lIIIilMlllIlll~~lllllllllllIlllll LM095494 31 a BY THE COMPTROLL GENERAL . OF THE UNITED STATES COMPTROLLER GENERAL OF THE UNITED STATE!5 - WASHINGT0N.D.C. 2.M48 - , B-167006 ,I-, Dear Mr. Scherle: L / By letter dated July 12, 1971, you requested’ that the General Accounting Office review selected areas of financial and property administration of Federal City College, Washing- t&n- Technical Insti.tyte, and District of Colmbita Teachers ’ Coilege. This is our report on Federal City College. In ‘j : _’ ac”cor-dance with an agreemnt reached with your office, the report is based on two earlier reviews at Federal City Col- lege cormpleted in August 1969 and March 1971, respectively. Reviews at Washington Technical Institute and District of Columbia Teachers College are in process. A report on our findings at these two institutions will be issued to you as SQO~ as possible. - ADMINISTUTION OF CERTAIf PUNDS Our reviews showed that college funds were being aain- tained ila three commercial bank accounts. We believe that the enabling legislation for the college required that the funds deposited in two of the accounts be deposited in the U.S. Treasury. Although establishment of the other accost was authorized by law, the funds deposited in it were not con- trolled and accounted for in the same mnner as other obliga- tions and disbursements of the District of Cofumbia, contrary to reauirements. Section %03a[9) of the District of Columbia Public Edu- cation Act, as amended, approved November 7, 1966 (31 D.C. Code 160a(9)], provides, in part, that: “The Board is vested with the following powers and duties:” “To accept services and mormeys, including gifts or endowments, from any source whatsoever, for use in carrying out the purposes of this title. such 50 TH ANNIVERSARY 1921- 1971 B-167006 or in the collegels U.S. Treasury trust account. The presi- dent stated that no formal solicitation program for gifts had been initiated by the college or by the corporation. He indi- cated that the corporation planned to organize a solicitation campaign but that the college had no such plans. I In enacting section 103aC9) P the Congress prescribed the method by-which gifts might be received, deposited, and ex- pended by the Board of Higher Education to help-meet the finan- cial needs of Federal City College which, under the same stat- ute, had been placed under the control of the_ Board. Thus the Congress restricted by statute the namer in which gifts might be accepted by the college. Accepting such gifts in the name of the corporation was at cross-purposes with the statute and therefore should not be continued. Student Government Association Fund Section 103a(7) of the District of Columbia Public Educa- tion Act, as amended9 states that: “The Board is vested with the following powers and duties:” “To fix, from time to time,. fees to be paid by students attending the Federal City College. Receipts from such fees shall be deposited into a revolvirzg fund in a private depository in the District, which fund shall be available, with- out fiscal year limitations, for such purposes as the Board shall approve. The Board is authorized to make necessary rules respecting deposits into and withdrawals from such fund.” Section 105.bf the act states that: “All obligations and disbursements for the pur- pose of this title shall be incurred, made, and accounted for in the same manner -as other obli- gations and disbursements for the District of Columbia and, except as provided in paragraph (9) of section 103 of this title, under the direction and control of the Commissioner.s’ On Dedember 19, 1968, the Board of Higher Education autho- rized the Student Government Association to charge a studeirt activity fee no higher than $7.50 a student for each quarter. 3 B-167006 . Our review showed that the Board authorization concerning the charging of student activity fees had made no reference to procedures for the collection or disbursement of the fees. J Our examination of the accounting records of the Student Government Association in October 1970 showed that the records consisted of checkbooks, canceled checks, bank statements, and paid and unpaid invo$cks. A formal set of books was not main- tained. We were infcrmed by the accountant of the Student Government Association that no record of obligations incurred had been kept and that disbursements had been made on the basis of invoices and had not been supported by purchase or- *ders or receiving reports. We found no evidence in the legislative history of the District of Columbia Public Education Act that funds accumu- lated under subsection 103a_(7) were intended to b_e excepted from the accounting and control requirements stipulated by section 105 of the act. Thus, under the language of section 105 of the act, the Student Government Association Fund must be accounted for in the same manner as other obligations and disbursements of the District of Columbia and must be under the direction and control of the Commissioner of the District of Columbia. We