Audit of Bookstore Shows Major Losses : Finances: Report calls accounting practices at Oxnard College inadequate. No one is accused of intentional improprieties.

The Oxnard College bookstore has lost tens of thousands of dollars during the current academic year, but auditors say incomplete records have thwarted their effort to piece together the paper trail.

The Ventura County Community College District ordered the audit in January after it became apparent that numbers provided by the bookstore for the second half of 1993 did not match its ending balance from the first half of that year.

A summary of the audit, released by district officials on Monday, said the bookstore failed to keep track of how much money was due in accounts receivable, how much was owed to employees, and whether the store was making or losing money.

While no one has been accused of any intentional improprieties, the audit summary says: “It is not reasonable that the above noted condition of the bookstore records would have resulted purely out of an unintentional ignorance of accounting procedures. Controls which are basic to any accounting system were not implemented.”

While the audit summary suggests that bookstore manager Sharon Davies should have known the accounting practices were inadequate, district officials said Monday that they are not sure that Davies did anything wrong.

“This report doesn’t reflect missing money,” said Comptroller Sue Johnson. “We don’t know that there is or there isn’t any (money missing).”

The auditors “are saying that the records clearly should have been in better condition than they were,” Johnson said.

According to auditors, the bookstore lost as much as $183,000 in the six-month period ending Dec. 31, 1993.

*

But, the audit said, those operating losses could be lowered by uncollected accounts receivable of up to $40,000. Also, Johnson said, an inventory conducted last week showed the bookstore has about $100,000 more in merchandise than the auditors estimated.

Johnson said it is too early to be more specific, but she estimated that the losses probably will turn out to be less than $50,000 over the six months. But she acknowledged that both the Ventura and Moorpark college bookstores are money-making enterprises, and the Oxnard College store should have posted a better performance.

“Whether an operation loses or makes money does not mean wrongdoing,” Johnson said. “It merely means it may not have been managed properly.”

Davies said Monday that further review of her managerial practices would prove she has done nothing wrong.

“I’ve been an employee with the Ventura County Community College District for 22 years,” said Davies. “I have always loved my job and when all of the facts are in place, I will be exonerated.”

Davies referred further questions to her lawyer, Beverly Hills attorney David C. Bernstein, who said his client has always received positive job performance reviews.

Bernstein also said district officials have failed to provide him copies of the various reports he has requested.

“We think it’s suspicious that the district, for reasons of its own, has elected not to release the documents on which it bases these allegations,” Bernstein said.

“The inventory taken of the bookstore shows absolutely no loss or shrinkage,” he said. “Everything is accounted for.”

But the audit describes an accounting system that lists a disbursement book $20,000 out of balance and cash registers that were closed out only 38 times over six months, while common retail practice calls for daily summaries.

“In our opinion, this is a material weakness in the internal control structure,” the report said.

It also criticizes Davies for failing to correct the accounting errors prior to the independent audit and for failing to seek assistance in balancing the books.

“The above findings and the state of records we observed, at a minimum, disclose negligence in maintaining the financial records of the Oxnard College Bookstore,” the audit said.

*

Trustees discussed Davies and the bookstore audit in closed session at a meeting last week of the governing board. A decision on potential disciplinary actions is scheduled to be announced at a special budget meeting next week.

Bernstein said he and Davies are considering legal action against the college district and the accounting firm for “what appears to be truly outrageous conduct” in releasing the audit report without more facts.

The audit comes in the midst of a projected $3-million shortfall in the college district’s budget for the upcoming fiscal year. In addition, a dozen or more members of the college and district staffs have been called before the Ventura County grand jury in recent weeks to testify about the district’s fiscal condition.

Sources said the grand jury is looking into possible financial improprieties, but they would not elaborate. The 1993-’94 grand jury report is due out July 1.