RALEIGH — A recently released state audit has found more than $45 million in reporting errors at North Carolina Central University.
The North Carolina Office of the State Auditor’s (OSA) report on the school was a financial audit that spanned the year ending June 30, 2024.
“Part of what makes our university system so great is we hold the institutions to high standards and strive to bring the very best out of our public universities,” North Carolina State Auditor Dave Boliek said in a press release. “NCCU’s financial reporting fell far short of the standards expected of our high education institutions, but I’ve had productive meetings with university and UNC system leadership and have confidence NCCU is on a better path.”
In Boliek’s transmittal letter to state officials that accompanied the audit, he wrote that NCCU’s financial reporting was “grossly inaccurate, and as a result there is substantial risk created for the University.”
“Unfortunately, the deficiencies in NCCU’s financial reporting have snowballed over the last several years,” Boliek wrote. “The OSA issued a significant deficiency in 2021, a second significant deficiency in 2023, and now for 2024 the defects amount to material findings.”
Specifics cited in the NCCU audit report include:
- Supplies and services expenses were overstated by $8.3 million because the disposal of capital assets was misclassified, which also understated other nonoperating expenses by the same amount.
- Scholarships and fellowships expenses were understated by $1.2 million because revenues related to the UNC System’s Project Kitty Hawk partnership were not recorded correctly, which also understated state and local grants and contracts revenue by the same amount.
- Cash was overstated by $4.9 million because of inaccurate journal entries, which also overstated the beginning net position by the same amount.
- Noncapital contributions were overstated by $4.8 million because donated capital assets were misclassified, which also understated capital contributions by the same amount.
- Federal grants and contracts were overstated by $3.7 million because of inaccurate journal entries, which also understated nongovernmental grants and contracts by the same amount.
- Restricted nonexpendable net position was overstated by $2.6 million, restricted expendable net position was overstated by $3.6 million and unrestricted net position was understated by $6.2 million because of errors in the calculations.
NCCU’s response letter agreed with the findings of the audit. The school said it would establish a “systematic evaluation process” to deal with the issues and that personnel have been assigned to develop “comprehensive contingency plans” as well as actions to be taken.
