Office of the State Auditor of Missouri
October 4, 2002
Report No. 2002-109
The following problems were discovered as a result of an audit conducted by our office of the Ozarks Technical Community College.
The college expended over $1 million as a result of change orders for the Industry and Transportation Technology Center.
Many of the construction change orders were for work that was not included in the scope of the original project and additional bids or proposals were not solicited for any of the change orders.� In addition to the increased construction costs resulting from change orders, we also noted increased architectural costs totaling $124,913 and $73,874 on all active construction projects for the years ended June 30, 2001 and 2000, respectively.
State funds for South Campus Development remain idle.
Approximately seventy-four acres were purchased from the individual that serves as the college�s attorney.� The college did not have an agreement with the attorney related to the property transactions and an independent appraisal of the property was not obtained.
The college signed a contract in February 2001 with the city of Ozark transferring $360,000 to an interest bearing checking account, but the college retained the authority to spend the funds.� This agreement provided the college a means to draw a specific appropriation totaling $180,000 from the State of Missouri that would have otherwise lapsed at year-end.� The invoice requesting the appropriation was misleading, and one year later funds totaling over $298,000 still remained idle in the city's account.
Controls over expenditures need improvement.
College bidding guidelines are unclear and are not being consistently followed by the various college departments.� Our review noted requests for proposals were not solicited for over $3.9 million in various professional services.� In addition, written agreements were not entered into for some professional services.
According to college records, approximately $53,600 was paid for employee registration, lodging, meals, and mileage expenses for employees to attend the Missouri Community College Associate Annual Convention held in St. Louis, Missouri during October 2001.� We noted the college sent 178 employees to this conference while other community colleges across the state sent an average of approximately 20 employees.
The college has not adequately bid or monitored furniture purchases of the various building projects. The college has purchased approximately $1.8 million in furnishings from one primary vendor since 1997.
In 2000, the college entered into a ten-year contract with a local vendor to provide and service vending machines at the Springfield campus.� The college did not solicit bids for this contract.� The terms of the contract were negotiated with a representative from the vending company, who also serves as a member on the Ozarks Technical Community College Foundation Board.
The college subsidizes most of the operating expenses of the Foundation and the Foundation is depriving eligible students of available scholarship funds.
The Ozarks Technical Community College Foundation, a not-for-profit corporation, was established in 1995 to provide financial support and assistance for certain charitable, education, literary, and scientific purposes of the college; however, the college subsidizes most of the operating expenses of the Foundation.
The Foundation is not fulfilling the charitable intentions of donors and efforts to monitor scholarship donations need to be improved.� We noted one scholarship donation totaling $6,217 that has been inactive since 1995. �The college agreed to match the interest earned on this donation and informed the donor in 1997 that scholarships would be awarded; however, the college has not matched the interest earned nor has the Foundation awarded any scholarships from this donation.� At April 30, 2002, scholarship funds totaling over $19,000 were available but not distributed by the Foundation.
President's compensation needs to be reviewed.
The President�s contract is for three years, and is handled as a continuous contract.� As a result, the contracts never expire, and the Board loses much of the authority and influence it might otherwise exercise over its top administrator.
Also, as part of the President's compensation package, the college paid an automobile allowance of $5,400 annually and reimbursed the President 34.5 cents per mile for mileage incurred on college related trips.� During the year ended June 30, 2001, the college paid more than $11,350 to the President for mileage and automobile allowance.� In July 2002, the automobile allowance increased by 89 percent, to $10,200 annually.� The practice of paying both an automobile allowance and mileage reimbursements needs to be re-evaluated.Our audit also reviewed the college's monitoring of the its bookstore contract and day care facility.� The audit also noted staff development and reimbursement policies, and accounting controls that need improvement.
Complete Audit Report