FARMINGTON — San Juan College’s fiscal year 2017 audit came back with the best possible feedback — no findings — and a controversial issue that came up in the FY16 audit was resolved, college leaders say.
The college’s Board of Trustees unanimously approved the FY17 comprehensive annual report during a meeting on Tuesday. Both the college and the San Juan College Foundation received unmodified opinions on their FY17 audits, which is “the best opinion given,” according to the State Auditor’s Office.
The opinion means that auditors are “confident that everything in the financial statements is a true reflection of the entity’s operations,” according to the audit summary on the state auditor’s website.
“In the accounting world, this is a big deal,” Board of Trustees Chairman John Thompson said during the meeting.
The college resolved some issues it had in the last fiscal year, in which the audit reported four findings. Auditors said in FY16 that San Juan College acted improperly in reimbursing a family member of a college administrator for travel expenses in a situation that also could have been a conflict of interest.
Ed DesPlas, vice president of administration for the college, said the situation stemmed from a grant application for work force development. The college reimbursed the significant other of a high-ranking administrator for out-of-pocket travel expenses to attend a grant application conference in Washington, D.C. The person who was reimbursed had volunteered to help the college with the grant application, but never entered a formal agreement with the college regarding expenses.
“What we should have done was had a consulting contract with a person and said, ‘You might be charging us nothing for your time and your efforts, but if you incur travel expenses on bona fide college business, we will reimburse,’ or we could have gone into a memorandum of understanding,” DesPlas said. “… We didn’t do that. It was a handshake sort of thing.”
The family member was reimbursed for $1,541.55 in travel expenses, according to the FY16 audit.
The college did not receive the grant, but auditors also found that the person was employed by a company that would work with the college to implement the grant and was “scheduled to receive grant funds, which could indicate a potential conflict of interest.”
Auditors recommended a procedure be developed to cover nonemployee travel in order “to properly reimburse nonemployee travel expenses on college business,” according to the FY16 audit. They also recommended a procedure to ensure nonemployees working on behalf of the college are doing so under a contract or memorandum of understanding.
The recommended policies were implemented on Dec. 1, 2016, according to the FY16 audit.
DesPlas said no similar situations came up in FY17 and that he reviewed all travel records for the past three fiscal years and found the issue to be an isolated incident.
However, DesPlas said the college takes the issue seriously, saying the situation was “too close to nepotism.” The board has a policy in place to prevent family members from working for each other or from working within the same department without board approval.
Megan Petersen covers business and education for The Daily Times. Reach her at 505-564-4621 or firstname.lastname@example.org.