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After gutting oversight department, CFCC had to repay state funds for miscalculating FTE


Last year, Cape Fear Community College ‘restructured’ a department and pushed out top employees tasked with keeping the college from overreporting ‘full-time equivalency’ — a measure of how many hours of instructional time the college is providing, which is then used to garner state funding. In the wake of that restructuring, the college was forced to pay some of that state funding back.

On February 22 of this year, CFCC President Jim Morton received a ‘coaching letter’ from the state community college office telling them that auditors found areas that they needed to improve upon in claiming FTE, or full-time equivalency, hours.

FTE is essentially a measure of how much instruction the college is providing — and it translates into money, so increasing the amount of FTE the college can claim means more funding from the state.

State auditors said course hours for basic law enforcement training (BLET) were miscalculated and documentation for these courses was inconsistent.

The February ‘coaching’ letter warned the college of a potential future finding; three months later, CFCC received a letter informing them of a “material finding.” This finding stemmed from issues during the 2021-2022 compliance review year.

FTE auditors from the North Carolina Community College System (NCCCS) conducted the review — and the FTE ‘finding’ meant CFCC had to send back $18,375 to the state for misreporting FTE hours.

However, this does represent a small portion of the overall FTE budget. CFCC received from the state last year — $35.9 million. About $30.8 million went to the curriculum side of the college, $4.2 million to continuing education, and $747,230 to ‘basic skills.'

Auditors found that CFCC had overreported over 2,000 hours of instruction in its college and career readiness program (formerly known as ‘basic skills’). State auditors found that records of instructional pay didn’t match the level of FTE the college was reporting.

This college and career readiness portion of the college falls under Continuing Education, overseen by John Downing, the vice president of economic and workforce development. This area helps students prepare to take the GED.

Only two community colleges in the state that were audited that year had to revert back funds to the state: CFCC and Fayetteville Tech.

Because CFCC had this finding and had to revert the funds back, the auditors will return this academic year. If there’s not an additional finding, then the college’s next compliance review will be for 2025-2026.

When CFCC leadership was notified

Then-Board Chair Bill Cherry received notice from the state about the reversion less than a week after Morton’s $38,000 raise was announced at the May board meeting. At the July meeting, neither Morton nor Cherry made any mention of the over $18,000 in FTE funding they had to return. It was not listed on the official minutes, either.

The state’s recommendation to the college was that “certain internal controls [needed to be] in place to ensure classes are set up correctly and class hours” are reported correctly. (You can find the material finding report and the coaching letter at the end of this article.)

Compliance Department was mainly dissolved in May 2022

Last spring, the college did have a compliance department dedicated solely to the review process of FTE. But it was dissolved, as part of a restructuring, in May 2022, right before the reports were due to the state office.

Related: Part II: CFCC dissolved its ‘full-time equivalency’ department. What does that mean?

Bonnie McGlauflin was the FTE Compliance Technician — she was let go in the middle of reviewing the college’s FTE. After working for CFCC for 20 years, she was walked out of the office on May 31, 2022, without any warning, and before her contract was up on June 30.

“I was in the middle of doing everything, doing those FTE adjustments, but I couldn’t finish them, because I was let go,” McGlauflin said.

McGlauflin said she was one of the founding members of the FTE compliance review department, created in 2012 under former CFCC President Dr. Eric McKeithan.

“In the ten years I worked in the department, we never had a reversion of funds. Never. Things were being done right. We were taking out what couldn’t be reported for FTE,” she said.

The former FTE compliance director, Nina Taylor, was also walked out suddenly on May 31. Like McGlauflin, she was unable to complete a review of the FTE reports.

Related: Part I: CFCC could be violating regulations on using state money for contract buyouts

Responsibility for catching FTE mistakes last spring?

After the restructuring effectively gutted the FTE oversight department, it’s not clear who was responsible for catching errors in the reporting. According to the college’s most recent organizational chart, CFCC appears to have reassembled the former FTE department, but there are still staff vacancies.

According to the most recent CFCC organizational chart, dated August 29, 2023, there is a department listed as the “FTE Compliance Review.” It lists Vice President of Institutional Effectiveness, Planning, and Compliance Michael Cobb as the head of the department, along with three vacant positions.

While Taylor and McGlauflin handled oversight over FTE for both summer and fall 2021, McGlauflin reiterated they couldn’t catch any mistakes, like retracting non-compliant hours, made to the spring 2022 report because they were let go. Furthermore, they weren’t present when the state auditors came this spring semester to discuss last year’s FTE reports.

McGlauflin said most of the FTE compliance work moved under the umbrella of Student Services and the Registrar’s Office, where the job description of ‘record specialists’ matched verbatim Taylor’s and McGlauflin’s old ones. According to the description, 'records specialists' were responsible for “conducting internal reviews of the Institution’s Class Reports [FTE reports] for both curriculum and continuing education classes.”

One of the only people from the former compliance department who wasn’t 'restructured' out of a job was Henry “Tucker” Lee, the son of Michelle Lee (who was recently promoted to Chief of Staff of President Jim Morton's Office).

Tucker Lee received a promotion and a title change about ten days before McGlauflin and Taylor were let go. He then reported to Cobb.

However, while Tucker Lee faired well through the restructuring, personnel records show his last day at the college was August 11, 2023. It’s listed as a “separation” from the college. His most recent salary was $68,784. He saw a 41% salary increase over the last three years. Michelle Lee has received a 50% increase over this same time period, making $155,000.

We don’t officially know the reason for the separation; the college said there was no termination letter — but according to three people familiar with the department, he suffered from absenteeism. Those employees spoke to WHQR on condition of anonymity, based on concerns about retaliation.

There remain unanswered questions about the FTE reporting process. WHQR sent several questions to the college and Board of Trustees chair, including whether this was the first time the college had been forced to repay FTE funds, who sent the final FTE reports to the state, and what department was responsible for oversight after the 'restructuring.' WHQR also asked whether the vacancies in the new FTE department have been filled. As of Thursday, September 28, no response has been received, and no comment has been provided.

Rachel is a graduate of UNCW's Master of Public Administration program, specializing in Urban and Regional Policy and Planning. She also received a Master of Education and two Bachelor of Arts degrees in Political Science and French Language & Literature from NC State University. She served as WHQR's News Fellow from 2017-2019. Contact her by email: rkeith@whqr.org or on Twitter @RachelKWHQR