Chicago State University has miscounted tens of millions of dollars, improperly handled dozens of contracts, overspent on several federal grants and fell as much as six months behind on routine accounting tasks that should have happened monthly, a new state audit says.

The report, issued by the Illinois Auditor General, is highly critical of many aspects of CSU’s finances during the previous fiscal year, which ended June 30, 2008. It identifies 20 problem areas. The auditor general found problems in 12 of those areas a year or more ago, but many of the same issues remain.

Leon Finney, the chairman of CSU’s Board of Trsutees, says while he hasn’t seen the audit report, he expected it to point out many of the same problems as past audits.

He placed the blame squarely on former university president Elnora Daniel. She left in June 2008 when the board refused to renew her contract.

“We tried over and over again to get the administration, Dr. Daniel, to focus on the audit exceptions, but she didn’t,” Finney says.

Many problems with contracts

The findings stretch across nearly all aspects of CSU’s books. Some relate to how it counted the value of projects under construction and buildings it had recently finished.

Some issues revolved around tracking how federal research grants were spent, while other problem areas included CSU’s accounting of federal financial aid money it received for its students.

University officials violated the school’s own rules on using credit cards, in some cases using them to charge items costing more than $1,000, the audit says.

The new audit report found a range of problems with contracts, including 11 that had been signed after companies started providing goods and services.

Three contracts totaling $786,000 never went to the Board of Trustees to first get approved. And a single $930,000 contract was never signed by the university’s legal counsel, as was required.

That contract was doled out to Buck Press Limited, a book printing company in the African nation of Ghana.

Some contracts were missing standard ethics language and also omitted standard language about complying with several federal laws, the audit found.

While the audit only addresses last year’s finances, at least some contract problems remain.

At a meeting Wednesday, the board voted to renew a $1.6 million contract for student health insurance, even as the board members acknowledged it should have been put out for bid in 2008 but still has not yet been reviewed.

Variety of bookkeeping problems

Other aspects of the university’s bookkeeping had big problems, too.

The auditor general singled out several grants for research and student aid that weren’t issued correctly.

For example, the university recorded spending $28,000 more than the amount awarded in a federal Academic Competitiveness Grant, putting that grant account in the red. But it left $25,000 untouched in another federal program, the National Science and Mathematics Access to Retain Talent Grant. The auditor said it appeared that in some cases, charges got posted to the first grant instead of the second, a result of poor controls to review how the grant money was spent.

The university also not only over-spent a $3.5 million grant for covering tuition costs for some students, but then did not properly record how the grant was spent.

And CSU’s cash flow statements, which show how much cash it has on hand at any given time, were inaccurate. At the time of the audit, the difference between that statement and what CSU actually had in the bank was $6.8 million.

And while financial records showed the university receiving $12.6 million in capital grants, it had not actually received any capital grant money. There were similarly large discrepancies elsewhere in the books, the audit found.

“The University’s Board of Trustees and management share the ultimate responsibility for the University’s internal control over financial reporting,” Auditor General William Holland said in the audit report.

Watson will inherit problems

Finney says he doesn’t want to speculate on what next year’s audit – covering the current fiscal year – will look like.

“We now have a new administration that started July 1, 2008,” Finney says, referring to outgoing interim president Frank Pogue. “Hopefully that administration will have made major strides in cleaning things up.”

But Finney says he doesn’t know the status of the university’s finances over the last year. That would have been the realm of Jim Reynolds, who chaired the board’s finance and audit committee, Finney says. Reynolds resigned from the board several weeks ago, saying he could not commit enough time to it.

Reynolds was traveling and could not be reached for comment. Neither Pogue nor Wayne Watson, who will have to deal with the audit problems when he takes over as president on Aug. 1, returned calls for comment.

“With this audit, we will now sit down with Dr. Watson and make sure it’s very clear to him that these audit findings require his urgent attention,” Finney says.