Audits of NC community college enrollments could end this year

(An earlier version of this article misstated when a misspending case happened at Cape Fear Community College. It was discovered in 1986.)

In a little more than two months, a long-standing program that audits North Carolina’s 58 community colleges to make sure they aren’t overstating their enrollments could come to an end.

The N.C. Community College System has been performing the audits for decades because student attendance determines how much money each college receives from the state. But at the end of June, the audits will go away if state lawmakers don’t restore them.

Two years ago, state Rep. Linda Johnson, a Kannapolis Republican and a chief budget writer, pushed legislation that phases out the audits, saying they weren’t justifying their expense.

“The state is spending administratively $550,000 and finding no major problems,” Johnson said.

That’s true in recent years. The biggest amount of money that had to be repaid in the most recent round of audits found that Lenoir Community College had claimed $113,297 in student instruction costs that college attendance records didn’t back up.

But in the 1980s and 1990s, auditors and criminal investigators found serious problems at some colleges, including Cape Fear Community College paying more than $1 million to part-time instructors for hundreds of phony classes.

Concerns over the audits two years ago prompted a community college system study, completed late last year, that said the audits should continue but less often and under new guidelines that reflect the changing nature of community college courses. The study found that the system’s instruction requirements had not been updated to take into account the growing number of classes that no longer meet in the traditional 16-week format, causing auditors to find issues with classes that are legitimate.

More classes are meeting for shorter periods of time to teach specific workplace skills. Community colleges are also offering more online or virtual classes that don’t easily translate into equivalent classroom hours.

The study also found some audits delved into areas outside of the program’s scope, such as athletics, and involved too much paper-pushing and inconsistent policy interpretations. Nor was it necessary to conduct audits every year, the study said.

A big majority of community college presidents endorsed the study’s findings and said a revised auditing program should continue, said Garrett Hinshaw, president of Catawba Valley Community College and leader of the presidents’ association.

Conflicting proposals

The study’s recommendations include suggested legislation that would restore the audits under the community college system at their current $550,000 annual cost. That bill has been filed in the House and Gov. Pat McCrory has included it in his budget proposal.

Rep. Grier Martin, a Raleigh Democrat and bill sponsor, said “controls and safeguards are important” given the nature of the community college system, in which oversight is a shared responsibility between state and local governments.

“We’ve confirmed that these audits are a very good thing and we should continue them,” he said.

A bill filed in the state Senate would shift the auditing to State Auditor Beth Wood’s office. She said her staff has more expertise than the community college system’s auditors, and could do the audits for $300,000 a year.

“It would be an add-on to the financial statements that we are already doing, so I think we are already able to take it on without much financial expense,” said Wood, who served on the study committee.

Neither bill has made it out of a legislative committee, though it’s possible either could end up in a budget bill.

The competing proposals in the Senate and House create a dynamic that sometimes leads to nothing moving. That would shut down the audits.

Johnson said she wants the proposals to be heard in committee, but she prefers to wait on restoring the audits until a new permanent or interim community college system president is hired to replace Scott Ralls, who is leaving to become head of a community college in suburban Washington, D.C. She wants that person to weigh in on the audits.

Ralls supports keeping the audits as recommended by the study committee.

Wood said her priority is to keep them going.

She said without audits, “there’s no way to know that every community college is getting all the money they are supposed to get, and only the money they are supposed to get.”

This story was originally published April 30, 2015 at 3:19 PM with the headline "Audits of NC community college enrollments could end this year."