YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
Report No. 2006-31
May 2006
The following findings were included in our audit report on Truman State University.
Various concerns were noted involving Truman State University expenditures. The university did not document its evaluation and selection of the provider of architectural services for five of eight construction/renovation projects reviewed. State law requires that three qualified firms are to be considered when such services are needed. The fees paid to the architectural firms for four of these projects totaled approximately $1.4 million. No architect fees had yet been paid related to the other project at the time of the audit.
In addition, the university had not periodically bid its collection agency services or soda and snack vending services. Collection agency services were last bid over 10 years ago and bids had not been solicited for soda and snack vending services since 1988. The auditors also noted that reasons for selecting law firms to handle litigation are generally not documented, and in February 2005, the university did not solicit bids for copying services related to a lawsuit involving the university. These copying services cost approximately $13,000, and the circumstances surrounding the selection of this service provider were not documented.
Auditors noted some expenditures which may not be a necessary or prudent use of university funds, including:
The university does not have a formal policy related to food purchases. During the three years ended June 30, 2005, the university spent a significant amount on food-related expenditures, with over $493,000 being expended for this purpose from the university's unrestricted funds.
The multi-year contracts with the university's current and previous presidents have been on a rolling-year basis, or extended so as never being allowed to expire. Should the Board of Governors wish to terminate an extended term contract, buyout terms could prove costly.
The university presidents have been allowed to accumulate vacation days without restriction, in contrast with university policy for all other university staff, with accumulations to be paid out upon retirement or termination, When the previous president retired, he was paid approximately $45,000 for 470 hours of unused vacation leave accrued during his employment with the university. If he had been subject to the same accrual limit as other university employees, the cost of his vacation leave payout would have been reduced to approximately $15,300.
The university has increased tuition rates each of the last five years; however, it does not adequately document the annual reviews of its tuition rates, including how any related increases are calculated or determined. While decreases in state funding in recent years have affected tuition levels, the auditors did not always see a clear correlation in changes to state funding levels and the increases in tuition levels. It was noted that during the fiscal years 2003 through 2005, the university transferred significant current operating surpluses (including those from auxiliary operations) to the Plant Fund for capital project-related costs and future property acquisitions.
As of June 30, 2005, approximately $389,000 in delinquent student accounts had been turned over to private collection agencies. In addition, delinquent accounts totaling approximately $28,200 were written off as uncollectible during fiscal year 2005. The university, through the student accounts office, has not established formal written policies and procedures regarding the handling of delinquent student accounts. Students with outstanding balances are in some instances allowed to register for classes, despite the restrictions, or holds, that have been placed on their accounts.
The Truman State University Foundation is a tax-exempt, charitable not-for-profit corporation that has been established to support the goals and activities of the university. The university subsidized over $340,000 of the foundation's operating expenses during the year ended June 30, 2005. Most of these subsidies related to eight employees in the advancement office who are paid from university funds, but who spend much, if not all, of their time working on foundation activities. The audit report concluded that the practice of subsidizing the foundation with university funds may constitute the granting or lending of public funds to a private entity, which is prohibited by the Missouri Constitution.
The audit also includes comments and recommendations related to controls over receipts, off-campus traffic checkpoints, department budgetary practices, child care operations, use of university facilities by outside parties, capital asset records and procedures, and controls over vehicles upon which the university should take appropriate corrective action.