Audit Criticizes CSUN’s Handling of Finances

Cal State Northridge officials failed to collect more than $1.3 million in delinquent student fees, parking citations and other funds owed the university, according to a CSU audit released Thursday.

The audit also criticized the arrangement that provided a residence for university President Blenda J. Wilson, and said campus administrators at CSUN failed to provide sound financial oversight.

“The campus does not maintain adequate internal control over cash receipts, accounts receivable, purchasing and fixed assets,” the report said.

Wilson disputed key findings of the Financial Integrity and State Managers Accountability audit, which is conducted by the chancellor’s office of California State University and Colleges. The audit is routinely conducted for each CSU campus every two years.

“The university has been aware of many of the issues raised for some time and already has taken significant steps to address them,” Wilson said.

According to the audit:

* CSUN failed to collect more than $1.1 million in student fees between 1995 and 1997.

* It was owed $140,000 as of April 1998 for unreimbursed cash advances and salary overpayments.

* As much as $150,000 in campus parking citations were more than 3 years old and were probably unrecoverable.

University Controller Robert Kiddoo blamed part of the problem on the 1994 Northridge earthquake, when accounting records were destroyed.

“After the earthquake the sprinkler system drenched the entire accounting operation,” said Kiddoo. “There were also a number of small fires. Many of those records were removed with shovels, so there were no source documents to prove our case for collection.”

Despite these obstacles Wilson said the campus hired a bill collection agency last year and has reduced its yearly arrears from 11% of total student fees owed to 4%. And of $1.1 million in delinquent student fees cited by the auditors in 1998, Wilson said the school has recouped approximately $265,000.

The audit also characterized as “deficient” an agreement between two campus agencies to provide an official presidential residence.

“The lease was not approved by the state,” according to the audit. “The agreement was not executed with appropriate review and consultation with the Office of the Chancellor.”

But Wilson said the large three-bedroom Northridge home was purchased before she arrived at CSUN and she was unaware her use of the residence was unauthorized.

The audit also criticized Wilson’s use of public employees and $70,000 in state funds for landscaping and a new patio for the home.

Wilson said the renovations also included new sewer pipes, an irrigation system and other additions to make the home, which is frequently used for presidential functions, accessible to the disabled. Wilson said the campus fund was reimbursed by CSUN’s fund-raising arm after auditors found the problem.

“The error is . . . the bill was not sent in a timely way,” Wilson said.

The $70,000 was reimbursed earlier this month, according to the audit.

William Hauck, chairman of the CSU Board of Trustees, said he had not reviewed the document Thursday and declined to discuss its findings.

Several other high-ranking Cal State University officials, including Chancellor Charles B. Reed, did not return calls Thursday.

In a written statement released to CSUN students today, Wilson calls the audit “a look at our past” and joined Kiddoo in blaming the 1994 Northridge earthquake for hurting the school’s bill collection and bookkeeping efforts.

The audit also found that cash and blank checks were not kept in safes or secure areas. Kiddoo said the campus safe on the fourth floor of the administration building was abandoned after the structure was destroyed in the temblor.

Wilson is leaving CSUN this summer to take the helm of a Massachusetts-based educational foundation.

Sources said Wilson and members of her staff had been working for several months to “tone down” and “soften” the language included in the final audit.

“She’s doing her best to persuade them to take out the most damning stuff,” one CSU official said days before the audit was released.

Kiddoo said any haggling with auditors was done out of concern for precision and truthfulness. He acknowledged there had been an earnest “give and take” between CSUN’s administration and the auditors, but said no strong-arming took place.

“In any audit of this kind, when you do an original finding there’s always a dialogue [with] the auditors,” Kiddoo said.

The CSU trustees are expected to discuss the audit at their board meeting next week.

Wilson, who became president of CSUN in 1993, was widely regarded as the school’s champion after the Northridge earthquake caused damage to the campus estimated at $393 million. Under her tenure CSUN began a number of bold initiatives including an $85-million partnership with biotechnology entrepreneur Alfred Mann to create an on-campus biotech park.

But Wilson’s tenure has also been marred by a series of damaging audits questioning the university’s financial management.

In an interview last week, Wilson said after the Northridge earthquake she had to decide whether to rebuild the campus “or have a great accounting system.”

“You have to set priorities by what is more important,” she said. The audit was created in 1983 with the passage of the Financial Integrity and State Manager’s Accountability Act and follows every odd-numbered fiscal year. CSU officials conducted the audit last year focusing on CSUN’s financial records between 1996 and August 1998.

The audit, published on March 5, was sent to Wilson and the 24 members of CSU’s Board of Trustees this week.