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Emails reveal college officials knew they were overbilling state

Newly released emails and documents show which current and former senior administrators at the College of the Desert were aware that the district's enrollment figures were inaccurate and the college was overbilling the state – a deception that will cost the district $5.26 million in repayments.

A recent audit by the state Fiscal Crisis & Management Assistance Team characterized the overbilling as potential fraud, though it did not name names.

Beginning in 2003-04, officials at the Palm Desert college used an inaccurate formula for counting enrollment that assumed most classes met for the exact number of hours listed in the catalog. By that calculation, every three-unit class provided 54 hours of instruction per semester.

But in reality, many three-unit classes met for 52 or 53 hours per semester.

The seemingly small discrepancy was significant because college districts receive the bulk of their state funding based on the number of instructional hours served. Applied over thousands of classes per year, the overbilling added up to millions of dollars that should have gone to other districts.

 

The California Community Colleges Chancellor’s Office first found out about the overbilling in spring 2011 through an anonymous tip. This summer, the chancellor’s office asked the Fiscal Crisis & Management Assistance Team, a state-funded agency, to investigate.

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College of the Desert inflated enrollment, overbilled state

The College of the Desert in Palm Desert will have to pay back $5.2 million because the district knowingly overstated its enrollment and overbilled the state for seven years, a pattern that the state Fiscal Crisis & Management Assistance Team characterized as potential fraud.

The state chancellor’s office forwarded the matter to the Riverside County district attorney’s office in a letter Thursday. Without naming any individuals, the report says the president at that time, Jerry Patton, unnamed members of the "senior management team" and a consultant knew the college was submitting false reports.

The penalty is significant, representing about 15 percent of the district’s $34 million annual budget. But the chancellor’s office has ensured district officials they will be able to pay back the money on a schedule that allows the district to remain fiscally sound, a college spokeswoman said.

The fiscal team's review found “sufficient evidence to demonstrate that financial statement fraud and mismanagement may have occurred” from 2003 to 2010, according to the Nov. 28 report.

College of the Desert President Joel Kinnamon took office in July, after the period in question. He said he plans to work with the chancellor’s office and any local or state authorities on any further investigations.

Filed under: Higher Ed, Daily Report

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More state oversight needed for community colleges, report finds

Several bills introduced in the last few years have tried – unsuccessfully – to reform the California Community Colleges system by changing its funding formula or its governance structure.

Now, the Little Hoover Commission – an independent state oversight agency that investigates state government and follows through with legislation on its recommendations – has renewed the call for such changes, describing the sprawling system as "starved of essential leadership in Sacramento" needed to navigate a current crisis and lead toward a brighter future.

 

The commission spent a year studying the community college system and voted 7-1 on a final report. The group's most high-profile recommendation calls for community colleges to take over the task of running the state's adult basic education programs, the bulk of which are currently operated by K-12 school districts.

But the commission also zeroed in on key governance changes it says are critical. At present, thousands of students who want degrees or certificates leave the system without them, and thousands more are unable to get into the classes they need.

The California Community Colleges Chancellor's Office should be given more authority and autonomy to oversee and coordinate the 72 college districts and 112 colleges spread across the state, the Feb. 28 report from the Little Hoover Commission said.

Filed under: Higher Ed, Daily Report

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