FRANKFORT — Internal accounting at Kentucky State University was so haphazard and inadequate that examiners could not give an opinion about the school's financial condition, a set of state audits released Thursday say.

        A former employee's ability to embezzle $845,000, simply by writing checks for “nonexistent invoices,” was directly related to an absence of internal financial controls, auditors said.

        There were three audits, all for fiscal 1999. One was on the university's financial statements. A second dealt with internal financial controls and compliance with laws and regulations. The third dealt with administration and spending of federal funds.

        Each culminated in a disclaimer — the worst of four possible opinions the examiners could have rendered. The audits also listed 15 separate “material weaknesses” — deficiencies in internal controls that create an “unacceptable risk” of undetected errors or fraud. Beyond the much-publicized embezzlement, auditors did not specifically allege fraud, however.

        State Auditor Ed Hatchett's office took over the audit last June after KSU's hired accounting firm, PricewaterhouseCoopers, resigned. PWC officials said the university failed to furnish information needed to finish the job.

        Major findings in state audit of Kentucky State University were:

        • Auditors unable to vouch for university's finances.

        • $845,000 embezzlement “directly related” to lack of internal financial controls.

        • Inadequate oversight of transactions.

        • No inventory of land, buildings and equipment; claim of $116 million value could not be confirmed.

        • $149 million in “adjustments” to financial statement could not be documented.

        • KSU failed to employ adequate, knowledgeable accounting staff.

        • Failed to report payroll withholding taxes on time; paid $124,000 in penalties and interest to the Internal Revenue Service.

        • Failed to make contributions to employees' retirement fund on time; paid $44,000 more in penalties.

        • Bank statements piled up, not reconciled timely. Accounts that failed to reconcile were “forced balanced.”

        • KSU failed to properly monitor student financial aid, grant money or enrollment. Federal funds not adequately documented.

        • U.S. Department of Agriculture research and extension programs out of compliance.

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