Three legislative audits of the state’s higher education system were announced Thursday, one of which noted “minimal system-wide oversight” that contributed to “improper or questionable financial activity.”
The report was approved Thursday by the Legislative Commission’s Audit Subcommittee.
On Wednesday, the Nevada Higher Education System’s 13-member Board of Trustees will make an information-only presentation on its findings. There are no plans to do so.
The higher education system, with eight schools and over 100,000 students, received a total of 34 nominations. His 60-day plan for corrective action expires on April 10.
The audit was required under Congressional Bill 416, which Congress passed during its 2021 session.
The audit focuses on capital building, institutional foundations, and self-reliance and reserve accounts. They looked at data from 2018 to 2022, which varied by audit.
In a December memo to the legislative auditor, NSHE President Dale Elquiaga wrote that the higher education system understands the value of auditing.
At a subcommittee meeting on Thursday, Erquiaga, who became prime minister in July under an 18-month contract, said the system had already started working on policy changes.
Self-supporting and reserve accounts
Audits on self-supporting and reserve accounts noted that “minimal system-wide oversight” contributed to inappropriate or questionable financial activity.
The board has given schools “freedom to operate,” the report said, but policies and guidelines are often “vague or inadequate.”
The audit also found schools with “questionable tuition use” and a mix of “limited and unrestricted earnings.”
Some self-reliant programs also had a “substantial amount of idle funding,” with approximately $200 million in reserves at the end of fiscal 2021.
According to the report, “Excess reserves may indicate that the program is overfunded, and fees should be reduced or funds redirected to more pressing ends.” the report said.
Erquiaga told the subcommittee dealing with the topic of student fees that it was the board’s primary concern that students were not overcharged, and that if fees were charged, that money would be used for the features for which the fees were charged. He said that it is certain that it is spent on.
A capital construction audit showed that UNLV and the University of Nevada, Reno used nearly $5 million in state operating funds for capital construction.
Of the 27 projects surveyed, 10 fell into that category.
According to the report, “the management of the UNLV and UNR capital building projects using state operating funds was not always in compliance with state law and NSHE policy.”
The audit also noted that the school uses “non-traditional procurement methods” for capital projects. This refers to UNLV’s new $125 million medical education facility, which uses private funds and his $25 million state funding.
It’s unclear whether the school has the “legal authority” to use the method, according to the report.
“Furthermore, the use of non-traditional methods compared to traditional methods provides less control and oversight over construction project management and financial activities,” the report notes.
An audit of an institutional foundation (a school non-profit that accepts donations from individuals) found that 99% of sampled donations were properly recorded and 99% of gift fund spending was properly spent I understand.
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