Nevada colleges engaged in ‘questionable financial activity’ with student money – The Nevada Independent

The legislative auditor told lawmakers on Thursday that “inadequate oversight” of the higher education budget has led to mistakes and “questionable use of funds” by the state’s public universities. The use of operations designed to avoid returning unused money to the state.

Through three separate audits of the Nevada System of Higher Education (NSHE) self-support budgets, charitable foundation accounts, and capital construction projects, auditors called on the system to tighten spending controls, primarily at the Board’s feet. I took the responsibility of directing. of the regent, which has “provided the institution with operational freedom” with “vague or inadequate” guidelines.

The new report stems from 2021 Bill AB416, which allowed legislative auditors to comb through certain NSHE accounts from 2018 to 2022. Legislators originally called for a much broader audit of accounts dating back to 2014, but the push has been scaled back. As a matter of concern, auditors will not have the resources to match the scope of the bill.

These listed violations include state-backed accounts (or public funds, taxpayer dollars allocated by legislators) and self-help accounts (funded by student tuition, tuition, and other ancillary expenses). Includes institutions that move “significant” amounts between accounts Bid to use all state funds allocated to the agency.

According to auditors, such transfers meant a minimal amount of unused funds returned to the state’s General Fund “over the years.”

NSHE Acting Chancellor Dale Erquiaga told MPs about the legislation: Audit Subcommittee.

The auditor also highlighted multiple instances of individual institutions using student and tuition fees for purposes outside of those fees.

This includes two unnamed institutions that instead spent $6.7 million in funds aimed at “general improvements” (such as advising and counseling services for all students) on sports and band programs. increase.

Although such transactions represent a small fraction of the total — auditors found that 2% of restricted transactions tested were spent contrary to Board policy — auditors asked the Regent to remove any ambiguity that would allow such spending again.

Similarly, auditors have found that some programs have thousands or tens of thousands of dollars in unused student fees over multiple fiscal years, despite policies that limit balance carryover to one fiscal year only. expressed concern. In one extreme case, his unnamed UNR program carried forward funds over his 15 years totaling $53,241. At UNLV, another one of his programs had carried forward fees totaling more than $2.9 million over his four years.

Auditors also found that UNLV and UNR used approximately $5 million in state operating funds. It is intended to be used for educational and operating expenses, in return helping pay for capital construction projects.

Of the 27 capital construction projects managed by UNLV and UNR, the auditor found that under state law the projects were required to use the construction management services of the State Department of Public Works, yet such oversight was not required. I found 3 cases where I didn’t. Auditors also found problems with change orders used to amend construction contracts, resulting in more than $200,000 in “improper payments to contractors.”

In another part of the audit report, questioning UNLV’s decision to enter into a public-private partnership to build a new $125 million medical school building, the auditor wrote: I’m here. [public-private partnership] Methods in procuring capital construction projects.

With that partnership, UNLV lost some control over the management of construction projects, including “accountability for the use of state-allocated funds” totaling $25 million.

Auditors recommended 34 separate changes to the NSHE policy in three separate audits.

In a written response attached at the end of the budget audit, Elquiaga agreed and accepted all 33 requested changes, and the system “has begun the important work necessary to adequately address the findings.” said.

The board is scheduled to discuss the audit results next week, but the agenda item is listed as “information only” and no vote is scheduled.

Separately, the auditors also found that NSHE broadly implemented “reasonable” oversight and structural practices over its investment funds. This was used to offset about $129 million of his $164 million worth of forced budget cuts in the first months of the COVID pandemic.

Funding for that investment was provided in two chunks of so-called “special distributions”. Both are from a rainy day market fund unique to NSHE. But before the federal government began distributing aid broadly through legislative packages such as the CARES Act and the American Rescue Plan, investment funds were also distributed, and auditors expect about $70 million in unused special distributions at the end of fiscal year 2022. discovered.

Institutions tell auditors that funds are likely to remain in reserves to offset expected declines in enrollment or to fund certain maintenance projects that would otherwise remain unfunded. We have shown that it is likely to be used as a means to

The bill that triggered the new audit, AB416, emerged in part as a companion to efforts to remove the Board of Trustees from the Nevada Constitution and, in doing so, increased legislative authority over higher education governance.

Question 1 of 2020, the ballot measure to accomplish that task, failed by less than 3,900 votes. However, it was revived as his SJR7 in 2021, and its new form also included language calling for additional legislative oversight of the NSHE.

This language was included in part at the Council’s request for a better Nevada, a philanthropist-backed outside group that has long criticized the council and sought to strengthen legislative control over the board. was

The head of the group, Maureen Schafer, who also heads the private company tasked with building the UNLV Medical College building, did not immediately respond to a request for comment on the recent audit.

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