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An Ordinance of the County of Allegheny, Commonwealth of Pennsylvania, requiring that the Community College of Allegheny County (CCAC) undertake an immediate audit of its financial and other activities for the purposes of fully disclosing to the public the condition of the College and creating corrective action plans, where warranted.
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WHEREAS, the Community College of Allegheny County (CCAC), although funded with public dollars, has only within the last two months elected to begin granting the public access to its records; and
WHEREAS, the first examinations of CCAC's records have raised questions about the College's accounting and audit practices, internal procedures and controls, travel approval and reimbursement practices, hiring trends, and procedures for allowing for the participation of M/W/DBE firms in projects that are put up for bid by the College; and
WHEREAS, the state law under which CCAC was created provides for an annual financial audit to be forwarded to the Department of Education, but the College is only required to submit: (1) results of the tests of the community college's accounting records and other procedures that are considered necessary to enable the independent certified public accountant to express an opinion as to whether the community college's financial statements are fairly presented, in all material respects, (2) a schedule of operating expenses that presents all operating expenses pertaining to the community college's educational program, and (3) a verification of equivalent full-time students enrolled in the community college during the fiscal year for which the audited financial statement is presented.; and
WHEREAS, the audit required by state law is not adequate to address the many and varied concerns about CCAC's operations that have been expressed by the public; and
WHEREAS, the Commonwealth Court of Pennsylvania and the Supreme Court of Pennsylvania have both held that a municipality with subordinate powers to the state may make such additional regulations in aid and furtherance of the purpose of an existing general state law as may seem appropriate to the necessities of the particular locality and which are not in themselves unreasonable, so long as those additional regulations are not inconsistent with the existing state law; and
WHEREAS, the Community College of Allegheny County is defined as a County Agency under §5-215.01 of the Administrative Code of Allegheny County, and shall continue to be operated in accordance with applicable federal and state laws and regulations, as set forth in §5-215.02 of the Code; and
WHEREAS, the Council of the County of Allegheny finds that it is necessary for the protection of the taxpayers of the County and the Commonwealth for the Community College of Allegheny County to undertake a comprehensive audit of its financial and other activities; and
WHEREAS, Council further finds that compliance with the audit procedures set forth below in no way impact the College's obligations to comply with existing state audit requirements, and that the procedures set forth below do not affect the College's ability to fulfill any of its other statutory obligations;
The Council of the County of Allegheny hereby enacts as follows:
SECTION 1.
A. The Community College of Allegheny County shall, by January 1, 2007, conduct a comprehensive audit of its financial and programmatic activities, as follows:
1. Financial Audit
a. The Community College of Allegheny County shall, with the advice and consent of the County Controller, select an independent auditor to conduct a financial audit of the College.
i. The independent auditor shall be a member of the American Institute of Certified Public Accountants, and must have a minimum of five years' verifiable experience in performing audits of government funds for organizations with an annual budget comparable to or larger than that of the College.
ii. The independent auditor shall not have been an employee or agent of the College for a period of at least ten years at the time at which he or she is selected, and the independent auditor shall be an individual or firm that has not performed a financial audit for the College for at least five years at the time at which he or she is selected.
iii. Final selection of the auditor shall be made by the Community College of Allegheny County, subject to the written approval of the County Controller.
b. Once selected, the independent auditor shall conduct a financial audit of the College, and shall be given free and unfettered access to the financial and other records of the College. Such audit shall be paid for in its entirety by funds from the operating budget of the College.
i. The final audited financial statement shall be consistent with the generally accepted accounting principles prescribed by the American Institute of Certified Public Accountants or its successor and consistent with the financial reporting policies and standards promulgated by Federal Government and State government which apply to government entities.
ii. The audited financial statement required under Subsection b.1. shall, at a minimum, include:
a. Results of the tests of the accounting records and other procedures of the agency or nonprofit entity that are considered necessary to enable the independent auditor to express an opinion as to whether the entity's financial statements are fairly presented, in all material respects, consistent with the accounting principles set forth in Section B.1.;and
b. A schedule of expenses that presents and fully describes all operating and capital expenses pertaining to the College's activities since 2004; and
c. A schedule of all reimbursed and nonreimbursed travel expenditures, broken down by individual traveler, that have been incurred since 2004, together with a specific evaluation of all of the College's controls and procedures governing reimbursement for travel since 2004, a discussion of whether these procedures and controls are consistent with existing federal, state, and other relevant guidelines, a description of what expenses may have been improperly reimbursed since 2004, and a delineation of whether any individuals received preferential treatment under the College's procedures and controls in any fashion with regard to travel reimbursement; and
d. A full disclosure of the College's operating costs, delineated by cost type, campus, and program, for the last three fiscal years; and
e. A full disclosure of the College's enrollment, delineated by campus and program, for the last three fiscal years.
