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State says C-GCC lax on spending safeguards

GREENPORT — State Comptroller Thomas DiNapoli said Friday that Columbia-Greene Community College has weak oversight of its spending practices, citing among other items that the college insufficiently documented credit card purchases and that the C-GCC Association, its non-profit arm, spent funds questionably.

C-GCC President James Campion indicated Friday that much of the document does not reflect the college’s true state of fiscally protective measures, and disagreed with a substantial part of its content.

“It is constructive and helpful to us,” Campion said, “but in my opinion, our policy already is sound.”

Campion also noted that the report’s accompanying press release used language that seemed to imply wrongdoing by the college, and said he takes exception to that.

“The use of the language in the press release would leave the impression that there were irregularities at the institution,” said Campion, “and that’s certainly not stated in the report. ... We’re concerned that the citizens of Columbia and Greene counties might get that impression from the language used in the press release from the Comptroller’s Office.

“I would assure all of our constituents,” he said, “that there has not been any irregularities discovered by the Comptroller’s Office.”

This is the first time C-GCC has undergone a comptroller’s audit, Campion explained.

“Every year we have independent auditors come in, and those audits have always been clean audits,” he said. “They’ve never revealed or discovered any wrongdoing. ... We have every year received clean financial audits from independent auditors and I would want to assure our public that if they have concerns from this report, I would recommend they read the entire report, rather than just the press release.”

Campion said the report suggests that the Comptroller’s Office feels particulars of some expenditures are not in compliance with adopted procedure, but that the procedure itself was not out of compliance.

“I think we do agree with some of the recommendations in the report,” said Campion, “but much of this report is opinion and is not statute (law) anywhere.”

The audit findings come as part of a 22-month-long look at the college’s purchasing and auditing practices, which examined the period from September 2005 to June 2007.

Friday’s report on that audit — a 39-page document available on the state Comptroller’s Web site — took strong issue with several aspects of the college’s spending practices.

“There are significant weaknesses in the college’s internal controls over purchasing and the Bursar’s Office, as well as problems with the contract with the association,” the report stated.

Among those issues, the report alleges the college did not follow bid and competitive pricing requirements, employed ineffective auditing prior to bill payment, that its use of credit cards resulted in circumventing purchase and auditing procedures, denoted contractual conflicts of interest with three board members, had insufficient internal controls in the Bursar’s Office, lacked contracts for its tuition delinquent collection agencies, had shortcomings in the College Association contract, and had questions about the association’s expenditures.

The report lists eight recommendations to address those matters, which, in summary, are:

n College officials should monitor compliance with the board’s purchasing policy to ensure that written or verbal quotes are routinely sought and documented.

n The Board should either audit each claim or assign that responsibility to an individual who is independent of all other aspects of the purchasing and payment process.

n The Board should re-examine its purchasing policy to ensure that it effectively addresses all the issues identified in the report.

n College officials should ensure that documentation requirements are followed by those individuals authorized to purchase goods and services.

n The Board should adopt a comprehensive policy for credit card use.

n College officials should require that each credit card transaction contain adequate supporting documentation, including approvals.

n College officials should review the circumstances of the questionable transactions identified.

n The board should take steps to address the conflicts of interest identified in this report.

Campion said that of the matters they agree on, many of those issues have already been addressed.

“The examiners were here at the college from the first week of July 2007 through the end of October 2007,” he said, “and we received the first draft of the report in September 2008. ... There was quite a bit of time in between the (audit’s exit) discussion in September 2007 and the draft report of 2008.

“In the interim, many of the recommendations that the Comptroller’s Office noticed in the report have already been addressed,” he said. “We’ve already made changes.”

As also noted in the college’s official response to the report, Campion said that a variety of the issues are simply a function of the college’s small size, and not irregular. “For instance, when a credit card bill comes in,” he said, “the bill does not get paid until we have the documentation that corresponds to the expenditure on the bill.”

The state, however, said that the supporting documentation for such bills was not attached.

Campion explained that the matter is essentially a combination of filing and storage constraints, in that the bill is in one physical location of the office and the receipt in another part.

“We would have to get about 100 filing cabinets to keep this stuff together,” he said, but indicated limited changes, as possible, may be made.

Regarding a separation of internal audit responsibilities, Campion said that was also a matter of the college’s size, adding that it would probably require another two or three staff members to implement those recommendations.

“There would certainly be additional staff needed to fully implement along the lines the comptroller prefers,” said Campion. “But again, there were no irregularities, so we feel the compensatory controls that we have in place are adequate. ... We don’t have the resources to fully implement the kind of options the comptroller would prefer.”

Regarding any board member’s necessity to disclose a potential conflict of interest, Campion said the report’s recommendations have been “fully implemented.”

Of the report’s finding on credit card use, Campion said, “We feel that our policy is sound. However, we will begin to take the steps to implement the comptroller’s recommendations regarding credit cards.”

On not having contracts with the collection agencies used to collect delinquent tuition, Campion said, “There are written contracts with all of our collection agencies.”

The audit also called for leasing of space to the C-GCC Association to operate its activities, such as the bookstore. Campion said the state’s authority to audit the association, since it is a freestanding not-for-profit and not part of the college, is questionable, but that the college chose not argue the point.

“They’re a component unit of our financial statement, and that’s it,” he said, “but they are not subject to municipal law.”

Campion also noted that as a not-for-profit, the association is legally capable of conducting operations like the bookstore and student activities, whereas the college is not. “Those are all areas that the community college can’t legally be involved in,” he said.

Of the report’s recommendation that C-GCC rent space to the association for its activities, Campion pointed out that, on the flipside, those services are provided free of charge. “The association does not charge us for those services to operate them,” he said.

The report took in-depth exception to more than several of the association’s expenditures regarding use of the President’s Discretionary Fund, such as attending a hospice gala, a hospital ball, a state senator’s reception and a county Chamber of Commerce holiday party, calling them and the others “questionable.”

Campion indicated that he felt the suggestion was uncalled-for, and said point blank that none of them were questionable. He said all were expenditures that benefited the visibility of the college, and — most importantly — it wasn’t the college’s money.

“The President’s Discretionary Fund,” he said, “resides in the association. ... It ranges from $3,000 to $5,000 per year, and there are no taxpayer dollars in there. None.

“It is the association’s Board of Directors’ discretion to grant that (money) or not,” Campion said. “Anything that I do like that absolutely benefits the institution, and the funds used come from the association.

“All that is paid out of the association,” Campion said. “It is not operating money, and it is all to the benefit of this institution.”

Campion additionally noted that there are numerous appearances and related costs that he absorbs out of his own pocket each year for the benefit of the college, ostensibly finding the report’s implication offensive.

Of the overall report, however, Campion said the college will move forward.

“We have to issue a corrective action plan, which is due 90 days from now, addressing the recommendations,” he said. “Then we have until the end of the next fiscal year to begin implementation of the corrective action plan.

“We learned from the process,” Campion said, “but there are still some things which we still disagree upon,” and again encouraged anyone with concerns to read the full report.

That report is available at www.osc.state.ny.us/localgov/audits/schools/2008/columbiagreene.pdf.

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