Massachusetts Maritime Academy (Chapter 647 Review)

This is a State Auditor performance audit of Massachusetts Maritime Academy covering July 1, 2009 through June 30, 2010.

“We conducted this performance audit, which covered the 2011-0182-12S -2- period July 1, 2009 through June 30, 2010, in accordance with generally accepted government auditing standards.”

The auditor was notified of incidents that state law requires agencies to report when public money or property may be missing, lost, stolen, or not properly accounted for.

“The Office of the State Auditor (OSA) was notified that three incidents had occurred at the Massachusetts Maritime Academy (MMA) that fell under the jurisdiction of Chapter 647 of the Acts of 1989, an Act Relative to Improving Internal Controls within State Agencies.”

The point of the audit was to find control weaknesses, recommend fixes, and report problems to the right managers or law enforcement officials when needed.

“Chapter 647 also requires the OSA to determine the internal control weaknesses that contributed to or caused an unaccounted-for variance, loss, shortage, or theft of funds or property; make recommendations to correct the condition found; identify the internal control policies and procedures that need modification; and report the matter to the appropriate management and law enforcement officials.”

For ordinary citizens, this matters because the report pushes MMA to tighten controls over public funds, student work-study payments, and outside arrangements involving public employees.

“MMA should continue to evaluate, update, and initiate corrective measures for strengthening its internal controls and policies and procedures to be in compliance with Chapter 647 of the Acts of 1989 and the Office of the State Comptroller’s Internal Control Guide and directives.”

The auditor agreed with the outside accounting firm’s recommendations to improve cash handling and work-study hour controls.

“We reviewed the IPA report and concur with the recommendations therein for corrective action to improve internal controls in the cited areas, including the processing of cash receipts and disbursement and accounting for students’ work-study hours.”

MMA had already ended its relationship with the testing firm, replaced the professor for test administration, and referred the professor’s off-campus sales to the State Ethics Commission.

“Consequently, MMA has terminated its affiliation with the testing firm, and a new firm has replaced the professor to provide the test administration services to MMA students.”

The report points to possible conflict-of-interest and accountability concerns because MMA said it did not know a professor was being paid by a private testing company while also being paid by MMA.

“MMA was not aware of the arrangement by which the professor was receiving compensation from Elkins, Incorporated at the same time he was teaching MMA transportation courses and receiving compensation from MMA.”

Chapter 647 is the state law requiring agencies to tell the auditor about missing or unaccounted-for funds or property, and requiring follow-up on weak internal controls.

“Chapter 647 of the Acts of 1989 requires agencies to report unaccounted-for variances, losses, shortages, or thefts of funds or property to the OSA.”