$275,000 Found

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Irregular News for 01.16.06

 

Tampa, FL - University of South Florida officials fired three employees of the school's English Language Institute after finding $275,000 in misplaced checks and cash scattered throughout an office there.

 

Nearly half the money - $133,647 - is in checks as old as a decade and cannot be deposited, which means lost money for the university, USF spokeswoman Michelle Carlyon said.

 

The institute's director, Richard Schreck, found the cash and checks Dec. 21 inside desks and underneath books and office machines, among other places, Carlyon said. Much of the money was in payments to the program, which provides intensive English study for international students and prepares them for college. Some money was for student health-insurance premiums, which never reached their insurance carrier. The discovery comes about a month after a state audit of USF found lax financial controls.

 

In a November report, the auditor general identified several vulnerable areas that, if left uncorrected, could have led to the money mismanagement issues similar to those unearthed at the English Language Institute. In an e-mail Thursday to employees, USF Provost Renu Khator wrote that the university directed a finance committee to consider the audit's recommendations. Unfortunately, Khator wrote, the institute's money problems "happened in the interim, revealing not just the vulnerable nature of our system, but also the urgent need to act," Khator wrote.

 

University leaders acted this week by firing Schreck and Assistant Director Barbara Smith-Palinkas on Tuesday, citing management failures. Schreck, who had worked for the university since 2004, earned $75,520 per year. Smith-Palinkas had worked there since 1996 and earned $47,060 annually.

 

"The full extent of the financial damage to ELI may never fully be known due to the absence of financial controls in place," officials wrote in letters to Schreck and Smith-Palinkas.

 

Officials fired Patricia Baker, a senior fiscal assistant at the institute, on Wednesday, alleging she neglected to deposit payments in a timely fashion. The mislaid cash and checks were found in Baker's office. Efforts to reach the three for comment on Friday were unsuccessful. They can appeal their firings, but none has filed a grievance yet, Carlyon said. The university's Board of Trustees does not have to approve the dismissals.

 

Wei Zhu, an associate professor of the world languages department, will serve as interim director of the English Language Institute.

 

The school's Office of University Audit and Compliance is investigating how the money was mislaid; there is no criminal investigation. University officials would not comment about the inquiry.

 

The university has counted at least $32,000 in cash, which has been deposited, Carlyon said. In addition to the more than $133,000 in old checks, investigators have counted 132 checks from 2005 totaling $92,734. University officials are trying to deposit them, although some banks may consider them too old, Carlyon said.

 

Even if USF is able to deposit them all, some probably will be drawn on bank accounts with insufficient funds, university officials say. USF is notifying those students that it's trying to deposit those checks. Officials will handle bounced checks on a case-by-case basis, Carlyon said.

 

A projected 130 international students are expected to begin studies at the institute next week. USF has a $1.3 billion annual budget.

 

On Friday, the financial council reviewing the state audit recommended reducing the number of departments that collect money from 170 to 59, said Carl Carlucci, USF's chief financial officer and executive vice president. USF also needs to train workers to keep better financial records, he said.

 

The vulnerabilities the state audit found include:

• Late deposit of payments at departments throughout the university.

• A failure to review some statements that compare cash transactions with bank records.

• Poor controls over petty cash accounts, some of which were excessive.

• More than 7,000 parking tickets, totaling $242,983, that did not include such information as the name and address of the violator, making it hard to collect the money.

 

The University of South Florida has promised swift action in addressing concerns raised in a November state auditor general report, which warned that the university's financial practices could lead to money mismanagement, loss or theft.

 

Some of those concerns and USF's responses:

•Late deposits: The university plans to consolidate the number of departments that collect money, possibly from 170 to 59, and train employees to keep better records.

•Poor petty cash management: USF has developed a workgroup to review petty cash policies and make changes where necessary.

•Failure to review records: The university now requires manual signatures from supervisors on all statements that compare cash transactions with bank records.

 

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