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Uncertain numbers

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A recent internal financial audit shows Colorado State University-Pueblo’s budget woes may run much deeper than the reported poor enrollment figures.

Questionable accounting practices, an undertrained finance department, lack of staff, staffing turnover and ineffective accounting technology all show the university was unable to deal with the school’s finances long before the announcement of the budget crisis last year.

The audit, which was conducted by BKD CPAs and Advisors in June, made recommendations to correct these problems, but in some areas, the department has yet to comply.

The audit found in one case, 17 new entries were recorded after the fiscal year ended that totaled $20 million. Of those, 14 affected at least one account by $100,000. In simple terms, additions to the books of CSU-Pueblo after they were submitted resulted in accounts changing to the tune of $20 million.

If internal controls are working correctly, the audit said, it shouldn’t have happened.

In another case, accrued interest totalling $890,000 was incorrectly recorded. Twice.

Many of the mistakes pointed out in the audit can be credited to improper recording and lack of supervision. Finance management was unable to provide auditors with the department’s methods in collecting commercial accounts receivables.

In other words, the finance department could not explain how they got their numbers.

The audit also points out that the department failed to adhere to a Governmental Accounting Standards Board guideline that requires accounting departments to define certain payments and fees as deferrals.

Another recording mistake occurred when $683,000 of technology fees were classified as “deferred” when they should have been categorized as “earned.”

In terms of technological errors, 49 accounting entries were simply deleted when instead, they should have corrected for mistakes, according to the audit.

A new accounting software system was recently implemented to help fix the problems that the audit found.

In other words, the finance department could not explain how they got their numbers.

In 2013, several faculty members questioned whether budget cuts were made based on sound financial data because of the software data the university was using.

Di Mare said in a faculty senate meeting in December 2013, just after the budget crisis announcement, that it was very difficult to track the money coming in and going out of CSU-Pueblo.

The software system, AIS, was “home-grown,” said Vice President for Finance and Administration Karl Spiecker.

“That software package had significant limitations. We recognized that a year ago and Fort Collins has assisted in migrating us to a new system,” Spieker said. “So, the audit findings that were identified last year will be addressed now because we are on the new financial system.”

Staffing problems within the finance department, however, might not have as an easy fix.

“The current challenges are associated with vacancies we have,” Spiecker said. “We need to fill vacancies so that we have enough staff with the right expertise.”

Perhaps the most palpable vacancy is the university’s lack of a certified public accountant. One of the audit’s recommendations was to hire a CPA, but so far, no real progress has been made there.

“I am working with the president on a job description and we are posting to hire someone to hire with CPA and higher education experience,” Spiecker said. “That’s certainly a finding in the audit that we need to address.”

The staffing problems that became evident in the audit also extend to a lack of training in existing staff members.

The university also failed to report accurate enrollment numbers to the National Student Loan Data System in a timely manner.

“CSU-P does not have adequate controls in place to ensure that student enrollment data is reported to the NSLDS timely, as required,” the audit said.

The university is obligated to report the enrollment status of students so that loan repayment deadlines can be determined.

One of the audit’s recommendations was to hire a CPA, but so far, no real progress has been made there.

The finance staff told the auditor that they use a manual process determine if students meet degree requirements upon graduation. Sometimes, it takes them two months after graduation to decide this.

The department’s explanation for the error was that, “they did not understand the required deadlines for receipt of enrollment status changes by the NSLDS,” according to the audit.

The result of an error like this could make students face consequences like missing payment deadlines, the audit said. Students who have not yet graduated can also be inaccurately placed into repayment status.

According to the audit, the financial staff “indicated that, in part, policies and procedures were not followed during fiscal year 2014 due to turnover in the accounting department and a lack of proper training for new staff on required procedures.”

During fiscal year 2014, the finance staff at CSU-Pueblo was straying away from procedures it didn’t even necessarily know existed.

Plus, consistent changes in staffing made the procedures even more difficult to learn and follow.

One major audit recommendation is to ensure that the finance staff is equipped for the next fiscal cycle.

But, perhaps ironically, in order to solve its problem with staffing, it has to hire better-trained staff, which will create even more turnover.

“In the course of really the last two fiscal years, we have had significant turnover in our financial staff, and anytime you have the turnover, you lose that institutional knowledge,” Spiecker said.

