By Greg Gelpi
Conditions created the "perfect storm" of accounting mistakes at Clayton College & State University, officials there said.
Turnover in the university's accounting department, new software for reporting its accounting records and new rules governing accounting hit the university at the same time and resulted in the state's worst rating for its fiscal year 2003 audit. Clayton State scored a 5 on a five-point scale.
"From an accounting perspective, these are serious problems," said Ronald Stark, the University System Board of Regent's associate vice chancellor of internal auditing. "From a management of the university perspective, these problems are not that serious."
It is "very unlikely," but possible that poor audit ratings could make it difficult for Clayton State to receive federal contracts and to be eligible for federal funding, Stark said. The university hasn't been penalized for the poor audit findings.
Most of the mistakes were accounting mistakes, and none involved criminal activity, Stark said. Other mistakes involved "poor internal control."
One such mistake was leaving money bags unsupervised on desks, according to the audit.
"Anybody can have written procedures and not follow them," said Bruce Spratt, Clayton State's executive director of budget and finance. "We have strict procedures. It will not happen again."
Someone had a "memory problem" and got caught, but money is normally kept secure and handled properly, Spratt said.
"Access to the cash drawer in the Business Office was not limited and the key was left in the drawer's lock," the audit states. "In addition, the auditors observed the delivery of money bags from Auxiliary Enterprises' locations on campus during the absence of the head cashier. The money bags were left out on the head cashier's desk unsupervised and not placed in the vault upon receipt."
Spratt stressed that the audit does not affect students' financial aid or scholarships.
The audit also found that the university frequently mislabeled entries on accounting forms and reconciled financial records as much as a year later.
Spratt said the audit covers the year before he began at the university May 1. He doesn't expect this fiscal year's audit to be "clean," but said the university's accounting records should be in order by Oct. 1.
Stark said that he, the chancellor and the board of regents are "certain" that the problems will be fixed.
"They lost a lot of the knowledge base of the new system," Spratt said of the turnover in the department.
The turnover included the departure of the university's chief business officer and director of business services, he said. Amidst the turnover were rules changes by the Government Accounting Standards Board.
"Everything is falling back in line," Spratt said.