ORGANIZATIONAL STRUCTURE by sZ73y0

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									                            Shelton State Community College
                                  Special Team Report
                                      April 9, 2007

                                    INTRODUCTION

        On January 25, 2007, Dr. Thomas E. Corts, then Interim Chancellor of the
Alabama College System, after consulting with legal counsel for the Department of
Postsecondary Education, appointed a team to review various allegations regarding the
hiring, qualifications and compensation of employees, the awarding of financial aid to
students, and questions regarding management and financial operations, and relationships
between the campus and certain campus-related organizations at Shelton State
Community College in Tuscaloosa, Alabama. The team was composed of Mr. Donald
Edwards, Executive Consultant to the Chancellor, who acted as Chair, Ms. Joan Davis,
General Counsel and Vice Chancellor for Legal Services and Human Resources, Dr.
Michelle Sylvester, Director of Student Services, Mr. Nace J. Macaluso, State
Administrator, G.E.D. Testing Program, and Mr. Jack Burrow, Dean for Business and
Finance, Calhoun Community College.

        Dr. Corts charged the team to review material at the Department relative to
Shelton State Community College (hereinafter “Shelton State”); to identify areas to be
reviewed; to schedule on-site visits to Shelton State, conduct interviews, review
documents; and to provide a written report detailing findings, conclusions, and/or
recommendations for his review and for review and consideration by the Department’s
legal counsel.

       The team initially categorized the areas to be reviewed into the following
subjects:

1. Organizational structure. Scope of responsibility of key leaders; qualifications of
personnel in key leadership positions; supervisory and management practices.

2. Personnel. Salary schedule C positions; hiring; number and responsibilities of retired
personnel working for the college; evaluations, file maintenance, payroll classifications
and policy compliance.

3. Relationship between the college and the college foundation; corporate structure,
governance and operations; agreements/arrangements between the college and the
foundation; use of college staff and/or facilities; foundation financial practices, sources of
funds, cash flow, assets and operations; compliance with DPE policies, tax mandates;
financial reporting.

4. Relationship of the college and the foundation with Theatre Tuscaloosa. Financial
arrangements; reporting; compliance.

5. College financial and budgeting procedures, contracting and procurement practices,
financial reporting; accuracy, adequacy, timeliness, relevance, compliance.

6. Scholarship awards and financial aid. Categories, compliance, process and propriety.

7. Presidential residence. Ownership, use, condition, financial relationships, tax and
policy compliance.

8. Respiratory therapy program. Qualifications of instructors, program evaluation,
continuing accreditation.

9. Other matters, as they might appear.
        The summary of findings and recommendations that follows presents conclusions
of the review team after a limited review of documentation and interviews with a
selection of Shelton State Community College personnel during several campus visits
over a three week period, and should be considered as strictly limited to those subjects
and findings discussed in the review. Any findings represent the opinions of the
investigative team based upon its review. Any and all legal (civil and/or criminal)
opinions or actions which may be indicated by these factual findings are reserved for the
Department’s legal counsel.

Committee Note: The responses of Shelton State Community College follow the
various recommendations of the committee in the body of this report, and are each
labeled "Response." The committee has not conducted deliberations on the content of
the proffered responses.

                         ORGANIZATIONAL STRUCTURE

1) Finding: Key leaders at the College appear to possess at least the minimum academic
qualifications and experience called for by their respective job titles. Senior offices are
filled, and scopes of responsibility are generally in customary and appropriate alignment,
except that apparent disagreements between the Dean of Business Services and an
Associate Dean have caused the Acting President to redirect the Associate Dean to report
directly to the Acting President.

Documentation: Interviews with the Acting President and senior officers of the College.

Recommendation: Determine whether issues between the Dean of Business Services
and the Associate Dean require personnel action or permanent structural change to
normalize reporting structures. Review and determine whether this situation is more
widespread or are otherwise compounded, and take appropriate action as needed.

Response:

       The Acting President is recommending to the Department of Postsecondary
Education that the title of the Associate Dean for Business Services be changed to
Associate Dean for Facilities and Auxiliary Services, a title which more accurately


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reflects her job responsibilities. Additionally, the facilities and auxiliaries departments
are well placed in a direct reporting responsibility to the President.

2) Finding: Administration at the College has a history of issues regarding policy
compliance and management, especially with regard to deficiencies in hirings and
transfers of personnel, awarding of scholarships, issues regarding presidential housing,
procurement and management of construction contracts, accounting for the use of state
assets and facilities, establishing and managing appropriate relationships with associated
entities, and establishing effective comprehensive internal controls.

Documentation: Interviews with the Dean of Student Services and the Director of
Human Resources; Uniform Guidelines; proceedings in Shuford, et al v. Alabama State
Board of Education, et al, Civil Action No.89-T-196-N in United States District Court for
Middle District of Alabama, and Kennedy v. Alabama State Board of Education, et al,
Civil Action No.CV-89-T-196-N in the United States District Court for Middle District
of Alabama; Uniform Guidelines; Alabama Code §16-22-15; SBE Policy No. 602.02;
personnel files. Employee rosters; interviews with the Acting President, the Dean of
Student Services; correspondence; personnel files; The Principles of Accreditation,
Commission on Colleges, Southern Association of Colleges and Schools; interview with
Foundation Executive Director/SSCC Director of Advancement; Lease by and between
Shelton State Community College and Shelton State Foundation [sic], dated August 1,
1989, expiring February 1, 1990; Foundation scholarship records and forms; Family
Educational Rights and Privacy Act (FERPA) (20 U.S.C. § 1232g; 34 CFR Part 99) the
Gramm-Leach-Bliley Act (P.L. 106-102) and the Federal Trade Commission’s
Safeguards Rule (16 CFR Part 314); Financial Statements and records of the Shelton
State Community College Foundation, Inc.; Contract (“Partnership”), as of January 1,
2000 through December 31, 2009, between Buffalo Rock Company and “New Campus
Foundation, Inc. of Shelton State Community College” [sic]; interview with Foundation
Executive Director; “Agreement for the Use of Vending Space” by and between Shelton
State Community College and Shelton State Community College Foundation, dated April
1, 2000;” payroll and personnel records of the College; interview with the Dean of
Student Services; Joint Operating Agreement between Shelton State Community College
Foundation, Inc. and Theatre Tuscaloosa; review of College expense accounts; interview
with the Dean for Business Services; telephone interview with the Executive Producer of
Theatre Tuscaloosa; Alabama College System Contract Report; Theatre Tuscaloosa
Website; review of scholarship and financial aid records; review of purchase orders.

Recommendation: Take appropriate personnel actions in response to violations of
established policies and legal mandates; establish a comprehensive internal control
program and internal audit office; establish periodic training for senior officers and
directors regarding policies and procedures; follow additional recommendations set forth
in the individual subject areas set forth below.

Response:

       Although the College has a review process in place for selected programs and



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services, the College understands and supports the need for a more formalized process for
internal review and/or auditing and for professional development regarding policies and
procedures and will cause both issues to be strengthened.


                                     PERSONNEL

1) Finding: Some positions at the College were improperly filled in violation of the
Shuford/Johnson/Kennedy Partial Consent Decrees or the State Board of Education's
“Uniform Guidelines,” posting laws and Shelton State policies. It appears that several
employees were given new jobs or transferred to new titles without a search or
reorganization of the position as required.

