Officials at the Memphis-based Southwest Tennessee Community College did not report fraud to state officials as the law required, and they may have wasted money through their Federal Work Study program.
This, according to an audit Tennessee Comptrollers released this week.
“In October 2017, persons outside the college created and cashed fraudulent Southwest Tennessee Community College checks. Staff at the college discovered the fraudulent checks during the monthly bank reconciliation process,” Comptrollers wrote.
“The college notified campus and Memphis police; however, the fraud was not reported to the internal auditor at the college, system-wide internal audit, or the Comptroller of the Treasury. In addition, subsequent to the audit period, staff at the college discovered fraudulent ACH transactions within the operating bank account. Management reported this fraud to the Memphis police. However, management did not report the fraud to internal audit at the college, system-wide internal audit, or the Comptroller of the Treasury until approximately one month after the fraud was discovered.”
The audit went on to say the school’s vice president of Financial and Administrative Services was unaware she legally had to report fraud to Comptrollers — and that she had to do so immediately.
The audit also said school officials didn’t have controls in place to comply with the Federal Work Study program.
According to the U.S. Department of Education, this work study program provides funds for part-time employment to help needy students finance the costs of their postsecondary educations.
But Comptrollers said they sampled 35 of the school’s Federal Work Study students — 17 athletic and 18 nonathletic — and they questioned more $6,097 in federal costs.
Among the costs:
• Five of 17 athletic FWS students tested (29.4 percent) reported working during class times. The students received a total of $263 during class times, which represents federal questioned costs.
• Three of 17 athletic work study students tested (17.6 percent) reported working while practicing, playing, and traveling for a sporting event, resulting in federal questioned costs of $32.
• Nine of 18 nonathletic work study students’ timesheets tested (50 percent) were not approved. These unapproved payments totaled $5,510, which represents federal questioned costs.
• Nine of 18 nonathletic work study students tested (50 percent) reported working during class times, resulting in federal questioned costs of $292.
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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to firstname.lastname@example.org.
Photo “Southwest Tennessee Community College” by Thomas R Machnitzki. CC BY 3.0.