The FAMU BOT audit committee is having an emergency meeting today at 3 p.m. to discuss an additional contract for KPMG and the FAMU NAA.
Trustees are being breifed on the status of the US Dept. of Labor's investigation into FAMU's payroll records. The US DOL is asking for two years worth of records.
Also, it appears that the new KPMG contract is open ended and that the $300,000 is just a retainer.
Here's what went down so far:
The Players: Trustees Allen, Lowe, Jennings, Duncan, Diallo, Bryant, McBride, Little, Al Bryant, Len Franklin (NAA treasurer), John Grayson (firm that audit NAA)
Earl Fagan (Forensic Director, KPMG)
W. George Allen said that they had a great meeting with the legislators today. They have an open-mind. I shared with them that all findings will be dealt with expeditiously. Jeremy Ring said he was overwhelmed by the emails and press and will try to keep an open mind and will not wrong FAMU. I met with William Proctor, Eleanor Lynn, Lisa Caldwell, Sen. Neoumoours; Sen Orleich; Sen. Pickings; Sen. Grayson; and Sen. Pruitt as well as Sen. King.
Lowe: I am concerned about comments saying that may withhold funds and the taskforce.
Bryant – Sen. King said he is adamantly oppose to the JLAC, but he would support an investigation, but not withholding funds.
Diallo: are you already working; even though we are discussing this
Diallo: second question is KPMG is not doing any work that is stated on this draft document, correct?
Allen: is reading that he is doing #1
Fagan: we are doing services under #1 and #2.
Lowe: how is that being paid for
Fagan: under the old contract
Lowe: What Diallo is asking is if we are reviewing this contract, then how is it that working is being done since this $350,000 has not been approved?
Allen: the contract is for #5, #6, #7
Diallo: please fax the new draft to me. Mr. Fagan just said that DOL wanted records for 2 years; but the contract says 7 years? What has the DOL asked for?
Little: DOL has asked for 2 years; however, we have to go beyond that period to understand the leave balances so we have to go back 7 years.
Diallo: Why 7 and not 4 or 5?
Fagan: we have identified that the improper balances extend back that far. You can identify the potential liability to the university. We have identified that it goes back until 1999.
People: Annual leave accrued beyond the limit of 352 annual is lost if not used.
Duncan: I don’t think we should spend anymore money on KPMG until they finish the task that have not been completed. Is KPMG the only firm that can do this type of work?
Branker: What is not clear is the DOL deadline. Duncan raises a very good questions, “is KPMG the only firm?”
Branker: Can we go back and indicate that we are looking for another firm?
McBride: DOL has requested that this audit be completed before Bryant leaves.
Little: We looked at other firms.
Branker: who is they?
Little: We looked at another south Florida firm; Sharpton and Bronson.
Jennings: I have missed placed my copy of the master service agreement. If you look at the master service agreement does it include payroll and in form or nature.
Liz: Yes, the assisted in the payroll audit.
Ali: They did, but this is a specific request.
Jennings: if they were providing assistance and come in and audit and review
FAGAN: I am concern about the word – audit. This is not an audit, this is a request to complete a document for the DOL. KPMG is assisting in preparing the info to be submitted to DOL in the format that DOL requested.
Jennings: I have a problem with KPMG doing this work.
Allen: this is different than the original group.
Allen: I call for a motion to accept the draft of the KPMG. Chair can you second it.
Lowe: No, I am not a member of the committee. Trustee Duncan. No, I think she exited that call.
Allen: so we have to wait.
Allen: Let’s move onto the NAA audit.
Alvin Bryant: Mr. Grayson and Mr. Franklin are there to present our audit.
Allen: revenue and other support are there any more questions.
Lowe:
Allen: Alvin we should be doing more in scholarships.
Lowe: what page are memberships enumerated on?
Franklin: page following 12.
Lowe: what ties back to the $400,000 amount?
Allen: salary and benefits are paid by the University, correct?
Ali: yes
Allen: are there any other questions. The chair will entertain a motion to approve as amended by Mr. Grayson. 14760 is a typo error. Are you going to correct this.
Grayson: I will make an addendum to it. And the other note is the University in-kind services and review by OAA.