        Prior to December 31, 2005, hiring, promotion and transfer of personnel in all of
the institutions of the Alabama College System were subject to the provisions of Consent
Decrees entered in two Federal lawsuits. The current version of the Department's
Uniform Guidelines, which supplanted the Consent Decrees, was adopted by the State
Board of Education on May 25, 2006, and contains substantive provisions modeled after
the Consent Decrees. It appears that no search was conducted for appointment to the
position of Special Assistant to the President. Likewise, a number of Adult Education
positions were improperly filled, including positions where instructions were received
from the Department of Postsecondary Education to appoint specific persons to positions
which were then funded or paid by the Department, without required postings or
searches. One such employee is the spouse of the College President. Additionally, a
part-time clerk related to the Dean of Business Services was appointed to the position
without the position being posted.

        It was also noted that the employment of one Adult Education employee was
retained by the College for more than two years despite indications of poor performance
and his continued refusal to sign an employment contract. In a number of Salary
Schedule E positions and some part-time positions there were neither postings nor
searches. These same deficiencies were noted in the appointment of at least one office
manager position on the Fredd Campus. The Lifelong Learning Center Director, who is
the spouse of the Dean of Instructional Services, was appointed to the position without
application, reportedly after a search failed to yield qualified applicants. One staff
member stated that the Dean of Business Services requested him and other College
officials to hire her sister-in-law upon passing her G. E. D. The sister-in law was
subsequently hired in the Adult Education Program. The employment records of three
other individuals in Adult Education show no indication of postings or searches
associated with their hirings.

Documentation: Interviews with the Dean of Student Services the Director of Human
Resources, and the Lifelong Learning Director; Uniform Guidelines; proceedings in
Shuford, et al v. Alabama State Board of Education, et al, Civil Action No.89-T-196-N in
United States District Court for Middle District of Alabama, and Kennedy v. Alabama
State Board of Education, et al, Civil Action No.CV-89-T-196-N in the United States



                                            4
District Court for Middle District of Alabama; Uniform Guidelines; Alabama Code §16-
22-15; SBE Policy No. 602.02; personnel files.

Recommendations: Hiring and modifications to title, duties or salary, must comply with
the Uniform Guidelines, posting laws, and other State Board and College policies.
Insubordinate or incompetent employees should be disciplined in accordance with
policies.

Response:

       The College located documentation that four of the above referenced positions
had been properly filled through reorganizations approved by the Chancellor. These
include the Assistant Dean of Students—Athletics and Student Organizations (2000),
Assistant Dean of Health Services (2004), Assistant Dean for Student Services (2004),
Director of the C.A. Fredd Campus (2006).

        The College has revised the hiring process for E and H salary schedule personnel
to insure that all jobs are properly posted and that the College is in full compliance with
equal employment opportunity requirements.

       The College has, at times, been directed by the Department of Postsecondary
Education to employ specific individuals, particularly in the Adult Education Division,
without using proper hiring procedures.

Committee Note: When the committee first conducted its review, it appeared that
appointments of the Assistant Dean for Student Services and the Assistant Dean for
Health Services were made by "assignment," and also that the positions of the Assistant
Dean of Students-Athletics and Student Organizations, and the Director of the C. A.
Fredd Campus were filled in violation of the Consent Decrees, which were in effect
through December 31, 2005. However, on April 2, 2006, the College provided the
committee with documents which confirm that the appointments were made as part of
reorganizations approved by the Chancellor. As such, those positions appear to have
been filled in compliance with the Consent Decrees. The committee has revised its report
accordingly.

2) Finding: The College has employed and currently employs several individuals
without proper justification or need, some of whom provide little or no service to the
College and do not regularly appear at the College. Other hirings carry the appearance of
political motivation.

       One person, a City Councilman, received a part-time employment contract as
"Coordinator of Communications" at the same time that he had a $5,400 contract with the
College to provide media services for the academic year of '06-'07. Interviews with
College personnel indicate that this individual did not report to the campus regularly for
work nor were there evaluations or documentation in his personnel file to indicate what
work he performed. There was no indication that the position was posted, or that a search



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was conducted. A State Representative has been employed by the College since
November, 1999, and is currently employed in the title of "Coordinator" on a part-time
basis, receiving $49,677.00 per year. College personnel interviewed by the committee
indicate that this person has no office on campus, does not regularly appear at the
campus, and is of limited service to the College. This employee has another part-time
position with Bevill State at a similar rate of compensation, in addition to maintaining a
law practice and his legislative duties. Another legislator, now deceased, was employed
as a "Special Populations Coordinator" from December, 2002 until his resignation on
May 31, 2006. There do not appear to be any evaluations or other documentation to
indicate what work he performed, and there was no indication that the position was filled
by a posting or a search. Another State legislator was employed as an "Adult Education
Instructor" in January, 2006, without a posting or a search. This individual resigned in
December, 2006. A fourth legislator, who was for a time the College's Director of
Human Resources, left employment with the College in 2006 after entering a guilty plea
in Federal court to a public corruption charge involving the College and the Fire College
Foundation.

        Another individual was employed as a part-time administrative assistant from
May, 2000 until he resigned in January, 2007. There are no evaluations or other
documentation in his personnel file to indicate what work he performed. It appears that
the position was not advertised, nor was a search conducted. Another individual was
employed as a part-time “Coordinator” in November, 2002. While there are evaluations
covering the period of December 2002 through August, 2004, interviews with College
personnel indicate that he had no office on campus, did not regularly appear on campus,
and did not appear to render significant service to the College. This individual resigned
on 11/5/05. Another individual was employed in May 2002 and his personnel file
contains an employment contract as “Medical Director” dated 10/3/05. There are no
evaluations or any documentation to indicate what work he performed. The position was
not advertised nor was a search conducted. This individual resigned in November, 2006.

Documentation: Employee rosters; interviews with the Acting President, the Dean of
Student Services and the Director of Human Resources; correspondence; personnel files.

Recommendations: All employees should be required to regularly appear for work at
assigned work locations in accordance with their work hours. Job duties should be
clearly defined, and based upon proper justification and a bona fide need for the services
to be provided. Hiring and transfers of all employees covered by the Uniform Guidelines
should be accomplished only in compliance with the Guidelines. Human Resources
should be consulted in advance of any change of employee status, duties or title. All
employee contracts, evaluations and other employee documentation should be maintained
in personnel files. The hiring of elected officials, if any, must occur in strict, substantive
and bona fide compliance with all laws, policies and procedures, and should be closely
scrutinized to avoid the fact or appearance of impropriety.




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Response:

       As of April 9, 2007, all of the employees in the categories described by the
finding have either resigned or been terminated.


                    COLLEGE/FOUNDATION RELATIONSHIP

1) Finding: No formal agreement exists to comprehensively define the relationship
between the College and the Foundation. Not having such an agreement is inconsistent
with Core Requirement 3.2.13 of The Principles of Accreditation of the Commission on
Colleges, Southern Association of Colleges and Schools, which describes the need for an
agreement which accurately describes the relationship between the institution and the
Foundation and any liability associated with that relationship, and for assurance that the
relationship is consistent with the institution’s mission.