And that type of turnover applies even further back than two years. For the past three-and-a-half years, the financial body at CSU-Pueblo has been facing transition.

Much of CSU-Pueblo’s administration, as a whole, is relatively new. President Lesley Di Mare was hired in October 2011, after former President Joe Garcia moved on to become Lieutenant Governor of Colorado.

“We need to make sure we don’t ever get into this situation again.” – Karl Spiecker, Vice President for Finance and Administration

The vice president for finance and administration under Garcia was Joanne Ballard, who resigned shortly after he did.

Since Ballard resigned in June 2011, the university has gone through five finance and administration vice presidents, including two who acted in an interim position.

Martin Hanifin, who left the university in the middle of its 2013 budget crisis, was the first VPFA hired under President Di Mare. Spiecker replaced Hanifin as VPFA in January 2014.

Hanifin did not respond to PULP’s requests for comment.

Spiecker was appointed directly by Chancellor Martin, because, “given the difficult budgetary challenges ahead for the university, it was imperative that no time was lost in the leadership transition,” according to a university news release.

Usually, there’s an interview process for the position.

Spiecker has been working as chief finance officer and in other high-level budget analysis positions for the past 17 years. Before he came to CSU-Pueblo, he was the CFO and director of finance and administration at the Colorado Department of Corrections.

Having to dole out budget cuts was not necessarily a new task to him but having to present a university with a largely unpopular budget plan was.

“It’s a little tough to come in and basically present the campus with a cut plan that I didn’t help develop. I came in mid-cycle,” Spiecker said. “By the time we were presenting to the campus what we were doing, a lot of those decisions had already been made by the president and her cabinet.”

When the budget crisis was first announced, university officials said the school had been operating on budget deficits for close to six years. The software’s reliability was questionable. The audit pointed out a lack of staff and the staff that exists is undertrained.

While the audit doesn’t directly correlate the problems to the deficits, it raises the question of if the finance department would have been stronger, could CSU-Pueblo have avoided a budget crisis?

Spieker couldn’t be reached for contact after his initial interview to answer that question. But he previously said, “We need to make sure we don’t ever get into this situation again.”

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1 Comment
  • johe

    Maybe I am not understanding this article correctly . For sure there is more to it. However the turnover of the financial department reflects badly on the accounting students graduating from CSU-P. Not being able to hire qualified, trained staff? What does it take to crunch numbers? CSU-P can’t even graduate accounting students that are capable or qualified to fill a job at the university? it reminds me of the times ; first when USC (named at that time) received money for a program back in the 90’s called “A” forgive me I can’t quote the name but the purpose was to create a program between the high schools and university to ensure more H.S. graduates were ready for college, 20 years later the program money disappeared and students still aren’t ready. Second I remember going to the Sangre de Cristo for a large meeting; Grant money was received to create programs once again to develop a mediation between lower and higher education. I attended the meeting we broke up into small groups to brainstorm then after that evening I never heard from them again. There were many of us I am sure from the turn out of people that wanted to assist in improving any part of the educational institution but the “money and movement ” was here one moment and gone the next. No one I called KNEW ANYTHING about what was going on. You have to admit it makes one wonder about the social stigma of obtaining a college education.

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Push to legalize marijuana upends governor’s race in New Mexico

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ALBUQUERQUE, N.M. — Democratic gubernatorial candidate Jeff Apodaca on Thursday called for the expansion of New Mexico’s medical marijuana program and for legalization of recreational use, saying the poverty-stricken state is missing out on millions of dollars in tax revenues and jobs that could be spurred by the industry.

Apodaca released his plan solidifying his position as a supporter of legalization as the race for governor heats up.

Apodaca pointed to New Mexico’s history as the first state to allow for research and experimentation with marijuana as a therapeutic drug. It was his father, then-Gov. Jerry Apodaca, who signed that legislation in 1978.

The research program stalled and it wasn’t until 2008 that New Mexico rolled out its medical cannabis program.

“Why are we shooting for being the last to legalize cannabis for adult use?” Apodaca said.

The push for legalization comes as New Mexico’s medical marijuana program has grown exponentially in just the last two years. Producers licensed under the program reported record sales of more than $86 million in 2017 and the number of patients enrolled now tops 50,000.

