It’s a sad state of affairs when the University of Hawaii’s Student Housing Services isn’t able to chase down rent from students, collect housing fees from conference groups or properly bid out contracted services such as custodial maintenance. All these would seem to be among its most basic duties.
The lax financial and operational procedures were outlined in an internal audit of the student housing branch — and the loose management of what’s supposed to be a self-funded operation needs re-tooling.
Simply put, UH-Manoa’s Student Housing Services must shore up and stop the bleeding.
Unpaid rental balances have increased in recent years and the amount owed to the housing branch had grown to $1.2 million as of June 30, 2015, from $821,000 two years earlier. The amount considered uncollectible also increased to $870,000 from $652,000 over the same period.
Why students are allowed to take up residence when they have unpaid balances is a policy issue that must be addressed.
Michael Kaptik, director of Student Housing Services, said unpaid balances are part of a bigger issue at the campus and system level. It boils down to “students being able to take classes while having a payment balance and not being enrolled on a payment plan.”
This fall, Kaptik said, 683 students living on campus who were not enrolled in a payment plan owed the university $5.3 million, including $2.8 million for student housing.
Those figures alone show a major lapse in collections, and, unfortunately, reveal that the university is unable to strictly enforce its payment policies.
It’s the wrong message a public university wants to send current and future students, and it’s certainly not a reputation UH wants or needs when it goes before the state Legislature with hat in hand.
Further, lax collections of student rent is just one of several faulty practices highlighted in the audit.
What’s missing, the audit pointed out, is preparation and analysis of periodic budget-to-actual reports that would allow the branch to quickly adopt strategies to maximize revenues and control expenses.
In response, Kaptik said his office would “work to prepare and analyze budget on a periodic basis.”
Other troubling deficiencies cited by the audit include:
>> Nonenforcement of a policy requiring full payment prior to check-in or requiring credit card information from conference groups or its participants as a hedge against uncollectible conference housing charges, which resulted in $79,000 in outstanding accounts as of June 30, 2015.
>> Questioning “whether contracts with third parties are complying with the university’s procurement policies as certain contracts were extended for more than 10 years.”
Re-bidding these services — from dining programs to disposal services — conceivably could have realized some cost savings, and that no-competition culture needs to change.
>> Housing Services’ inability to monitor utility consumption at individual residence halls and dining facilities, which would help pinpoint where energy savings could be made.
Kaptik, in a written response to the audit, said meters will be installed or upgraded.
Kaptik outlined responses to the audit’s 14 recommendations regarding financial, operational and compliance procedures.
But regent Randy Moore, chairman of the UH Board of Regent’s Internal Audit Committee, was correct to criticize Kaptik’s lackadaisical “We’ll work on it” reaction, saying pointedly that “I would be happier if it said, ‘We’ll fix it.’”
The review of UH-Manoa’s student housing branch is the latest in a series of audits called for by the regents’ Internal Audit Committee, which has focused attention on the university’s revenue-generating enterprises.
The audits have become a valuable tool, highlighting inefficiencies that, if fixed, could save the university millions of dollars over the long term. It’s also up to the regents and university administrators to ensure that the audits don’t simply end up on a shelf collecting dust.
Kaptik, in written responses to the audit’s recommendations, said that for the majority of the processes, the “goal is to implement the necessary changes by August 2017.”
What’s needed is action and a clear timetable that tracks the progress on each recommendation, not just for Student Housing Services, but for all UH enterprises that are under, or have undergone, audit.
University personnel must be held accountable and work to higher standards — which, as this audit reveals, are obviously needed.
