The University of Maryland University College made millions of dollars in unnecessary payments to contractors and faculty members, according to a state audit released Thursday.
The bulk of the overpayment, $3.3 million, came from an online advertising contract the school entered. The vendor was supposed to use online ads to generate student leads, then forward those leads to the college. Between July 2007 and March 2008, however, UMUC paid $75 each for 43,662 leads it never actually received.
"We took this process very seriously -- we cooperated fully and accepted the findings and have taken appropriate action," said UMUC spokesman Bob Ludwig. "It's putting in controls to prevent overpayments in the future."
The vendor went out of business in 2010, according to the report, and the college stopped paying by lead for online advertising in April 2011.
The college is the University System of Maryland's primarily online college, with more than 90,000 students worldwide. Former President Susan Aldridge resigned last year with no explanation following allegations that she forced employees who disagreed with her to resign and gave severance packages to those who signed nondisclosure agreements.
The audit uncovered other, smaller financial issues at the school. In one instance, UMUC paid $248,000 in benefit reimbursements to two retired employees but could not provide any documents to support how that amount was calculated.
In another case, a faculty member received $128,000 while on sabbatical leave, even though faculty at the school aren't eligible for sabbatical pay. Investigators were notified after an anonymous tipster reached out through the state's fraud, waste and abuse hot line, according to the report.
"When we discussed this matter with current UMUC management, it was unclear to them exactly what happened during this period," the report says. "While we were advised that this employee worked during the month of December 2007, there was no documentation, such as time sheets, to support this claim."
The report also cites $39,000 in improper leave pay for four employees, a lack of adequate security measures on the college's computer network and 11 employees who had unnecessary access to student financial accounts.
UMUC officials said they would avoid granting any sabbatical pay, improve online security and review which employees have access to financial information. The college did dispute that the $39,000 in leave pay was against policy but said it would keep better documentation in the future.