Report censures college’s finances
Significant accounting errors pointed out
OFFICIAL
Auditor general Merwan Saher continues to paint an ugly picture of weak financial controls at the Alberta College of Arts and Design and some other post-secondary institutions around the province.
In his report released Tuesday, Saher said Calgary-based ACAD had made improvements to its financial reporting after a series of recommendations from his office that began in 2008, but noted the college “is still unable to produce accurate year-end financial statements.”
Draft financial statements contained three “significant accounting errors” that needed to be corrected to avoid having the statements be materially incorrect.
Saher said he had no explanation why the problems persist at ACAD and other post-secondary schools, including Olds College, Edmonton’s NorQuest College and the multi-campus Northern Lakes College.
“These are the facts — and our recommendations are made to institutions that we believe should try harder, will need to try harder, to get their financial reporting controls in order,” he told reporters.
Saher also made a series of new recommendations for ACAD after finding no formal procedures to sign, track or monitor contracts and no disaster recovery plan in place. The auditor-general’s office also noted the use of college credit cards with no backup or explanation, purchasing orders issued after invoices for payment had been received, and issues with the management of the college’s bookstore and computer system.
Donald Dart, ACAD’s senior vicepresident of finance and corporate services, said the 1,200-student college has been working to improve its financial controls, as noted by the auditor.
“For a smaller institution like ourselves, we always have limited capacity in how we apply our resources,” he said.
“Our No. 1 commitment is to providing our students with the best possible education here and sometimes that means that instead of redirecting them towards administrative structures and support in how the auditor would like us to improve our controls, we do direct that as much as we can towards our education.”
The three errors on the
… we always have limited capacity in how we apply our resources.
DONALD DART, ACAD
college’s initial financial statements caught by the auditor-general related to employee retirement costs, tuition revenue and the depreciation of some building costs. They represented an additional $200,000 in expenditures on the college’s $26-million budget, said Dart.
In Saher’s report a year ago, ACAD, along with Olds, Northern Lakes and NorQuest colleges, along with Edmonton’s Grant MacEwan University were identified as needing to significantly improve their accounting processes.
Saher noted that MacEwan had made major progress in its financial practices, illustrating that a turnaround can be made in the space of one year, but problems continue at the other institutions.
Tuesday’s report said Olds College had made improvements in the timeliness of its reporting, but still needed to do more to improve its processes and controls around its annual reporting.
Jordan Cleland, vice-president of advancement at Olds College, said the institution fully accepts the recommendations of the auditor, as it has done in the past. But he noted it can be difficult for a small institution to make the necessary human resource, technology and structural changes in the span of one year.
Thomas Lukaszuk, the newly-minted minister of Advanced Education, said he is concerned by the continued inability of some insti- tutions to meet the auditor’s standards.
But he acknowledged there are often issues of capacity related to the size or location of a college.
“Maybe we can develop synergies. Maybe we can develop a process where several institutions can share their financial management and this way have a little bit of economy of scale,” said Lukaszuk.
NDP Leader Brian Mason said the Tory government has let problems slide for too long. “The advanced education minister need to make sure that by the time the next auditor general’s report comes around, that all institutions have complied with those recommendations and if not there should be some consequences,” he said.
Saher also recommended Tuesday that Mount Royal University review the adequacy of its financial statements.
The auditor-general’s office also found errors in MRU’s draft consolidated financial statements received last fall and “the university experienced difficulties in producing accurate financial statements in a reasonable time.”
Annalise Van Ham, Mount Royal’s associate vice-president of financial systems, said the university was working out the bugs in a new financial reporting system, which led to delays.