2. Programmatic Audit
a. The Community College of Allegheny County shall, with the advice and consent of the County Controller, select an independent auditor to conduct a programmatic audit of the College.
i. The independent auditor shall have a minimum of five years' verifiable experience in performing programmatic audits of government organizations with an annual budget comparable to or larger than that of the College.
ii. The independent auditor shall not have been an employee or agent of the College for a period of at least ten years at the time at which he or she is selected, and the independent auditor shall be an individual or firm that has not performed any type of audit for the College for at least five years at the time at which he or she is selected, provided that the same individual or firm may conduct both the financial and programmatic audits required under the terms of this ordinance.
iii. Final selection of the auditor shall be made by the Community College of Allegheny County, subject to the written approval of the County Controller.
b. Once selected, the independent auditor shall conduct a programmatic audit of the College, and shall be given free and unfettered access to the financial and all other records of the College. Such audit shall be paid for in its entirety by funds from the operating budget of the College.
i. The final programmatic audit report shall, at a minimum, include:
a. A full description of all academic programs at each of the College's campuses, with a full discussion of student grade point averages, student-teacher ratios, faculty qualifications and faculty tenure in the prior three academic years; and
b. A full description of all academic programs that have been terminated in the past three academic years, together with an evaluation of the needs for these program terminations; and
c. A full evaluation of the College's efforts to include M/W/DBE businesses in the competitive bidding process, together with an evaluation of the College's performance in paying participating M/W/DBE contractors and subcontractors in a timely fashion, the actual participation rates by M/W/DBE business, a full description of all instances in which qualified M/W/DBE bidders were not awarded a contract upon which they had submitted a bid since 2004, and a summary and description of the College's efforts to create and implement a policy governing M/W/DBE participation; and
d. A full delineation of all existing professional services contracts currently in force to which the College is a party, together with a complete description of the work performed under each contract, the reasons given for the existence of each contract, a complete discussion of any instance in which multiple contracts have been awarded for essentially the same function, and a full description of any M/W/DBE firm participation in any professional service contract; and
e. A complete discussion of the College's hiring record since 2003, with demographic information by grade and title for each new hire in that time span, together with an evaluation of the College's hiring practices regarding minorities and women since 2003, the effectiveness with which those practices are implemented, a comprehensive review of the search process for each individual hired at the Associate Dean level and above since 2003, and a statement of the amount expended by the College upon hiring each individual at the Associate Dean level and above.
B. Copies of the completed audits required above shall be transmitted no later than January 10, 2007 to the President of Allegheny County Council, the Chief Executive of Allegheny County, the Allegheny County Controller, and the Allegheny County Manager.
C. The Allegheny County Controller shall review the audited financial statement and the final programmatic audit report generated by the independent auditor(s) to determine whether the public funds allocated to the College have been expended in accordance with the accounting principles set forth in Section A and in a fashion consistent with the County's policies governing the expenditure of public funds. The Controller shall have ninety (90) days from the receipt of an audited financial statement final programmatic audit report to conduct this review and notify the independent auditor(s), the College, County Council, and the Chief Executive of any material failure to meet the requirements of this ordinance.
1. In the event that the College receives notice from the Controller under this section, it shall have ninety (90) days from the receipt of such notice to submit a corrective action plan to the Controller, County Council and the Chief Executive.
ii. The Controller shall approve, reject or alter the corrective action plan within thirty (30) days of submission. After the College receives written notice of approval of the corrective action plan or agrees in writing to the Controller's alterations of the corrective action plan, the plan shall be implemented and binding on the entity. Implementation of the approved or agreed-upon corrective action plan shall be verified by an audit conducted by the Controller no later than the end of the fiscal year following the fiscal year during which the plan is implemented. If no agreed- upon corrective action plan is in place within one year after the date of the Controller's written notice under this section or if the agreed-upon corrective action plan has not been implemented within one year after the date of the Controller's written notice under this section, then the Controller shall petition Allegheny County Council to adjust payments to the entity to collect any amounts due based upon the findings contained in the audit report.
D. In the event that the required audits are not completed and provided under the terms of Subsections A and B above, County Council shall, at a minimum, immediately:
1. Reduce the County appropriations to the Community College to the minimum levels allowed by existing law, and shall not raise such appropriations until all audits required under this ordinance are completed and copies provided to all designated parties; and
2. Institute a policy strongly disfavoring or precluding reappointment of any member of the College's Board of Trustees who was seated on the date upon which this ordinance was passed until such time as all audits required under the terms of this ordinance are completed and copies provided to all designated parties.
SECTION 4. If any provision of this Resolution shall be determined to be unlawful, invalid, void or unenforceable, then that provision shall be considered severable from the remaining provisions of this Resolution which shall be in full force and effect.
SECTION 5. Any Resolution or Ordinance or part thereof conflicting with the provisions of this Resolution is hereby repealed so far as the same affects this Resolution.