USG: ‘GPC’s fiscal challenges were preventable’

By David Schick


The Board of Regents (BOR) answered the questions of “how” and “why”  GPC’s budget deficit occurred in an official audit report released today by the University System of Georgia (USG).

The special review, conducted by the Office of Internal Audit and Compliance (OIAC), summarized that “GPC’s fiscal challenges were preventable,” had the shortfall been detected “in any given year leading up to FY12.”

According to the report, there was no fraud and the “budget neglect did not appear to be malicious or intentional.” The conclusion was that senior financial GPC administrators didn’t perform their duties, but “responsibility for the institution’s management rests with the President.”

Each one of GPC’s former fiscal leadership team, which included former President Anthony Tricoli, former Excutive Vice-President of Financial and Administrative Affairs and Chief Business Officer (CBO) Ron Carruth, former Budget Director Mark Gerspacher and former Assistant Vice-President (AVP) for Financial and Administrative Affairs Sheletha Champion, all claim “to have been unaware of GPC’s fiscal condition.” However, the audit states that the AVP knew of over-expenditures in the budget in June 2011 “when a consultant informed her of the possibility,” and “even after she was made aware of this possibility, the problem was not remedied.”

From page 17 of the audit report:

The former President has stated that he was unaware of the college’s financial straits and that he relied on the former CBO for accurate financial and budget information. Similarly, the former CBO stated he was not aware of the college’s actual financial condition (as reflected in the audited financial reports) and that it would have been the former AVP’s and former budget director’s responsibility to notify him. The former AVP asserted that she was excluded from many of the discussions and much of the decision- making with respect to budget matters, even though the budget director reported directly to her. Consequently, she possessed limited knowledge of the decisions made with respect to GPC’s budget, including whether or not budget reductions should be implemented.

The former CBO “indicated that he did not review GPC’s financial statements and essentially relied on the Budget Director and AVP to bring budget-related fiscal issues to his attention” while “every primary duty of the Budget Director was left unfulfilled.”

Additionally, “budget reporting was inaccurate, budgets were not correctly loaded into the financial system, numerous individuals could override the flawed budgets that were loaded in the system, and budget development essentially ignored actual financial experience.”

Essentially, the “how” and “why” audit answers of GPC’s budget deficit amount to – everyone dropped the ball, but no one saw it drop.

In regards to the question, “Where did the money go?”

The audit states, “it is difficult to determine exactly where the budget was overspent,” but several pages later cites a $16.8 million increase in personal services from 2009 to 2012, which correlates to an inaccuracy in the calculation of  “fringe benefits.”

“The audit and our internal review have led to changes in policy and practice that have improved our fiscal management,” wrote Chancellor Hank Huckaby in a statement to GPC faculty and staff.