60

The report shared with the former President and former Board Chair on December 21, 2020, identified a total of $2,146,861 in open, unpaid invoices for the fall 2020 period. Review of this report, as reflected in Figure 14, identified over $136,100 in outstanding accounts payable were incorrectly identified as paid and $50,522 in paid invoices were incorrectly identified as open, resulting in a net overreporting of paid invoices by KSU at that time by nearly $86,000. Additionally, over $1,165,000 in additional outstanding accounts payable from the fall 2020 were not included in the report, under reporting accounts payable for this period by just over $1.2 million.

Figure 14: APA Comparison of Fall 2020 Outstanding Accounts Payable and Bills Paid

Source: APA, based on various KSU financial data, including December 21, 2020 report by former EVP for Finance and January 1, 2021 Argos Accounts Payable Report.

After inquiry regarding the discrepancies in the report, the former Purchasing Director reiterated that the report was not intended by her to be a comprehensive report of outstanding accounts payable. Additionally, she explained the missing accounts payable of $1,165,000 resulted from her manually trying to pull data from the University’s accounting system when fulfilling the former EVP for Finance’s report request, noting that the system does a poor job at producing reports.

The provided report did not account for an unknown number of invoices that had yet to be entered into the Banner system. The report provided to the former President and former Board Chair also did not account for an unknown number of invoices that had yet to be entered into the Banner system. According to the former Director of Purchasing, who also managed KSU's accounts payable office for a portion of the examination period, accounts payable staff would routinely receive invoices without a corresponding purchase order. Staff would not be able to enter the invoice into KSU's accounting system until a purchase order could be set up. In the interim, invoices without a corresponding purchase order were maintained in an

The report provided to the former President and former Board Chair also did not account for an unknown number of invoices that had yet to be entered into the Banner system. According to the former Director of Purchasing, who also managed KSU's accounts payable office for a portion of the examination period, accounts payable staff would routinely receive invoices without a corresponding purchase order. Staff would not be able to enter the invoice into KSU's accounting system until a purchase order could be set up. In the interim, invoices without a corresponding purchase order were maintained in an

accordion folder until staff had an opportunity to address them. It is not known how long invoices would be maintained outside of the accounting system before being entered or the dollar amount of the vendor invoices maintained outside of the system at that time.

KSU’s former President stated that he was not aware of how KSU managed its accounts payable until early July 2021. While meeting directly with staff, the former President learned that though the accounting system could produce reports, the reports were incomplete. Furthermore, the accounts payable process was being managed manually, with staff using a spreadsheet to track invoices, as not all the invoices were entered into the accounting system.