Documentation: The Principles of Accreditation, Commission on Colleges, Southern
Association of Colleges and Schools; interview with Foundation Executive
Director/SSCC Director of Advancement; Lease by and between Shelton State
Community College and Shelton State Foundation [sic], dated August 1, 1989, expiring
February 1, 1990.

Recommendations: The College and the Foundation should enter into a formal
agreement comprehensively defining the financial and operational relationship between
the College and the Foundation, providing for Foundation compliance with College and
Department policies, and increased financial accountability, by obligating itself to
provide the College periodic financial statements and audits, assuring the proper handling
of student records, coordination of activities, description of organizational roles,
restriction of conflicts of interest, and management of services and resources for the
exclusive benefit of the educational mission of the College.

Response:

        Since the founding of the Shelton State Community College Foundation, Inc. in
1984, the Articles of Incorporation, Foundation By-laws, and Guidelines have governed
the relationship between the College and the Foundation. The purpose of the Foundation
is to support Shelton State Community College and its students. To comply with Core
Requirement 3.2.13 of the Principles of Accreditation of the Commission on College,
Southern Association of Colleges and Schools, a Memorandum of Understanding
between the Foundation and the College is currently under development and will be
presented to the Foundation Board of Directors, legal counsel, and appropriate
administrative officials of Shelton State for approval.

2) Finding: A review of the Foundation’s scholarship process and application forms
indicates that the Foundation receives certain student information from the College in a
manner that may not be sufficiently protective of the privacy of such information, which



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must be protected in accordance with the Family Educational Rights and Privacy Act
(FERPA) (20 U.S.C. § 1232g; 34 CFR Part 99) and may also maintain information which
must be protected under the Gramm-Leach-Bliley Act (P.L. 106-102) and the Federal
Trade Commission’s Safeguards Rule (16 CFR Part 314).

Documentation: Foundation scholarship records and forms; Family Educational Rights
and Privacy Act (FERPA) (20 U.S.C. § 1232g; 34 CFR Part 99) the Gramm-Leach-Bliley
Act (P.L. 106-102) and the Federal Trade Commission’s Safeguards Rule (16 CFR Part
314).

Recommendations: The College should make available to the Foundation protected
records and information concerning students and alumni only in accordance with the
requirements of the above-referenced statutes and regulations. Should the Foundation
receive access to confidential information on students, alumni or financial customers of
the College, the Foundation should formally agree with the College to comply with
FERPA and the Gramm-Leach-Bliley Act (P.L. 106-102) and the Federal Trade
Commission’s Safeguards Rule (16 CFR Part 314), wherever applicable.

Response:

        The only potential violation of rights to privacy that the College and the
Foundation could identify was an occasional request from the Foundation to the College
for student transcript information for the purpose of awarding scholarships without the
express consent of the student. All future scholarship application forms will include the
applicant’s consent for the Foundation to obtain transcript information from the College.

3) Finding: The Foundation, as the apparent assignee of a now-dissolved College-
related entity, known as “Shelton State Community College New Campus Foundation,
Inc.” has received and continues to receive substantial financial revenues from an outside
entity for the “exclusive” use of State-owned College facilities for profit.

Documentation: Financial Statements and records of the Shelton State Community
College Foundation, Inc.; Contract (“Partnership”), as of January 1, 2000 through
December 31, 2009, between Buffalo Rock Company and “New Campus Foundation,
Inc. of Shelton State Community College” [sic]; interview with Foundation Executive
Director; “Agreement for the Use of Vending Space” by and between Shelton State
Community College and Shelton State Community College Foundation, dated April 1,
2000.”

Recommendations: Revenues generated from the possession or use of State assets
should be received by the College and accounted for as State funds within College
revenue accounts. Where the Foundation or another College-related supporting
organization seeks to contract with a third party for the possession or use of State assets,
such asset must first be formally leased or rights to its use otherwise conveyed by the
College to the Foundation for reasonable consideration. Commercial opportunities
within College facilities should be afforded to outside entities by the College or the


                                              8
Foundation only after a competitive process which assures a reasonable return and fair
access for potential contractors to be considered for such commercial opportunities.

Response:

       As referenced in the above documentation, there is currently in place an
“Agreement for the Use of Vending Space” between the College and the College
Foundation. Although this agreement has an ending date of 2009, the College and the
Foundation Executive Director have agreed to evaluate the agreement to be certain that
the Foundation is in compliance with all laws, regulations, and guidelines of the State of
Alabama, the College, and the Department of Postsecondary Education.

4) Finding: The Director of Advancement for the College also serves as Executive
Director of the Foundation, and receives a salary from the College (as a full-time
employee) and a salary from the Foundation. Since the Director of Advancement is the
College employee acting in the role as the primary overseer of the activities of the
Foundation, this officer’s also serving in the role of Executive Director of the Foundation
creates an inherent and irresolvable conflict. Although a member of the Department's
staff recalls that the former Chancellor authorized this person's dual role, the conflict
remains, and receiving compensation from both entities in such a circumstance further
exacerbates the potential ethical dilemmas of this arrangement.

Documentation: Financial records and minutes of the Foundation; payroll and personnel
records of the College; interview with the Acting President; interview with the Director
of Advancement/Executive Director of the Foundation; interview with the Dean of
Student Services.

Recommendations: The positions of Director of Advancement and Executive Director
of the Foundation should be held by two different people. College officers and
employees should not receive additional compensation from College-related entities.

Response:

       Absent the existence of Board Policy relative to the operation of college
foundations, the College seeks further clarification from the Board and the Department of
Postsecondary Education regarding policies as they apply to the relationship between a
college and its foundation, particularly as those policies may apply to shared employees.

5) Finding: For academic years ‘04-’05 and ’05-’06, the Shelton State Community
College Foundation, Inc. granted some thirty-five “Presidents Discretionary”
scholarships, upon the President’s authority, without formal committee review, and with
inadequate documentation.

Documentation: Scholarship awards printout provided by the Foundation; interview
with the Executive Director of the Foundation; interview with the Dean of Student
Services.



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Recommendations: Grants of “discretionary” presidential scholarships from the
Foundation should cease. (It appears that the Acting President has not approved the
award any such scholarships since her appointment.) All Foundation scholarships should
be granted only after committee review upon pre-established criteria. Awards should not
be made to family members of Foundation officers or staff. Applications, records and
minutes documenting each award should be kept to permit periodic reviews and audits of
the propriety of awards.

Response:

        The College agrees with the guidelines and suggestions offered in the
recommendation. No “discretionary” presidential scholarships have been offered since
fall 2006 and the Executive Director of the Foundation reports that there are no plans to
continue the offering of such scholarships.

6) Finding: Upon the direction of the Dean of Business Services, the revenues generated
from enrollment fees in the Lifelong Learning Program for senior citizens had been
transferred on a periodic basis to the Shelton State Community College Foundation, Inc.,
in spite of the fact that administrative and certain instructional staff Lifelong Learning
staff are paid by the College.

Documentation: Interview with Director of Lifelong Learning, SSCC; Memorandum
from the Dean of Business Services, dated February 9, 2004; excerpts from financial
records of the College and the Foundation. Memo from Dean of Business Services to the
Acting President dated February 20, 2007, regarding "Lifelong Learning Institute Internal
Review."

Recommendations: Revenues generated from State-funded programs or from the use of
State assets should be received by the College and accounted for as State funds within
College revenue accounts. Where services provided by the Foundation or other
organizations are provided and reimbursement is sought, payment should be upon
approved invoices. Shared or exchanged services between the College and the
Foundation for College programs should be provided for by an appropriate written
agreement.

