Audit of Southeast shows what is good and what needs to be improved

The Missouri State Auditor's Office released an audit of Southeast Missouri State University on Feb. 7 that gave praise overall, but also pointed out a few areas that may need improvement.

Since state auditor Thomas A. Schweich took office in January of 2011, the auditor's office has given one of four ranks to institutions: excellent, good, fair and poor. To get an excellent rating, the auditor's office cannot find any points of contention with the entity audited.

"It's nigh impossible to be excellent," deputy state auditor Harry Otto said. "There are very few excellents that we hand out. Last year I think there might have been one or two, and they weren't for higher education institutions. There are so many things, so many facets that we always think can be improved on."

Southeast received the good rating, meaning the auditors that looked at the university for over nine months found Southeast to be well managed. Southeast president Dr. Kenneth W. Dobbins said that the audit reflects on the work that the university's staff and faculty do.

"What this says is that our faculty and staff are very conscientious," Dobbins said. "They do things by regulation and by statute, and they're proud of what they do."

The findings were broken into a list of 11 categories where the auditors felt Southeast could improve. According to Otto, the audit mostly analyzes management and procedures, as well as the university's control on the taxpayers' dollars.

In one category, the audit questioned Southeast's practice of paying the fees charged by credit card companies instead of requiring credit card users to pay for them. Approximately $694,000 in fees was absorbed by the university between 2008 and 2010.

"When I came in 1991 we had half a million dollars a year put on credit cards," Dobbins said. "Right now we have more than $16 million a year put on credit cards. Students and parents are using that method of payment to make ends meet."

Otto said that while the practice does benefit students who pay with a credit card, the university is still incurring a $694,000 expense; Southeast is short that money, and it has to be made up somewhere.

"The university, you might say, eats that charge itself," Otto said. "Our experience with most other universities is they do charge a convenience to the purchaser whenever they use a credit card. That does cost the university."

The audit also covered expenditures made by the university. Over the course of a three-year period, Southeast spent over $60,000 on employee recognition that the audit said "did not appear reasonable or necessary."

"We take that hard line on every place we go," Otto said. "We're just questioning the good sense of spending taxpayer dollars for those kinds of recognitions. Most of the time the institution or the auditee will come back and say we feel that it is a worthy expenditure of money and our people need to be recognized to keep the morale up."

Included in that expense are lapel pins, medallions and rocking chairs for longtime or retiring faculty and staff. In its response to the audit, Southeast stated that recognizing its employees for their work is an "important tradition, a prudent expense and a reasonable way to show our appreciation for service to our university and its students."

"That's just a benefit to make sure we reward and thank those who do such a good job for us," Dobbins said.

The audit also found that Southeast has been subsidizing a significant portion of the Southeast Missouri University Foundation's operating expenses. Although it is tied to Southeast, the foundation can't be funded by taxpayers' dollars.

"They are separate institutions," Otto said. "It has to stand alone. It should not receive taxpayer money. In some respects they should be at arm's length. The foundation should not benefit from its relationship with the university."

In response to this finding, Southeast said in the audit that "we believe that the university has not subsidized the Foundation." The university did say it would perform a time study, which would look at money spent versus hours worked by employees, to determine how much is being given to the foundation.

Other categories included administrative transfers, a comprehensive food policy, employment contracts, closed meeting discussions for the Board of Regents' meetings, management of Show Me Center receipts and information security. Otto said that Southeast's response to suggestions made in these categories was overall positive and very receptive.

The complete audit is available at southeastArrow.com.