An audit of the state Office of the Commissioner of Higher Education found several instances where money spent on travel and meals constituted an "abuse" of state money, including a plane ticket from Europe and hotel rooms around annual Cat-Griz football games.
In a response to the audit released this month and done by the Legislative Audit Committee, the commissioner of higher education said he concurred with recommendations to address noncompliance and abuse of state money. Commissioner Clayton Christian wrote that the office would create new procedures and ways to monitor spending, as well as new policies where ones were lacking.
"The recommendations of this financial audit will help OCHE to improve critical operations related to internal controls and compliance monitoring," Christian wrote in a letter to auditors dated June 5.
The Office of the Commissioner of Higher Education is the administration hub for the Montana University System and the Board of Regents that governs the system. There are seven regents appointed by the governor and confirmed by the state Senate. There are just shy of 60 full-time equivalent positions in the commissioner's office.
On Wednesday the office said it had no further comment until the Legislative Audit Committee meets later this month, because that is what the Legislative Audit Division has asked them to do.
Auditors reviewing office staff and regent expenses raised questions about hotel rooms paid for with state money around two of the annual Cat-Griz football games.
The board typically holds meetings on Thursday and Friday in either Missoula or Bozeman in advance of the rivalry matchup. Following that, there are community engagement meetings held Saturday mornings before the games that office staff and regents are invited to attend.
Even though the board meeting adjourned around 10:30 a.m. on Friday, Nov. 17, 2017, the office paid for 10 hotel nights that evening. It also picked up an additional four hotel nights the following Saturday. Eight of the nights were for regents and six were for staff. The total charges were $2,100.
In 2018, the office paid for 10 hotel nights in conjunction with the Cat-Griz game. While the board meeting again adjourned at 10:30 a.m. on Friday, Nov. 16, 2018, the office paid for seven nights for office staff and three for regents that evening. The cost was $1,518. There were no hotel nights Saturday that year.
A auditor review of time sheets for staff who attended the board meetings found no staff or board members claimed per diem meals on the Fridays before the Cat-Griz games in either year, which they are entitled to when traveling on state business. Only one employee in 2017 claimed work and travel time for the day of community engagement in 2017. None did in 2018.
“We consider the use of state funds for the Saturday night stays to be an abuse of state resources,” the audit reads.
According to the audit report, the board and office management indicated to auditors the events are significant and work-related, but there is not a formal policy or documented requirement for participation. The audit also noted travel documentation did not describe the business need or benefit to the state for the events.
The board and office management did agree the accommodations for Saturday night in 2017 should not have been paid for by the state.
State policy requires that employees use the most economical method of travel, and can only be reimbursed for the lower-cost equivalent if they use a more expensive option. The audit found several instances where the office did not comply with that.
In one case in April 2018, an office official and regent who live in Missoula spent more than $1,000 to travel from Missoula to Billings on an in-state airline, plus two rental cars and airport parking fees to participate in a tour of Dawson and Miles community colleges. Most others attending traveled via state car or their own vehicles.
In June of the same year, an office official chartered a flight, totaling nearly $4,000, to travel from Helena to Glasgow to meet with a delegation from Montana State University who were on a bus tour of northeastern Montana, and to meet with community leaders, local officials, alumni, staff and students from a tribal college. The auditors estimated the cost if the trip was done in a personal vehicle would have been about $115 reimbursed by the state.
The office responded to auditors by saying the travel picked in these circumstances was the most “economic, efficient and beneficial, considering the significant distance and travel time associated with the trip” and taking into consideration other business engagements requiring the official’s attendance.
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Auditors said there was not sufficient documentation to demonstrate the need for such high-cost travel.
The auditors also found the office bought a one-way plane ticket from the United Kingdom to Colorado, for an employee who was on a personal trip to Europe, to attend a conference related to their job. Auditors classified that as out of compliance with state policy.
The office justified the cost of the flight to auditors as being comparable to a round-trip ticket from Helena to Colorado. However, the cost comparison was done just a week before travel, meaning it was likely more expensive than had it been purchased further in advance. Auditors found a roughly $200 difference between the one-way ticket compared to the round-trip if purchased in advance.
The auditors found the office frequently provided meals during meetings on systemwide special projects. While the board has a policy for campuses, which must show a cost/benefit analysis for meetings where the cost of food exceeds $30, the board does not have a policy for its own or the office's catering hosted meetings.
When traveling, the auditors found times when regents and staff overspend their per diem for meals. The regents and office management told auditors the cost of meals was reasonable and per diem rates didn’t apply to catered meals. Auditors said they did not agree, saying the cost of the meals were not reasonable given the “facts and circumstances surrounding them.”
There is not an office policy on expectations for catered food and beverage costs, something auditors recommended creating and the office said it would develop.
Auditors found problems with the way the office used federal Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) funding on travel to conferences for both state employees and local school district employees.
While office policy says travel to meetings and conferences by nonemployees should be kept to the “absolute minimum,” that phrase is not defined.
Auditors found GEAR UP liaisons who are not state employees, like school district employees, high school administrators, counselors, teachers, students and parents, attended an “excessive number” of conferences during the 2018 fiscal year. The auditors also raised questions about whether the expenditures were in compliance with federal regulations because they did not meet the office's nonemployee travel reimbursement policy.
In February 2018, five office staff and 43 nonemployees went to a GEAR UP conference in Las Vegas. Plane tickets were purchased before getting federal approval, and the total cost of the conference, including hotel rooms, was $63,646.
In October 2017, six office staff and 31 nonemployees went to a conference in Portland, Oregon, for a cost of $35,729.
The auditors said this spending would not have been questioned if the office got prior authorization before buying the plane tickets, and documented any exceptions to their nonemployee travel policy.
Auditors also found "repetitive conference participation" by both employees and nonemployees. Out of three conferences for the GEAR UP program, six people went to all of them and 22 people attended two.
The regents and office staff said that grant sub-recipients were required to attend the conferences to meet criteria in grant proposals, but auditors said it was unclear if participation was required to that degree.
In total, auditors raised questions about $11,770 in federal GEAR UP spending in the 2018 fiscal year.
The Legislative Audit Committee is set to meet June 25-26 to review about 20 audits of state divisions and agencies and will discuss audit findings with division and agency leadership.