The University of New Orleans sign sits in front of the University Center on Dec. 15, 2022. (Photo credit: Matthew Perschall).
A University of New Orleans administrator deliberately circumvented school policy to install a $215,000 boiler under an illegal contract, and a UNO employee allegedly stole $3,600 from the athletics department, according to a state audit that detailed the incidents in a report released last week covering the university’s 2021-2022 fiscal year.
The Louisiana Legislative Auditor’s office found UNO management “deliberately circumvented university policies and procedures” to purchase and install the boiler by failing to provide a required list of three contractors to the Purchasing Department to obtain quotes. The act increased the risk of fraud and overpayment for services, the audit stated.
In his response to the auditor’s office, UNO President John Nicklow blamed the contract violation on the university’s former vice president of business affairs/chief financial officer, whom he did not directly identify.
The audit report, which covered UNO’s fiscal year ending June 30, 2022, stated university management allowed the existing maintenance contractor to obtain unsealed quotes and make their own recommendation for a winning bidder. The school then accepted the contractor’s recommendation and allowed the contractor to buy and pay for the boiler. Additionally, the auditors found that UNO management failed to record the boiler as a capital asset in its financial records.
The university’s Facility Services Department should have prepared a project proposal for the boiler and submitted a list of three potential contractors to the Purchasing Department. Quotes from the contractors should have been sealed and opened publicly to determine the most favorable bid, the audit stated.
According to the second finding, someone stole an estimated $3,600 in cash from the UNO Athletics Department over three separate occasions. The exact amount of the thefts couldn’t be determined because the supporting documentation for the cash collections was also missing, the report stated.
The Athletics Department collected the cash through ticket sales, concessions, parking and other activities related to athletic events. After the first theft in October 2021, the department alerted the University of New Orleans Police Department and conducted an internal investigation but failed to prevent two more thefts from occurring 10 days later. According to the audit, the school concluded the theft was an inside job.
“Athletics Department management completed its investigation and concluded that the thefts were likely committed by an employee with knowledge of the controls and access to override those controls,” the report stated. “The employee was subsequently terminated.”
In a third finding, auditors stated some UNO employees failed to certify and approve time and attendance records. A review of time certification records for the 2022 fiscal year disclosed that 738, or 4%, of 16,677 time cards were not certified by employees.
In a written response to the audit, Nicklow agreed with the findings and pointed out that he fired the vice president of business affairs “who consciously and deliberately circumvented our agency policies and procedures.” The vice president of business affairs is also the university’s chief financial officer and comptroller. Nicklow did not identify that official in his letter, and UNO’s website indicated Tuesday the position is currently filled by an interim vice president/CFO.
Nicklow wrote the university has also updated its internal controls to prevent future thefts of cash and to allow the payroll department to more easily verify employee time certifications. As of Nov. 3, the athletics department no longer accepts cash at athletic events and no longer has a petty cash fund, he wrote.
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