james_ammons_2.jpgTALLAHASSEE, Fla. (AP) _ While the death of drum major Robert Champion last year exposed Florida A&M University's long struggle with hazing, university officials are grappling with another persistent problem: questionable bookkeeping.

Senior sources with Gov. Rick Scott's office say that cash payments to band members for meals and other small expenses during off-campus trips are among the expenditures being investigated for possible financial fraud by the Florida Department of Law Enforcement.

The university's Division of Audit and Compliance _ thanks to questioning by members of FAMU's Student Government Association _ also is investigating whether student activity fees governed by state laws have been properly accounted for and spent.

And that same university audit division is facing its own probe by the State University System's Inspector General after being found last year to have passed off flawed and incomplete internal audits to the university trustees and the Board of Governors.

FAMU President James H. Ammons and other top university officials, contending with the barrage of inquiries and the likelihood of civil lawsuits, largely have declined comment, citing ongoing investigations and legal concerns.

University spokeswoman Sharon Saunders, in a written statement regarding the activity fee investigation, said Friday:

“FAMU's Division of Audit and Compliance is conducting an on-going investigation regarding the discrepancies noted in the SGA Financial Standing Report. We consider the alleged discrepancies allegations until the division completes its review.

“To consider these allegations and other investigations grounds for drawing the conclusion that this constitutes a persistent problem that plagues the university is misleading and inaccurate, especially in light of the fact that FAMU has received four consecutive financial audits with no findings.''

In an earlier statement, Saunders added: “We are committed to ensuring that policies and regulations are followed in distributing dollars that are entrusted to the university.''

Tracking those dollars, however, can be challenging. As part of a public records request, FAMU provided band financial documents that appeared to show that $33,150 in per diem payments were given to 425 band students, cheerleaders and staff for last year's Florida Classic football game in Orlando without any signatures or verification that they each received their allotted $78 for the three-day trip.

Twenty-six band students were barred from performing at the Nov. 19 game because of their involvement in suspected hazing activities that occurred earlier in the fall. When questioned about the seemingly high number of band members said to be traveling to the Classic and the way the per diem money was distributed, FAMU officials, days later, provided copies of the list of people whom FAMU said received the cash that included the required signatures with redacted student names.

The signed lists, which were given to the Tallahassee Democrat on Feb. 22, appear to have been sent from band officials to the athletics department business manager on Nov. 30. An accompanying letter dated Feb. 9, noted that the signed sheets listed the wrong trip dates and year, but actually were from the Nov. 18-20 Classic trip.

Additional documents provided to the Democrat Feb. 24 included a letter stating 351 band members, cheerleaders and support staff actually made the trip to Orlando and that the extra per diem and hotel room costs were to be reimbursed. Also included in the documents was a copy of the hotel refund check and a money order from the band department returning to the university the unused per diem dollars.

In a written response to questions, FAMU spokeswoman Saunders said that band staff members confirmed they used proper procedures overseen by top university officials, including the director of athletics and the vice president of the Division of Administrative and Financial Services.

However, a senior source in Gov. Scott's office said the per diem payments to students are among the financial issues being scrutinized by FDLE investigators, who discovered financial irregularities in the course of a probe into hazing within the band.

FDLE officials declined to comment on the active fraud investigation.

Meanwhile, another accounting issue is being investigated by FAMU officials.

Late last semester, a group of Student Government Association members distributed to students and administrators a “Financial Standings Report'' that raised a host of concerns about how student activity and service fees were being tracked and spent from July 2011 through October.

Stanley Hardy, a student senator and one of those who helped draft the report with SGA Comptroller Tyler Calhoun, said the group began its investigation amid growing doubts that the budget for activity fees was being followed.

The group discovered that student government members were operating from a different budget document than the official one approved by the university. The report found that the official budget exceeded the budget circulated and used by SGA members at student senate meetings by $750,000.

The report also noted discrepancies in other areas, including salaries paid to students and staff, undisclosed and unapproved budget transfers and unauthorized payments for non-emergency services from SGA reserves.

“The line items weren't matching up with the approved budget,'' Hardy said.

The report also contended that activity fee money had been used unlawfully to help pay for bus trips to football games on the “Rattler Express,'' for which students paid $90 each. State law dictates that other than SGA-sponsored concerts, student activity and service fees are not to be used to benefit activities that require an admission fee.