“We know the medical benefits of it. And we also know the opportunities of legalization for adult use,” Apodaca said, suggesting expansion of the long-standing medical marijuana program along with legalization could result in an estimated $200 million of additional tax revenues for the state.

The state’s largest producer, Ultra Health, announced that it has acquired farmland in southern New Mexico and has plans for what the industry says could be the largest cultivation facility in North America.

The property spans nearly one-third of a square mile (81 hectares) in Otero County. It will include 20 acres (8 hectares) of indoor cultivation, 80 acres (32 hectares) of outdoor cannabis fields and another 100 acres (40 hectares) of outdoor hemp fields.

Ultra Health president and CEO Duke Rodriguez said the company is preparing for a future in which New Mexico stands to benefit from expanded medical use and possibly recreational use.

Apodaca’s plan calls for lifting the current limits on the number of plants producers can grow and reducing costly licensing fees.

Other Democratic candidates have been more cautious.

U.S. Rep. Michelle Lujan Grisham said she would work with state lawmakers to ensure there are adequate health, safety and enforcement measures in place. She called for a “thorough analysis” of recreational pot programs in other states as part of that effort.

Lujan Grisham was in charge of the state Health Department when the medical marijuana program began. Aside from the legalization debate, she said supporting producers to create the latest medicines and methods to help patients would help create jobs and expand the industry.

State Sen. Joseph Cervantes, another Democratic candidate, has sponsored unsuccessful legislation to decriminalize possession of small quantities of pot but has said the state is lacking infrastructure and isn’t ready yet to legalize.

Cervantes recently lauded efforts at the local level by the state’s largest city — Albuquerque — to decriminalize possession of small amounts. He said he would do the same as governor and that it would mark a first step.

Republican congressman and gubernatorial candidate Steve Pearce expressed reservations about legalization at a forum earlier this month. He said it might create a stumbling block for people trying to climb out of poverty and addiction to other drugs.

“I just don’t see how it fits that we’re going to deal with addiction and yet we’re going to tell people, ‘This one is OK.’ I’ve watched it for a lifetime. I just am very nervous with recreational marijuana,” he said.

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‘For fun’ killing reveals vulnerability for homeless Native Americans in New Mexico

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The morning a homeless man was shot and killed in Albuquerque, police say surveillance videos showed him running down a street before sunrise, and then gunfire flash in the dark.

Native Americans make up only 4 percent of the population, but account for 44 percent of people living on the streets, raising the likelihood they will be victimized when there is an attack on the homeless.

Ronnie Ross, a 50-year-old from the Navajo Nation town of Shiprock, had been shot a dozen times, including once in the forehead and temple, and four times in the back, according to a criminal complaint. Police say the two teenage suspects charged with murder this week apparently shot him “for fun” as they came and went from a hotel party nearby.

The homicide marked the latest in a series of brazen killings and assaults of homeless Native Americans in the city. In Albuquerque, Native Americans make up only 4 percent of the population, but account for 44 percent of people living on the streets, raising the likelihood they will be victimized when there is an attack on the homeless.

A 2014 survey showed 75 percent of homeless Native Americans in Albuquerque had been physically assaulted.

“Just being harassed is part of everyday life, but it’s not as much harassment as it is overgrown bullying,” said Gordon Yawakia, who works at the Albuquerque Indian Center and was once homeless himself. “What do you do when people are against you and then the authorities are against you and you’ve got nobody, you know?”

In 2014, Allison Gorman and Kee Thompson, both Navajo, were beaten to death as they slept in a vacant lot. While authorities did not say the men were targeted because they were Native American, activists disagreed and the deaths spurred the creation of a city task force to address Native American homelessness that now-former Mayor Richard Berry said could set the stage for changes for the population across the Southwest.

Now, Ross’ death is underscoring how difficult it may be to protect and find solutions for the city’s Native American homeless population.

“When I hear a story like this it adds fuel to the fire,” said Dawn Begay, who is the city’s tribal liaison, and works with the homeless through a local nonprofit. “Where we’re headed is a good direction but it has to happen faster.”

