FAMU’s management of construction projects draws ire of state auditor

FAMU Center for Access and Student Success

In FAMU’s most recent operational audit, state auditors took issue with the university’s management of the construction contract for the Center for Access and Student Success (CASS) building currently under construction in the parking lot between Gaither Gym and Gibbs Hall. Specifically, auditors sighted FAMU for not providing providing proper documentation and for not verifying bills issues by the contractor related to the general conditions cost a $3.6 million on the building.  General conditions cost typically generally related to issues that don't involve swinging a hammer or installing something permanently --- site management, material handling, and project management.

University records not provided

Auditors "requested University records to evaluate whether the CASS Project general conditions costs (both non-personnel and personnel costs) were effectively negotiated and monitored. To demonstrate the University’s efforts to effectively negotiate general conditions non-personnel contract costs. University personnel provided a documented evaluation by a consulting company of these costs in the draft GMP contract and University revisions to the GMP contract for general conditions non-personnel costs based on the recommendations."

“(Although) we requested, University records were not provided to demonstrate the reasonableness of the general conditions personnel costs included in the contract,” auditors wrote in their finding.

Bills not verified

Further, “the CASS Project GMP contract required reimbursements for non-personnel costs to be based on CME-paid vendor invoices and personnel costs be based on the actual monthly salary rate for each person charging time to the project and the actual CME employee benefits and taxes paid. We found that University records included vendor invoices of the CME purchases to support University general conditions cost reimbursements and CME personnel time sheets to demonstrate University monitoring of CME work efforts. However, although we requested, the University did not provide records such as CME payroll records evidencing CME personnel actual salary rates, benefits, and taxes,” auditors wrote.

It appears, that FAMU facilities staff, simply took the contractors word that the charges were true and just and did not verify them as being correct, thus the finding.

The audit said: "University personnel explained that general conditions personnel costs were billed as a percent complete each month and the rates were based on an average anticipated cost to the CME to supply qualified individuals to fill the positions for the project. Notwithstanding this explanation, the University did not comply with the GMP contract requirement to reimburse the CME for the general conditions personnel costs based on the actual monthly salary rates."

The auditor's finding comes on the heels of the Board of Governors growing distrust of FAMU's ability to manage construction projects, and placing unprecedented conditions on the university following its approval to allow FAMU to borrow $125 million from the federal HBCU loan finance program in September.

The BOG concerns dated back to the FAMU Division of Finance and Administration's mishandling of millions of dollars in construction money during the construction of Pharmacy Phase II which left the 72,000 sq ft new building with nearly 33,000 sq. ft of "shell space" that is unusable. FAMU broke ground on the building in 2010, but did not complete it until seven years later.