Auditor accuses CSC/NSCS of mismanagement, lack of oversight

In a statement Tuesday, the Nebraska Auditor’s Office accused both CSC and the Nebraska State College System of poor decision-making and oversight.

The criticism came in the Auditor of Public Accounts’s management letter, signed by Assistant Deputy Auditor Don Dunlap, which details deficiencies and weaknesses of the audited unit.

 In the letter, Dunlap stated that CSC was in its current position “due, in large part, to an overall lack of institutional control and poor decision making and/or oversight by multiple parties, including the administration of the institution itself.”

All calls to CSC President Janie Park about the audit were being referred to the System Office, Pam Anderson, Park’s secretary said Wednesday morning.

NSCS Chancellor Stan Carpenter did not respond to eight telephone calls throughout Wednesday. In addition, emails to Carpenter and Brad Smith, CSC athletic director, requesting interviews were not returned by press time Wednesday.

Dunlap stated that if CSC’s administration had been observant, the organization would have had ample opportunity to recognize and fix many of its current problems relating to the recent football fundraising scandal.

Dunlap went on to highlight 14 of what he classified as “some of the more glaring indicators of problems” the APA’s office noted during the 2010-11 NSCS audit.

Included in the letter’s list of indicators was Smith’s attendance at and approval for resources related to the Last Chance for Glory Golf tournaments and senior college officials’ discussion regarding the liability of transporting individuals to the tournament.

The list also referred to a news article from the college’s sports information office describing the success and scope of the tournament.

“This type of publicity – especially considering that it was internally generated by CSC staff – should have alerted CSC’s administration and others to the amount of money raised by the golf tournaments,” the letter stated about the press release.

Dunlap listed five issues relating to O’Boyle and the private bank accounts. The five issues were:

1) Lack of institutional control by CSC Administration. 2) Minimal, if any, supporting documentation was retained over the years to support account activity from all three bank accounts. 3) CSC provided its employees with minimal training or coordinated education regarding the broad array of NCAA compliance issues. 4) CSC had overall weak accounting procedures in its Athletics Department. 5) Confidential information was released to individuals outside of the NSCS before the information was made public.

As The Eagle reported in its Feb. 9 edition, the System Office created two new positions to monitor its finances – director of system-wide accounting and, pertaining to CSC specifically, athletics accountant.

In the letter of management’s findings, the APA’s office identified three “significant deficiencies” related to the NSCS. The first was “Undue Influence of the NSCS’s Executive Management (State College System).

Referring to the first deficiency, Dunlap stated that an email from the System Office regarding the optional nature of NSCS’ employees responses to state auditing personnel was restrictive and significantly harmed the APA staff’s ability to conduct the audit.

The same deficiency also details multiple other cases of delayed, disrupted, or partial communication from the NSCS to the auditor.

“As a result of these non-cooperation directives and refusals to cooperate with the audit process, there is a significant, irreversible risk that the NSCS employees will withhold essential information from auditors or will not share information that they might otherwise have had such directives and/or refusals not occurred,” the management letter states.

This far in the report, Dunlap’s criticism targeted the NSCS management as a whole; however, in the auditors’ recommendation section of the report, Dunlap referenced Carpenter specifically, stating “The actions of the NSCS’s Chancellor are difficult, if not impossible, to repair due to their long-term impact on auditor-auditee communications and the overall ability of the auditor to conduct a comprehensive, full, fair, and balanced audit of the State College System with full auditee cooperation.

The APA’s office also recommended that the NSCS Board of Trustee’s chair, Carter Peterson, communicate the importance of “complete, accurate, and unfiltered” responses to all NSCS employees for any information requests submitted by the auditor’s office.

The NSCS responded that it felt it was acting in accordance with the directive issued by the State Attorney General’s Office.

In the NSCS’ response, contained in the auditors’ management letter, Peterson stated “The Chancellor has kept me and the entire Board informed of the issues and communication related to Chadron State athletics and the Auditor.  I am very satisfied with the actions of the Chancellor.”

The 2010-11 NSCS Audit can be viewed here.

The accompanying NSCS Audit Management Letter can be viewed here.