Slipping in just ahead of the Christmas holiday, Nebraska State Auditor Mike Foley released his fiscal year 2012 audit of the Nebraska State College System last Friday…including conclusions to the response from the NSCS and Chadron State College to the highly critical report he issued back in February over the financial irregularities in the CSC athletic department that led to an NCAA investigation.

Foley says the college and NSCS implemented quite a few of the recommendations his office made, but considers many of them pending and not settled because the NCAA investigation is continuing…with follow-ups to be made in next year’s audit since the NCAA is scheduled to take final action in February.

At the heart of both the NCAA investigation and Foley’s critical earlier report are secret checking accounts set up by former football coach Bill O’Boyle outside the Chadron State Foundation to handle donations from a golf tournament and one set up back in the 1970s for concession sales.

In his February report, Foley cited weak overall accounting procedures in the athletic department, a lack of institutional control, insufficient training of athletic department personnel on NCAA compliance rules, insufficient documentation for the secret accounts, and the release of confidential information before it was made public.

The latter issue was the hiring by the NSCS and CSC of outside firms to do an initial forensic accounting investigation of the secret accounts, then to work with the NCAA investigation on possible rules violations. Foley objected to both the hiring process…done without a Request for Proposal…and to the NCAA-required secret nature of the investigation.

Among the changes made since the critical report that won a thumbs-up from Foley in the new audit are the hiring of a business officer to oversee athletic department finances and a full-time NCAA compliance officer, processing and recording concession sales through the state college computer system, and a review by all 3 state colleges of athletic department policies and procedures.

Foley also recommended that all student organizations maintain their own bank accounts outside the college and college foundation for fundraising or other activities. His new report says that as of October, only 3 of 38 CSC groups had moved their accounts off campus. 25 still had account balances with the foundation and 10 had no funds in their foundation accounts.

State College System Chancellor Stan Carpenter says in response to Foley’s new audit that Chadron State has made “considerable progress” in tightening up its athletic and financial situation, adding that the college and the NSCS “reacted reasonably quickly last year” when the secret accounts came to light and made “made major changes at the college to make sure this wouldn’t happen again.”

The NCAA issued a Notice of Allegations in mid-September following the joint investigation by Chadron State and the NCAA enforcement staff. The college had until last Monday…December 17…to submit its written response, and is expected to present an institutional response at hearing before the NCAA Committee on Infractions when the panel meets in late February.