discussed these matters with the college president who indicated a willingness to help the students establish adequate accounting records but who did not agree that the funds should be under the control of the Commissioner. He stated that he had requested the District's Office of Munici- pal Audits to make an audit of the Student Government Associ- ation Fund. Subsequent to our discussion with the president, we were informed by the District's Associate Director for Municipal Audits that, before his Office could start its audit, most of the existing records were stolen and that therefore the audit had not been made. On January 14, 1971,- we were informed by a college official that all financial activities of the Stu- dent Government Association had been temporarily assumed by .- 4 . ‘ B-167006 _-. - the college's financial office pending a policy decision of the chairman of the Board of Higher Education as to their disposition. e Federal City College extension courses / Section 103a(6) of the District- of Columbia Public Educa- tion Act, as amended,_ -states, in part, that: _ "The Board is vested with the following powers and duties:" "TQ fix, from time to time, tuition to be paid by students attending the Federal City College. aa* Receipts from the tuition charged students attend- ing the college shall-be deposited to the credit of the General Fund of the District of Columbia." On February 20, 1969, the Board of Higher Education approved a fee to be charged for extension courses on the ba- sis of the number of hours that the classes met. We found that extension course fee receipts had been deposited in a private bank account and that disbursements had been made for the purpose of paying the classroom expenses and the salaries of extension course instructors. During our first review we advised the chairman of the Board of Higher Education that, in our opinion, the fees charged for attending extension courses were, in fact, tuition and should have been deposited in the General Fund of the District of Columbia. In commenting-on our opinion, the chairman stated that these courses were a service to the community which the col- lege administered but for which the participants bore the costs . He concluded that the payments would be more properly considered fees than tuition. The chairman indicated that, if the payments were required to be deposited in the U.S. Treasury, they would be unavailable to pay the expenses of the courses since the conjectural nature of the courses would make requests for appropriations for them very difficult, which would make it virtually impossible to provide this com- munity service. - B-167006 On April 28, 1970, the District Corporation Counsel issued an opinion that the extension course payments were tuition and should be deposited in the U.S, Treasury. In October 1970 we discussed this matter with’the’presi- dent of Federal City College. He stated %hat the college did b not agree wi%h the position of the District Corporation Coun- sel. He sta%ed also %hat the funds in question were being kept in the private b-&k accotawts pending the outcone of a request for another decision from the District Corporation Counsel, - - We are in agreement with the position taken by the Dis- trict Corporation Counsel. The term tttuitiontt is defined as a fee charged to a student at a college or university for (1) the privilege of a%%endance at the ins%i%u%ion and (2) the price of, or payment for, ins%ruc%ion. If %here is no expres; intent to the contr<ry, words used in a statute are intended to be given their common meaning. Therefore we believe that paymanes made to the college for instruction in extension courses are tuition payments and, as such, are for deposi% in the General Fund of %he District of Columbia pursuant to subsection 103a(6] of the ace. TUITION COLLECTION During our first review we concluded that the college had not exercised %he control necessary to provide reasonable en- surance that the correct amount of tuition had been paid. We found that the amount of tuition due from each student had been determined a% %he time of regis%ra%ion and had been based on the number of hours applied for. Generally this amount was paid by the s%udent. At the time of payment, a tuition pay- ment record and receipt card was prepared. After regis%ration a summary listing was prepared showing courses and credit hours for each s%udent. This listing, how- ever, was no% later adjusted to show %he credit hours added or dropped nor was the amount of tui%ion paid reconciled with the listing. Also %he tuition payment record and receipt cards were no% prenumbered and tuition deposi%s did not list either the individual payers or the amounts paid. Further we found that the tui%ion had been waived in at least 24 instances. 