Summary of Report 99-027

February 1999

Report Number 99-027

Persistent problems in financial aid, human resources, and finance and accounting severely limit the University's ability to serve its students. Despite extensive assistance from the State Auditor's Office and other agencies, the University has not made substantial demonstrable progress toward improving these areas.

The University's Office of Student Financial Aid does not meet the needs of its students. Students do not receive their financial aid in time to pay their student bills or buy necessities. The University owes students more than $745,000 in late financial aid from last year or before.

As of January 1, 1999, the University was still submitting files for reimbursement for academic years 1996-1997, 1997-1998, and the Fall 1998 semester.

The University has consistently not used all of the Federal Supplemental Education Opportunity Grant and Federal Work-Study funds that are available to it.

Of additional concern is the University's failure to fulfill four of seven conditions imposed by the Department of Education. These four conditions are that the University:

• Use a separate bank account for financial aid funds.
• Prepare monthly reconciliations for all financial aid programs and submit them to the Department of Education.
• Use a third-party servicer or consultant for processing fiscal year 1998-1999 financial aid.
• Provide the Department of Education with periodic reports on financial aid processing and enrollment information.

Staffing issues are the cause of many of the problems in the Office of Student Financial Aid. Seven of 21 positions were vacant as of December 1, 1998. Personnel hired to fill the vacant positions are often inexperienced or unqualified, and the training they receive is inadequate.

The University is not able to improve operations because it does not have a system to attract, select, and retain qualified employees.

A lack of leadership in human resources management-along with inadequate recognition of the significance of human resources-has resulted in at least the following three deficiencies at the University:

• The University routinely hires inexperienced and/or unqualified personnel for critical positions.
• The training program for University staff is not comprehensive or job-appropriate.
• The employee appraisal system does not properly evaluate the effectiveness of employees' work on a regular basis.

The University is unable to manage its financial resources effectively. It has trouble paying its bills on time, collecting money it is owed, using money in compliance with rules and regulations, and keeping accurate financial records. For example:

• Sixty-nine percent (more than $25 million) of the University's current fund assets are in receivables. Thirty-six percent of the $14.6 million in student receivables may not be collectable because the debts are more than two years old. The inadequate management of these receivables has caused severe cash flow problems.

• The University cannot prove the accuracy of the information in its 1998 Annual Financial Report because it does not have accurate records to support the amounts listed.

The University has developed outcome measures for all administrative departments. Now it must use the measures to monitor the departments' progress toward achieving its strategic plan.

The automated information systems for finance and accounting and student financial aid are on line. However, not all of the finance and accounting system's components work as intended, and data in the financial aid system files are inaccurate.

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