"Students that paid their tuition, in accordance with school policy, were not afforded the same opportunities to avoid tuition payment or avoid the receipt of failing grades that was available to the 103 students who simply failed to pay their tuition in accordance with policy," the report states.
There are additional outside costs involved with educating or housing any student, the report states. Allowing students to live in a dorm without paying could also prevent students who are paying their bills from finding a room if all university housing is occupied.
The audit covers July 2008 through June 2009. Auditors only conducted an in-depth review for the Spring 2009 semester, but the report states there is evidence of similar sloppy practices during the Fall 2008 semester.
Jones said he does not know how long the problems happened at State, but is confident they will not continue.
The audit recommends State abide by university collection policies. It's one of 16 recommendations included in the audit, all of which discuss violations of State rules.
Those violations include the university bookstore essentially serving as a check cashing service. Students could present a check that exceeded the amount of their purchase, and the bookstore would provide them cash in the amount of the difference, the report states.
The manager of the bookstore told the auditors he would leave the amount of cash due to students in a store safe until the check cleared. Then the student could come back to the store and receive his or her money.
This goes against university policy and poses a risk for the school to lose money, the report states.
Other audit findings involving the bookstore include failing to collect and send about $12,000 in taxes to the state during the 2009 fiscal year and allowing university administrators, athletic coaches and faculty to inappropriately establish lines of credit at the store.
About $200 missing from a change machine, incorrect assessment of fines and fees and a lack of oversight for faculty and staff housing are also mentioned in the recommendations.
A full copy of the audit is available at dailymail.com.
Auditors met with the university last Wednesday, the same day as Hemphill's state of the university address. A response from State included within the report says the university will or has complied with all of the recommendations.
State has faced a mountain of financial struggles in recent years. Lower enrollment and fundraising figures led to a $3.5 million budget deficit two years ago. That resulted in cuts, a hiring freeze and a no-confidence vote from the faculty that preceded the eventual resignation of former President Hazo Carter.
"I really don't want to try to caste any dispersions on the prior administration, but we have come in and re-examined the kinds of things that are going on," Jones said. "We have made changes.<\!p>.<\!p>.and they provide for better accountability."
Since he was officially hired July 1, Hemphill has said the school is headed in a new direction. The university managed to end the last fiscal year with a $200,000 budget surplus, but Hemphill told the Daily Mail in August further cuts will be necessary this year in order to make ends meet.Student tuition accounts for about $10 million of the university's annual $50 million budget, Jones said.