COLUMBIA, SC (WIS)- After more than 10 months, the Legislative Audit Council has finished an investigation into how South Carolina State University used more than $30 million in state and federal funds on the James E. Clyburn University Transportation Center.
Construction of the center is 13 years behind schedule and the university has not accounted publicly for how it spent the money, but auditors said they did not find any missing money during their investigation, but instead found a lack of oversight and inexperience within SC State University's administration in dealing with the multi-million dollar project.
In July 2010, the university's board ordered President Dr. George Cooper to conduct an audit of the project's funding and asked for a report in September. During the September meeting, Cooper said it would be December before he had a report ready. The report never came.
A group of state lawmakers asked the LAC in July 2010 to conduct an investigation into the Clyburn Center and SC State's Transportation Research program's funding since the university won the UTC designation in 1998. In August 2010, state auditors met with university president George Cooper and began their work.
The federal tax dollars awarded to SCSU came through Congressman James E. Clyburn's office as earmarks. The university was required to secure state funds as a match for a percentage of the federal dollars it received. The Clyburn Center funds would sit in a US Treasury account until the university spent money on the center's construction and research programs, then SCSU would submit approved expense reports to the Treasury for reimbursement.
CLYBURN CENTER DELAYS
The Clyburn Center was planned to cover 33 acres and be comprised of six research buildings including a library and archives center, a hotel, an administration building and a conference center. The original plans put the price tag for construction at $107 million.
The project has faced several delays since 1998. The LAC found that the delays came as a result of "lack of proper oversight, inexperience and insufficient staff," within the university. University officials ran into trouble from the beginning when an engineering firm hired by the university discovered water pressure problems at the Clyburn site. The firm told SCSU that it would need to construct a $3.4 million dollar water tower to correct the problem. Auditors discovered the engineering firm had a "contractual relationship" with the Orangeburg County Department of Public Utilities; a fact the university said it was not aware of at the time. A second firm was hired by SCSU and found that tapping into existing water lines on campus would correct the water pressure woes and the fix cost the university less than $500,000.
SCSU began site work on the project in October 2006 when the contractor realized that part of the Clyburn Center site was sitting on private property, and that the university didn't have clear titles on two public streets that the school shut down in order to construct the center. "These property issues arose even though the Office of the State Engineer had notified SCSU in its comments as early as September 2004," the LAC found. It would take SCSU another three years, four months to correct the property issues.
SCSU received 17 bids for the construction contracts on the center. The winning bid went to the 16th highest bidder and drove up initial construct costs by more than $1 million dollars. The 15 lowest bids were thrown out because the SC Department of Transportation determined that the firms did not meet standards for a Disadvantaged Business Enterprise, which was a requirement to secure the contract. The DBE was set up to give minority-owned businesses an advantage in securing taxpayer-funded contracts.
SPENDING STATE AND FEDERAL TAX DOLLARS
Auditors found several "questionable expenditures" where university officials misused money that was earmarked for the Clyburn Center's construction and the transportation programs that went along with the project. Auditors found misuse of Clyburn Center funds and in one instance, a university employee "doctored" an expense receipt, then submitted the fake document for reimbursement, according to the report.
Auditors found misuse of funds in lodging, meals and travel reimbursements to SCSU employees. Auditors discovered that on several occasions, employees were reimbursed for meals during trips to conferences, even though meals were included in the registration fees for the conference. University policies prohibit those kinds of reimbursements.
The LAC's report shows that in September 2007, two SCSU staffers took a trip to Washington, D.C. to attend a transportation conference. Government regulations cap hotel room rates at $189 a night. The LAC found that one of the SCSU employees stayed in a hotel and charged the university a rate of $189, while the second employee chose another hotel and charged SCSU $426 per night.
In another instance, the LAC uncovered a "doctored" expense report where an employee claimed to have stayed four nights in a hotel while out of town for an undisclosed meeting. The employee gave SCSU's finance office a receipt that showed he was billed for four nights. However, when the LAC called the hotel during the investigation, the hotel's records showed the employee only stayed for one night, and the receipt the employee submitted was changed. The employee was paid $476.21 by the university.
The LAC found that the university did not have the "proper controls" in place, which allowed charges like the ones above to go undetected. The lack of controls also led the university to pay twice for purchases under the Clyburn Center grants, and led to shortages in state matching dollars to the federal government.
Auditors found that SCSU may have to repay $1.7 million to the federal government because the university did not send the correct amount of state matching dollars to Washington during the life of the Clyburn Center grants.
