Morgan State University fails to properly track student residency, award contracts, Maryland audit finds

A state audit of Morgan State University found that the school failed to follow procedures to ensure students are not being under- or overcharged for tuition and that it hasn’t been contracting vendors appropriately.

The September 2022 audit by the Office of Legislative Audits within the Maryland General Assembly, revealed five repeat violations of required procedures. Two of the issues have yet to be resolved, according to a follow-up review from the office dated May 2.

“While the audit report highlights opportunities for improvement, it does not necessarily provide the details surrounding the internal controls that were implemented and what we believe mitigate the risk to an acceptable level,” read a Thursday news release from Morgan State. “We will continue to add resources and work with the auditors to successfully resolve the two aforementioned issues as we have done in the past.”

One of the unresolved issues was that the Baltimore university failed to either document or independently verify changes in student residency. This could lead to students being charged incorrect tuition totals due to the difference between in- and out-of-state costs.

When a student changes residency status, they are required to report it to the school. Although Morgan State‘s leadership told the auditors it reviews those changes every month, the legislative office found that those reports were not independent or documented at all. This fall’s tuition plus fees for Maryland residents at Morgan State is about $4,115 a semester. For out-of-state students, that more than doubles to $9,562, according to the school’s website.

In the September 2022 report, the historically Black university responded that it had “an extensive tracking process in place for monitoring any updates made to residency.” However, it vowed to “work to determine the feasibility of a more refined system.”

The school tasked an independent employee with reviewing reports detailing residency changes for accuracy. But the Office of Legislative Audits found that insufficient.

According to the May 2 update, that employee left the school in August 2023, and Morgan State could not provide adequate documented proof that the employee had indeed reviewed residency information before leaving.

The school said a new employee was hired in December who would take over the responsibilities, but as of January, the employee has not yet performed a review, according to the audit update.

The other violation that auditors say the university has not yet resolved centers around contracts. The office found the school had given out contracts without taking the proper steps to ensure the awardee was the best candidate for the job. It also failed to properly monitor contracts once they’d been given out, according to the audit update.

The school awarded contracts for security guard services, information technology work and more without undergoing a competitive procurement process, according to the audit, which is performed every four years.

The security guard service vendor was paid $6.5 million for work conducted from 2016 to 2021. The school also failed to secure Maryland Board of Public Works approval for some of the payments despite being required to, the audit found.

Another company hired to install computers was given the job without having to go through a selection process or establishing a written contract with the school, according to the legislative office. Morgan State also couldn’t verify the delivery of $250,000 worth of equipment.

In other cases, the school didn’t verify services had occurred before giving out payment, such as in the case of a sign language interpreters the school hired and significantly overpaid, the report says.

The contract involved 690 hours of interpreting during the fall and spring semesters over three years. However, the vendor was paid $58,300 for 834 hours of work for one month in November 2019. As of April 2021, about two years into the contract, the vendor had been paid $294,300 over the contract amount.

To resolve this, Morgan State said it had developed new templates and forms to ensure it was following proper procedures and that services were actually being received prior to payment. The school also hired a new director of procurement in October 2023.

However, the Office of Legislative Audits’ report still found no proof there was a competitive process going on to choose contractors, violating the school’s own policies.

“They were still in the process of instituting those templates, so because those templates are not all the way done yet, we said it was still not resolved,” said Adam Westover, the audit manager who oversaw the Morgan State audit.

About $500,000 of administrative funding for this fiscal year was required to be withheld from the school if it did not take action to correct these issues by Nov. 1, 2023.

The money is still being held up, Westover said. The General Assembly’s budget committees will make the final determination on whether or not the school resolved the issues enough to get it back.

“Morgan State University is committed to upholding the highest standards of integrity, transparency, and accountability in all aspects of our operations,” the school’s statement read. “The University appreciates the opportunity to work with its peers to address audit issues that persist across the higher education sector.”

The school did mostly resolve issues related to monitoring refunds to students and independently verifying changes to student room and board charges, according to the audit update. One of the violations was related to cybersecurity and redacted from the report.