Whether $15K E&G bonus payment to David will lead to state audit finding remains unclear

On Oct. 19, FAMU Vice President for Audit and Compliance Rick Givens sent the Board of Trustees (BOT) a memorandum that stated his office had reviewed a set of administrative signing bonuses and found that one was paid from Education & General (E&G) funds contrary to state law. That bonus was $15,000 and went to Provost Marcella David on February 11, 2015.

“Payment of bonuses from E&G funds is in violation of Section 215.425, Florida Statutes,” Givens told the BOT.

President Elmira Mangum followed up with a memorandum of her own on Oct. 21 that said problem was an unintentional error that was found on Oct. 16 and corrected on Oct. 20.

“I take matters of budgeting and financial operations serious and would not purposely misuse funds with clear knowledge that the University goes through a detailed auditing process annually,” Mangum wrote.

But at an emergency BOT meeting on Oct. 22, Givens said the correction might not be enough to prevent a finding if the issue is examined by state auditors.

“Well, it’s good to have the transfer made, but I don’t believe in the audit world that it would result in a no finding, primarily because was there was no control in place to ensure that it was corrected in time,” he said.

Givens explained that he was speaking based on what he knew from the 25 years he worked in the Office of the Florida Auditor General.

“Based on my experience with the Auditor General, when I was there, I would say typically it would result in a finding,” Givens said.

Trustee Nicole Washington said she had spoken with the chief financial officer of the Executive Office of the Governor about the issue.

“I actually report to the Governor’s CFO on this matter, and he said it is not uncommon for universities to pay out of E&G funds and then reimburse at the end or before the close of the fiscal year,” she said. “And he said as long as the money is transferred, he did not believe that it would rise above the level of a finding.”

Student Body President Tonnette Graham then asked a follow-up question to Givens.

“Can you provide clarity on how it works through Trustee Washington's comments about this regularly happening with E&G funds and it being reimbursed; how does that work or what’s the common practice for that across the [State University System of Florida]?” she asked.

“Yeah. For work like that, it is acceptable,” Givens said. “A number of the universities have paid bonuses, and the bonuses typically are paid from the Foundation funds, and if it was reimbursed timely and there was a process in place, I mean, that’s a factor in determining whether or not it would be a finding or not, and any findings are subjective and it’s up to the judgment of the auditors in some cases, and so you would have some difference there.”

The Florida auditor general will have the opportunity to check whether FAMU had functional controls and processes for administrative bonuses in place as it completes either the financial audit for 2014-2015 or the upcoming operational audit.