Each year, a small auditing unit within the state community college system recovers hundreds of thousands of dollars in improperly claimed instruction expenses at the state’s 58 community colleges. The audits range from courses with much lower attendance than previously reported to classes with students who shouldn’t have been in them in the first place.
It is a unit that was beefed up 20 years ago after numerous colleges were found to be inflating their enrollments with suspect classes in homeless shelters, a sheltered workshop for mentally retarded adults and sedated residents of a nursing home. In one case, a criminal investigation found that Cape Fear Community College paid more than $1 million to part-time instructors for hundreds of phony classes.
But lawmakers nearly killed the auditing unit last session, and they still might. A House budget bill originally would have shut it down July 1 of this year, but it was extended when Rep. Rick Glazier, a Fayetteville Democrat, won approval of an amendment to keep it alive through mid-2015 while lawmakers study its effectiveness.
He called cutting the program the equivalent of using a sledgehammer when a scalpel, if anything, was needed.
“I was just kind of shocked when I saw it being kicked out,” he said.
Rep. Linda Johnson, a Kannapolis Republican and chief budget writer, said she inserted the provision killing the program after lawmakers came to her and said community college officials in their districts were complaining that the audits were cumbersome and found few problems. She could not remember which lawmakers reported those concerns.
“The time-consuming end of it was what seemed to be the problem that other legislators had mentioned and I had actually heard,” she said. “That they were spending so much time without actually finding real problems.”
Weighing costs, benefits
Minutes of a study committee now looking into the audit program show some officials at local community colleges were unhappy with the audits. George Little, the chairman of Sandhills Community College’s board of trustees, said they were “nitpicky.” The college’s most recent audit required the return of $6,885 for class-time miscalculations.
According to the minutes, he said that neither the UNC system nor the state Department of Public Instruction has a similar program for universities and public schools, and if such audits are needed they should be handled within each community college.
Stelfanie Williams, president of Vance-Granville Community College, said in the minutes that the the audits have “moved from being a compliance process that helps institutions to being focused on (full-time enrollment) and minutia of what is done at the institutions.”
The program audit unit costs the state about $550,000 a year. Jennifer Haygood, the community college system’s chief financial officer, said it recovers on average about $500,000 a year.
“The argument is whether these costs outweigh the benefits,” Haygood said. “Obviously the costs and benefits are difficult to capture concretely because it’s hard, if not impossible, to capture the deterrent effect, as it is to capture the cost to the colleges for having to comply with the rules.”
She is advocating for the program’s survival, but she is also seeking ways to make the process work better for the system and the colleges.
A review of the last fiscal year’s audits does not show the level of duplicity of 20 years ago, but the auditors did find numerous examples in which colleges were improperly claiming attendance in some courses. Lenoir Community College’s audit found $113,000 in overcharges alone, tops among the state’s 58 community colleges.
More local control?
The colleges’ state funding is largely based on full-time equivalent enrollments. The state reimburses colleges $5,312 per student in high-cost degree programs such as health care, $4,837 per student for other certificate earning programs and $4,361 for basic continuing education classes.
The move to eliminate the audits is similar to another move to swing more control to the local colleges and their boards of trustees.
Three years ago, the local officials persuaded lawmakers to eliminate a cap on presidential salaries. That move now has lawmakers considering pension reform after The News & Observer reported last month in a three-part series, “Checks Without Balances,” that boards then converted tens of thousands of dollars in perks to salaries for presidents who were nearing retirement age.
Glazier said it’s also a flawed argument that the UNC system doesn’t require such audits of its 17 member schools. UNC-Chapel Hill is now grappling with a major scandal – more than 200 lecture-style African studies classes dating back to the mid-1990s that are either confirmed or suspected of having never met.
The university is now having to perform spot-checks of classrooms to satisfy the concerns of the agency that accredits it.
“Just because someone else isn’t doing it doesn’t mean we should get rid of something we’re doing right,” Glazier said.
The study committee is tasked with producing recommendations by the start of the 2015 legislative session.
Kane: 919-829-4861; Twitter: @dankanenando
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