Eliminating Blanket Purchase Orders: Henderson State University (Arkansas) ORACLE

Posted: Tuesday, January 20, 2015 12:15 pm | Updated: 1:17 pm, Tue Feb 3, 2015.
By Josh James | 0 comments
Last October, President Glen Jones requested an investigative audit of The Center for Language Proficiency which multiple ethical violations and resulted in the removal of the director and assistant director and the closing of the Center.
Clark County Prosecuting Attorney Blake Batson said Tuesday that the case had been referred to his office but declined to comment further, citing the sensitive nature of an “open investigation.”
Jones grew suspicious of the improper spending last summer and consequently contacted the Arkansas Division of Legislative Audit (DLA), according to a statement he emailed last month.
As the audit proceeded, Julia Correia, former director of the Center for Language Proficiency, returned nearly 300 pieces of equipment that was missing from campus on two separate occasions, according to the audit report. Among the items were steam irons, office chairs, a desktop computer, olive oil, and over 200 other pieces of “media related equipment.”
The ESL Academy and The Center were largely Arkansas Department of Education (ADE) grant-funded.
Among other findings, the DLA report determined there to be a “lack of guidelines for use of the ADE grant funds” and a “lack of Henderson State University oversight on the use of these funds” regarding the Center.
Many of the violations regarded nepotism, the use of one’s position to benefit family members vocationally and financially through business transactions. More than $58,000 went to business projects in which the family of the former director or former assistant Christine Smart were involved.
Those who participated in the graduate academy of the language program received CDs recorded by Correia’s son’s band. The cost totaled more than $9,000. Correia’s husband and son edited e-books and DVDs which were purchased and then given to academy participants. The cost totaled more than $28,000. Correia’s husband received more than $17,000 in payments giving presentations at the ESL academy. A state law, Arkansas Code Annotated 19-11-75, specifically forbids universities from conducting business with any organization in which a family member has a financial interest.
The audit also found that the Center engaged in general excessive spending. The Center purchased a new oven and dishwasher for the office.
They spent more than $80,000 on office supplies and ink cartridges, $30,000 on snack food and $3,000 on DVDs. Cookware and groceries “for which a business purpose could not be determined.” Five televisions, several laptops, iPads, microphones and other electronic equipment, many of it unopened were determined to be excessive spending.
President Jones, in his email, explained that he and other Henderson officials acted swiftly and that having been alerted to possible fraud “immediately contacted external auditing professionals to conduct a preliminary review of the Center’s activities.”
Jones wrote that Henderson will adopt the recommendations of the audit committee and in addition, eliminate blanket purchase orders, hire an internal auditor, employ an outside accounting firm and establish a third-party hotline for employees to report fraud.
Cathy Bell, assistant controller, said that many of the changes made to the business office and purchasing department procedures are “things we should have been doing all along.” She added that in the previous weeks, the administration and Elaine Kneebone, legal counsel, has “sent out a lot of emails about changes in procedure.”
Bell said that when she first began working at Henderson, faculty who have the ability to make purchases were required to attend administrative workshops in which the ethics of purchasing and business relationships were discussed in detail. She said she hopes the administration will re-implement the workshops.
Bell explained that before a purchase is made, it must go through a chain of administrators and offices. She said it’s only a small number of faculty who are authorized to make purchases and when they do, the purchase must first go to a department chair, then to the dean, then to the Provost and then to purchasing.
Bell admits that they should have been more carefully scrutinizing their invoices, and since the audit began they have been.
“We need to make sure the proper person is signing the invoice,” Bell said. “Just looking at it and signing off isn’t enough. We’ve been paying extra attention to duplicate invoices and we’re making sure we have the proper documentation.”
Bell said there was no excuse for what happened and that the violations were clear violations, not mistakes.
“We, here in the business office are doing everything in our power to see this doesn’t happen again,” Bell said. She said only a few students, because of technicalities, paid any fees to the ESL academy, so the money used in the violations came almost strictly from the ADE grant and not from the student body’s tuition.
The ESL academy, which Correia also oversaw, has been placed under direction of the Teacher’s College. Judy Harrison, Dean of Teacher’s College, said that they are in the process of writing a request to the ADE to host the graduate academy, but that the audit’s findings has had no effect on undergraduates who wish to add the ESL endorsement to their teacher’s license.
“If you want your ESL endorsement, you can get it,” Harrison said. “The ESL academy is a credit-generating program that prepares those who want to teach K-12 and want to work with English Language Learners, ELL, and it has helped thousands of Arkansas kids.”