An annual audit of the South Arkansas Community College found two areas of discrepancy that have since been addressed. Neither resulted in an impact to the college’s available funds.
The first addressed four fraudulent charges on college purchasing cards (P-Card). These are similar to credit cards given to specific administrators on campus for low-cost purchases for the office.
According to the audit, in October of 2016 online hackers obtained the information for two of these cards. The hackers placed two payments totalling $3,998 to a company called Blading Landscaping and one payment of $3,266 made to a Red Seal Meal PayPal account.
Carey Tucker, vice president of Finance and Administration, said in this instance the checks and balances set up for the P-Card program worked the way they’re supposed to. The charges were determined to be fraudulent by the bank and the college was reimbursed for the total $7,264 during the next billing cycle.
Each month all card holders get a bill for their expenses, Tucker said, and are responsible for reviewing the bill with their receipts from their purchases. This is where the aforementioned fraudulent charges were found.
“Really, this is a good news story as far as I’m concerned because it means the process works,” Tucker said. “We found it, reported it and the bank took care of it after that. We expended no college funds toward fraudulent charges.”
After a fraudulent charge is reported to the bank, people from the bank look into it to double check. Once the bank verified that the charges were fraudulent, the college was reimbursed for the charges. Once the fraud was identified, the cards were cancelled and new ones were issued.
Traditionally, if the P-Card holder doesn’t find any charges that don’t match, the account is reviewed by the procurement office and then one of the vice presidents at the college. Tucker said this system has been in place for at least a decade. Each P-Card holder has a different dollar limit depending on their position and the needs of the office.
“This is an unfortunate reality of today’s world,” said Heath Waldrop, director of marketing and public relations. “I’ve had my personal credit account have fraudulent charges on it on more than one account from overseas, Southeast Asia.”
The second discrepancy found errors in reporting of expenses. Tucker said it boiled down to items getting placed in the wrong line item in the reports.
One of the issues was that “student tuition and fees were overstated by $746,603,” according to the audit. Tucker said this came from a change in the IT program the college was using and was a result of still learning the new system.
“When you’re a college student, you register for fall at the end of the spring semester,” Tucker said. “Well that’s a new fiscal year. With the new system, for the first year we were using it, we couldn’t figure out how to correctly recognize that as a receivable account for the next fall because it came in during spring. So we just did a deferred revenue and wrote it up that way. They said we shouldn’t have recognized any of that until we recognized the income when students actually showed up for class in August.”
Another of these misstatements came from an energy savings contract with Johnson Controls. Tucker said the money was going into a pot that the college used like a line of credit and withdrew from it when needed, but the auditor said the whole thing should have gone on the count rather than only reporting what was used.
During the audit process, these statements were corrected and didn’t impact the college’s financial bottomline.
“Things were just not put in the right line item,” Tucker said. “Nothing was lost in the bottom line.”
Michael Shine may be reached at 870-862-6611 or [email protected]. Follow him on Twitter and like him on Facebook @MichaelAZShine for updates on Union County school news.