FAMU's financial picture better
Still needed, according to a new audit: a sharper focus on accounting controls. It'll happen, says the interim president.
By SHANNON COLAVECCHIO-VAN SICKLER
Published August 11, 2006
ORLANDO - Financial management problems persist at Florida A&M University, but a surplus outlined in a recent audit proves the troubled institution is moving from "grave concern" to "optimism," FAMU trustee Al Cardenas said Thursday.
"I don't believe we are where we need to be, but we are taking the measures to get us there," Cardenas told the board of governors, which oversees Florida's 11 universities.
The auditor general's examination of FAMU's 2004-05 finances found a $2.7-million surplus. But that was far less than the $8-million surplus interim president Castell Bryant reported in the fall following an audit by university-hired consultants KPMG.
Moreover, state auditors said FAMU, the only historically black public institution in Florida, still suffers from accounting and financial control problems.
Millions in grant and student fee accounts could not be verified or reconciled against receipts. Auditors tested 100 random expense transactions and concluded that nearly half had not been properly recorded by the FAMU staff. Several staffers who made financial journal entries didn't have the authority to do so. Auditors say the central cashier's office didn't deposit or record collections in a timely manner.
The audit problems are largely the result of insufficient training and personnel turnover, according to the auditor general. The turnover stems in part from FAMU's 2003-04 audit, which found FAMU wasn't paying vendors, failed to keep track of student aid programs, and signed contracts without bids.
"I think everybody understands that audits are used to improve the system," Bryant said. "So this audit is an extremely useful tool."
FAMU trustees hired Bryant in January 2005, midway through the period covered by the recently released audit, and directed her to clean up the mess. She fired or reassigned dozens of employees, cut budgets and implemented stricter financial controls.
Cardenas told the board of governors that half of the 10 problems outlined in the recent audit were holdovers from the 2003-04 audit.
Bryant pointed out that her overhaul of FAMU's finances didn't begin until March 2005, and the recent audit covers the year ending June 30, 2005, so it does not reflect many of the improvements made since she arrived.
Under Bryant, Cardenas told the governors, FAMU now records its payroll accounts each month and compiles monthly financial reports. There are new vice presidents for financial affairs and for compliance and auditing. More than 200 employees have been trained in record management, and FAMU hosted universitywide budget workshops. Key vacancies were filled in the controller's office.
"We are instituting measures that, frankly, should have been in place a long time ago," Cardenas said.
For decades, FAMU struggled under segregation era mistreatment and poor state funding. Later, lawmakers and education officials tried to rectify years of skimpy budgets by doling out plenty of money but with little oversight.
"In the past, we were not dealing with these issues as responsibly as we should have," Cardenas said.
Bryant has agreed to stay on until trustees hire a new president with the help of a recently hired Chicago search firm.
She said she anticipates the next FAMU audit, covering the budget year that ended several weeks ago, will be better than the current one.
"We are not going to be where we need to be," she said. "But you'll see we are on the road to get there."
Shannon Colavecchio-Van Sickler can be reached at 813 226-3403 or email@example.com.