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House Budget Targets $1.26 Million for S.C. State Audit

Government entities rarely look the budget gift horse in the mouth, but if the S.C. House has its way, S.C. State University will shortly be getting an appropriation that comes with some major strings attached.

As part of the House’s amended 2012-13 budget, the Orangeburg school would receive about $1.26 million for an outside firm to conduct an “independent financial audit” of the institution, according to university spokeswoman Erica S. Taylor.

In addition, the school could get another $80,000 for an audit of S.C. State’s Public Service Activities division.

The proposed $1.26 million appropriation was a surprise to school officials, Taylor said.

“Those funds were put in the budget specifically by the House Ways and Means Committee,” she said. “The university had requested the money for deferred maintenance, but the Ways and Means Committee apparently felt instead that an audit needed to be conducted.”

The $1.26 million allocation isn’t a done deal, as it’s only included in the amended House budget. Both the House and the Senate budgets include the $80,241 for a review of the PSA division.

Conference committee members from the House and the Senate met last week to try to reach a compromise on areas where the chambers differ on a budget for the upcoming fiscal year, which starts July 1. The final product will then be presented to the governor.

S.C. State, the Palmetto State’s only state-funded, historically black land-grant institution, has been wracked by a good bit of turmoil recently.

The school has accrued debt of $6.4 million, according to officials, and has seen enrollment decline from nearly 5,000 in 2008 to less than 4,200 projected for the 2012-13 year according to officials and media reports.

In addition, S.C. State President George Cooper stepped down in March after firing eight administrators, accusing them of failing to follow university rules and procedures.

He’s been replaced on an interim basis by Cynthia Warrick, a senior fellow at the Howard University School of Pharmacy, who officially begins July 1.

The university's difficulties were so pronounced that several legislators introduced bills this session seeking to remake the school’s board of trustees.

One of the bills, H. 5025, sponsored by Rep. Jerry Govan, D-Orangeburg, proposed removing the entire board and having lawmakers elect new trustees by June 30. That bill was amended by Rep. Gilda Cobb-Hunter, D-Orangeburg, who sought to have the current trustees replaced by an interim seven-member board.

Govan’s bill passed both bodies and was sent to a conference committee in order to iron out differences between the versions.

The proposed $1.26 million in the House’s version for an overall audit would come out of the state’s capital reserve fund. The Nerve has previously reported that although the fund often has been used to cover capital improvement projects at colleges and universities, lawmakers have raided it for their pet projects.

According to language in the House’s amended budget, the $1.26 million would be used to “retain an audit firm to conduct a complete financial review of the university’s financial status and procedures.”

It also says the State Auditor’s Office will assist the school in selecting a qualified firm, and any funds not used to pay for the audit “shall be retained and utilized to correct any findings of the audit as determined and authorized by the General Assembly.”

The $80,142 proposed for an audit of S.C. State’s PSA program was inserted into the budget through Proviso 90.20, which divvies up general fund surpluses for last and this fiscal year, and part of next fiscal year’s general fund revenues, among several dozen agencies and projects.

Taylor said that S.C. State, to her knowledge, has never requested funding to help cover costs associated with audits.

An official with the S.C. Commission on Higher Education, the coordinating body of the state’s taxpayer-supported colleges and universities, said she had no information on money being added to the budget for audits at S.C. State.

“We have no knowledge of who put that in or why it was put in,” said Julie Carullo, the commission's acting executive director. “You would have to go back to the Legislature to find that out.”

House Ways and Means Chairman Brian White, R-Anderson, did not return a pair of calls last week to The Nerve for this story.

S.C. State is familiar with the audit process. The state Legislative Audit Council conducted a review of the institution’s James E. Clyburn Transportation Center last year.

The LAC audit questioned some spending and billing, as well as the lack of a plan to raise more than $80 million needed to complete the center.

At the time the audit was released, in June 2011, more than $50 million, much of it federal funds, had been directed to the center in the previous 13 years.

The LAC also said that no construction was completed in the 13-year period. The project, as of last year, had been delayed for nearly two years after construction started on land the university thought it owned but didn’t, the report said.

The LAC also noted that inadequate financial controls had resulted in insufficient state matching funds for both construction and center programs, unwarranted travel reimbursements and overbillings that needed to be repaid.

Reach Dietrich at (803) 779-5022 ext. 110, or kevin@thenerve.org.

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