Louisiana Auditor Delivers Blast of Bad News to Historically Black Universities

Louisiana Auditor Delivers Blast of Bad News to Historically Black Universities
By Scott Dyer

Grambling, La.
Louisiana Legislative Auditor Dan Kyle gave this state’s two biggest historically Black universities a double-barreled blast of bad news only days before Christmas.
Grambling State University’s accreditation and the future of its president, Dr. Steve Favors, were thrown into uncertainty when Kyle issued a report saying the school’s books were too much of a mess to audit.
Appointed by the Louisiana Legislature, Kyle’s job is to audit the state’s publicly funded colleges and universities and to ferret out activities that may involve the illegal use of state money.
This was the third consecutive year that Kyle has concluded that Grambling’s books couldn’t be audited because of inaccuracies and a lack of internal controls.
As a result, the Southern Association of Colleges and Schools decided on Dec. 20 to withdraw its unconditional 10-year reaffirmation of Grambling’s accreditation that had been granted only two weeks earlier.
Meanwhile, at Southern
University’s Baton Rouge campus, Kyle released another pre-Christmas audit that provided details of a complex scam in which $167,317 in federal work-study money that was issued for hours that were never actually worked.
Kyle found that from January 1996 through May 1999, eight Southern University employees allegedly recruited students to participate in the scam, submitted falsified payroll records to pay the students for work-study hours that were never actually worked, then split the resulting paychecks with them.
In some cases, the Southern University employees issued and cashed the checks in the names of unsuspecting students, Kyle said in the report.
In all, bogus checks were issued in the names of 67 different students.
“This was money for needy students, and you had university personnel actively soliciting students for illegal activities — that just is unbelievable,” Kyle says.
Southern University System Vice President Ralph Slaughter says the school became aware of the scam in mid-1999 and alerted Kyle’s office at that time. But Slaughter says Southern University officials didn’t realize the extent of the scam until Kyle’s auditors conducted a year-long investigation into it.
All eight employees have either resigned or been terminated, Slaughter says.
“We’re trying to clean this up,” Slaughter says, noting that a completely new staff has since been hired to handle work-study money.
The local district attorney, Doug Moreau, says he is studying Kyle’s investigative audit and could file criminal charges against the eight employees, as well as some of the students who knowingly took part in the scam.
At Grambling, there is no talk about criminal charges resulting from Kyle’s recent report, but plenty of speculation about how it may affect the school’s president.
Grambling was re-accredited Dec. 4 after assuring the Southern Association of Colleges and Schools that its finances were in good shape.
But when Kyle’s report came out about two weeks later, the Southern Association announced that Grambling’s re-accreditation was being placed on hold.
In a press release, the Southern Association said its full 77-member commission voted Dec. 4 to reaffirm Grambling’s accreditation for another decade “based on information available at that time.”
But because of Kyle’s report, the association announced that its executive council had recommended deferral of Grambling’s reaffirmation until a special committee can be convened to visit the institution and report its findings back to the commission in June 2001.
But in the meantime, the state governing board that oversees Grambling is demanding that
Favors give a full accounting at its next monthly meeting.
Andre Coudrain, chairman of the University of Louisiana Board of Supervisors, made it clear last summer that he considered Favors to be “the person ultimately responsible for the conduct of all affairs of Grambling State University.”
In May and June public statements at board meetings, Coudrain told Favors his leadership abilities would be evaluated largely on his getting a successful audit and SACS reaffirmation.
But after Kyle reported that he could not audit the school’s books, Coudrain and two other high-ranking board officials sent Favors a Dec. 18 letter demanding an explanation at the board’s next meeting. 



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