Response:

        The issue regarding revenues generated from enrollment fees in the Lifelong
Learning Program has been resolved by the College. Those fees and all expenses for the
program are now accounted for properly in the unrestricted funds of the College. Some
revenues from Lifelong Learning held by the Foundation were expended for the benefit
of the Lifelong Learning Center. All excess revenues will be returned to the College.




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             COLLEGE/THEATRE TUSCALOOSA RELATIONSHIP

1) Finding: The College provides Theatre Tuscaloosa, (an incorporated, free-standing
501(c)(3) not-for-profit community arts organization, which has had a continuing
relationship with the College for more than three decades), substantial College-owned or
College-funded resources, including theater facilities, theater management and staffing
provided by State employees, and other in-kind operational support to promote and stage
Theater Tuscaloosa’s productions, without the College’s fully tracking the costs involved,
and without reimbursement to the College for the use of College assets and cost of
College-provided operating resources. The College and Theatre Tuscaloosa were parties
to a "Joint Operating Agreement" dated November 15, 2000, which provides for use of
College facilities by Theatre Tuscaloosa, including offices, support equipment, a right of
first refusal on the use of the theater, Theatre Tuscaloosa being "exclusive booking
agent," and receiving all concession profits associated with its events. The agreement
provides, in part, that "TT shall provide its own concessions equipment, supplies and
personnel for its events on the campus of SSCC and retain the profits from the same."
The agreement expired after five years according to its terms, which also provided for a
mutual five-year renewal option. There is no indication whether this agreement was
renewed. This agreement appears to have replaced a "Joint Operating Agreement" dated
October 1, 1997, which had provided for the College to assume payment of some of the
employees of Theatre Tuscaloosa.

        Theatre Tuscaloosa, through a January, 2005 “Joint Operating Agreement” with
the Shelton State Community College Foundation, Inc., pays the Foundation net annual
revenues in excess of $85,000.00, (on a quarterly basis), much of which is attributable to
the use of College facilities, resources and staff. Beyond this, Theatre Tuscaloosa has
occasionally received substantial monetary payments from the College, including some
$74,050.00 paid from State funds during fiscal ’05-’06, the largest portion of which is the
College's subsidy of Theatre Tuscaloosa's bi-annual Gala. Theatre Tuscaloosa’s
VP/President-Elect also appears to have received $12,000.00 in consulting fees from the
College to identify and solicit funding sources for SSCC and the Community College of
Fine Arts. It was noted that much of the theater's interior infrastructure was initially
provided to the College by contributions solicited by Theatre Tuscaloosa, Inc., and
portions of this infrastructure (i.e. lighting, sound and associated stage equipment),
continue to be maintained by the corporation.

Documentation: Financial Statements and records of the Shelton State Community
College Foundation, Inc.; Joint Operating Agreements (October 1, 1997 and November 5,
2000) between Shelton State Community College and Theatre Tuscaloosa; Joint
Operating Agreement between Shelton State Community College Foundation, Inc. and
Theatre Tuscaloosa; review of College expense accounts; interview with the College’s
Acting President; interviews with the Foundation Executive Director and Deans for
Business Services and Student Services; Alabama College System Contract Report;
Theatre Tuscaloosa Website; telephone interviews with the Executive Producer of



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Theatre Tuscaloosa.

Recommendations: Generally, revenues generated from the possession or use of State
assets should be received by the College and accounted for as State funds within College
revenue accounts. Where a College-related supporting organization seeks to use or
possess State assets for its operations, the use of such assets and disposition of resulting
revenues should be the subject of a current lease or operating agreement with the College
and any other parties involved. Expenses associated with staffing and use of State
resources should be separately accounted for. The fiscal and operational relationships
among the College, the Foundation and Theatre Tuscaloosa should be documented by a
current agreement or agreements comprehensively defining the relationship among the
entities, fully defining shared services, consideration paid and received, and reciting
intangible and educational benefits to the College and its mission which may exist in lieu
of financial reimbursement of known costs.

Response:

       The “Joint Operating Agreement," which expired in November 2005 had a
renewal clause that, through oversight, was not exercised. However, both parties have
continued to operate in compliance with the Agreement as if the formality of renewal had
been executed.

        Shelton State recognizes that its partnership with Theatre Tuscaloosa needs
review by both parties to ensure that all aspects of its current relationship are accounted
for properly. Upon completion of the review, a new operating agreement will be
developed and submitted for approval to appropriate legal counsel and to the Department
of Postsecondary Education.

        The Gala referenced in the Committee report is a recognition event sponsored by
in part by Shelton State because of the College’s identification by the legislature as the
Alabama Community College of the Fine Arts.

        Additionally, the referenced consulting contract with the Vice President/President
Elect of Theatre Tuscaloosa was cancelled at his request.


            COLLEGE FINANCIAL AND BUDGETING PROCEDURES*

1) Finding: The College has frequently delegated procurement of construction services
to a single outside construction management firm, and has failed to maintain records in
the possession of the College pertaining to the means of procurement of such
construction services. Charges appear to be excessive and duplicative of architectural
services.

Documentation: Interview with Acting President; interview with the Associate Dean of
Business Services and her staff; Alabama College System Contract Report;


                                             12
correspondence, work orders and invoices.

Recommendation: Retrieve all procurement records for construction contracts from
outside firms and parties; maintain and preserve all procurement records within the
College's files; assure that all College procurements for construction contracts are
processed in accordance with applicable laws and policies by College personnel, or under
the continuing supervision of College personnel. It is recommended that the transactions
involved all such vicarious procurements by the College be audited to determine
compliance with procurement laws, policies and procedures.

Response:

       Original documents pertaining to construction at Shelton State and housed off-site
have been retrieved, are housed in the office of the current Associate Dean for Business
Services, and will be maintained there for the period required by the State Records
Retention Manual. The Associate Dean has the responsibility for closely monitoring the
construction contracts to assure that they are processed in accordance with applicable
laws and policies. The College is currently being audited by the Examiners of Public
Accounts who routinely examine construction contracts.

2) Finding: Since March 24, 2005, the College has hired several firms utilizing state
funds, which records indicate are potentially associated with lobbying state and federal
officials.

Documentation: Interview with Acting President; interview with Director of
Advancement; Alabama College System Contract Report; SBE Policy §215.01; Shelton
State contract files.

Recommendation: All institutional contracts or consultancies using State funds for
lobbyist services should be terminated. All lobbying activities for the Alabama College
System must be coordinated by the Chancellor. Any College contracts with firms
intended to assist in grant applications should specifically and narrowly describe the
services sought, and reflect only authorized services.

Response:

       All potential lobbying contracts at Shelton State were cancelled effective August
2006 with the exception of one which was approved by the Chancellor. Regarding grant
applications, all proposed applications must be screened by the Office of the Director of
Advancement and subjected to all appropriate departmental approvals before the
proposals are submitted. Any contracts with outside firms for writing grant applications
must be approved by the President.

