Report: LCC Financial Controls 'Malfunctioning'

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"Malfunctioning at multiple levels" -- that's how a report characterizes past accounting practices at Lansing Community College.

"Some people weren't doing their job and the board is requiring some accountability," LCC Board of Trustees Chairman Chris Laverty said.

The report from a forensic accountant looked at LCC's books for the last couple of fiscal years and found the college's auditor making millions of dollars in changes to financial records that the college should have made on its own. It says the college wasn't balancing accounts on a regular basis.

And it says changes auditors had repeatedly requested weren't being made.

So why all the problems for the college?

The report suggests high staff turnover and software problems may be partly responsible. But perhaps the most critical suggestion is that the previous administration simply didn't understand the seriousness of the problems taking place.

The report says the problems were so serious that, if someone wanted to, they could have misused college funds. But trustees say they're confident that didn't happen.

"We have done a lot of checking," LCC Trustee Thomas Rasmussen said.

He says the problems were serious enough to justify major changes at the college. President Paula Cunningham earlier this year. Since then, personnel and other changes have been made, some of which the report praises.

"We have already appointed an internal auditor who is an employee of the college," Laverty said, citing one such example.

But Michelle Gallagher, the forensic accountant, says one of the board's most significant coming decisions -- picking a new Chief Financial Officer -- will effectively determine whether the college's financial controls are enough to prevent waste, fraud and abuse.