BOSTON – In an audit released today, the Office of State Auditor Suzanne M. Bump (OSA) found Northern Essex Community College (NECC) has failed to take steps previously recommended by the office to better safeguard and track the college’s valuable property. The audit also showed NECC did not always obtain required documentation, including approvals, for expenditures. The audit, which examined the period of July 1, 2018 through June 30, 2020, notes that as a result of these issues, NECC cannot be certain that all its fixed assets are adequately safeguarded against misuse or that it can effectively detect lost, missing or stolen items. A previous audit issued in 2016 found similar issues related to inventory tracking.
“It is imperative that higher education institutions like Northern Essex Community College have strong internal systems in place to protect their assets and property,” said Auditor Bump. “As our audit today and from 2016 noted, safeguarding these assets should be a priority for the institution moving forward. I hope that this audit provides a pathway for the college to enhance its systems.”
Of the fixed assets reviewed on the inventory list, 50 percent were in locations different from what was on the list, and 4% were not on the inventory list at all. In fiscal year 2019, NECC purchased 131 fixed assets with a total cost of $274,389. In fiscal year 2020, NECC purchased 351 fixed assets with a total cost of $1,097,627. Today’s audit recommends that NECC review its inventory list to include accurate locations for all items, conduct an annual inventory of assets, and enhance its asset policy to provide guidance on the relocation of fixed assets
NECC utilizes procurement cards (P-Cards) to purchase supplies and to pay for college-related business and travel expenses. Of the P-Card transactions reviewed during the audit period, eight did not have preapproved Travel Authorization forms, fifteen did not have evidence of preapproval, and five did not have adequate supporting documentation. The audit recommends NECC ensure that all required supporting documentation for P-Card expenditures is provided.
The audit also found that NECC did not ensure that its security vendor maintain required incident reports and daily crime logs. During the audit period, NECC had a contract with a security vendor to provide public safety and security for the Lawrence and Haverhill campuses. Without any documentation of incident reports or daily crime logs, NECC cannot ensure that all losses or thefts of college property are submitted to the Office of the State Auditor in compliance with Chapter 647. The audit recommends that NECC should implement better controls to ensure the vendor complies with the requirements of the contract. Lastly, the audit found that NECC had not updated its internal control plan since 2015.
Northern Essex Community College (NECC) is an accredited public two-year college that offers associate’s degrees and certificates of program completion. NECC is a member of the Massachusetts public higher-education system, which consists of 15 community colleges, nine state universities and five University of Massachusetts campuses. NECC received appropriations of $20,288,244 and $21,111,643 from the Commonwealth for fiscal years 2019 and 2020, respectively.