3) Finding: Shelton State Community College has paid substantial royalties to outside
parties for materials published by the College and sold in the College bookstore, as
follows: a. To Shelton State Foundation, 1994-1996, $24,150.95; b. to Alabama Fire


                                            13
College Foundation, 1997-2006, $269,077.28; c. to Alabama Fire College $11,312.04.
To the extent that it appears that such materials may have been developed totally or
partially on College time, with the use of college materials or facilities or with college
funding, no royalties should be payable.

Documentation: "Copyright Agreement" between Alabama Fire College Foundation,
Inc., and Shelton State Community College, dated September 1, 1997; "Copyright
Agreement," between Shelton State Community College Foundation, Inc., and The
Alabama Fire College, dated February 17, 1995; SBE Policy §321.01, issued 12/8/94;
reissued 3/24/05.

Recommendation: Cease royalty payments to other entities for copyrighted materials
developed totally or partially on College time, with the use of college materials or
facilities, or with college funding; seek refunds where appropriate.

Response:

        The issue of royalty payments is an item that is subject to review during the audit
currently underway at the College. Any findings or comments will be addressed and
appropriate actions taken.

*References to various financial practices are also included in other topic areas.


                          SCHOLARSHIPS/FINANCIAL AID

The team reviewed the following:

   A.       Institutional and athletic scholarship procedures from 2004-current
   B.       Business office records for all institutional and athletic scholarship recipients
            from 2004-current
   C.       All athletic team rosters from 2004-current
   D.       All athletic scholarship recipient listings from 2004-current
   E.       National Junior College Athletic Association (NJCAA) Letters of Intent and
            Scholarship Awards for all athletic programs

                                Institutional Scholarships

State Board Policy 805.02 provides that each community college shall be allowed to
award 300 institutional scholarships. Further, the policy allows a college to award one
additional scholarship per every 100 additional FTEs above 2,000.

State Board Policy 805.01 provides that each college shall appoint a scholarship
committee representative of faculty, staff and students to review all scholarship
applications as outlined in the committee’s policies and procedure.




                                             14
Committee Note: Scholarships may be awarded by the College as full-time or partial. It
is important to note that several partial scholarships may equal one full-time scholarship.
The review team requested documentation regarding the number of partial scholarships
that may have been awarded. The College was unable to provide the team with accurate
documentation regarding this request. As such, the team was unable to conclusively
identify the numbers of scholarships awarded by the College expressed as full-time
equivalent totals. Therefore, it was often difficult or impossible to tell whether the
College awarded institutional scholarships in excess of its allotments. The College has
indicated that it intends to modify its record-keeping to resolve this dilemma in the future.

1) General Findings:

A) Fall term of the 2006-2007 Academic Year. Shelton State Community College
awarded 453 institutional scholarships during the Fall Term of the 2006-2007 school year
in the following categories: Presidential, Technical, Academic, Performing Arts and
Ambassador. The College had an FTE of approximately 4,000 for the 2006-2007 Fall
Term, 2,000 FTE above the base number of 2,000. Based on the College's FTE, State
Board of Education Policy would permit the college to award 320 institutional
scholarships. See "Committee Note" above this section.

B) 2005-2006 Fall Term. For the fall term, the college awarded a total of 542
institutional scholarships, including 269 Presidential Scholarships. College records show
an FTE count of 4,052 for the 2005-2006 Fall Term, 2052 above the 2,000 FTE base
number. State Board of Education Policy would permit the College to award an
additional 20 scholarships for a total of 320 scholarships. See "Committee Note" above
this section.

C) 2004-2005 Fall Term. For the fall term, the College awarded a total of 523
institutional scholarships. According to College records, the college had a total FTE
count of 4346 for the 2004-2005 academic year, 2346 above the 2,000 FTE base number.
State Board of Education Policy would permit the College to award an additional 23
scholarships, for a total of 323 scholarships. See "Committee Note" above.

Supporting Documentation and Interviews Conducted: Financial Aid billing reports
for 2006, Financial aid year-to-date reports from 2004-2005, Alabama College System
website; current scholarship award letters from a random selection covering 2004-
current; scholarship applications from a random selection covering 2004-current;
Interview with the Dean of Student Services on February 5, 2007.

Recommendations:

   1.      The College should obtain additional data to determine the extent to which it
           may have exceeded the number of scholarships allowed by State Board of
           Education Policy, and in the future should maintain data permitting accurate
           calculation of total scholarships awarded.




                                             15
   2.       In the event that the college has awarded scholarships in excess of its
            allotment, the College should reduce the number of scholarships awarded to
            the number allowed by State Board of Education Policy.

   3.       Copies of scholarship packets shall remain on file in a centralized location of
            the college for a period of three years.


Response:

        The College agrees that the findings in the Scholarship section are substantially
correct and has taken action to refine the scholarship award process. The revised process
is described below and will be followed in the awarding of scholarships for the 2007-
2008 academic year.

        All scholarships at Shelton State will be awarded by an oversight Scholarship
Committee that will evaluate and potentially approve recommendations based on input
from five sub-committees. The sub-committees, each chaired by a member of the
Scholarship Committee, include Academic, Technical, Performing Arts, Athletics,
Courage and Perseverance, and Economically Disadvantaged. The award criteria for
each scholarship will be posted on the website, made available in the College counseling
centers, and mailed with all scholarship application packets. The number of awards in
each category, as defined by Board policy, will be the maximum number of awards
allowed. When partial scholarships are awarded, the award letter will specify a one-
fourth, one-half, or three-quarter scholarship and will also include the number of credit
hours covered by the scholarship. Agendas and minutes of the Scholarship Committee
will reflect scholarship awards and will be kept on file in the office of the Dean of
Student Services for a period of three years. Complete scholarship award records and
related information identifying student recipients will be kept in the Office of the
Financial Aid where they will be imaged and retained following the guidelines for record
retention.

2) Finding: Shelton State Community College does not have an active scholarship
review committee for all of its institutional scholarship categories.

Supporting Documentation: Interview with the Dean of Student Services on February
5, 2007.

Recommendation:

Shelton State should immediately create an active scholarship committee for each
institutional scholarship category in existence without an active committee currently in
place. Each scholarship category committee shall be charged with creating effective
policies and procedures for guidance in issuing scholarships.




                                             16
Response:

See the Response to recommendations under General Finding #1 above. (p. 16)

Presidential Scholarships

3) Finding: Shelton State Community College does not have an active scholarship
committee that reviews and recommends Presidential Scholarship applications. In 2005,
the college formed a Presidential scholarship committee consisting of the President, the
Dean of Instructional Services, the Dean of Student Services, and the Dean of Business
Services. The document creating the Presidential Scholarship/Tuition Waivers
(Institutional) Committee consists of a statement of purpose, and a description of the
process under which the committee shall award scholarships. However, the team was
unable to substantiate whether or not this was an active committee. The team requested
copies of agendas and committee minutes, but received no such documentation to review.
The team reviewed copies of award letters and scholarship request forms which contained
information suggesting a possible link between the President and the scholarship
recipient. In some cases, notations were made on the scholarship request form such as
“friends of Rick” or “friends of RR”. In other cases, the team reviewed emails and award
letters which indicated a prior knowledge of either the scholarship recipient or parents of
the recipient. The team also noted recommendations for Presidential scholarships from
members of Shelton State Community College’s staff and faculty.

Supporting Documentation Reviewed and Interviews Conducted: Financial Aid
billing and year end reports for 2004-2005, 2005-2006 and 2006-2007; a random review
of scholarship award letters from 2004-current, a random review of scholarship
applications and score sheets from 2004-current; emails and an interview with the Dean
of Student Services on February 5, 2007.

