$438,285 in questionable costs found at Bishop State

A special report by the state Department of Examiners of Public Accounts shows dubious practices and spending at Bishop State Community College in Mobile including more than $400,000 in questioned costs.

The report, which was mailed to two-year college officials this week, is to be released Friday. It was obtained Wednesday by The Associated Press.

Examiners covered Oct. 1, 2002 to Sept. 30, 2006 in the report and label $438,285.95 as questioned costs, including $293,496.02 in federal financial assistance.

Among the findings was $67,632.50 for 35 athletic scholarships that were given to 24 students who appeared ineligible to receive them and $279,353.36 for scholarships and waivers for 48 students who didn't meet financial aid requirements.

Several records were not available for examiners, including student roll books and instructor grade books, attendance vouchers used to verify enrollment, athletic travel vouchers and dependent applications used for approval of tuition waivers.

According to a report, a financial aid manager ordered the destruction of all federal financial aid files for the 2002-2003 award year in February 2006, and some 2003-2004 award year files were inadvertently destroyed.

Bishop State President Rep. Yvonne Kennedy said in a statement Wednesday that "corrective actions have already begun to take place with most of the financial aid problems listed in the audit."

She said employees who were alleged to have participated in criminal activity have been suspended or have terminations pending in keeping with the Fair Dismissal Act.

Three of the nine members on the Alabama board of education have called for Kennedy's firing or resignation. Kennedy, D-Mobile, has served as president since 1981.

Officials began reviewing allegations last year that two employees arranged aid for ineligible recipients, including a 67-year-old disabled grandmother who was enrolled in sports classes three months before her death.

School board member Stephanie Bell of Montgomery supports removing Kennedy from office and said the new report is the latest in a long line of audits that showed problems at the school.

"I think it confirms what we already knew and it just presents a picture of a situation that is completely out of control and has a lack of leadership," she said Wednesday. "There are problems with nearly a half-million dollars and it runs the gamut from academics to athletics. The president is responsible for every single area that is mentioned."

Also listed in the new report is a women's basketball scholarship that was given to a 54-year-old woman that the coach said he did not know. Two women received scholarships to play men's baseball, but no records indicated they were on the team.

Reports of grade changes and passing grades given to students who did not attend classes were also documented.

Interim two-year Chancellor Thomas Corts sent a team from his office to investigate problems in the school's financial aid office in August. Several students and employees, including the women's basketball coach a secretary and a teacher, have been arrested in a student aid theft scheme since then.

Kennedy has said she began looking into problems in May but went on medical leave in June for open-heart surgery. She has refused to resign, saying the investigation is not completed.

Two-year system spokesman Andre Taylor said he had not yet seen the report Wednesday and could not comment. He said Corts will not be at the board's meeting next week and had not prepared anything for members to consider "as to any action that can or will be taken at that meeting regarding Dr. Kennedy."

"The last time we talked there was no indication that he will be proposing any action at that time," Taylor said.

Kennedy said Wednesday that a consultant, Financial Aid Services, Inc., will continue operating the school's aid program "until all of the problems have been corrected" and the college is "continuing to explore ways to minimize and/or remove all questioned costs."

The two-year system released a report in September that detailed "grade fraud" and "virtually nonexistent" supervision of the Bishop State financial aid system. The U.S. Department of Education has placed the college on "heightened cash monitoring" and demanded the return of $150,000 in aid money, which the school has agreed to.