For the second consecutive year, state auditors say Florida A&M University needs to be more vigilant in monitoring purchase card use by employees.
An operational audit released Wednesday by the Florida Auditor General’s Office also questioned the use of other university funds to cover a 10-year deficit in the athletics department.
The audit covered the 2017 calendar year.
In response, the university says it has taken corrective actions to address the issues.
According to the report, in 2017, the university issued purchase cards to 133 employees, with expenses reaching $2.8 million. Auditors reviewed 30 card expenses totaling $184,671 from 22 accounts.
It also reviewed purchase card cancellations from 17 employees who left the university.
The review found a sampling of employees failed to submit expenses in a timely fashion, and expenses were not always documented or approved by a supervisor
For instance, a review of 18 purchase card expenses totaling $100,100 from 13 cardholders showed the paperwork was not properly submitted.
“The expenses, ranging from $100 to $20,000, included, for example, charges for lodging, bus rental, catering and repairs and were submitted four to 99 days, or an average of 27 days late,” the report said.
Auditors also noted a review of five other expenses, ranging from $2,400 to $30,000 and totaling $67,050 from four cardholder accounts, showed no documentation was provided for approval. Those charges were for lodging, bus rental and catering.
The audit also determined cards for 10 employees who were no longer employed, were not canceled for an average of 81 days after the employee left.
FAMU acknowledged departments did not always ensure receipts and documentation were submitted for expenses. It also said departments did not notify the Office of Procurement Services in a timely manner that some cardholders had left the university.
“While our examination of university records did not disclose any P-card charges unrelated to university purposes for these individuals subsequent to their employment separation dates, our procedures cannot substitute for management’s responsibility to promptly cancel P-cards,” the report says.
While the audit did not identify employees or any specific departments, FAMU President Larry Robinson said corrective actions pertaining to the Athletics Department include monthly reconciliation of P-card purchases, open purchase orders and vendor invoices.
The university has reduced the number of athletic department employees assigned cards.
Robinson said the Office of Procurement Services in February will begin monthly training campus-wide for purchase cards users and their supervisors.
He also said the Procurement and Human Resource offices are working collaboratively to make sure cards are terminated in a timely manner once an employee has left the university.
More: Concerns over purchase cards and athletic expenses mar FAMU audit
More: FAMU President Larry Robinson: We’re getting it right at Palmetto North
In its April 2017 report, the Auditor General’s Office found that from April 2015 through June 2016, FAMU issued purchasing cards to 127 employees who made purchases totaling about $3.2 million. Elmira Mangum was president at the time.
In some cases, receipts and documentation were submitted as much as 228 days late.
Among other findings:
As expected, auditors said FAMU trustees must continue to closely monitor the financial status of the athletics department and its 12-year repayment plan to erase the deficit approved by the Board of Governors.
FAMU officials have said the money is actually owed to the university as a result of a previous practice to tap into other auxiliary accounts to cover athletic deficits.
In its findings, the Auditor General’s Office questions the transfer of $188,763 from a concession fund to the athletic department’s auxiliary enterprise fund.
Auditors said this is not allowed under Board of Governors policy.
However, administration officials cited an Attorney General’s Opinion saying the practice was allowed and use of the funds, in this case for athletic scholarships, was not prohibited by the BOG.
The Auditor General’s Office said the opinion predates current BOG policy.
To better monitor athletic finances, the president and chief financial officer must approve any transfer of auxiliary funding to athletics to ensure it’s within BOG guidelines.
The university entered into contracts with 23 vendors to renovate and refurnish student residential buildings totaling $941,100.
Auditors found the university contracted with four vendors for heating, ventilation, air conditioning, furnishings and other improvements to the tune of $205,300; $133,000; $130,000 and $115,000, without seeking competitive bids.
FAMU said its Housing Department had a short window to get the buildings renovated to house an increased number of freshmen. It stated the purchase orders were approved because of an emergency situation.
“Notwithstanding this response, although we requested, university records were not provided to evidence written certification of the emergency condition by the president or vice president for fiscal affairs or director of procurement services’ verification of the justification for handling the purchases on an emergency basis.”
FAMU said it will change policy to make sure the vice president of finance and administration provides authorization for emergency expenses.
Contact senior writer Byron Dobson at email@example.com or on Twitter @byrondobson.
Read or Share this story: https://www.tallahassee.com/story/news/2018/12/06/state-auditors-find-issues-famus-oversight-purchase-cards-athletic-expenses/2227210002/