Financial Reporting
We will ensure that accounting and financial records are accurate, clear, and complete-
This means that each member of the campus community entrusted with handling financial and business matters
- Conducts business in a manner that ensures published financial reports provide full, fair, accurate, timely, and understandable disclosures as required by regulatory and other entities
Perspective: A Real World Illustration
An August 2004 News & Record (Greensboro, NC) newspaper article reported on a highly critical state-government audit of a North Carolina community college that overdrew a federal-aid account by $327,830 and could not balance its books because of poor financial practices.
The report did not allege any embezzlement or other crime. But the state auditor's office found that the school's financial leaders were not doing one of accounting's most basic tasks: matching bank statements each month to the community college's ledger, the equivalent of a family balancing its household checkbook.
"As a result, cash recorded in the general ledger and on the financial statements was understated by more than $500,000," the auditors said.
They also faulted the college for not having its books ready when inspectors arrived for the review. "The conditions resulted in excessive amounts of time spent attempting to resolve the out-of-balance situation and attempting to obtain missing documentation," the audit said of the school.
Fallout from the April report is continuing and costly. The college is cutting the U.S. Department of Education a check for $114,400 to retire the last of its debt for overdrafts from the federal Pell Grant program, a source of financial aid for needy students.
The college distributes about $2.5 million per year in Pell Grant money. But when state auditors checked yearly financial records, they found five different bottom-line figures for how much the college had distributed.
The school gave an unknown number of students more money from the Pell Grant than they were entitled to receive. College officials are still checking student records to learn how much; the college ultimately will have to repay the federal government to settle that claim.
The issue of a community college improperly handling student aid and other education money is critical to the entire region. The area is going through an economic transformation. It is struggling to redefine itself because such bedrock industries as textiles and furniture-making have lost thousands of jobs.
The region's six community colleges are the key to retraining workers for the industries of tomorrow and nurturing new businesses. Anything that wastes or jeopardizes money fueling this engine of regrowth is serious.
The college's president said procedures include carefully complying with all state and federal regulations, properly reconciling each month's financial records, monitoring financial-aid recipients to make sure they meet all academic standards, and training staff in the business and financial-aid offices.
State auditors also flagged the college for being unable to account for two pieces of equipment - worth $15,200 - bought with county funds.
The president attributed the school's poor performance primarily to turnover in its business and financial aid offices. He said the transition was complicated by the installation of a new data-processing system during the time covered by the audit.
Last Revised 5/23/2006