SCSU LOSES FEDERAL DESIGNATION—JIM CLYBURN RESPONDS
SC State University was awarded a Tier I University Transportation Center designation in 1998 by the Federal Highway Administration. SCSU was only one of 33 colleges and universities to win the designation, which included million in federal funding to support educational programs for transportation research. The designation included funding for the Clyburn Center. At the end of the designation, which stopped in 2006, SCSU's Clyburn Center was the only one of the 33 centers that was not completed and conducting research.
In 2006, SC State University re-applied for Tier I designation, but was denied by the feds. Auditors found that the federal agency didn't provide any specific reason for denying SCSU the designation, but "documents indicate that federal officials were not pleased with SCSU's performance," according to the LAC. Since SCSU won the designation, the university continued to cause problems with the project and did not follow the guidelines of the grant, according to auditors.
On March 19, 2009, Congressman Clyburn sent President George Cooper a letter concerning the loss of the UTC designation. In the letter Clyburn wrote, "I am willing to assist the university in trying to regain its federal status, and pursue other ventures for its students and faculty. However, until there is clear direction and leadership at the Transportation Center, I am reluctant to pursue further federal investments for this project."
"It is also very clear to me that these challenges led to SCSU losing its designation," Clyburn continued. "However, it is clear to me that a vision to train SCSU students, and others, in becoming transportation professionals and create a new and inviting entrance to the campus have deteriorated to a point of stagnation, which has ultimately jeopardized a unique mission."
SLED AND STATE ETHICS INVESTIGATION
Auditors turned over thousands of documents to State Law Enforcement Division agents and to State Ethics Commission investigators during the audit. Investigators are looking into how university employees spent public tax dollars, and whether the expenditures were within the law. Neither agency would confirm or deny the existence of an investigation when contacted following the audit's release Tuesday.
CLYBURN CENTER CHANCES BLEAK
SC State University officials must come up with an additional $83 million in order to complete the construction of the James E. Clyburn University Transportation Center. The university currently has $24,097,233 in federal funds on hand in the Treasury account for construction of the center. However, the university must come up with $3 million in state matches in order to access the funds.
The LAC's investigation shows that only one portion of the Clyburn Center is fully funded and will be finished by September 2011. It's Phase I, which is made up of a 10,590 square foot vehicle bay and research area, and a "chiller plant," which houses the heating and air systems that would have run the Clyburn Center. Phase I square footage makes up only 5% of the total of the Clyburn Center. Auditors found that of the remaining 95% of the center, only 11% (the Emily Clyburn Archives Center) was partially funded.
SC State University administration told auditors it was looking to use South Carolina Education Lottery funds to make up the state matches required to complete the Clyburn Center. The use of lottery funds for that purpose may not be legal, according to the LAC. State lawmakers are planning to address SCSU's use of lottery funds and make a determination as to whether those funds can be used.
The LAC told SCSU's Board of Trustees that the chances of the Clyburn Center being finished are dim, and that the board, "should re-examine plans for constructing the center," according to the report. "SCSU has no viable plan to secure the remaining $80 million necessary to complete the building project."
Even if the Clyburn Center was fully funded, the LAC found that it would not be finished until 2020.
CLYBURN, SC STATE UNIVERSITY RESPONDS
After multiple requests were denied for an interview with Congressman James Clyburn concerning the center at SC State University that bears his name, Clyburn released a statement Tuesday after the LAC report was published.
In his statement to the AP, Clyburn said "the troubled South Carolina State University transportation center that bears his name is being unfairly bullied by people opposed to seeing the Orangeburg school succeed." Clyburn said, "he's not surprised a state audit found no money missing from the long-delayed project at his alma mater. Clyburn also says he would support more federal money for the center."
"This report vindicates what I have been saying all along about the Transportation Center funding," said Clyburn. "No federal funds are missing. They are sitting safely at the National Highway Trust Fund waiting to be drawn down after approved expenditures are made by the university as mandated by this cost-reimbursement contract award.
"While this project may have challenges, the biggest obstacle comes from those who sought to manufacture this controversy and delay the university's efforts for their own agenda," said Clyburn. "I continue to support this project and will do everything I can to see that it is completed. This project began as an opportunity for South Carolina State to have a unique mission to help train a diverse workforce for our state and nation's transportation needs well into the future. That is still an important goal, and one I am pleased to support."
In an emailed statement, SC State University President George Cooper responded, "The most important finding in the report confirms what we've always known and said: there is no missing $50 million at SC State," Cooper continued, "While we don't believe there is anything in the report that hasn't already been discussed, we will immediately and carefully review the rest of the findings and recommendations because we are committed to correcting the mistakes of the past, to reforming our policies and procedures and to moving forward to build a stronger university."
There is no word on whether SC State University plans to participate in the press conference planned for Tuesday afternoon.