State audit finds apparent misuse of ASU student fees

According to the audit, ASU spent $445,000 of student athletics fee revenues on recruiting-related expenses

A recent state audit of ASU has found two instances of apparent misuse of revenue from student fees.

The Arizona Office of the Auditor General released an audit on Jan. 19, 2018, detailing the use of student fees from all three of Arizona’s in-state universities from the 2016 fiscal year.

ASU spent $445,000 of student athletics fee revenues on “recruiting-related expenses” that involved travel costs such as car rentals, lodging and airfare, according to the audit.

These expenses appear to be inconsistent with the charter made between the Associated Students of Arizona State University, University administration and ASU Athletics on how the student athletics fee revenues would be used, though it was apparently permissible under the purpose of the fee approved by the Arizona Board of Regents, according to the audit.

According to the charter that was submitted, the $75 student athletics fee would not be used for any salary or recruitment purposes, a stipulation which the University said it abided by.

In its response to the auditor general’s findings, ASU said, “We believe that the use of funds for student-athlete recruitment was an allowable expense under the charter, based on discussions with student leadership and university administrators at the time the charter was developed."

An ASU spokesperson said in an email that student leadership originally specified that the athletics fee revenue would not be used for the purpose of recruiting coaches or coaching salaries.

"You will note in the founding charter, the language notes only 'recruitment,'" the spokesperson said. "No fee revenue has been used to recruit coaches, but the Auditor General interpreted the recruitment more broadly, to include student athletes, and consequently presented the finding." 

President of Undergraduate Student Government Tempe and ASU marketing and business senior Brittany Benedict said USG is going to work with University administration to restructure how the student athletic fee is used.

“We are looking into it on our end as the Council of Presidents,” Benedict said. “We are also working with ASU (administration) because (the audit) came up and we were like, ‘Oh my gosh, that’s not good.’ So, we are re-negotiating the athletic fee this year.”

In addition, the audit found that ASU contributes to more than half of the number of different student fees among Arizona's three main public universities. 

According to the audit, ASU has 3,212 different types of fees, all of which totaled to roughly 57 percent of the overall number of fees recorded — those fees brought in a total of $192.8 million for ASU in 2016.

The audit also found that ASU spent online class fee revenues to support faculty research, which was not part of the purpose approved by the Arizona Board of Regents.

While the University approved some of the fees to pay course assistants to build and maintain online classes, ASU spent $5,000 of the $209,000 in online criminal justice class fee revenues on the salaries of at least two student workers, one of whose duties included assisting in faculty research.

ASU told the state it corrected this error in November 2017 and that the individual ASU departments are responsible for ensuring fees are spent for their approved purpose.

“Accountability for the monitoring of class fee uses is decentralized to the departments and colleges of ASU with periodic central review of balances,” ASU said in its response to the audit. 

Hank Fradella, associate director of the School of Criminology and Criminal Justice, said in an email that the misuse was the result of faulty accounting.

"This was nothing more than an accounting error," Fradella said in the email. "The salaries for all of the graduate students working on online courses were correctly billed ... except for two students who were paid from that account in error. But once the error was discovered, the $5,000 mistake was corrected."

The Arizona Board of Regents is responsible for the approval of all ASU student fees. In response to the auditor general’s findings, ABOR said its policies set the standard for ASU fee spending.

“We have numerous legal and other obligations to consider in fee setting," ABOR said in its response to the audit's findings. "Therefore, it is ultimately our policies that are the standard against which we expect our universities to operate.” 

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