Ross’ killing in March came three months after the body of Audra Willis was found decapitated in an area not far from the Sandia Mountains that line the city’s east side. The 39-year-old had come from To’hajiilee, a tiny Navajo community west of Albuquerque, and records show she had multiple addresses during her time in the city, including at the Albuquerque Indian Center.

Willis’ especially grisly death sent shockwaves through Albuquerque, just as the beatings of Thompson and Gorman had three years earlier.

The two men had been killed on a July 2014 night when authorities say three boys — ages 15, 16 and 18_returned home from a night of drinking and decided to attack them as they slept on a mattress. The men were beaten with a wooden table leg, cinder blocks, and other objects, police said. One young suspect later told authorities that the teens had beaten dozens of homeless people, though apparently none others fatally.

In Ross’ death, the complaint filed against the 15- and 17-year-old suspects does not identify a motive, but says the two teenagers bragged to friends about the shooting.

According to police, friends and acquaintances of the boys — whom The Associated Press is not naming because of their ages — said the suspects had been showing off a gun at the party, and had said to others that they had shot a man. At one point, the younger boy also said to a close friend at the party that he shot a “hobo” in the back.

The boys made one more stop at the scene to find Ross still alive, prompting the older boy to shoot him multiple times, according to the complaint.

“It’s completely disturbing,” said Officer Simon Drobik, an Albuquerque police spokesman, said Tuesday. “They just shot this guy for fun.”

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The Last Castro; Raul retires as Cuban president

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Raul Castro turned over Cuba’s presidency Thursday to a 57-year-old successor he said would hold power until 2031, a plan that would place the state the Castro brothers founded and ruled for 60 years in the hands of a Communist Party official little known to most on the island.

Castro’s 90-minute valedictory speech offered his first clear vision for the nation’s future power structure under new President Miguel Mario Diaz-Canel Bermudez. Castro said he foresees the white-haired electronics engineer serving two five-year terms as leader of the Cuban government, and taking the helm of the Communist Party, the country’s ultimate authority, when Castro leaves the powerful position in 2021.

“From that point on, I will be just another soldier defending this revolution,” Castro said. The 86-year-old general broke frequently from his prepared remarks to joke and banter with officials on the dais in the National Assembly, saying he looked forward to having more time to travel the country.

In his own half-hour speech to the nation, Diaz-Canel pledged to preserve Cuba’s communist system while gradually reforming the economy and making the government more responsive to the people.

“There’s no space here for a transition that ignores or destroys the legacy of so many years of struggle,” Diaz-Canel said. “For us, it’s totally clear that only the Communist Party of Cuba, the guiding force of society and the state, guarantees the unity of the nation of Cuba.”

Diaz-Canel said he would work to implement a long-term plan laid out by the National Assembly and communist party that would continue allowing the limited growth of private enterprises like restaurants and taxis, while leaving the economy’s most important sectors such as energy, mining, telecommunications, medical services and rum- and cigar-production in the hands of the state.

“The people have given this assembly the mandate to provide continuity to the Cuban Revolution during a crucial, historic moment that will be defined by all that we achieve in the advance of the modernization of our social and economic model,” Diaz-Canel said.

Cubans said they expected their new president to deliver improvements to the island’s economy, which remains stagnant and dominated by inefficient, unproductive state-run enterprises that are unable to provide salaries high enough to cover basic needs. The average monthly pay for state workers is roughly $30 a month, forcing many to steal from their workplaces and depend on remittances from relatives abroad.

“I hope that Diaz-Canel brings prosperity,” said Richard Perez, a souvenir salesman in Old Havana. “I want to see changes, above all economic changes allowing people to have their own businesses, without the state in charge of so many things.”

But in Miami, Cuban-Americans said they didn’t expect much from Diaz-Canel.

“It’s a cosmetic change,” said Wilfredo Allen, a 66-year-old lawyer who left Cuba two years after the Castros’ 1959 revolution. “The reality is that Raul Castro is still controlling the Communist Party. We are very far from having a democratic Cuba.”

After formally taking over from his older brother Fidel in 2008, Raul Castro launched a series of reforms that led to a rapid expansion of Cuba’s private sector and burgeoning use of cellphones and the internet. Cuba today has a vibrant real estate market and one of the world’s fastest-growing airports. Tourism numbers have more than doubled since Castro and President Barack Obama re-established diplomatic relations in 2015, making Cuba a destination for nearly 5 million visitors a year, despite a plunge in relations under the Trump administration.

