So as I was driving on a beautiful, crisp spring evening, I was reminded of those quaint events that mark the rites of spring. Baseball’s opening day, perennials bursting forth from the ground seeking the light and warm of the sun, clocks springing ahead and of course the posting of the university’s annual audit report on the Auditor General’s website. Spring brings us news of how well the university is being financially and institutionally managed. Last spring brought great news to the university. Under the direction of Interim President Pogue, the university reduced the number of audit findings from 20 to 13. Most notably this was done in spite of Dr. Pogue being prevented by the BOT chairman from hiring a Vice President for Finance. One could only imagine how much greater the improvement could have been if the Interim President was allowed to do his job. So it was widely anticipated that another 35% decrease in audit findings was in the offing as the university right sized and set off on its new mission. Sadly, it was not to be. Under the direction of the current CEO the university’s audit findings jumped from 13 to 41 with 11 repeat findings from the previous year. This means that the university not only did worse in its overall management according to the audit report, it repeated 85% of the errors from the previous year. By way of comparison, the University of Illinois system with its three campuses, $2 bn budget, and 72,000 students amassed 43 findings with 29 repeat findings during its FY 2010 audit. So it appears that any assertions by the regime that he would have the university cleaned up in six months were misguided and foreshadowed what would become another failure of BOT appointed leadership
So, you are probably asking for some context about the audit report. First, it covers the previous fiscal year. The most current report for FY2010 covers the period July 1, 2009 through June 30, 2010. Second, the findings are divided into three categories; Government Auditing Standards, Federal Compliance and State Compliance. Third, the State Auditor General contracts with firms on a rotational basis so one set of auditors doesn’t work with an agency or institution for too long. Fourth, amounts of money are not what generates findings, it is the absence of internal controls, non-compliance with Generally Accepted Accounting Principles, or non-compliance with applicable state and federal laws or regulations. Finally, the report indicates findings that are repeated from the previous year(s). Repeat findings are not necessarily indicators of mismanagement. Providing background is imperative in understanding the meaning of the findings.
From these three categories the breakdown of the findings provides some insight into the continued dysfunction of the institution. There were four Government Auditing Standards findings, twenty-four Federal Compliance findings and thirteen State Compliance findings. Twenty-nine of the forty-one findings were designated “Significant Deficiency/Noncompliance.”
I point your attention to four of the forty-one findings as being typical of the dysfunction of the university.
In Finding 10-14, the auditors found the University did not have systems or mechanisms in place to ensure federal funds are not spent with vendors barred or suspended by federal agencies.
Auditors discovered in Finding 10-22 that the University did not comply with provisions of the Drug-Free Schools and Communities Act Amendments of 1989. The university is directed to provide specific information to students and employees annually. This university didn’t do that. A fairly simple act of communication eluded the institution.
One of the most oft repeated criticisms of the university is its low graduation rate. Somehow during this year, the regime didn’t submit its graduation rate data (Audit Finding 10-26) to the US Department of Education. As this has been a federal requirement since 1992, how would something this significant have slipped through the cracks?
And in the area that disturbs me because of the life safety implications there is Audit Finding 10-38. A curious repeat finding from the previous year, the auditors found the university was not compliant with the Illinois Campus Security Enhancement Act of 2008. As the only employee certified by the Illinois Emergency Management Agency as an Illinois Professional Emergency Manager (IPEM) I have on several occasions commented to the Board of Trustees that the university did not have a National Incident Management System (NIMS) compliant Emergency Operations Plan. I warned the Board that there could be consequences both short and long term if this wasn’t addressed. The Board was told by the Police Chief, that I was over qualified to speak about the university and that the institution had complied with all legal requirements. I believe this repeat finding repudiates the statements made by the Police Chief but more critically points to a pattern of mismanagement that could endanger lives. I am sure you can understand how serious this finding is especially given this urban university is bisected by freight rail lines and a major expressway. There is actually more to NIMS compliance than simply stating to the BOT that a plan exists and an IPEM doesn’t know what he is talking about.
So seeing a threefold increase in the number of findings from the previous year caused me great concern. Of course the regime responded in all of the expected ways, many of them the administrative equivalent of “the dog ate my homework.” Using personnel turnover is always convenient but irrelevant. Turnover is a function of the quality of leadership. High turnover brings to question whether the leadership is up to the task of motivating and inspiring people to their best or whether threatening and berating subordinates is the order of the day. The regime has responded that it wanted to know all of the flaws, defects and imperfections. This is a peculiar request of the external auditors. Instead of requesting that the internal auditor go over the university’s practices, the CEO requested the external auditors be particularly incisive. Is this historical revisionism, given that the Chicago Tribune is likely to excoriate the university again or is it sound management practice? This practice of course, gives opponents of the university more ammunition in their war of death by a thousand paper cuts. It raises more questions than it answers, especially given there were 11 repeat findings from the previous audit.
