(The Center Square) — The University of New Orleans failed to maintain an effective internal audit function and did not fully comply with financial reporting standards, according to a recent audit conducted as part of the University of Louisiana System’s financial review.
The audit report found that UNO’s internal audit function did not adhere to the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing, possibly increasing the risk of inefficiencies and oversight failures.
During the 2024 fiscal year, UNO issued only one internal audit report, which was initiated in 2022 based on an audit plan from 2020. Additionally, approved audit hours for 2024 were not used for their intended projects, and no reports were issued for those projects.
Under Louisiana law, public universities with appropriations exceeding $30 million — UNO received $103 million in 2024 — must maintain an internal audit function that aligns with IIA Standards. The audit report noted that UNO management failed to prioritize an effective audit function, leading to gaps in financial oversight and risk management.
“The University acknowledges that the auditor function was not effective and did not adhere to appropriate professional standards. We concur with the findings and recommendations,” UNO management told the Louisiana Legislative Auditor’s office.
The university further noted that its auditor resigned in March 2024 and that it plans to merge its audit function with Nicholls State University. The schools posted a job listing for a director of internal audit in May, with a hire expected by the end of October 2024. The position was filled, according to Nicholls.
The audit also found that UNO failed to comply with the UL System’s “Students with Debt” policy, which mandates a justifiable methodology for calculating allowances for doubtful accounts and timely reporting of delinquent accounts to the Louisiana Attorney General for collection.
UNO did not provide adequate support for its calculation of student receivable allowances, and delinquent student accounts were not transferred to the AG in accordance with system policy and state law.
According to UNO management’s response to the audit, UNO’s method for estimating uncollectible student debt was based on writing off accounts with no activity for three years, but auditors found no justification for using that timeframe.
Additionally, UNO did not transfer delinquent accounts related to salary overpayments for non-academic, unclassified employees dating back to 2019. As of June 30, 2024, these overpayments totaled approximately $240,000.
UNO responded in January, stating that while it concurs in part with the audit findings, it believes its methodology for determining student receivable allowances was sufficient under system guidelines. The university admitted that it failed to transfer delinquent accounts to the AG in a timely manner, citing prior management’s directive not to send student accounts to collections.
As part of its corrective action plan, UNO said it implemented new procedures in December, including issuing collection letters to former employees with outstanding balances and setting a Jan. 31 deadline for payment arrangements.