Lowe: and add additional wording.
Allen: We should take that out the in-kind from NAA president, because there is not specific amount.
Ali: is there insurance on the balances?
Grayson: yes, they are in the foundation and they should be insured there.
Ali: I am just curious as to rather the campaign endowment is restricted from NAA.
Grayson: don't understand your questions.
Ali: Is the pool cash related
Grayson: this note speaks to the fact that an endowment has been established in 2006. Only the donor can restrict funds. Only a certain amount is restrict by our standards.
Ali: is that temporarily restricted.
Grayson: yes it is restricted by the board.
Ali: is it restricted by the board or the donor?
Liz: she is talking about the Life Membership money is it restricted?
Little: can you make sure that NAA does the current year recommendation.
Franklin: we agreed and will implement it immediately. We will reconciled our bank account on a monthly basis (foundation account) and insure that they are reconciled.
Allen: chair will entertain a motion.
Duncan: so moved.
Allen: approved.
Allen: let's go back to the draft engagement letter of KPMG. I would like your indulge to complete the audit. Will you suppor that motion.
Duncan: what is the deadline?
Allen: before Dr.Bryant leaves in June. It may be before if we makes her mad.
Jennings: Do you intend to monitor how much it is going to cost the university so we don't
Benita Quincy Brown: I am a manager of KPMG. I want to describe what we have done in the last several years. HR department has completed the task. Payroll audit - we completed this and developed procedures for accounting payroll. You have two sentences running at the University. How do you plan to reconcile these two systems? Third project refer to the HM module and we made recommendations in your IT area. I primarily role has been on the back end. I wanted to clarify what we can't give a timeline for DOL request. We have been working diligently. It has taken 2-3 hours to review just one employee's file. We are developing a database to assist with this.
Allen: would you move that the chair of the audit committee has the authority to work with the president and her staff to come up with a engagement letter.
Duncan: I am very apprehensive about KPMG and what they have done. I still don't understand the controls with the payroll.
Allen: It has nothing to do with the DOL audit.
Little:
Diallo: I have one question about the draft. Did KPMG recommend that we go back 7 years?
Allen: you already asked that questions.
Liz:
Diallo: what was the recommendation from KPMG>
Allen: that we go back farther.
Diallo: it is a yes or no answer.
Duncan: will this audit go to the full board.
Jennings: by the time it gets to the full board the majority of the work will be completed.
Lowe: we have a meeting scheduled for the workshop on the payroll on April 13. I think the work has to continue.
Jennings: at this point we don't what the exposure is.
Lowe: I don't think we can stop the work.
Castell: trustees my suggestion would be for us to contact DOL and inform them that this will be delayed. The work that has already done is covered under the existing contract. I think someone should contact DOL.
Lowe: Someone to contact them..... I think it should be you Castell.
Castell: I don't mind doing it, but the board needs to make a decision.
Branker: right now as I understand it KPMG is doing an assessment under the current task agreement.
Castell: we modified the task to cover them.
Branker: it looks like they are still doing the assessment.
Castell: yes, we need some more clarifercation (is this a word).
Branker: if they continue doing this is it still covered under their current contract. The assessment should be able to continue under the amended task order. So part of their original task assignment is to do this assessment?
Castell: Trustees Branker, the items under #1 dey (is this a word) said that.
Branker: they are already tasked and paid to do this. We can't decide on what this contract will be because we don'tknow what the scope and amount is. And they should complete their assessment.
Lowe:
Liz: we did not want to have a task order that did not cover this.
Jennings: I thought you modified the task order.
Liz:
Diallo: will someone explain to me why KPMG would provide observation and comments.
Allen: let's take it off the table.
Branker: we need to continue this.
Little: they can continue their and expect them to complete this by the end of March.
Allen: Will they come and then give us an indication of what 3, 4, and 5 are for.
Fagan: we will be able to
Branker: and Dr. Bryant will call DOL.
Allen: is that a motion we do 1, 2 (under a modified agreement) and get an assessment of 3, 4, 5 to the agreement.
Operational Audit
Allen: all in favor. Carried. Let's go to the operational audit. Did everyone get a copy? I got mine on March 19.
