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Shepherd audit finds problems

June 15, 1998

From staff and AP reports

CHARLESTON, W.Va. - Mismanagement of bank accounts at Shepherd College has delayed bank deposits by up to 22 months and might have allowed unsupervised employees to have interest-free loans, a legislative auditor said Monday.

''It's a pattern of total mismanagement,'' said Senate Finance Chairman Oshel Craigo, D-Putnam.

''Or ignorance of the code, or a combination thereof,'' said Thedford Shanklin, director of the Legislative Post Audits Division.

The audit, covering the period July 1, 1990 through June 30, 1996, found 10 problems with college operations. The college's response said it had either complied with audit recommendations or would.

According to the audit, many deposits were delayed for more than 30 days. In the worst instance, it took 22 months for one deposit of less than $1,000 to be made, the audit said.

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''It's hard to believe it took 22 months to go from the business office to the bank, assuming the bank was in the United States,'' said Shanklin.

College President David Dunlop said he was unaware of the 22-month transaction.

''I can't imagine what would take 22 months,'' he said.

Some shorter delays involved receipts from athletic events on Thursdays that were not deposited until the next week.

Practices have been changed so that money is deposited more quickly, Dunlop said. The changes were made before the audit was finished, he said.

Shepherd College spokeswoman Valerie Owens said she learned of the audit report Monday afternoon.

"Recommendations made by the auditors about management of bank accounts were adopted by Shepherd College, thus fixing the problem," she said. "All of the problems cited were corrected in regards to the bank accounts."

No money was missing and there was no indication that any crimes were committed, Shanklin said.

''It all got into the bank. It just took a long time getting there,'' he said. ''We don't know where the money was.''

The accounts had $10.8 million between July 1994 and June 1996. ''This is not peanuts we're talking about here,'' Shanklin said.

The audit also found the Shepherdstown, W.Va., college did not have a system for allocating rent paid to student union accounts and did not properly allocate money from telephone commissions that should have been used to pay off building bonds.

Auditors also said college officials' annual leave was not deducted from their leave balance, some were paid from the wrong accounts and other employees' years of service were not properly calculated.

Also, some equipment worth $9,000 could not be located and other items did not have identifying tags.

The problems were caused by a lack of supervision, Shanklin said.

Auditors plan to go back to the college in six months and make sure their recommendations are being followed, Shanklin said.

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