NIU is fixing issues that led to it improperly reimbursing an employee $31,945 and working with companies before contracts were approved, said Al Phillips, vice president of Administration and Finance.

The issues were reported in a state audit released Thursday. The audit covered the year ending June 30, when Nancy Suttenfield was interim chief financial officer. Phillips, who took over for Suttenfield, started working at NIU on March 1.

Travel

The state found NIU improperly reimbursed $31,945 of the $46,501 travel expenses auditors tested.

The $31,945 was reimbursed to a employee for his or her commute between home in Lopez, Wash., and work in DeKalb. Reimbursements cannot be made for travel between an employee’s home and headquarters, according to the report.

TA-2 tax forms for the employee who received the reimbursements listed his or her headquarters as NIU instead of Lopez, Wash. That error led to NIU “reimbursing expenses that are considered unreimburseable,” but a correct TA-2 has been completed, according to the report.

The report and NIU officials have not named the employee who was improperly reimbursed, but Baker consultant Ron Walters lives in Lopez Island, Wash., and commuted to DeKalb for his work at least 19 times, according to the results of a Freedom of Information Act request submitted to NIU by the Northern Star.

Walters was reimbursed about $32,033 by NIU for travel June 2013 to July 2014, after which there are no more processed reimbursement forms for him, according to the FOIA results.

Walters’ work calendar, which was obtained through a FOIA request, shows he continued commuting from Washington to DeKalb after July. His employment at NIU ended Dec. 31.

The Illinois Higher Education Travel Control Board will determine if the employee must pay back a portion or all of the funds he or she was improperly reimbursed. Phillips said NIU hopes to “have this finished up in the next few days.”

Contracts

NIU was found to have improperly begun work with vendors, or companies, before the companies’ contracts were approved, which goes against regulations and can lead to legal issues, according to the report.

Fifteen of the 66 contracts tested by auditors were not approved prior to companies beginning work. Phillips said this occurs when, for example, a company is doing consulting work and its employees begin discussions a before their contract with NIU has been “fully approved and signed.” Companies cannot be paid for work done before then, he said.

This can leave NIU “vulnerable to … potential legal problems,” according to the report.

Phillips said he has formed a task force that will re-engineer NIU’s procurement and contracting practices.

“Obviously, work should not be initiated before the contracts are signed,” Phillips said. “… We’re in the process of addressing that issue to ensure it doesn’t happen in the future.”

Compliance

Three of 10 evaluation forms sent to NIU vice presidents to test compliance with the Fiscal Control and Internal Auditing Act were not returned, according to the report.

One of the forms that was returned indicated the department that filled it out was only in partial compliance with one of 25 attributes, and there was no explanation about actions being taken to make corrections. Another form indicated the department that filled out the form was only in partial compliance with 18 of 25 attributes, and there was no information about corrective actions being taken. “Attributes” are items on a checklist auditors use to determine if departments are in accordance with regulations, Phillips said.

Phillips said he does not know why forms were not filled out correctly or why follow-up wasn’t done.

“… We’ve already started to identify areas where we need to do a better job of managing these kinds of processes and transactions …,” he said. “We will be doing a process re-engineering to ensure that not just these issues but other issues as well are properly addressed.”