To view the complete audit report, Citizens Summary and audit rating scale, visit http://www.auditor.mo.gov/press/2011-47.htm.
JEFFERSON CITY (September 6, 2011) -- State Auditor Tom Schweich today released the completed audit of Northwest Missouri State University (NWMSU).
In the areas audited, the overall performance of the commission was rated Fair.
The auditor's office found NWMSU has not solicited competitive bids or proposals for auxiliary services for many years, which is required by state law. Instead, NWMSU extended and amended its food services, facilities management, vending and bookstore contracts in exchange for approximately $1.5 million in donations or other payments to fund a stadium renovation. These amendments effectively guaranteed the continued renewal of the contracts, because NWMSU would otherwise be required to repay prorated portions of the payments. NWMSU also is not properly monitoring its food services, facilities management, auditing services and other contracts.
The former university president's employment contract included payments which may have been in violation of the Missouri Constitution, which forbids payments to public officials in recognition of past services. Former President Dr. Hubbard was paid $224,762 for the year after he stepped down as president, he and his spouse received insurance benefits for two years after his resignation as president, and NWMSU paid nearly $9,000 to move his personal property and furnishings to his new residence in Kansas City. Dr. Hubbard also received $30,000 from the Northwest Foundation in March 2009 in recognition of his 25 years of service to NWMSU and to compensate him because he had not been provided a vehicle for 6 years, even though he had received $1,800 a month for a vehicle allowance. It appears Dr. Hubbard performed some services for NWMSU during the year after he resigned as president, but it is not clear whether such services justified the salary and benefits provided.
The auditor found in a three year period NWMSU subsidized over $3.3 million of the operating costs of the Northwest Foundation, a not-for-profit corporation, in apparent violation of the Missouri Constitution's prohibition against granting or lending public funds to a private entity. Moreover, NWMSU and the Northwest Foundation have not entered into a written agreement defining the objectives of any collaboration and the parties' respective obligations.
The audit report noted NWMSU raised room and board rates in each of the last four years but does not maintain documentation of the annual reviews to show how rates are determined.
The three on-campus education programs NWMSU operates for preschool through high school age children are operating at substantial losses. The Early Childhood Center operates at approximately a $100,000 per year loss, while the Horace Mann (K-6) Laboratory School appears to have nearly $700,000 in operating losses per year. The NWMSU accounting system is not capable of reporting operating results of the various programs and operating segments, which would be useful information for decision-makers.
At the request of NWMSU officials, the Northwest Foundation purchased a parcel of property in 2004 for $475,000 and one in 2007 for $501,060, but these properties have not been developed, there are no specific plans for their use, and no appraisals were conducted before the purchases to determine the fair market value of the parcels.
The auditor recommends that NWMSU perform a cost-benefit analysis to determine whether the continued ownership of its airplane is justified, and NWMSU policy should require that the cost of alternative travel methods be considered prior to authorization of a flight on the university-owned airplane.
The auditor's office found that internal controls over cash receipts should be improved and capital asset records are not accurate and contain assets that are likely no longer owned by NWMSU. A complete physical inventory of capital assets has not been conducted for at least 15 years, and no formal policy exists requiring notification when capital assets are disposed of or relocated.
The reported also cited NWMSU's inadequate computer security. NWMSU lacks an adequate disaster recovery plan, and supervisors do not periodically review computer user accounts to prevent unauthorized computer access.
# # #
Loading...
9:48
Top Ten Steps to Audit Excellenceby AuditorSchweich471 views
All Comments