Amid call for restraint, finger pointing continues in WV audit mess

Data about state agencies’ pension liability that held up the most recent statewide financial audit has already been sent to agencies this year, months ahead of when the information went out last year.

That’s according to Michael Farrell, chairman of the Higher Education Policy Commission, who spoke to college administrators at a Friday meeting in Charleston. It was the first regular meeting of the commission since the Gazette-Mail reported the state was late for a third year in a row on submitting its audit, and Farrell told administrators to stay positive and not play the blame game.

“It is not our role to blame other institutions — whether it be state government or anybody else,” Farrell said. “It is our role to prioritize these statutory obligations and accomplish these in an exemplary way.”

Paul Hill, the HEPC’s chancellor, said the pension information was the reason all of the colleges missed an Oct. 31 deadline to send audit information to the Department of Administration. That department combines audits from higher education and more than 200 other state agencies to submit what’s known as a Single Audit to the federal government.

Because the state submitted its Single Audit after the March 31 deadline, the U.S. Department of Education put financial sanctions on the state’s colleges that slow their access to federal dollars.

The pension liability information is needed for agencies to comply with federal accounting standards. Farrell said colleges will be able to turn in drafts of their financial audits next month and turn in final audits by the state’s Oct. 31 deadline because they already have the pension data.

“Those are reasonable times, and reasonable people ought to be able to get it done,” Farrell said after the meeting.

Colleges didn’t get the pension information until December last year, after the state’s deadline for audits to be turned in. Still, about half of the colleges didn’t turn in their audits until February.

In an email to John Myers, the Department of Administration’s cabinet secretary, Hill linked the colleges turning their financial information in late to new legislation lawmakers passed during the regular session.

House Bill 2815, which officials from West Virginia University referred to as the higher education “freedom bill,” lessens the amount of oversight the HEPC has on the colleges.

“In the case of Higher Education the institutions have successfully lobbied for greater autonomy in many reporting areas claiming that somehow they become more nimble and entrepreneurial,” Hill wrote. “Exempting them from public accountability does neither and no empirical evidence of cost savings has been provided. The current situation with audits shows a loose [almost chaotic] situation when central authority and accountability are weakened.”

Removal of the HEPC’s oversight functions during the legislative session “effectively lessened their interest in all requirements emanating from Charleston,” Hill wrote.

Hill also wrote that, for he and Myers to ensure state agencies submit their audit information on time, lawmakers would need to give them statutory authority to compel the state agencies to move quicker on the audits and to implement penalties if they’re late.

“As we’ve seen, reliance on nagging those on the other end of the phone just doesn’t cut it!” Hill wrote.

A few days after the Gazette-Mail reported the late audit, the Chronicle of Higher Education wrote about the fiasco in one of its morning briefings. WVU President Gordon Gee said in the briefing he was “irritated as heck” the state missed the deadline.

The website quotes Gee saying his school’s audit information was ready in time, but a “state oversight agency” compiles the information and files the audit all at one time. Even without directly naming the oversight agency, officials at the HEPC saw Gee’s comments as being directed at them.

Farrell complained about the “negative publicity” in a July 25 email and asked Gee to have the Chronicle retract his comments or send in a letter to the editor clarifying his statements. He called Gee’s statements a “national slur on the HEPC” and the state’s colleges.

“You and I both know that all the higher education audits were completed before the deadline and became delinquent solely because of the failure by non-higher educational state agencies to fulfill their responsibilities,” Farrell wrote.

Farrell clarified later that he meant the audits were completed before the March 31 deadline, not the Oct. 31 deadline the state set. Farrell and Hill both said Friday they hadn’t heard back from Gee or anyone at WVU about his comments.

A WVU spokesman provided the Gazette-Mail with an email from Gee to the two men in which he clarifies he meant to say the Department of Administration was at fault, not the HEPC.

Officials at the HEPC are exploring whether they can submit the colleges’ financial audits directly to the federal education department separate from the state’s Single Audit. Farrell said to do this, the federal government and the governor would have to give the OK.

Reach Jake Jarvis at

jake.jarvis@wvgazettemail.com,

Facebook.com/newsroomjake,

304-348-7939 or follow

@NewsroomJake on Twitter.

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