Transcript Legislative Audit Report - Seven Colleges

Office of the Legislative Auditor
Report #06-28
Minnesota State Colleges and
Universities System
Internal Control and Compliance Audits
of Selected Colleges
Brad A. White, Audit Manager
Office of the Legislative Auditor
Colleges Examined:
• Alexandria Technical College
• Anoka Technical College
• Dakota County Technical College
• North Hennepin Community College
• Northland Community & Technical College
• South Central College
• Saint Paul College
Office of the Legislative Auditor
Audit Period
– 3 Fiscal Years ending June 30, 2005
Financial Cycles
– Security Access to Financial Applications
– Tuition, Fees, & 3rd Party Billings
– Personnel/Payroll Expenses
– Administrative & Operating Expenses
– Bookstore Operations (3 Colleges)
Office of the Legislative Auditor
Internal Control Elements
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Separation of Duties
Safeguarding of Assets
Authorization
Recording Transactions
Physical Verification
Financial Monitoring
Legal Compliance Areas
– Statues and Laws
– MnSCU Policies & Procedures
Office of the Legislative Auditor
Key Conclusions
Generally……
• Internal controls were adequate
• College transactions complied
However, 17 Findings specified areas of
– internal control weaknesses
– instances of noncompliance
Office of the Legislative Auditor
Findings by College
4 - Alexandria Technical College
10 - Anoka Technical College
3 - Dakota County Technical College
4 - North Hennepin Technical College
4 - Northland Community & Technical College
6 - South Central College
3 - Saint Paul College
Office of the Legislative Auditor
Findings by Financial Cycle
1 – Security Access
8 – Tuition, Fees, and 3rd Party Billings
5 – Personnel Expenses
3 – Administrative and Operating Expenses
Office of the Legislative Auditor
Security Access to Financial Functions
Preventive Control
(1 employee cannot access incompatible functions)
versus
Detective Control
(1 employee can access all functions, but their work
is reviewed after-the-fact)
GOAL  avoid exclusive control of a transaction
from beginning to end
Office of the Legislative Auditor
Finding - Security Access
• 5 of 7 colleges provided incompatible access
(College financial staff size can be an issue)
• detective controls not defined
– no written guidelines
– no documented evidence of the control
– no process for reporting exceptions
Office of the Legislative Auditor
Findings - Tuition, Fees, and 3rd Party Billings
• unapproved tuition rates
• uncontrolled waivers & registration changes
• no referral of delinquent receivables
• late deposits or recording of transactions
• voiding of erroneous college-issued checks
• no evidence supporting negative receipts
• no customized training agreements with clients
Office of the Legislative Auditor
Findings – Personnel/Payroll costs
• no written or untimely assignments for
customized training faculty
• untaxed income for late employee
reimbursements
• inaccurate faculty severance and leave
accruals
• no independent monitoring of payroll
transactions
Office of the Legislative Auditor
Findings – Admin & Operating Expenses
• concerns with procurements, authorizations,
and transaction coding
• no written agreement as fiscal agent
• no monitoring of frequent flyer miles
Office of the Legislative Auditor
Findings – Bookstore Operations
• Control weaknesses at one college
• No findings due to closure of bookstore
(transition to an on-line bookstore vendor)
Office of the Legislative Auditor
Overall Conclusions
The 7 MnSCU colleges examined……..
(except for the 17 finding areas)
• had internal controls ensuring
– safeguarding of assets & public funds
– accurate recording & control of transactions
• complied with MnSCU policies and
management authorization
Office of the Legislative Auditor
Audit Report #06-28
http://www.auditor.leg.state.mn.us
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