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State audit of ECC’s financial practices finds a startling lack of oversight

The troubling state audit of Erie Community College serves to bolster critics who have argued that the college suffers from lax financial management.

To their credit, college officials are accepting the scathing report and promising to improve.

The findings by the office of State Comptroller Thomas P. DiNapoli included senior executives receiving unauthorized raises and bonuses of more than $100,000 between 2012 and 2015 and the hiring of contractors without seeking competitive bids and, in some cases, without having written contracts.

DiNapoli’s audit pointed to lax oversight by the board of trustees that put President Jack F. Quinn Jr. in a position to make, as The News reported, important financial decisions behind closed doors, compromising the transparency of the college’s operations.

This is distressing news for taxpayers who have had to listen to college officials complain about declining student enrollment and continued pressure on finances.

In a stunning conclusion, the audit said, “the college’s stakeholders, including the students and taxpayers who fund its operations, cannot be assured that college resources have been used properly or that decisions have been made in their best interest.”

While the audit did not allege any fraud, misappropriation of funds or other illegal activity, the findings spotlight practices that never should have been allowed to happen.

College officials have said they would implement all 22 recommendations for improvement. However, Quinn and Stephen Boyd, chairman of the board of trustees, disagreed with the characterization of the board as lax in its fiduciary oversight. They said they need to do a better job of recording their actions and the rationale for them. It should have gone without saying.

The state audit began in October 2014. Among the findings were that between 2010 and 2015, the college created an additional 10 senior executive positions with the annual salaries averaging $75,600. This without producing any written justification for the hires, despite the fact that it is required by ECC board policy.

The board never authorized salaries for the new positions, or for any of the 28 senior executive positions, aside from Quinn, from 2013 to 2015. That’s $2.2 million in annual salaries that was never approved by the board. According to the audit, between 2013 and 2015, Quinn authorized salary increases and bonuses of $118,000 for senior executives without board approval, and in 2012 authorized a 2 percent salary increase for 15 senior executives on the payroll without board approval.

And then there were “questionable payments” to the associate vice president of information technology totaling $74,750 from 2010 to 2013.

The audit drilled down in some detail, such as inaccurate paid leave time balances among senior executives, amounting to 72 days valued at $25,000. The college is considering installing a new electronic system with built-in audit functions.

The audit pointed out 11 instances in which the college paid a total of $440,000 to contractors without seeking requests for proposals, as required by the college’s procurement policy. And in eight cases, professionals were paid $342,000 without any written contracts.

College officials seem willing to implement the recommended changes. They must be held to that pledge.