Recommendations:

   1.       The College should activate the scholarship committee for the Presidential
            Scholarship
   2.       Copies of scholarship application packets shall remain on file in a centralized
            location of the college for a period of 3 years.

Response:

Presidential scholarships will no longer be awarded. Additionally, see the Response to
recommendations under General Finding #1 above. (p. 16)

Academic Scholarships

4) Finding:

In accordance with State Board Policy 805.01, the College created a scholarship



                                             17
committee for the purpose of reviewing academic scholarship application packets. The
committee met at least annually and did not operate under an established set of
guidelines.

Supporting Documentation Reviewed: Committee minutes; score sheets; student
applications; financial aid billing and year to date statements from 2004-current; Shelton
State Community College website.

Recommendations:

1. The committee shall convene to establish written policies and procedures for guidance
in issuing scholarships, including the number of academic scholarships the committee
may award.

2. The committee shall continue to maintain all scholarship application packets; score
sheets, notes, minutes, memorandums identifying scholarship recipients in a centralized
location of the college for a period of 3 years.

3. In addition to maintaining minutes, the committee shall develop agendas for all
meetings and copies of agendas in a centralized location of the college for a period of 3
years.

Response:

See the Response to recommendations under General Finding #1 above. (p. 16)

Technical Scholarships

5) Finding:

A committee composed of a technical instructor, the Associate Dean of Instruction and a
Technical Prep Coordinator administers the Technical Scholarships. The committee
meets at least annually. According to financial aid billing reports, the committee
awarded 173 technical scholarships for the fall term of 2006-2007, 121 technical
scholarships in the fall of 2005-2006, and 118 technical scholarships during the fall of
2004-2005.

Supporting Documentation Reviewed and Interviews Conducted: Financial aid
billing and year to date reports for 2004-2005, 2005-2006 and 2006-2007 and interview
with the Dean of Student Services on February 5, 2007.

Recommendations:

a) The process for awarding scholarships and the responsibilities of the technical
scholarships committee should be stated in writing.




                                            18
b) The guidelines for awarding scholarships should be published in the College’s General
Catalog and any other student publication.

c) The scholarship committee should maintain an agenda and minutes and maintain
copies in a centralized location of the college for 3 years.

Response:

 The majority of technical scholarships are issued as partial scholarships and are
designated as such in the award letters, thus making the total number of scholarships less
that the cited number. However, the College acknowledges that record keeping regarding
partial scholarships needs refinement. This refinement is in process as outlined in the
Response to recommendations under General Finding #1 above. (p. 16)

Ambassador Scholarships

6) Finding:

Ambassador scholarships are another category of institutional scholarships. An active
committee is in place and meets at least annually. According to financial aid year-to-date
reports reviewed by the team, the Ambassador Scholarship committee awarded 36
scholarships during 2004-2005, 38 scholarships in 2005-2006, and 37 scholarships in
2006-2007.

Supporting Documentation Reviewed and Interviews Conducted: Selection process
materials; application; memorandum listing ambassador scholarship recipients for 2006-
2007; scholarship award letters for 2006-2007; Financial aid year-to-date reports for
2004-2005, 2005-2006 and 2006-2007. Interview with the Dean of Student Services.

Recommendations:

a) The process of awarding scholarships and the responsibilities of the Ambassador
Scholarship Committee should be stated in writing.

b) The college should publish guidelines in the College’s General Catalog and any other
student publication.

c) The college should continue to maintain committee agendas, minutes and any other
documentation relevant to awarding scholarships in a centralized location for a period of
3 years.

Response:

       Effective Fall 2007-08, Ambassador Scholarships will no longer be awarded as a
separate scholarship category.




                                           19
Performing Arts Scholarships

7) Finding:

Performing Arts Scholarships are another category of institutional scholarships.
Interested students must audition for the performing arts committee. The committee
meets at least annually to award scholarships to qualified students.

Supporting Documentation Reviewed: Financial aid billing and year-to-date reports
from 2004-current; brochure for 2006-2007 auditions; scholarship application.

Recommendations: The committee should continue to maintain copies of agendas,
brochures and minutes in a centralized location of the college for a period of 3 years.

Response:

See the Response to recommendations under General Finding #1 above. (p. 16)

                                   Other Scholarships

In addition to the above mentioned institutional scholarships, the college also awarded
other scholarships included in Board Policy such as Senior Citizen and Dependent of
Blind Parents.

2004-2005      Senior Citizen 22                     Dependent of Blind Parents 5

2005-2006      Senior Citizen 13                     Dependent of Blind Parents 4

2006-2007      Senior Citizen 13                     Dependent of Blind Parents 3

Committee Note: The team did not count either Senior Citizen or Dependent of Blind
Parents scholarships against the 300 institutional scholarships permitted by Board
policy. These scholarships are listed only to describe their presence in the College's
variety of scholarship categories.

Athletic Scholarships

State Board Policy 805.02 (4.2) states the total number of athletic scholarships in effect
at an institution may not exceed 125. State Board Policy 805.02 (4.4) states all
scholarships will be awarded according to the criteria and procedures established
through the institution’s scholarship committee (805.01). National Junior College
Athletic Association (NJCAA) rules and regulations require that athletic scholarships be
processed in the same manner as all other scholarships; however in practice, the coaches
of each respective team award scholarships to athletes.

8) Finding: Athletic Scholarships are not reviewed by a committee as directed in State



                                            20
Board of Education Policy 805.01; rather, scholarships are awarded by each team sport
coach. National Junior College Athletic Association (NJCAA) rules and regulations
require that athletic scholarships be processed in the same manner as all other
scholarships.

Supporting Documentation Reviewed Interviews Conducted: NJCAA handbook;
team rosters, NJCAA Letters of Intent.

Recommendation: The College should establish a procedure for awarding athletic
scholarships consistent with NJCAA regulations and State Board Policy and publish the
procedure in all official College publications including the College’s website.

Response:

See the Response to recommendations under General Finding #1 above. (p. 16)

Baseball

The National Junior College Athletic Association (NJCAA) allows colleges to award up
to 24 baseball scholarships per season.

9) Finding: According to financial aid year-to-date reports reviewed by the team, the
College awarded and/or maintained 24 players on athletic scholarships during the 2006-
2007 season. NJCAA rules and regulations, Article 5, section 13 C require copies of
Letters of Intent and Scholarship Award Letter be kept on file by the athletic officials.

Shelton State Community College maintained 39 players on scholarships during the
2005-2006 season and 32 players during the 2004-2005 season, according to financial aid
year-to-date reports reviewed by the team. NJCAA rules and regulations, Article 5,
Section 13 C require hard copies of Letters of Intent and Scholarship Award Forms
(Letters) be kept on file by athletic officials of the College. The team requested copies of
Letters of Intent for its review in an effort to confirm that actual number of players on
scholarship for the 2004-2005 seasons, however, documentation for the 2004-2005 and
2005-2006 seasons were not made available to the review team. Therefore the team is
unable to conclude whether the College awarded more baseball scholarships than the
College was allotted for those periods.