Duncan: I got mine on Friday. I am concerned about the Task Force, who is on it.
Lowe: No, I don't have details. There is still some discussion. It will be under the auspice of the chair of the BOG audit committee. I know Chair Roberts has discussed this with the governor.
Branker: is the expectation that the task force will be on campus.
Lowe: none of that has been discussed yet.
Duncan: is the university still working on it's response in the meantime for the 30 day timeframe.
Lowe: when is our 30 day up; April 14. Will we hear about this at the April 13 meeting.
Allen: yes.
Jennings: given that I would really like to get copy the
Liz: you will get it by Monday.
Diallo: will you explain why we are meeting in Jacksonville.
Lowe: the people traveling to Tallahassee find it impossible to get in and out. It will be at the airport.
Duncan: since it is a workshop on the April are we anticipating deans and departments and hearing from them
Allen: I don't know, I can assure you.
Bryant: Would like to have the deans there?
Duncan: I just want to know what the format is.
Lowe: I think we are talking about two different meetings. The president was to meet with the dean and department heads.
Jennings; for the meeting on the 13, the process is still blurry. Can you prepare a flow chart?
Bryant: just the payroll.
Jennings: No everything, the hiring process all the way through to that person getting a pay check.
Bryant: Well, they are adjuncts and overloads and you will have two is that okay?
Jennings: Yes, about the peple not getting paid.
Allen: will entertain a motion to adjourned.
Duncan: so moved.
Allen: meeting adjourned at 4:46 pm
WHATS GOING ON AT FAMU????
ReplyDeleteTown Hall Meeting with Student Body President Phillip B. Agnew
Wednesday March 28
8 pm
Senate Chambers
"Ignorance is a sickness; Knowledge is contagious. Don't mistake the two."
Our BOT is jaded.
ReplyDeleteI don't understand what happened?????
ReplyDeleteI agree with Anon @ 6:13. What the hell really happened in this meeting? How can Trustee Lowe address an operational audit when she obviously doesn't know all the details (her words, not mine)? Roosevelt Wilson was right in one of his commentaries in that we have to have trustees who are local and have some committment to FAMU. This ignorant, wasted exchange of words is a foreshadow of how the April 13 BOT will be.
ReplyDeleteRoosevelt Wilson is old school and lacks the grasp for true educational evolution in the 21st century. What he "preaches" might have worked in the 60's, but not in the global market based education of today! FAMU needs to get out of the local mode, or it can stay in it and continue to sink.
ReplyDeleteEnough is Enough! A criminal investigation should be launched with regard to these matters. FAMU is a shame to our community and our state.
ReplyDeleteTALLAHASSEE - Lawmakers are calling for a criminal investigation into the financial mess at Florida's only historically black public university after a new audit shows the long-running problems remain unsolved.
Midway through the first public discussion of a draft audit of Florida A&M University operations, Sens. Ronda Storms and Jeremy Ring said the state should launch a criminal investigation. The audit found a list of problems involving tens of millions of dollars.
"This is over our heads," said Ring, D-Margate. "I mean, this is sounding like Enron."
Rep. William D. Snyder, R-Stuart, asked state university system chancellor Mark Rosenberg, "What's the worst-case scenario here for Florida A&M?"
Rosenberg replied: "There would be a decision not to fund it. And without that funding, the university would cease to exist."
"Thank you," Snyder said. "I'll leave that hanging in the air."
The operational audit, released last week, covers the budget year that ended last June. That's about 18 months after FAMU trustees hired Castell Bryant to right the ship of her alma mater.
A financial audit that delves deeper into FAMU's spending and revenues is under way. But the operational audit found 35 areas of concern involving more than $50-million in undocumented and unexplained expenses and revenues - including more than $40-million that was never approved by the FAMU board of trustees. The school has a $394-million budget.
"Back in the days of bank telling, we would call that a kitty," said Storms, R-Brandon. "A slush fund."
Ted Sauerbeck, audit manager for the state auditor general's office, said the money wasn't necessarily misspent.
"We're still trying to get a handle on what those things were," he said.
