Scathing State Audit Hits ECC’s Lax Control Environment

 

ECC President Jack Quinn ...under fire in state audit

ECC President Jack Quinn
…under fire in state audit

The long-awaited state audit of Erie Community College (ECC) has now been released and it confirms much of what we have reported over the last several months about the management problems at the college that many have suggested have contributed to the institution’s current financial crisis that has resulted in the college relying heavily on tuition hikes to stay afloat.

In what can only be characterized as a scathing audit report, State Comptroller Tom DiNapoli said “our auditors found a lax control environment in which significant decisions were made out of the view of the board, the public and students,” a statement that certainly suggests a runaway ECC administration under President Jack Quinn that made decisions without board of trustee approval and with almost no transparency or public accountability.

In effect, the audit says the board of trustees was little more than a rubber stamp for Quinn and his executive staff.  Our sources have repeatedly suggested that the Quinn relationship with the board has been managed almost completely by his chief legal affairs advisor, Kristin Klein-Wheaton, often described as Quinn’s surrogate.  As we have previously reported, Klein-Wheaton, as the college’s audit liaison, attempted to control all interaction between school officials and state auditors, and during the course of the audit, according to the report, she was unwilling to provide the audit team with phone numbers for the board members (more on that later in this story).

The board’s passive role is underscored in the audit findings that found that during the period between September of 20http://southbuffalonews.com0 through February of 20http://southbuffalonews.com5, college officials created http://southbuffalonews.com0 senior executive positions with yearly salaries averaging $75,600 and totaling $756,000 without written authorization from the board of trustees, as required by state law.

The audit also found that the administration, also without board approval, gave the http://southbuffalonews.com0 employees health insurance and retirement benefits with annual costs of more than $200,000.  According to the state audit, ECC officials also made questionable compensation payments to two senior executives totaling $77,000 and increased salaries of all senior executives (Quinn’s staff) by 2 percent, totaling $27,000, again without board approval.

State Comptroller Tom DiNapoli ...blasts ECC’s lax controls

State Comptroller Tom DiNapoli
…blasts ECC’s lax controls

According to state regulations governing community colleges, the ECC board lacked authority to delegate the power to establish salaries and approve raises, and the actions came at a time the college was facing severe financial challenges which has forced emergency cost-saving measures and tuition hikes, as we have reported over the last several months.

DiNapoli’s audit also revealed:

  • The leave record of senior executives were inaccurate and, as a result, executives accumulated $25,000 worth of leave that they were not entitled to;
  • A retired executive cashed in on an overstated leave balance upon separation, resulting in a $2,500 overpayment;
  • The college paid http://southbuffalonews.comhttp://southbuffalonews.com professional service providers a total of $440,000 without using requests for proposals (RFPs) or other required competitive processes;
  • The college did not enter into written contracts with eight professional service providers for services total $342,000 as required; and
  • Financial transactions between the college and the Erie Community College Foundation and the Auxiliary Services Corporation of Erie Community College were not documented properly or conducted in a transparent manner.

The state comptroller is recommending, as part of the state’s first financial review of the college in 20 years, a more vigorous oversight policy by the board of trustees including ensuring that significant financial decisions such as the creation and funding of new positions are conducted in an open and transparent manner.

The report also recommends the board authorize all salaries, compensation and fringe benefits provided to senior executives and adopt comprehensive time and attendance policies for senior executives.  Among other recommendations to the board include:

  • Enter into written contracts with professionals establishing the services to be provided, the time frames for those services and the basis for compensation;
  • Ensure that written agreements with affiliated entities stipulate how performance will be measured and evaluated; and
  • Review student activity fee allocations provided to and used by clubs and organizations to determine whether the amount of the fee is appropriate and is necessary.

The state comptroller notes that although ECC did not agree with all of the audit findings, they have indicated the board of trustees has already taken action to address a number of the recommendations made in the report.

As part of a lengthy response to the state audit by several ECC entities, ECC Board Chairman Steve Boyd said had the board been contacted during the state review “we would have happily communicated that upon a cursory review, we agree with several of the recommendations, including those involving public transparency.  We are already well into the process of improving our Board operations on a number of levels,” and “it is our intention to fully explore every issue and, when necessary, take corrective action where authorized.

ECC City Campus ....audit targets poor management practices

ECC City Campus
….audit targets poor management practices

We should note here that despite attempts by auditors to reach board members, as we noted earlier in this story, Quinn’s top aide, Klein-Wheaton, refused to provide auditors with the phone numbers of board members, and in the case of Chairman Boyd, he was believed to be under medical care when state auditors finally did get his number from Klein-Wheaton and was not reachable.  As a result, the auditors were essentially blocked from talking to board members by Klein-Wheaton’s failure to provide them with contact information.

Erie County Legislator Kevin Hardwick, chairman of the legislature’s Community Enrichment Committee who has expressed concern about ECC’s financial situation, said Wednesday that while he has not yet had an opportunity to see the audit report, he expects his committee will take up the findings in the audit once they have the chance to study it.

“Obviously, we’ll have it before us,” he said Wednesday, “and will likely hear from the [ECC] administration in the near future.”  We will be following the legislature’s actions as well as the response from the county executive to the blistering report that suggests the ECC management has been lacking oversight from a passive board and spending money without proper authorization, especially on senior staff, as students are being forced to pay steadily increasing tuition costs.

 

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