Community College Audit Points to Computer and Bookkeeping Problems

Auditors studying the workings of Ventura County community colleges have uncovered a series of problems that cost the district time and money and expose security lapses in its aging computer system.

In a report released Thursday, auditors found that Ventura County Community College District officials failed to shield schools from inventory losses at campus bookstores and that adequate controls in payroll services were lacking.

Seven of 16 findings in the report were reissued from the 1995 annual audit--problems that Coopers & Lybrand analysts a year ago said should be corrected.

Nonetheless, college trustees defended their record and said the district is aware of its deficiencies and is headed in the right direction.

“I think it’s a good report,” said trustee Allan W. Jacobs, who served on an audit subcommittee aimed at addressing the findings and implementing the recommendations of previous auditors.

“It’s identified some of the areas we need to work on,” he said. “But I would be very surprised if we ever had a report that didn’t have some recommendations.”

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Board President Pete E. Tafoya said that because revenues have fallen in recent years, the district cannot afford to immediately correct all of the findings raised by auditors.

“With the budget cuts we’ve incurred, we’ve not been able to implement all of the findings in the [previous] audits,” he said.

Most of the problems discovered by auditors deal with the district’s computer system, a concern cited in each of the last three annual audits.

The auditors said the system allows the potential for fraud and makes it more difficult to access and retrieve information.

“The district is exposed to any disgruntled Information Systems employee,” the report concluded.

Board members have known for years that the districtwide computer system needs to be upgraded. But they have been unable to find the $5 million or more that a new system would cost.

“We are trying to transition into a new system,” Tafoya said. “So do you invest a lot of money in a system that will be replaced in a few years?”

Jacobs said the repeated recommendations by auditors that the district purchase a new computer system have prompted him to consider borrowing the money.

“I don’t like to borrow money if I can avoid it,” he said. “But based on this report, and the reports we’ve gotten in the past, I think we need to get started.”

The audit makes a series of recommendations beyond installing a new computer system.

Among other conclusions, the report said the district’s accounting system should be upgraded or replaced. The existing system has no accounts-receivable or accounts-payable modules and cannot generate computerized ledgers, auditors said.

“The district’s accounting system is inadequate to properly account for the activities of an entity with the size and complexity of the district,” the audit said.

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Bookstores at Ventura, Oxnard and Moorpark colleges are improperly managed, with inadequate controls over inventory contributing to a continuing lapse in security, the report said.

“The lack of accurate inventory figures may result in the misstatement of interim financial statements,” auditors said. “A centralized system to track the inventory on a regular basis, such as a perpetual recording system, should be implemented at all three bookstores.”

Two years ago, an audit of the Oxnard College bookstore showed that the store lost more than $180,000 in one six-month span while other bookstores made money. That review cited shoddy bookkeeping as the primary culprit.

Trustees conceded that monitoring bookstore receipts has been a continuing challenge.

“Any time you have free money coming in that comes in in dribs and drabs rather than tuition, you’re going to have a possibility that money is going to evaporate,” Jacobs said. “We have to be very careful.”

Tafoya said: “It’s just an ongoing problem. Our bookstores need to have some investment in them to not only improve security but improve service to students.”

The governing board will consider the audit at its monthly meeting Tuesday.