Auditor Mike Waguespack last week issued an audit report for Delgado Community College for fiscal year 2022 that examines the school’s financial statements and internal controls over financial reporting and compliance.
The report shows Delgado resolved prior year findings of Untimely Recording of Movable Property Additions and Noncompliance with Borrower Data Reconciliation Requirements, but auditors uncovered other issues from 2022.
“As a result, Net Investment in Capital Assets, a major component of total net position was also overstated by $21,608,320,” auditors wrote.
The report shows capital appropriations reported on Delgado’s Statement of Revenues, Expenses, and Changes in Net Position were also overstated by $19,517,654. The school’s Statement of Cash Flows also overstated non cash capital appropriation, grant or gift of capital assets by the same amount.
“These errors occurred because management did not perform an adequate review of the AFR,” according to the report. “In addition, there was a misunderstanding between Delgado and the (community college) System regarding the funding and recording of the new Nursing and Allied Health Building currently under construction on Delgado’s City Park Campus.”
The LLA pointed to the importance of good internal controls over financial reporting that “should include adequate procedures to record, process, and transmit financial data needed to prepare an accurate and complete AFR.”
“In addition, controls should include a review process that will identify preparation errors and correct those errors before submitting the AFR to be included in the System’s financial statements,” auditors wrote.
Other aspects of Delgado’s financial reporting were materially correct, according to the LLA.
Delgado Chancellor Larissa Littleton-Steib responded to the report’s findings in a letter to Waguespack on Dec. 8 that blamed the issues on a misunderstanding of how a new Nursing and Allied Health Building is included in financial reports.
“As part of our requirements to provide explanations on any significant variances from the previous year, the new building was explained in each section referencing ‘Capital Assets’ and ‘Net Position’ throughout the Workbook and the Annual Financial Report,” she wrote. “Delgado management’s understanding at the time of compiling the Annual Financial Report was that this capital asset should be reported by Delgado, but not until the misstatement was made known to Delgado by the Legislative Auditor did management become aware that this capital asset was supposed to be solely reported by the System Office.”
Littleton-Steib promised management would discuss any new or significant changes to the college’s AFR with the System Office in the future.
