Auditors find problems at Morgan State with scholarships, grants, computer access

By Megan Poinski

Morgan State University logoAuditors found that Morgan State University has a litany of problems with controlling spending on scholarships, research and development grants, and granting access to its computer systems – but on the whole, the university is doing much better.

According to the report published on Thursday by the Office of Legislative Audits, Morgan State has 10 major areas where controls need to be tightened.

This may sound like a lot, but the last time the university was routinely examined by the office – three years ago – auditors found 17 major problems, including potentially criminal activity in the capital division. Auditors found that Morgan State cleared up 16 of those problems, and the activity referred to the Attorney General’s Office is still under investigation.

“I guess you can say they have a track record for being good about clearing up issues,” said Legislative Auditor Bruce Myers.

Some of the new issues had to do with issuing scholarships to athletes and students in the honors program. The Financial Aid Office posted these scholarships to student accounts without having a supervisor check the amounts with verification documents – like letters from students accepting the scholarships.

Athletes didn’t get what was promised

Auditors examined five athletic scholarships, and found that nobody got the right amount of money. Three students had been credited with $21,900 less in scholarship dollars than promised. The other two students received a total of $8,700 more. Additionally, they looked at three honors scholarships, finding that one student received $2,000 less than promised.

The Financial Aid Office also did not monitor scholarship students to ensure that they stayed eligible for their funds. Students with honors scholarships need to take at least 12 credit hours each semester. Auditors looked at 17 scholarship students, and determined that three of them became ineligible because they dropped classes midway through the semester.

The university also did not monitor the grants it received for research, auditors found. The same employee is responsible for processing grant money and recording the amounts in accounts receivable, making it possible to falsify numbers without being detected. Last August, there was a $1.5 million difference between the grant funds processed and accounts receivable.

The university also did not pursue grant accounts that had not been paid; out of 25 accounts that owed the university money, 11 had been overdue for more than a month and there was no evidence the university had done anything to go after the money.

Auditors found something similar with student accounts. Auditors reviewed 10 unpaid accounts and found that three – owing the university a total of $47,200 – were not referred to the Central Collection Unit. Two students who owed the university a total of $15,400 from previous semesters were also allowed to attend classes, the report states.

Additionally, too many employees had access to many financial functions on the campus computer system without cause. For example, auditors found that 66 employees could record goods and services purchased as received, but didn’t need the authority. Fifty employees could modify vendors in the computer system, but did not need to for their jobs.

“This was a little surprising,” said Myers. Auditors often find a few employees have access that they don’t need, but it is uncommon to see numbers this large, he said.

Other findings included:
·      Changes in residency status were not reviewed or backed up by adequate documentation. Maryland residents pay $3,274 per semester, while out of state residents pay $7,709.
·      Payroll employees did not review authorizations from supervisors to pay overtime before cutting the checks. Auditors looked at 10 employees, finding that five employees were paid for 63 hours of overtime not on timesheets, and three employees got paid for 124 hours of unapproved overtime.
·      Purchases did not always have competitive bidding, and sole-sourced contracts were not adequately justified.
·      Computer systems security and passwords were not adequate.

Morgan State President David Wilson has been in his position for just over a year, and said in a letter responding to the audit that this is his first experience with a report like this. He pledged that the university will work hard to correct the problems.

“Specifically, our goal is to have none of the current findings repeated in the next audit,” Wilson wrote.

In its detailed response, the university agreed with all the findings and recommendations, and reported that many suggested changes had been implemented as the audit was going on.

About The Author

Len Lazarick

Len Lazarick was the founding editor and publisher of and is currently the president of its nonprofit corporation and chairman of its board He was formerly the State House bureau chief of the daily Baltimore Examiner from its start in April 2006 to its demise in February 2009. He was a copy editor on the national desk of the Washington Post for eight years before that, and has spent decades covering Maryland politics and government.

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