Audit Cites District for Inadequate Controls : Colleges: The report reveals no specific monetary losses due to the problems found, but it offers numerous remedies.

A yearly audit of the Ventura County Community College District has turned up a series of failings that contribute to inadequate financial controls, lax computer security and an undertrained accounting staff.

The 96-page report chastises the district for not tracking whether funds received actually matched revenue projections for the fiscal year that ended June 30.

It also suggests that workers in the district’s accounting office are not adequately trained, and that four new managers be hired to see that better accounting is done at the district and its three campuses.

What’s more, the auditors recommended rethinking some classes that do not traditionally attract large numbers of students.

The audit, performed by the firm Coopers & Lybrand, was submitted to trustees at a meeting late Tuesday. By law, the district must forward its audit to state education officials in Sacramento by the end of the year.

The report cites no specific monetary losses due to the problems that were uncovered. But it does offer numerous remedies.

Earlier this year, a separate audit of the Oxnard College bookstore found tens of thousands of dollars in losses due to incomplete record-keeping on the part of its manager.

Governing board members clearly were not pleased with some of the latest findings, although they said some work was already under way to remedy many of the shortcomings.

But Trustee John D. Tallman questioned the audit’s conclusion that the district has beefed up its reserves to 4.4% of its general fund.

“That’s based on your budget, so if you’ve budgeted revenue that isn’t materializing, then obviously you don’t have reserves,” he said. “We have an inflated revenue budget, so the reserves are very suspect.”

Tallman said he would propose adding three community members to the district’s audit committee, which now consists of two board members. “They could be accountants or others with specialized knowledge that will help us have more accurate income projections,” Tallman said.

The chief recommendation in the audit was to improve monitoring of the district’s finances. “There does not appear to be adequate and timely monitoring of the financial performance throughout the year,” the report states.

“That’s a very important sentence,” Tallman said. “But they don’t amplify what they mean by that. They’re in a polite way telling us we’ve got to quit adopting a budget that has faulty income projections.”

For example, Tallman said, the board adopted a budget earlier this year that assumed $800,000 in state funds that never materialized. The result, he said, was a budget balanced on paper but totally inaccurate. Trustees later voted to use a health insurance rebate to make up the $800,000.

Vice Chancellor Jeffrey Marsee on Wednesday stood by the audit and his 1994-95 recommended budget adopted in September.

“The audited reserve balance is based on actual reserves as of June 30, 1994,” Marsee said. “Mr. Tallman may be confusing actual audited information with budgeted revenues and expenditures.”

Marsee in September told the board--absent Tallman, who was just seated Tuesday--that the $800,000 may not be forthcoming.

Others complained that the audit was kept hidden from district staff and teachers. Oxnard College Academic Senate President Gary Morgan said he was denied a copy of the audit until the board acted on it Tuesday night.

“It’s my understanding (that) the minute a document like this is prepared, it becomes a public document,” said Morgan, who teaches journalism at Oxnard College.

Marsee said he ran short of copies of the report and could not immediately accommodate all of the requests.

Morgan was particularly concerned about the audit’s Recommendation 13, the suggestion that the district review its policy of offering courses that do not attract 15 or more students. But board President Timothy D. Hirschberg said the colleges are obligated to offer some courses that, by their nature, attract small numbers of students.

“I don’t think the auditors meant to make a sweeping indictment of all low-enrollment classes,” he said. “I don’t think the board would go along with that anyway.

“But certainly as enrollment overall has declined, one strategy is to offer more of what the students are registering for on admission day,” he said. “When dollars are limited, the board needs to maximize each dollar. One way to do that is to offer courses the public wants.”

Hirschberg also said the district may be forced to hire additional help “because of the chronic and continuing inadequacies,” despite approving new comptroller and accountant positions within the past two years.

An aging computer system with inadequate security controls exacerbates problems, Hirschberg said. Presently, individual computer passwords are not adequately protected, meaning that students and others have access to sensitive data, the audit said.

“We’ve got good people there, but they need to have the technology to work with,” he said. “With adequate training, I think we can address most of the issues.”

But Cheryl Herrmann, an official of the district’s classified employees union, said new business officers could duplicate work being done by others in charge of reviewing finances.

“If they add business officer positions at the campuses, then they should reconsider the need for the vice presidents of administrative services,” said Herrmann, a lab technician at Ventura College.

“The district has a history of dealing with problems by doing one of two things: throwing staff at it or throwing money at it,” she said.