North Carolina Central University Audit Reveals $45 Million in Financial Reporting Errors

Pat Brand

389 Country

The North Carolina Office of the State Auditor (OSA) has released a financial statement audit of North Carolina Central University (NCCU), uncovering over $45 million in financial reporting errors for the fiscal year ending June 30, 2024. The audit, conducted by State Auditor Dave Boliek’s office, detailed multiple discrepancies in NCCU’s financial records.

The audit identified several specific errors. Supplies and services expenses were overstated by $8.3 million due to misclassified losses from capital asset disposals, which also led to an understatement of other nonoperating expenses by the same amount. Scholarships and fellowships expenses were understated by $1.2 million because revenues tied to the UNC System’s Project Kitty Hawk partnership were improperly recorded, also understating state and local grants and contracts revenue by $1.2 million. Cash was overstated by $4.9 million due to inaccurate journal entries, which similarly overstated the beginning net position.

Noncapital contributions were overstated by $4.8 million because donated capital assets were misclassified, understating capital contributions by the same amount. Federal grants and contracts were overstated by $3.7 million due to faulty journal entries, which understated nongovernmental grants and contracts by an equal amount. Lastly, restricted nonexpendable net position was overstated by $2.6 million, restricted expendable net position by $3.6 million, and unrestricted net position was understated by $6.2 million due to calculation errors.

The Auditor’s Transmittal noted that NCCU’s financial reporting problems have worsened over time. Despite these findings, State Auditor Dave Boliek expressed optimism following productive discussions with NCCU and UNC system leadership, indicating confidence in the university’s efforts to improve its financial reporting processes. The detailed findings are available on pages 66-67 of the audit report.