Castro’s moves to open the economy even further have largely been frozen or reversed as soon as they began to generate conspicuous displays of wealth by the new entrepreneurial class in a country officially dedicated to equality among its citizens. Foreign investment remains anemic and the island’s infrastructure is falling deeper into disrepair. The election of President Donald Trump dashed dreams of detente with the U.S., and after two decades of getting Venezuelan subsidies totaling more than $6 billion a year, Cuba’s patron has collapsed economically, with no replacement in the wings.

Castro’s inability or unwillingness to fix Cuba’s structural problems with deep and wide-ranging reforms has many wondering how a successor without Castro’s founding-father credentials will manage the country over the next five or 10 years.

“I want the country to advance,” said Susel Calzado, a 61-year-old economics professor. “We already have a plan laid out.”

Most Cubans have known their new president as an uncharismatic figure who until recently maintained a public profile so low it was virtually nonexistent. Castro’s declaration Thursday that he saw Diaz-Canel in power for more than a decade was likely to resolve much of the uncertainty about the power the new president would wield inside the Cuban system.

“The same thing we’re doing with him, he’ll have to do with his successor,” Castro said. “When his 10 years of service as president of the Council of State and Council of Ministers are over, he’ll have three years as first secretary in order to facilitate the transition. This will help us avoid mistakes by his successor, until (Diaz-Canel) retires to take care of the grandchildren he will have then, if he doesn’t have them already, or his great-grandchildren.”

Cuban state media said Russian President Vladimir Putin congratulated Diaz-Canel and thanked Castro for the many years of cooperation between the two countries, while Chinese President Xi Jinping also reaffirmed his country’s friendship with Cuba and expressed interest in deeper ties.

At the U.S. State Department, spokeswoman Heather Nauert expressed disappointment at the handover, saying Cuban citizens “had no real power to affect the outcome” of what she called the “undemocratic transition” that brought Diaz-Canal to the presidency.

Vice President Mike Pence tweeted at Castro that the U.S. won’t rest until Cuba “has free & fair elections, political prisoners are released & the people of Cuba are finally free!”

Diaz-Canel said his government would be willing to talk with the United States but rejected all demands for changes in the Cuban system.

With Castro watching from the audience, Diaz-Canel made clear that for the moment he would defer to the man who founded the Cuban communist system along with his brother Fidel. He said he would retain Castro’s cabinet through at least July, when the National Assembly meets again.

“I confirm to this assembly that Raul Castro, as first secretary of the Communist Party, will lead the decisions about the future of the country,” Diaz-Canel said. “Cuba needs him, providing ideas and proposals for the revolutionary cause, orienting and alerting us about any error or deficiency, teaching us, and always ready to confront imperialism.”

Diaz-Canel first gained prominence in central Villa Clara province as the top Communist Party official, a post equivalent to governor. People there describe him as a hard-working, modest-living technocrat dedicated to improving public services. He became higher education minister in 2009 before moving into the vice presidency.

In a video of a Communist Party meeting that inexplicably leaked to the public last year, Diaz-Canel expressed a series of orthodox positions that included somberly pledging to shutter some independent media and labeling some European embassies as outposts of foreign subversion.

But he has also defended academics and bloggers who became targets of hard-liners, leading some to describe him a potential advocate for greater openness in a system intolerant of virtually any criticism or dissent. International observers and Cubans alike will be scrutinizing every move he makes in coming days and weeks.

As in Cuba’s legislative elections, all of the leaders selected Wednesday were picked by a government-appointed commission. Ballots offered only the option of approval or disapproval and candidates generally receive more than 95 percent of the votes in their favor. Diaz-Canel was approved by 604 votes in the 605-member assembly. It was unclear if he had abstained or someone else had declined to endorse him.

The assembly also approved another six vice presidents of the Council of State, Cuba’s highest government body. Only one, 85-year-old Ramiro Valdes, was among the revolutionaries who fought with the Castros in the late 1950s in the eastern Sierra Maestra mountains.

___

Associated Press writer Ben Fox contributed to this report.

 

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