News Summary

The University of New Orleans (UNO) faces scrutiny following an audit revealing compliance and oversight failures. The report highlights the university’s ineffective internal audit functions and adherence to financial standards, raising concerns over financial management and student debt policies. With recent changes implemented to improve accountability, UNO is working towards addressing these significant issues and restoring trust within the community.

Concerns Emerge Over Compliance at University of New Orleans

The University of New Orleans (UNO), nestled in the vibrant New Orleans metro area, has recently come under scrutiny following a thorough audit that uncovered significant compliance and oversight failures. The details of the audit paint a worrisome picture of UNO’s internal audit functions and adherence to financial reporting standards.

Auditing Woes: A Troubling Landscape

This particular audit was part of a larger financial review orchestrated by the University of Louisiana System. It revealed that UNO has struggled to maintain an effective internal audit function that aligns with the Institute of Internal Auditors’ International Standards. This misalignment may have opened the door to potential inefficiencies and significant oversight failures, leaving both the university’s management and the community concerned.

During the 2024 fiscal year, UNO managed to issue only a single internal audit report. Interestingly, this report had actually been initiated in 2022 based on an audit plan created back in 2020. Alarmingly, approved audit hours for 2024 remained unused, contributing to an absence of reports on intended projects. Given that public universities receiving over $30 million in appropriations are mandated by Louisiana law to have an internal audit function that meets IIA standards, UNO’s adherence to these guidelines is especially concerning. In fact, the university received a hefty $103 million in appropriations for 2024.

Breaking Down the Audit Findings

The audit report underscored a failure on the part of UNO management to prioritize efficient audit functions. This shortcoming has led to major gaps in financial oversight and risk management. Interestingly, the management admitted to the ineffectiveness of their audit function, acknowledging that it did not conform to the necessary professional standards.

In March 2024, it became public knowledge that UNO’s auditor resigned, precipitating plans to combine audit functions with Nicholls State University. Further demonstrating a desire for improvement, a job listing for a new director of internal audit was posted in May, with hopes of filling this crucial position by the end of October 2024.

Student Debt and Financial Procedures Under Scrutiny

The audit didn’t stop at internal auditing issues; it also raised alarms over UNO’s compliance with the UL System’s “Students with Debt” policy. Specifically, there were insufficient practices for calculating student receivable allowances, and delinquent accounts were not promptly forwarded to the Louisiana Attorney General for appropriate collection processes.

The current approach to estimating uncollectible student debt, relying on a method of writing off accounts inactive for three years, was deemed unjustifiable by the auditors. Even more alarming, approximately $240,000 related to delinquent accounts due to salary overpayments dating back to 2019 had not been properly transferred. While UNO partially agreed with the findings, they defended their methodology as adequate according to system guidelines.

New Procedures and Compliance Efforts

In response to these findings, UNO implemented new procedures in December aimed at improving the collection of overdue payments. These changes included the introduction of collection letters and the establishment of a strict deadline for payment arrangements set for January 31.

Policy Violations and Financial Irregularities

The audit also exposed instances of university policy circumvention, such as the illegal installation of a $215,000 boiler, which heightened the risk of fraud and financial mismanagement. Compounding these issues, an employee reportedly embezzled around $3,600 from the athletics department, which faced further criticism over its inadequate cash control procedures.

In the most recent fiscal year, a worrisome number of 738 time cards went uncoupled with proper employee certification, violating fundamental payroll protocols. This alarming statistic further reflects the challenges at UNO and the pressing need for effective management.

Taking Action Amidst Challenges

Despite the significant issues raised by the audit, the university’s president has not shied away from acknowledging the challenges. Actions have been taken, including the termination of employees to address the evident mismanagement issues. The road ahead for UNO may be rocky, but steps are being put in place to bring about the much-needed changes and restore accountability within the university.

Concerns Emerge Over Compliance at University of New Orleans

News Summary