting expenditures made from these monies should be obtained by the DHE.
The Department of Elementary and Secondary Education (DESE) does perform formal on-site monitoring procedures for its programs, except for Early Childhood Education and School Age Care Programs. Formal on-site monitoring procedures are essential to provide the proper oversight needed for these programs.
