Auditor General Eugene DePasquale released a performance audit of Kutztown University, showing that recently implemented campus energy conservation measures have saved more than $1.4 million over a two-year period through the use of a guaranteed energy savings contract.
“Kutztown University has done a great job of cutting operational costs by reducing energy use, enabling those savings to be put to use serving the educational needs of the students,” DePasquale said. “We all know that it’s getting harder for middle-class families to send their children to college, so I am encouraged to see that Kutztown University is doing what it can to hold down operating costs.”
The Guaranteed Energy Savings Act allows government entities, including state-owned universities such as Kutztown, to enter into contracts for evaluating, recommending, designing, implementing and installing energy conservation measures.
In 2008, Kutztown contracted with Noresco Inc. of Westborough, MA, for 15 guaranteed energy savings campus projects. The projects included lighting upgrades, window and weather stripping replacement, installation of energy management systems, new kitchen hood exhaust controls, a solar pool heater, heat pump improvements, a new roof on the field house as well as the establishment of a campus-wide awareness, communications and sustainability program. Under the contract, Noresco guaranteed that the university would realize net energy cost savings of $5.5 million over 15 years.
“In 2011 and 2012, Kutztown University exceeded the expectations of savings guaranteed in the contract, clearly demonstrating that guaranteed energy savings agreements are useful tools in energy conservation and related cost reductions,” DePasquale said, noting that other state-owned institutions, including Mansfield University, are benefiting from similar contracts.
In addition to the energy savings contract, the university also initiated several other projects on its own that are designed to reduce energy costs, including installing utility meters in all housing units, retrofitting water fountains with water bottle filling stations and using LED lighting.
In addition to the energy conservation findings, auditors found that Kutztown University:
• Set student fees at rates that allowed the university to build a reserve for facility repairs and replacements, but those fees were still comparable to fees at the other state-owned universities;
• Established sufficient controls over the collection and safeguarding of miscellaneous revenues, such as parking fines;
• Ensured that food service vendors paid the correct commission to the university as stipulated in food service contracts:
• Failed to comply with the State System of Higher Educations’ policy that requires the university to complete a physical inventory of fixed assets at least once every three years and to adjust the fixed asset ledger for assets taken out of service;
• Failed to comply with required travel policies and procedures in 7 out of 91 expense transactions reviewed, which signaled a need for the University to tighten administrative oversight of its travel expense reimbursements.
DePasquale said university officials agreed with all findings in the audit and have already initiated steps to resolve problems with fixed assets and travel expense reimbursements.
The full audit report is available online at www.auditorgen.state.pa.us, select “Performance,” then, “State-Owned Institution Performance Reports.”
Provided by Auditor General.