Cumberland Times-News

Local News

August 29, 2013

Audit pinpoints violations in construction of FSU building

OLA report: New $2 million facility wasn’t bid out

FROSTBURG — Frostburg State University was found to be in violation of established procedures for site selection, as well as failure to request competitive bids, when it constructed its new $2 million Sustainable Energy Research Facility, according to a recent audit report.

Released on Aug. 21, the report was compiled by the Office of Legislative Audits. Established by the Maryland General Assembly, the OLA audits all public school systems, as well as government agencies, about every three years.

“Regular legislative audits serve as a useful opportunity to examine our operations and procedures in a constantly changing regulatory terrain,” said Liz Medcalf, a spokeswoman for FSU.

Construction of the research facility, which is located on a portion of the campus called the Allegany Business Center, was completed in the fall of 2012.

“Selection of the site was critical because existing contractual agreements for the location required the use of a certain developer, who then used an affiliated contractor to perform the construction work,” said Legislative Auditor Thomas Barnickel in the report.

 FSU leases the land on which the ABC is located to Allegany County. A subsequent sublease agreement with a general contractor gave that developer exclusive rights to construct any buildings on the site.

The report also said that FSU did not request the developer to solicit competitive bids for the facility’s construction.

FSU also failed to get the proper approval for the project from the Maryland Board of Public Works and the University System of Maryland, according to the audit.

FSU is a USM member.

The OLA, in agreement with FSU, is referring the matter to the State Ethics Commission to see if any ethics laws have been violated.

In a written response to the audit finding, FSU, while noting what they feel was a lack of specific guidance in process, did agree with the finding.

“FSU prepared and forwarded a detailed request for approval of this project and engaged in numerous dialogues with its counterparts over details of the project.

“At some point, FSU proceeded in error without a formal response to the request and will take steps to ensure formal approvals are documented in the future,” the FSU response said.

The OLA included FSU’s written responses in the report as is customary with the audits.

The time period of FSU audit was from Jun. 1, 2009, to Jun. 3, 2012.

With 5,063 students registered for the spring 2012 semester, FSU revenue was $103.3 million for fiscal 2012, which included a state general fund appropriation of $33.5 million, according to the audit.

FSU was also cited for a lack of internal security controls over the university’s databases and networks. All required controls recommended in the audit will be in place by Sept. 30, according to FSU.

Greg Larry can be contacted at

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