6- . . . _ B-167006 J During our second review we found that Federal City Col- lege had made some pmgress in improving the control over tuition collection and that further corrective actions had been planned. For the fall 1970 quarter, the tuition- payment record and receipt cards were prenumbered and the tuition de- posit tickets showed the payers and the amounts paid. College officials -informed us that tuition was no longer waived, and during our review we found no evi-denee that waivers had been granted. . - For the fall 19 70 quarter, the college prepared a consol- idated computer listing showing courses, credit hours, and total payments for each student. This listing showed also cases where the total tuition had been deferred. The listing , however, did not show a comparison of the amount of tuition owed with the amount of tuition paid. Also, at the time of our review, we were informed by a college official that the listing had not been revised to show courses a@ed or dropped. Our exatination of 108 randcmly selected student tuition payment record and receipt cards prepared during the fall 1970 quarter showed that the c~imputer listing contained numer- ous errors. For example, some students for which there were tuition payment record and receipt cards were not shown in this’ listing and other students were shown in the listing as having paid no tuition when, in fact, they had. Since the listing contained many errors and included only a total for fees collected--tuition, student activity fees, and health insurance payments --it was not practicable for the college, or for us, to ascertain whether all tuition due ac- tually had been collected. We were informed by college officials in December 1970 that many changes -in tuition collection procedures were planned for registration for the winter 1970 quarter. They stated that the students would be required to preregister, after which the college would bill the students. The officials indicated that the amounts billed would have to be paid regardless of course changes. They indicated also that the-method of handling course changes had not been determined. We were informed that the computer listing prepared for the winter 1970 quarter would compare the amount of tuition owed with the amount of tuition paid. 7 1 e - - * B-167006 _ ACCOUNTABILITY FOR SUPPLIES AND EQUIPMENT c Our reviews showed that the college had not maintained adequate accounting controls over its supplies and equipment. Our first review showed that (1) equipment asset coats,@ accounts had not been established, (2) reliable inventories of supplies and equipment had not been taken, and (3) a list- ing of persons authorized to requisition supplies had not been prepared. . - Our second review showed that deficiencies (1) and (2) still existed. That review showed also that,-although a listing of persons’ authorized to requisition supplies had been prepared, college employees not OA the list had made 69 percent of the requisitions during the period August 21 through Septem- ber 28, 1970. IA Decetier 1970 a contract was awarded to a private firm to take an inventory of the supplies and equipmmt. The college anticipated that, after the inventory was taken, it would be able to maintain adequate control over its supplies and equipment. FUND CONTROL The District’s Office of Municipal Audits reviewed the status of the collegeCs appropriated funds and the procedures for controlling such funds and, on June 20, 1969, issued a report which stated that the college’s control of allotted funds was inadequate because (1) the responsibility for con- trolling obligations against allotments was not clearly fixed, (21 the obligations were incurred without knowledge of the availability of gunds, (3) the monthly financial plan and b status reports were not maintained, and (4) the established procedures for obligating funds were not followed. In October 1970 we were informed by an official of the Office of Municipal Audits that his Office had not determined whether any actions had been taken by the college on those deficiencies. Our second review showed that, as recommended in the internal audit report, the college had established budgetary and fund controls to correct the deficiencies noted. Although we did not examine the application of these controls, we believe that the system established was adequate to control appropriated funds. 8 +- . - * B-167006 . Ira accordance with m agreenent reached with your office, this report is based on data availab%e to us at the tine of our past reviews and has not beegl updated. Also District com- ments have not been ob%ained on %he ma%%ers discussed fn this report. We plan to make. 00 fur%her distribution 05 this report unless copies are specifical%y reques%ed, and then we shall make distribution only a%%er your agreement has been obtained or public announcement has been made by you concerning the contents of the report. Sincerely yours 3 Comp%rolHer General. of the united seatas The HonorabBe Wfl%iam J. Scherle - , Holaw of Representatives ?
Review of Selected Areas of Financial and Property Administration of Federal City College
Published by the Government Accountability Office on 1971-10-27.
Below is a raw (and likely hideous) rendition of the original report. (PDF)