YELLOW SHEET

Office of the State Auditor of Missouri
Claire McCaskill

 

June 28, 2001

Report No. 2001-50

The Kansas City Metropolitan Community Colleges (KCMCC) consist of the Longview Community College, Maple Woods Community College, Penn Valley Community College, and Blue River Community College as well as the Business and Technology Center.The KCMCC is governed by an elected six-member Board of Trustees.The trustees serve a six-year term and serve without compensation.The Board of Trustees appoints the Chancellor who serves as the Chief Executive Officer.The following concerns were discovered as a result of an audit conducted of the Kansas City Metropolitan Community Colleges.


A review of the employment contracts, related compensation and other benefits provided for the Chancellor and other officers disclosed the following concerns: 

        As part of their compensation packages, various car related expenses (i.e. gasoline, oil, etc.) are paid for by the KCMCC even though a portion of these expenses would appear to relate to the personal use of the vehicles. 

        The Chancellor was not required to account for any expenditures made from the monies he received annually as a special expense account.He received $5,268 related to this account in fiscal year 2000. 

        The Chancellor�s contracts are not completed on a timely basis. 

        The fiscal year 2000 compensation of the Chancellor and the four campus Presidents was not accurately reported to the Missouri Department of Higher Education. 

The colleges hire firms and individuals to perform various professional services; however, requests for proposals were not solicited for many of the services obtained.In addition, written agreements were not entered into for some of the professional services noted. 

The Board of Trustees� policy provides the KCMCC �will normally request proposals for contracted services such as architects, construction managers, consultants, banking service, auditors, bond counsel, investment banks, maintenance contractors, and/or related contracted services.�� However, the Chancellor may elect to either solicit bids or negotiate for these services.�Our audit of professional services expenditures and their procurement disclosed that the colleges frequently negotiate for professional services.For example, KCMCC has not solicited proposals for its annual audits since fiscal year 1993 and did not solicit proposals for some consultants hired to write grant proposals and advise on various programs.

The college system did not solicit proposals for the services of the bond counsel, financial advisor, and trustee for debt instruments issued during fiscal years 1999 and 2000.Other professional services for which the KCMCC did not solicit proposals included W-2 processing, network engineering implementation, wiring for various buildings, media relations and business plan consultants for the Child Development Center, and arbitrage services.The college system paid over $90,000 for these services in fiscal year 2000.Also, the college system does not have a written agreement with its legal counsel, nor did it solicit proposals for interpreting services for the deaf. 

According to KCMCC records, approximately $200,000 was paid from unrestricted funds for food costs during fiscal year 2000.These food purchases represented amounts billed from various food service providers and did not include amounts reimbursed to employees through expenses accounts or amounts paid with credit cards.Our review of the food purchases made in fiscal year 2000 disclosed that some of these purchases may not have been a prudent, reasonable, or necessary use of KCMCC funds.While a certain level of food expense is probably necessary, those costs need to be assessed in terms of their importance compared to other critical education needs. 

The KCMCC has not established district-wide written policies and procedures regarding the handling of delinquent student account receivable and their write-off, if applicable.As a result, inconsistencies were noted in the handling of delinquent accounts at the various campuses and instances were noted where students were allowed to enroll with a balance due from a previous semester, contrary to district policy. 

Various record keeping problems were noted regarding the Child Development Center located on the Penn Valley campus.In addition, the Child Development Center allowed some accounts to remain delinquent for an extended period of time without appropriate action being taken.The day care center on the Longview campus operated without a license from November 1998 to March 1999 due to non-compliance with licensing issues.It appears these issues were not addressed in a timely basis.

Other findings noted that a physical inventory of general fixed assets has not been completed for several years, even though KCMCC guidelines require such inventories annually.Also, procedures and controls over the collection of monies at various points needs to be improved. 

Criminal background checks on prospective employees are not initiated by the Human Resources Department, and the information obtained by other departments through these background checks is not maintained in the Human Resources Department. 

The KCMCC subsidizes most of the operating expense of its Foundation, a not-for-profit corporation established to receive donations and provide financial support and assistance for the KCMCC.These subsidies totaled over $550,000 during the two years ended June 30, 2000.This practice does not appear to be appropriate and may violate provisions of the Missouri Constitution. 

In its responses to the various recommendations, the KCMCC indicated that many of the problems reported had already been corrected or were in the process of being corrected.

Complete Audit Report


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