The student media organization of California State University Northridge

Daily Sundial

The student media organization of California State University Northridge

Daily Sundial

The student media organization of California State University Northridge

Daily Sundial

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Internal campus audit finds accounting errors

Cal State Northridge has misreported financial data to California State University auditors for the last four years, a recent state audit report shows. Student-related fees were not reported on time – sometimes not at all – and the collection of service bills and overpayments made to current and former employees were not actively pursued.

Auditors were on campus during the spring semester going over CSUN’s business practices from Sept. 27, 2004 to March 17, 2006. They discovered the following:

– More than $70,000 in overpayments made to 17 current employees one to five years before December 2005 were not “consistently and timely” pursued via collection letters. About $20,000 in overpayments made up to 10 years before December 2005 to terminated employees were also not actively pursued.

– Three bills for services provided by the university were sent to a number of campus organizations 59 to 537 days after they were rendered.

– From spring 2004 to fall 2005, cash receipts for admissions applications were not checked to see if they matched the amount in application fees collected. State university fees were also not checked during the spring 2004, fall 2004 and spring 2005 semesters until October of that year.

– The number of receipts received for parking permits sold during the fall 2005 semester did not match up with the amount of money that was collected for them.

Employees were overpaid because there were not enough accounting staff members to keep track of transitions in their pay, such as when employees serve as department chairs or go on sabbatical, said University Controller Robert Barker, who helped in reporting financial data to CSU auditors. In each case, employees receive slightly higher salaries.

When employees receive more money in their paychecks than they are entitled to, they tend not to volunteer this information, especially if they are later terminated by the university.

Someone, typically a financial manager in an understaffed office, has to pick up the slack, said Barker. This entails taking on more work.

So when a manager sends out bills for services provided by the university up to a year and a half after they were rendered, they receive an electronic memorandum and then a verbal reminder of the importance of sending them out promptly, the state audit report shows.

John Darakjy, director of financial services and tax, said he had more pressing matters to attend to before he could check if application and university fee receipts matched the amount of money University Cash Services received for them two years ago.

“We had to make sure tuition information on SOLAR was accurately calculated and that it matched up with what the financial aid office had on record,” Darakjy said. “We had to make sure account information was translated into something students could understand.”

It fell on Darakjy to take on the duties of an office that he said is still affected by staff turnover. The last University Cash Services supervisor retired and the last manager was promoted, leaving replacements little time to learn how to carry on in their stead, he said.

A setback also occurred when University Cash Services tried to convert accounting software, from Legacy to PeopleSoft. Legacy stored data as raw chunks, whereas PeopleSoft breaks data down into categories.

“What happened was that data were basically exploded into PeopleSoft,” Darakjy said. “So we had to go in and convert the data ourselves and that took about a year to do.”

It took this long because there were few employees on staff who could use both systems.

“Employees will find better positions at other campuses or they just retire,” Darakjy said. “It’s difficult to start new accounting processes when you have so much turnover.”

Parking and Transportation Services were affected by staff turnover as well. Alfredo Fernandez, who replaced the office’s last financial manager, said his predecessor had not set up a way to adequately check if parking permit receipts matched up with revenue.

Before, these numbers were analyzed as a whole, but are now matched up one at a time.

“It’s a long, slow process,” Fernandez said. “We know there are some bugs to this system, but we’re seeing what changes we need to make as we continue to work with it.”

Receipts and revenue collected also did not match up because CashNet, the automated system that handles most of CSUN’s financial transactions, was not programmed to take into account how parking permit rates drop as every semester progresses, Fernandez said.

Cal State Northridge spokesman John Chandler said the university was audited for a time period in which higher education had experienced major budget cuts, so academics had to take priority over refilling the accounting spots in the aforementioned departments.

Most of the vacant positions have since been refilled, Chandler said.

Northridge was not the only CSU campus affected by staffing limitations. San Francisco and Sonoma State, Cal State Long Beach, Channel Islands, Monterey Bay, San Bernardino and Stanislaus reported the same problem in 2005, their audit reports show.

Staffing limitations, and state requirements, affect the frequency of audits themselves, as they are conducted every two years and not annually, said CSU auditor Larry Mandel.

These key accounting positions are being left vacant by people who have left to work for city or county agencies, which offer raises that can keep up with the rising rate of inflation, said CSU Employees Union Vice President of Representation Dennis Dillon.

“A lot of staff (are) coming in on entry-level salaries because the CSU only wants to hire them at entry-level salaries, not according to their skills,” Dillon said. “So they leave, and there is no one to replace the 5 to 8 percent of CSU employees who retire per year.”

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