Audit: Sandhills Community College has $6.2M in reporting errors

The report cited over and understatement of certain receipts, projects

RALEIGH — A financial audit of Sandhills Community College identified “$6.2 million in financial reporting errors.”

According to the Office of the State Auditor (OSA), the audit covered the fiscal year ending June 30, 2024.

“OSA has determined these errors occurred because there were no detailed year-end procedures planned, and a lack of knowledge and experience to perform the duties required for critical financial reporting decisions,” the OSA’s report states.

An itemized list of the findings included:

  • Accounts receivable and beginning net position were overstated by $945,130 because the college did not write off student receivable balances that became uncollectible in prior years.
  • Construction in progress was understated by $763,460 because the college expensed construction activity that should have been capitalized, which also overstated supplies and services by the same amount.
  • Tuition revenues and accounts receivable were overstated by $289,171 because the college did not reverse a prior year journal entry.
  • Accounts receivable and accounts payable were understated by $245,591 because amounts were recorded in the wrong general ledger account.
  • Unrestricted net position was understated by $210,252, net investment in capital assets was overstated by $144,123, and restricted expendable net position was overstated by $66,129 because of errors in the underlying calculations for year-end presentation.
  • Restricted cash was overstated by $380,521 and unrestricted cash was understated by the same amount because of errors in the underlying calculations for year-end presentation.
  • Additional audit adjustments were required to correct misstatements in the financial statements and notes to the financial statements.

The OSA recommended that Sandhills staff be adequately trained to perform year-end financial reporting and implement contingency plans to ensure financial reporting objectives are achieved during times when staff turnover may be an issue.

Additionally, the OSA recommended a “year-end plan” should be designed and implemented so a “thorough review” of financial statements is accurate for year-end reporting.

In response to the audit, Sandhills Community College President Alexander “Sandy” Stewart wrote the school “fully agrees with the findings and recommendations” made by the OSA.

Stewart listed specific corrective actions being taken, starting with the chief financial officer (CFO) creating a “comprehensive and structured professional development plan” that will address staff turnover and vacancies.

The CFO and others responsible for the fiscal management of the college will also ensure financials are reviewed annually, as well as “review and enhance” end-of-the-year financial checklists and operating procedures.

About A.P. Dillon 1661 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_