Further, the report noted, there appeared to be no accounting of how any revenue from the bus trips was spent or that it was being deposited.

Morris Hawkins, the administrator charged with coordinating the SGA's budget, provided a written response to the students' financial report explaining the apparent inconsistencies, but the university would not release it, citing a state statute allowing limited public access to information pertaining to an ongoing investigation of employee misconduct.

Hawkins denied any wrongdoing and is awaiting the results of the investigation, which began in January.

“Everything I did was straight and OK,'' he said.

But students continue to question whether proper accounting procedures were followed. They too are looking forward to answers from university officials. The Division of Audit and Compliance's review of the matter is expected to be complete by March 30.

“A lot of our policies and procedures were not being followed,'' Hardy said. “Just basic (accounting) information, it's just not there. So we are waiting on it, patiently.''

The Florida Board of Governors also is waiting for the completion of internal audits found last year to be deficient and not in compliance with industry and university standards. The revelation that FAMU's Division of Audit and Compliance had presented trustees and BOG members with “executive summaries'' of audits that did not exist, led to the November resignation of Vice President of Audit and Compliance Charles O'Duor and the firing of another division staffer. As of last month, seven of the division's 10 positions were vacant.

“A large number of routine audits are incomplete and need to be addressed for two primary reasons, among others,'' said BOG spokesman Kelly Layman. “First, each one is specific to representing a fundamental and critical part of day-to-day university operations, fiscal decisions and decision-making practices. Second, the audits are required of all universities in order to be in compliance with Board of Governors regulations.''

FAMU has a history of lax financial controls. Audits conducted by the state from 2004 through 2007 returned qualified opinions with dozens of findings of mismanagement. Faculty were not being paid, students were not getting grant and scholarship money and FAMU administrators could not account for money or property at the university, state auditors said.

Ammons was hired in 2007 to fix the problems, which threatened the university's accreditation with the Southern Association of Colleges and Schools. In December 2007, FAMU received its first unqualified audit in three years and continues to have clean state financial audits.

In November, FAMU retained Jacksonville-base financial services consultant Accretive Solutions for up to $37,000 to provide a risk analysis and an assessment of the troubled audit and compliance division. On Jan. 17, State University System Chancellor Frank Brogan held a private meeting with Ammons and BOT Chairman Solmon Badger to emphasize the seriousness of the internal audit issues and the importance of addressing them thoroughly and swiftly. Three days later, Ammons wrote to Brogan that the consultant's work would be complete by March 9 and a written report would be prepared. On Feb. 2, the university amended its contract with Accretive to increase the company's fee by $11,000.

Last week, FAMU provided the BOG's Inspector General with Accretive's report, which was dated Jan. 31, but was not finalized until March 15, FAMU's Interim Vice President for Audit and Compliance Rick Givens said. The report, which also has been given to FAMU trustees, identifies needed improvements in the university's audit division and provides recommendations going forward.

The report notes that the division has begun enhancing its policies and procedures manual, has drafted a charter for trustee approval to guide and define its mission, authority and governance, and now has a risk assessment on which to base an internal audit plan. The consultant's report also calls for an annual assessment of the division, direct reporting to the Audit Committee of the Board of Trustees and staff development training.

The report's conclusion says, “Nothing came to our attention that would hinder the (division) from becoming fully compliant with IIA standards'' or to operate at a “level of effectiveness necessary for proper university governance.''

Givens said most of the recommendations for improvement were relatively minor. Procedures and policies were in place, he said, but they were not being followed,

“The issues can be addressed and they can be resolved,'' Givens said. “The major hurdle is getting enough staff and resources to do it.''

The BOG's Inspector General is reviewing the Accretive report to determine if it meets the criteria of an effective corrective action plan as outlined by Brogan in a Nov. 17 letter to Ammons and Badger. Among other things, Brogan called on FAMU to redo the flawed internal audits. Accretive did not address those audits in its work.

Givens said the division is in the process of hiring an accounting firm to redo eight of the 15 flawed audits found to be unsubstantiated and is aiming for the work to be complete by mid-May.

The BOG wants all the issues addressed quickly.

“The Board and Chancellor Brogan strongly prefer that we not enter into a new fiscal year without these matters fully resolved,'' Layman said, “and we will be working toward that end.''