Supporting Documentation Reviewed: Team rosters; National Letters of Intent for
2006-2007 season; financial aid year-to-date reports for 2004-2005, 2005-2006 and 2006-
2007; NJCAA Handbook

Recommendations:

1. The College should maintain copies of Letters of Intent, team rosters and scholarship
recipient lists for a period of 3 years. Copies should be maintained in the office of the
athletic director.



                                            21
2. Athletic officials should conduct a self review and should immediately self-report any
violations of NJCAA rules to the NJCAA and Alabama Community College Conference
(ACCC).

Response:

        The College is currently reviewing athletic scholarship reports to determine if and
where irregularities may have occurred as they pertain to the baseball program.
Appropriate measures will be taken to ensure that any discrepancies regarding the
awarding of baseball scholarships will be addressed. Appropriate measures will be taken
to afford compliance with Board policy, ACCC, and NJCAA regulations.

         In addition, the College will maintain copies of Letters of Intent in the Office of
the Assistant Dean responsible for athletics. The Assistant Dean will also keep the team
roster, submit eligibility lists, and assure that scholarship numbers comply with NJCAA
regulations. All records will be retained as required by record retention guidelines.

Softball

The National Junior College Athletic Association (NJCAA) allows colleges to award up
24 softball scholarships per season.

10) Finding: According to financial aid year-to-date reports, Shelton State Community
College awarded 18 softball scholarships for the 2006-2007 season, 20 during the 2005-
2006 season, and 24 during the 2004-2005 season.

Supporting Documentation Reviewed: Team rosters; National Letters of Intent for
2006-2007; financial aid year-to-date reports for 2004-2005, 2005-2006 and 2006-2007;
NJCAA handbook.

Recommendations: The College should maintain copies of Letters of Intent, completed
NJCAA eligibility forms, team rosters and scholarship recipient lists for a period of 3
years in the office of the athletic director.

Response:

       The documentation listed above-- Letters of Intent, NJCAA eligibility forms,
team rosters, and scholarship recipient lists-- will be maintained in the Office of the
Assistant Dean responsible for athletics.

Women’s Basketball

National Junior College Athletic Association (NJCAA) allows colleges to award up to 16
basketball scholarships per season.




                                             22
11) Finding: Shelton State Community College awarded and/or maintained 14 women’s
basketball scholarships for the 2006-2007 season, 16 in 2005-2006 and 17 in 2004-2005.

Supporting Documentation Reviewed: team rosters; National Letters of Intent;
financial aid year-to-date reports for 2004-2005, 2005-2006 and 2006-2007; NJCAA
handbook

Recommendations: The College should maintain copies of Letters of Intent, team
rosters and scholarship recipient lists for a period of 3 years in the office of the athletic
director.

Response:

       The documentation listed above-- Letters of Intent, NJCAA eligibility forms,
team rosters, and scholarship recipient lists-- will be maintained in the Office of the
Assistant Dean responsible for athletics.


Men’s Basketball
National Junior College Athletic Association (NJCAA) allows colleges to award up to 16
men’s basketball scholarships per season.

12) Finding: According to the College's financial aid year-to-date reports, Shelton State
Community College awarded and/or maintained 18 men’s basketball scholarships for the
2006-2007 season, 22 in 2005-2006 and 22 in 2004-2005, exceeding the number allowed
by NJCAA regulations. The team requested copies of Letters of Intent for its review in
an effort to confirm the actual number of players on scholarship for the 2004-2005 and
2005-2006 seasons, however, documentations for the 2004-2005 and 2005-2006 seasons
were not made available to the review team. Therefore, the team cannot draw any
conclusions about whether the College awarded more basketball scholarships than it was
allotted for those periods.

Supporting Documentation Reviewed: team rosters; National Letters of Intent;
financial aid year-to-date reports for 2004-2005, 2005-2006 and 2006-2007; NJCAA
handbook.

Recommendations: The College should maintain copies of Letters of Intent, team rosters
and scholarship recipient lists and completed hard copies of NJCAA eligibility forms for
a period of at least 3 years in the office of the athletic director. Athletic officials should
conduct a self review and self-report any violations of NJCAA rules to the National
Junior College Athletic Association (NJCAA) and to the Alabama Community College
Conference (ACCC). The College should also immediately implement procedures to
prevent toe over-issuance of athletic scholarships allowed by the National Junior College
Athletic Association (NJCAA).




                                              23
Response:

        The College is currently reviewing athletic scholarship reports to determine if and
where irregularities may have occurred as they pertain to the men’s basketball program.
Appropriate measures will be taken to ensure that any discrepancies regarding the
awarding of basketball scholarships will be addressed. Appropriate measures will be
taken to afford compliance with Board policy, ACCC, and NJCAA regulations.

         In addition, the College will maintain copies of Letters of Intent in the Office of
the Assistant Dean responsible for athletics. The Assistant Dean will also keep the team
roster, submit eligibility lists, and assure that scholarship numbers comply with NJCAA
regulations. All records will be retained as required by record retention guidelines.

Soccer

National Junior College Athletic Association (NJCAA) allows colleges to award up to 18
soccer scholarships per season.

13) Finding:

There were a total of 19 scholarships awarded during the 2006-2007 season. Shelton
exceeded its number of allowed scholarships by 1. In 2005-2006, Shelton State
Community College awarded and/or maintained 20 soccer players on athletic
scholarships, according to the College's financial aid year-to-date report, exceeding the
number allowed by 2. According to the College's financial aid year-to-date report, in
2004-2005, Shelton State Community College awarded and/or maintained 20 players on
soccer scholarships during the season again exceeding the number allowed by 2 for the
season. The team requested copies of Letters of Intent for its review in an effort to
confirm the actual number of players on scholarship for the 2004-2005 and 2005-2006
seasons, however, documentations for the 2004-2005 and 2005-2006 seasons were not
made available to the review team. Therefore, the team cannot draw any conclusions
about whether the College awarded more soccer scholarships than it was allotted for
those periods.

Supporting Documentation Reviewed: team rosters; financial aid year-to-date reports
for 2004-2005, 2005-2006 and financial aid billing report for 2006-2007; NJCAA
handbook.

Recommendations:

1. The College should conduct a self review and self-report any violations to the
Alabama Community College Conference (ACCC) and the National Junior College
Athletic Association (NJCAA).

2. The College should also immediately implement procedures to prevent the over



                                             24
issuance of scholarships allowed by NJCAA.

Response:

        The College is currently reviewing athletic scholarship reports to determine if and
where irregularities may have occurred as they pertain to the soccer program.
Appropriate measures will be taken to ensure that any discrepancies regarding the
awarding of soccer scholarships will be addressed. Appropriate measures will be taken
to afford compliance with Board policy, ACCC, and NJCAA regulations.

         In addition, the College will maintain copies of Letters of Intent in the Office of
the Assistant Dean responsible for athletics. The Assistant Dean will also keep the team
roster, submit eligibility lists, and assure that scholarship numbers comply with NJCAA
regulations. All records will be retained as required by record retention guidelines.

Cheerleader Scholarships

State Board Policy 805.02 provides the guidance for issuing cheerleader/dance team
scholarships. Policy states that each college shall be allowed to award up to 10 dance
team/cheerleader scholarships.

14) Finding: Shelton State Community College awarded 19 cheerleader scholarships to
members of the cheering squad for the 2006-2007 fall term, 15 in 2005-2006 according to
financial aid year-to-date reports and 14 in 2004-2005 according to financial aid year-to-
date reports, exceeding the maximum number of scholarships State Board Policy allows
to be awarded.