FAMU has struggled for years with its bookkeeping. Professors have gone unpaid, federal grant money has been returned because the school couldn't show how it was spent, staffers have been arrested for falsifying financial aid documents.
Bryant, who was not available for comment Monday, arrived 25 months ago with the goal of straightening out the mess following the ouster of president Fred Gainous.
She found multimillion-dollar budget deficits. The federal government said the university wasn't complying with financial aid regulations.
Bryant cut sports programs and scholarships, and fired more than three dozen employees, including the head football coach. She also fired eight nontenured professors from the nationally recognized business school.
Bryant insists she is making progress, while conceding there is much to be done. The school has 30 days to respond to this latest audit.
The audit suggests that for every hole Bryant and her staff plugged up, there are more leaks.
Among the findings:
- Nearly 1,000 items are missing, including computers and printers worth $2.7-million.
- Long-distance phone logs weren't maintained, and auditors found three charges totaling more than $6,500 that included calls made between midnight and 7 a.m.
- There is a $2.7-million discrepancy in financial aid fee transactions, and the ledgers for student activity, health and athletic fees were off-balance by about $5-million.
- FAMU officials also could not produce receipts for what they claimed were $1.8-million in athletic ticket sales.
Audit manager Sauerbeck said FAMU officials told his department the receipts were in a box near the concession area that was "inadvertently" thrown out during a cleaning.
"I'm sure it was inadvertent," Storms said, with sarcasm. "When documents are being carried out by the boxes for $1.8-million in sales, I think time is of the essence. They're currently flagrantly disobeying the laws."
Rosenberg told the audit committee he is creating a task force of state university experts to help FAMU start fixing the problems before the new president, James H. Ammons, arrives this summer.
"I don't think a fluff task force is what we need now," Rep. Susan Bucher, D-West Palm Beach, said. "Don't you think it's time that this Legislature impose on this university to get it fixed?"
Sen. Al Lawson, the only black member of the audit committee, said his alma mater has suffered from inconsistent leadership since the departure of president Frederick Humphries in 2001.
"I'm just embarrassed that we didn't have a board of trustees with the competence to get in there and roll up their sleeves and make sure that financial office was in order," said alumni president, Dr. Alvin Bryant.
"Now that we have a competent president coming, I think we have a chance to get this turned around."
Shannon Colavecchio-Van Sickler can be reached at 850 224-7263 or svansickler@sptimes.com.
What's next?
The Legislative Audit Committee agreed Monday not to recommend action until FAMU responds to the findings of the preliminary audit. The school has 30 days.
FAMU's finances: a time line
Florida A&M University's troubles go back a decade:
1997: The state threatens to decertify the FAMU Boosters because the fundraising group fails to give audited financial statements to the state for two years.
1997: A number of adjunct professors go without pay for several weeks because the school has overspent its $1-million adjunct faculty budget by $500,000.
1997-1999: A state audit shows poor accounting methods and spending guidelines that cost the FAMU foundation $350,000. The report raises questions about then-president Frederick Humphries and other top administrators using money for Christmas gifts and jewelry.
1998: The FBI, U.S. Department of Education and Florida Department of Law Enforcement investigate missing money at the financial aid office.
1999: Two dozen adjunct faculty members in the College of Arts and Sciences complain they have not been paid for three consecutive pay periods, prompting then-chancellor Adam Herbert to write Humphries demanding a fix.
1999: A state audit shows the financial aid office awarded $300,000 more than was authorized, paying students who didn't qualify academically and giving too much money to students who did.
2000: Federal authorities arrest a financial aid officer charged with soliciting and accepting bribes from students in exchange for submitting fake records for extra aid. At least two other employees and 13 students are thought to be involved in the scheme, which dates to 1996.
2000: The school hires an associate dean, then learns he has been convicted of raping a 13-year-old girl in Texas. He resigns when it becomes public.
2001: FAMU's longtime education dean is charged with stealing $60,000.
2001: State auditors investigate why Humphries used most of the money in accounts for two $1-million chairs at the business school on student scholarships and not faculty.
