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Darton State may have over-awarded $894,000 in student aid (AUDIT REPORT ADDED)

An audit of Darton State College reveals grants from hospitals were not spent for intended student stipends

Photo by J.D. Sumner

Photo by J.D. Sumner

ATLANTA —The University System of Georgia Board of Regents on Wednesday released a copy of a 2013 audit of Darton State College that raised six financial or record-keeping concerns, including the potential overpayment of $894,000 in federal financial aid to students over four school terms.

John Fuchko, chief audit officer and associate vice chancellor for the University System, said the primary area of concern was that satisfactory academic progress was not being adequately documented to determine federal financial aid eligibility at the school.

The school terms under scrutiny were fall 2011 and spring, summer and fall 2012.

“Our review has determined DSC (Darton State) has not properly assessed SAP (student academic progress),” Fuchko said.

He said the potential over-award to students could as much as $894,000.

The Darton State audit, conducted from last June through September, revealed five other major concerns as well.

First, restricted funds were not being spent in accordance with grant requirements.”Funds received from two local hospitals totalling more than $592,000 during the mid- to late 2000s for nursing stipends were not spent,” the report said. “Instead the institution used state appropriations to fund stipend payments with the intent of the using the local hospital funds for potentially related but undetermined future uses.”

The original granted funds can only be used for the stated purpose for which they were given, the report said

Second, time and effort reports were not completed as they should have been under federal requirements.

Third, a vendor was not provided with 1099s from 2005 until 2012.

Fourth, the audit found concerns with the salary of the college’s director of grants.

Finally, the costs of Darton State athletics were improperly allocated, distorting the actual condition of the department’s finances. College management allocated some of the cost of athletics to other departments within the institution, the audit said.

The Regents Board is expected to discuss the report at its next scheduled meeting in February.

Peter Sireno resigned as president of Darton State College on Oct. 18 after 24 years in the position. Paul Jones, Georgia College and State University Senior Vice President for Finance and Administration, was immediately appointed interim president. Sireno told trustees of the Darton Foundation that Chancellor Hank Huckaby asked for his resignation.