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Audit finds misclassifications at Northwest Arkansas Community College; Workday update caused tuition undercharges
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Summary
A legislative audit found repeat internal-control shortcomings at Northwest Arkansas Community College and a Workday software update that resulted in roughly $144,000 in tuition not being charged for some class line items; the college says funds were misclassified but not missing and has adopted closing checklists and hiring steps to address turnover.
A legislative audit presented to the committee found repeat deficiencies in Northwest Arkansas Community College’s financial controls and a tuition-revenue shortfall tied to a student-information-system update.
The audit, read by Mr. Fink of Arkansas Legislative Audit, described Finding 1 as repeat internal-control weaknesses that produced material misstatements in financial statements. Finding 2 identified an approximately $144,000 tuition revenue loss stemming from a Workday student-information-system update implemented after the academic period effective date, which caused some added classes not to be charged for tuition.
“These are misclassification and process issues,” Alex Vasquez, NWAC chief of staff, told the committee, adding that the college’s net position was better than initially reported. Catherine Doner, NWAC interim chief financial officer, said an internal misclassification placed a short-term $5,500,000 investment into cash and cash equivalents because of the governmental accounting cutoff rule for cash equivalents (about three months), and that scholarship-allowance calculations required different handling after Workday’s adoption.
Doner said consultants were engaged and tickets to Workday were opened to correct data after year-end. The college instituted monthly closing dates, a closing checklist and journal-entry approval processes to reduce year-end accrual errors. She also said the college’s Cabinet and Student Services decided not to bill students retroactively for affected classes after considering the administrative and financial-aid implications.
Members pressed the college on repeat findings. Cochair Juke and others noted the audit team flagged the same internal-control issue in prior audits; Doner said NWAC is reopening searches for an associate vice president of finance and a vice president role, expanding recruitment, implementing cross-training and carrying out multi-year compensation adjustments to reduce turnover.
Mr. Fink told the committee he was not aware of the exact scope of Workday-related problems at other institutions; NWAC was one of the earliest adopters in the state, the college said.
The committee filed the NWAC report as reviewed. The audit documentation shows the college corrected the misclassification and did not report missing funds; some tuition amounts were not collected for certain class line items and the college did not pursue retroactive student billing.