Audit finds $6.2 million in errors on NC community college’s financial statements
A state audit has uncovered substantial errors in Sandhills Community College’s most recent financial statement – to the tune of $6.2 million.
In its report published May 22, the Office of State Auditor detailed ineffective employee training and vague year-end procedures as the root of the problems. The errors for fiscal year 2024 include overstating money owed to the college and its assets after debt by about $945,000; understating construction in progress by about $763,000; and overstating tuition revenues and tuition and fees not yet paid by about $289,000.
Unreliable data could lead to poor spending decisions, OSA said in the report.
Of the 16 other community colleges with published audits for fiscal year 2024, none had substantial errors.
Sandhills Community College’s next steps
The college didn’t dispute the findings.
“We thank State Auditor Dave Boliek and his staff for their diligence. We are fortunate to have their services to ensure taxpayer dollars are expended for the purposes for which they were appropriated,” according to an email statement sent to The News & Observer and attributed to the college’s president, Alexander Stewart.
College leadership reported the audit’s results to a committee of its Board of Trustees, according to the email, and will report to the full board at its next meeting.
Stewart said the staff will implement training programs used throughout the rest of the North Carolina Community College system. Experts are being brought in to further train the staff, the president added.
To modify year-end plans – as recommended by the state’s guidance – Stewart said there will be “a series of steps” taken to ensure the final draft of financial statements is accurate. College leaders plan to meet with an auditing team June 1 to receive guidance on improving internal processes. The college also invited the state auditor to proactively review the Sandhills’ financial statement for the current fiscal year, Stewart said.
In an email to college faculty, leadership and others delivered May 23, Stewart said previous audits dating back at least 10 years also did not write off student receivables. In the email obtained by The N&O, Stewart said the state auditor’s office did not note this error until its most recent report. Student receivables at Sandhills is “student debt more than a year old the college will not likely ever recover.”
“It is noteworthy this error had not been identified or corrected in previous audits,” Stewart said in the email.
North Carolina’s community colleges undergo a financial audit every two years. Sandhills’ budget is influenced by state and county funding, tuition and fees, and gifts; and, it is largely determined by the state legislature, the Moore and Hoke County commissioners and the college’s own budget proposal.
For fiscal year 2023, Sandhills’ total revenues were $54.6 million and total expenses were $50.5 million.
According to a statement from the college included in the report, Stewart agreed with State Auditor Dave Boliek’s concerns that the errors were a result of inadequate training for employees in “critical financial reporting positions” and unrefined year-end plans – which are intended to tie up any loose end before the final draft is submitted to the state.
The 2024 fiscal year marked Stewart’s first as college president, following his Aug. 9, 2023, inauguration.
Sandhills’ previous completed report for fiscal year 2022 had no recorded errors, according to the auditor’s 2023 report under previous State Auditor Beth Wood and then-college president John Dempsey.
Randy Brechbiel, public information manager for the auditor’s office, said in an interview with The N&O that the office had no further comment on its report.
This story was originally published May 29, 2025 at 3:47 PM.