Supporting Documentation Reviewed: Team rosters; financial aid billing and year to
date reports for 2004-2005, 2005-2006 and 2006-2007.

Recommendation: The number of cheerleader scholarships awarded should be reduced
to conform to State Board Policy 805.02.

Response:

        The number of cheerleader/dance scholarships awarded by the College will equate
to ten as provided for by Board Policy, although some or all may be partial scholarships.

Dance Scholarships

State Board Policy 805.02 provides the guidance for issuance of cheerleader/dance team
scholarships. Policy states that each college shall be allowed to award up to 10 dance
team/cheerleader scholarships.

15) Finding: Shelton State Community College awarded 12 dance scholarships to
members of the Starlet Dance Team for the 2006-2007 fall term, 14 in 2005-2006



                                             25
according to financial aid year-to-date reports, and 12 in 2004-2005 according to
financial aid year-to-date reports, exceeding the maximum number of scholarships
provided by State Board Policy.

Supporting Documentation Reviewed: Team rosters; financial aid billing and year to
date reports for 2004-2005, 2005-2006 and 2006-2007.

Recommendation: The number of dance scholarships awarded should be reduced to
conform to State Board Policy 805.02.

Response:

       Effective Fall 2007, dance team scholarships will not be awarded by the College.

Manager Scholarships

State Board Policy 805.02 (4.3) states institutions may award up to 10 manager/trainer
scholarships (not to exceed three per team).

16) Finding:

There were 11 manager/trainer scholarships awarded for fall 2006-2007, 16 in 2005-2006
according to financial aid year-to-date reports, and 14 in 2004-2005 according to
financial aid year-to-date reports.

Supporting Documentation Reviewed: Financial aid billing reports for 2006-2007 and
year to date reports for 2004-2005, 2005-2006; NJCAA handbook

Recommendations: The number of scholarships awarded should be reduced to conform
to State Board Policy 805.02.

Response:

The number of manager/trainer scholarships awarded by the College will equate to ten as
provided for by Board Policy, although some or all may be partial scholarships.


                            PRESIDENTIAL RESIDENCE

1) Finding: College documents and purchase orders indicate that the Dean of Business
Services authorized the charging of more than $90,000 in various costs to State funds for
construction of the “Presidential Residence" owned by Shelton State Community College
Foundation, Inc. in the Woodbank Subdivision, Tuscaloosa. Purchase orders included
shrubbery and landscaping, topsoil, concrete and construction labor, driveway and
carport pad installation, drainage pipes, downspouts, gravel for site preparation, several
months of backhoe rentals, trencher rental, dump truck and chipper rental, a sprinkler



                                            26
system, an entrance gate and gate operators, framing labor, siding installation, masonry
blocks, water line and meter, tree removal and chipping, dumpster, lighting, curbing, and
inside and outside cleanup after construction. A staff member of the Associate Dean of
Finance and Business Services stated that he was directed by the President to personally
provide supervision to the house project and a College contractor that was engaged at the
project site, and to provide landscaping work at the site. Some materials appear to have
been acquired through purchase orders in amounts which would have required
competitive bidding.

Documentation: Lease by and between Shelton State Community College Foundation,
Inc. and Shelton State Community College, dated June 19, 2003; Hall-Taylor
Construction Co., Inc. construction itemization dated May 7, 2003; interview with
Associate Dean of Business Services; purchase orders; Letter from Larry W. Willard,
Director, Education Audit Division, Alabama Department of Examiners of Public
Accounts, to Dr. Roy W. Johnson, Chancellor, dated February 13, 2003.

Recommendations: College-provided goods and services associated with construction,
improvement, or capital maintenance of the Presidential Residence owned by the
Foundation should be separately accounted for and either: a.) reimbursed to the College
by the Foundation, or b.) attributed to the cost of the leasehold pursuant to the Lease.
Where required, goods and services must be competitively procured.

Response:

       A review of the purchase orders included in the reference to “more than $90,000”
revealed that competitive bidding was used when required or the purchase was made
from a documented sole source supplier. The referenced expenditures were made as
lease-hold improvements after the College had signed a lease agreement with the
Foundation on June 19, 2003. The College will seek further advice from legal counsel
and the Department of Postsecondary Education related to these expenditures.

2) Finding: In addition to providing ordinary maintenance pursuant to the Lease of the
Presidential Residence from the Foundation, the College has also provided a range of
personal services to the presidential household, including such items as laundry and maid
service, and mundane domestic maintenance activities such as, hanging pictures and a
mirror, moving furniture, painting and sealing patio furniture, spraying for wasps,
hanging bird houses, changing light bulbs, repairing an icemaker, hanging a tree
decoration, and unplugging drains. By direction of the Dean for Business Services, work
orders for maintenance to the Presidential Residence after its completion were logged in
the computerized work order system as follows: “Campus Location: Martin Campus”
“Building Name: Outside” “Facility 00003 Building 00004 Room 0099.”

Documentation: Lease by and between Shelton State Community College Foundation,
Inc. and Shelton State Community College, dated June 19, 2003; Lease by and between
Shelton State Community College and the College President, dated January 1, 2004;
interview with the Associated Dean of Business Services; review of work order details.


                                           27
Recommendations: College-provided goods and services associated with domestic
services and use of other State resources to provide services to the President and his
household should be separately accounted for. Goods or services provided by the
College to the President in excess of approved compensation levels should be terminated,
and unless reimbursed, goods or services with taxable excess value should be
appropriately reported to State and Federal tax authorities as presidential income.

Response:

       The College will seek further advice from legal counsel and the Department of
Postsecondary Education related to the referenced expenditures.


                       RESPIRATORY THERAPY PROGRAM

Finding:

Respiratory Therapy Program is currently operating under the status of probationary
accreditation. The program has consistently been plagued with poor passage rates.

Supporting Documentation Reviewed and Interviews Conducted: Interview with the
Dean of Instructional Services; interview with the Director of the C.A. Fredd Campus
and Director of Title III.

Recommendations: The College should continue to work with the program’s accrediting
body to ensure continued compliance with program guidelines, and continue to
implement procedures for addressing the student retention rate, admissions requirements,
and board passage. Conduct self reports periodically to ensure all relevant areas of
concern are addressed.

Response:

       The probationary accreditation status of the Respiratory Program was imposed by
the Commission on Accreditation of Allied Health Education Programs (CAAHEP) on
January 26, 2007, for the express reason that “the program did not meet the threshold for
RRT (advanced registry) success.”

        The College has documented efforts to improve the program over the past several
years but does not consider the current attrition rate of 14% excessive. The Director and
the Assistant Dean for Allied Health have worked with the assigned CAAHEP referee to
develop a plan for improvement which has been submitted to and approved by CAAHEP.
While Shelton State RPT graduates enjoy a high rate of success in employment and entry
level certification, steps are being taken to improve their success on the advanced registry
examinations. Prerequisite courses have been implemented, admission requirements
have been strengthened; the curriculum has been revised; every course has been reviewed


                                            28
for content; the grading scale has been raised (C=75-79); and additional preliminary
testing opportunities have been required for students to prepare them for advanced
registry exams. Required annual reports to COARC mandate continued monitoring of
the program.




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