We are not surprised the Arizona Auditor General gave Eastern Arizona College and Gila Community College bad marks for lack of spending oversight and general accounting practices.
Eastern Arizona College (EAC) has not been able to provide accurate financial reports to Gila Community College (GCC) board members for years, and GCC has no financial oversight over anything EAC does.
It is beyond our comprehension that it took EAC five years to give the state’s auditor general financial information. Even then, the auditor general said the data was incomplete.
No business, town, county or public school district in the United States could operate without an accounting of its funds for five years. That’s like writing checks and hoping after five years there is still money in the account.
The auditor general said there were numerous flaws in the way EAC/GCC maintained its books. The auditors found serious deficiencies, such as the lack of a finance director, procedures to keep track of equipment, failing to perform physical inventory, no review of billings and failing to put into place fundamental budget safeguards.
Remember that EAC manages 95 percent of GCC finances under an ironclad contract, which gives GCC board members almost no control — they cannot even get a monthly financial report.
They have to adopt budgets without knowing how much the school will get in tuition. The GCC board members have been asked to adopt yearly budgets when most of the numbers associated with revenue and expenses are missing from budget documents. They have also published legal documents in the past that omitted crucial budget numbers.
We have been reporting for the past three years that numbers given to the GCC board by EAC just don’t make sense.
The state’s auditors concluded “the district’s financial statements were not issued in a timely manner since they were issued five years after fiscal year-end. The district did not have anyone with accounting expertise to oversee the financial statement in accordance with generally accepted accounting principles.”
The auditors also said, “We identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies.”
Even someone without any accounting degree could have told GCC/EAC they had no financial oversight.
Heck, the GCC board voted out all its policies last year and has still not adopted new policies on how the school and board should conducted day-to-day business.
Board President Robert Ashford acted as if it was news to him that there were any problems. He said during a recent board meeting, “We didn’t know differences existed until now.”
Maybe he did not know there were any problems, but the rest of Gila County certainly did if they have been reading our stories.
How can you not know you don’t have problems when you cannot get financial statements, complete revenue numbers, monthly expenses and other timely budget numbers? We guess if you call getting 2006 information in 2011 timely, then you’re right.
The Arizona Auditor General says that GCC needs to improve its ability to monitor its contract with EAC, prepare a legally required annual expenditure report in a timely manner and establish policies and procedures for disclosing conflicts of interest.
In addition, we think the GCC board needs to re-establish its policies, demand accurate and timely financial statements from EAC, move forward with independence from EAC and get a new board president to lead the school out of this mess — one who has a clue there are problems.