One of the best questions I have learned to ask in difficult situations is what happens next. Any leader worth his weight would recognize his/her limitations, take responsibility and offer their resignation. Clearly, the task of righting the direction of the organization is beyond them and instead of continuing Titanic deck chair rearranging, a new type and style of leadership should be sought. Good leaders recognize when it is time to leave and don’t wait to be asked to go.
So, you are probably asking for some context about the audit report. First, it covers the previous fiscal year. The most current report for FY2010 covers the period July 1, 2009 through June 30, 2010. Second, the findings are divided into three categories; Government Auditing Standards, Federal Compliance and State Compliance. Third, the State Auditor General contracts with firms on a rotational basis so one set of auditors doesn’t work with an agency or institution for too long. Fourth, amounts of money are not what generates findings, it is the absence of internal controls, non-compliance with Generally Accepted Accounting Principles, or non-compliance with applicable state and federal laws or regulations. Finally, the report indicates findings that are repeated from the previous year(s). Repeat findings are not necessarily indicators of mismanagement. Providing background is imperative in understanding the meaning of the findings.
From these three categories the breakdown of the findings provides some insight into the continued dysfunction of the institution. There were four Government Auditing Standards findings, twenty-four Federal Compliance findings and thirteen State Compliance findings. Twenty-nine of the forty-one findings were designated “Significant Deficiency/Noncompliance.”
I point your attention to four of the forty-one findings as being typical of the dysfunction of the university.
In Finding 10-14, the auditors found the University did not have systems or mechanisms in place to ensure federal funds are not spent with vendors barred or suspended by federal agencies.
Auditors discovered in Finding 10-22 that the University did not comply with provisions of the Drug-Free Schools and Communities Act Amendments of 1989. The university is directed to provide specific information to students and employees annually. This university didn’t do that. A fairly simple act of communication eluded the institution.
One of the most oft repeated criticisms of the university is its low graduation rate. Somehow during this year, the regime didn’t submit its graduation rate data (Audit Finding 10-26) to the US Department of Education. As this has been a federal requirement since 1992, how would something this significant have slipped through the cracks?
And in the area that disturbs me because of the life safety implications there is Audit Finding 10-38. A curious repeat finding from the previous year, the auditors found the university was not compliant with the Illinois Campus Security Enhancement Act of 2008. As the only employee certified by the Illinois Emergency Management Agency as an Illinois Professional Emergency Manager (IPEM) I have on several occasions commented to the Board of Trustees that the university did not have a National Incident Management System (NIMS) compliant Emergency Operations Plan. I warned the Board that there could be consequences both short and long term if this wasn’t addressed. The Board was told by the Police Chief, that I was over qualified to speak about the university and that the institution had complied with all legal requirements. I believe this repeat finding repudiates the statements made by the Police Chief but more critically points to a pattern of mismanagement that could endanger lives. I am sure you can understand how serious this finding is especially given this urban university is bisected by freight rail lines and a major expressway. There is actually more to NIMS compliance than simply stating to the BOT that a plan exists and an IPEM doesn’t know what he is talking about.
So seeing a threefold increase in the number of findings from the previous year caused me great concern. Of course the regime responded in all of the expected ways, many of them the administrative equivalent of “the dog ate my homework.” Using personnel turnover is always convenient but irrelevant. Turnover is a function of the quality of leadership. High turnover brings to question whether the leadership is up to the task of motivating and inspiring people to their best or whether threatening and berating subordinates is the order of the day. The regime has responded that it wanted to know all of the flaws, defects and imperfections. This is a peculiar request of the external auditors. Instead of requesting that the internal auditor go over the university’s practices, the CEO requested the external auditors be particularly incisive. Is this historical revisionism, given that the Chicago Tribune is likely to excoriate the university again or is it sound management practice? This practice of course, gives opponents of the university more ammunition in their war of death by a thousand paper cuts. It raises more questions than it answers, especially given there were 11 repeat findings from the previous audit.
One of the best questions I have learned to ask in difficult situations is what happens next. Any leader worth his weight would recognize his/her limitations, take responsibility and offer their resignation. Clearly, the task of righting the direction of the organization is beyond them and instead of continuing Titanic deck chair rearranging, a new type and style of leadership should be sought. Good leaders recognize when it is time to leave and don’t wait to be asked to go.
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