News Summary
A recent audit of Alabama A&M University has highlighted significant compliance issues related to unclaimed funds and procurement practices. The report uncovered over $110,000 in unclaimed payroll checks and potential violations in the agricultural research operations. Additionally, the Athletic Department was criticized for poor ticket sales accountability. The findings underscore a lack of oversight and financial integrity within the university. Officials have acknowledged these issues and are committed to improving compliance and financial management moving forward.
Alabama – A recent state audit has revealed that Alabama A&M University is non-compliant with state laws pertaining to unclaimed funds and procurement practices. The findings, released in July 2023, cover financial operations from 2020 to 2022 and point to significant shortcomings in the university’s financial management and adherence to state regulations.
The audit uncovered over 250 payroll and other unspecified checks, totaling more than $110,000, that have classified as unclaimed funds. According to state law, payroll checks that remain uncollected for more than one year, alongside other checks older than three years, must be forwarded to the state treasurer. However, the review revealed that Alabama A&M had not submitted an unclaimed property report for fiscal year 2022, indicating a clear failure to comply with legal requirements.
A major concern highlighted in the audit is the absence of a policy for annually reviewing outstanding checks to identify reportable unclaimed property. This lack of systematic oversight raises questions about the university’s financial accountability. The audit did not specify the exact number of individuals affected by these uncollected checks as only a sample was analyzed.
The audit findings also uncovered potential violations of procurement laws within the university’s agricultural research operations. Specifically, the Winfred Thomas Agricultural Research Station had permitted a grain company to transport and sell grain without the necessary contractual agreements, a serious oversight. Documentation was lacking as the company was supposed to remit payment to the Research Station, minus hauling costs, thereby questioning the legality of the transactions.
Additionally, the university’s Athletic Department faced scrutiny for failing to maintain proper accountability regarding printed and sold tickets. This deficiency has contributed to problems related to cash handling and sales reporting. The audit showed that discounts provided for tickets lacked sufficient documentation and a standardized list of applicable discounts, suggesting gaps in financial controls within the department.
The university further demonstrated poor fiscal management as it had not instituted policies requiring reconciliations for bank accounts, nor did it ensure the timely reporting of financial statements. The audit reported discrepancies between subsidiary ledgers for student receivables and accounts payable and the general ledger, indicating a lack of financial integrity in record-keeping practices.
In its examination, the audit tested 25 journal entries which revealed improper approvals and inadequate documentation for several transactions. Furthermore, it was noted that an employee hired in March 2022 was overpaid as a result of incorrect payroll documentation, costing the university $7,228.26. Such financial errors emphasize the need for improved payroll management and documentation processes.
The audit concluded by emphasizing the necessity for Alabama A&M University to implement effective procedures for maintaining control over financial transactions. It called for the university to ensure compliance with existing laws and policies moving forward.
Alabama A&M University has acknowledged the issues raised in the audit and reported that steps are being taken to address the findings. Officials clarified that these compliance issues emerged under a previous administration, indicating a commitment to rectify past mistakes as part of a broader dedication to enhance the university’s financial integrity.
The ramifications of this audit reflect critical areas within Alabama A&M’s financial management that require significant improvements to prevent further issues and ensure compliance with state regulations in the future.
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