2003: New FAMU president Fred Gainous fires the administrator of a federal grant after an internal inquiry uncovers questionable spending, including tens of thousands of dollars spent on trips for Humphries, who is working as a consultant.
2003: Gainous discovers Humphries' construction budgets since 1990 are off by more than $3-million. About $1.5-million is used to pay contractors who have not been paid in years.
Summer 2005: Professors at FAMU's law school threaten to stop teaching after as many as 10 professors go weeks without getting paid.
January 2007: FAMU trustees name James H. Ammons, former FAMU provost, as president. He will take office this summer.
Feb. 2: Interim president Castell Bryant gets a call at home that adjunct faculty members have not been paid. She puts together a task force to determine how many have not been paid.
Feb. 9: The first checks go out to adjuncts.
March 14: The state auditor general releases its draft audit of FAMU finances for the 2005-06 year, and finds nearly three dozen problems with accounting, personnel, record-keeping and financial management.
March 19: The chancellor of the state university system announces a task force to address FAMU problems. Some lawmakers call for a criminal investigation.
^^^^^Its not FAMU thats a shame to the community, its the idiots that have been hired that are incompetent. Someone needs to be held accountable for these fools that is slowly trying to tear this great institution down. What the hell are all the meetings for. We just need to concentrate on fixing the financial crisis and quit meeting. Folks could be working on a solution to the problem. Time is being wasted holding so many damn meetings.
ReplyDelete6:13 PM said: I don't understand what happened?????
ReplyDeleteNewsflash- Neither do they! The incompetent leading the clueless.
It's sad, really.
CAN SONEONE PLEASE EXPLAIN WHY BOT MEMBERS WHO HAVE HAD YEARS TO REMEDY THE PROBLEMS ARE ON THE COMMITTEE EXAMINING THE FINANCIAL MESS? SOMETHING DOES NOT SMELL RIGHT HERE...
ReplyDeleteArticle published Mar 23, 2007
FAMU task force chosen
Team to examine financial troubles
By Bill Cotterell
FLORIDA CAPITAL BUREAU POLITICAL EDITOR
A former state Supreme Court Justice, a Chicago investment analyst and two members of the Florida A&M University board of trustees were among seven business, legal and education leaders chosen Thursday for a special task force to examine FAMU's finances.
State University System Chancellor Mark Rosenberg announced plans for the team, headed by Board of Governors audit chair Lynn Pappas, last Monday. He acted in response to a scathing preliminary report by Auditor General Bill Monroe, who found more than $50 million in unexplained expenses and revenues at FAMU.
The 35 critical concerns in Monroe's report prompted some members of the Joint Legislative Auditing Committee this week to call for a criminal investigation. Rosenberg sought to allay legislative outrage with the task force.
''When the task force has completed its work, Florida A&M University will emerge in the strongest shape in the university's history,'' said Carolyn King Roberts, who chairs the Board of Governors. ''The FAMU community can look forward to a more efficient and responsive institution.''
''I want the legion of FAMU supporters to once again speak with pride about their university, without hesitation or need for explanation,'' said Roberts.
In addition to Pappas, members of the task force are:
Former Supreme Court Justice Leander J. Shaw of Tallahassee, vice-chairman. He was a law professor at FAMU and was the first black member appointed to the Florida Supreme Court.
W. George Allen of Fort Lauderdale, an attorney and FAMU graduate who serves on the university's board of trustees.
Barbara Bowles of Chicago, vice chairman of Profit Investment Management. For more than a decade, she worked for First National Bank of Chicago as a securities analyst and portfolio manager.
Albert Dotson Sr. of Miami, chairman and CEO of the Puryear Inc. consulting firm. He was a founding trustee of Florida International University and chaired the audit committee of the Barry University board.
Ava Parker of Jacksonville, head of the Board of Governors facilities committee. She is president of Linking Solutions Inc. and a partner in the law firm of Lawrence and Parker.
Bill Jennings, of Orlando, another FAMU board member, is the retired executive director of the Greater Orlando Aviation Authority.
Edward Penson of Tallahassee, former president of Salem College and ex-chancellor of the University of Wisconsin-Oshkosh. He is general chairman and senior scholar of Penson Associates Inc., a research and consulting firm.