Audit Calls for Tighter Fiscal Control at Cal Poly : Education: Irregularities were caused by miscommunications, inexperience and lack of oversight, report states. It says the violations were isolated incidents.

An audit of two departments at Cal Poly Pomona found personnel and policy violations and recommends that the university tighten financial controls at two campus offices.

The report by the accounting firm Deloitte & Touche said the violations appear to have resulted from miscommunications, inexperience, lack of information and lack of appropriate guidance. It called the violations isolated incidents.

Cal Poly President Bob Suzuki said in a statement that he was pleased that only minor problems were uncovered. He called the violations “honest mistakes made by people trying their best to do their jobs.”

The irregularities were revealed in Times articles last year that detailed how friends of Suzuki were hired to promote the university in Asia. Henry and Jennifer Whang received $239,569 in salary, commissions and travel expenses during a year in which they took eight business trips to Asia.

The California State University chancellor’s office recommended the audit after policy violations were found in Cal Poly’s continuing education office and its educational foundation, which raises money and runs the bookstores and cafeteria.

The audit found that Cal Poly had acted inappropriately by paying Jennifer Whang a 15% commission for each foreign student she recruited, in addition to her base salary of $3,430 per month. The recruitment was part of her job description, the report said, and should not have provided extra money for her.

International travel claims submitted by the Whangs in 1991 and 1992 “occasionally had incomplete supporting records,” the audit said, because of a convoluted accounting system that allowed the couple to submit some claims through the university and others through the foundation.

In some cases, the audit also found that international travel took place without the required approval of deans or vice presidents. On numerous occasions, travelers, including the dean of continuing education, Van Garner, submitted claims for fellow travelers, the audit found.

“While these do not reflect a consistent pattern, there were isolated instances which should be avoided in the future,” the report stated.

The audit also provided a glimpse into the workings of Cal Poly’s foundation and its continuing education department, which are normally not open to public scrutiny because they are separate, self-sustaining arms of the university not bound by public disclosure laws.

According to the audit, the continuing education department established two accounts totaling $55,000 to hold and disburse discretionary funds. The audit stated that some payments to the Whangs involved transfers of funds from these accounts, which the audit said has raised some concerns. The report recommended closing the accounts and transferring the money into a more tightly controlled reserve account.

The audit also found that some students paid the continuing education department in cash. That procedure, which was questioned, has been discontinued and cash transactions are now handled by the campus cashier, the audit found.

The Deloitte & Touche audit, released April 25, made several recommendations, including that Cal Poly:

* Require the foundation’s executive director to approve all continuing education disbursements above $5,000.

* Require the foundation’s executive director and the vice president for academic affairs to review all travel budgets proposed by the dean of continuing education.

* Appoint a foundation travel coordinator to provide information on policy regarding per diems and air transportation.

* Appoint an employment liaison between academic and administration departments to avoid mistakes such as the compensation paid to Jennifer Whang.

In closing, the report found that the foundation, which has been without a controller for more than a year, would benefit from better financial leadership. Cal Poly’s foundation is considering hiring a budget director.

In his statement, Suzuki said the school will implement the audit’s recommendations.