Office of the Legislative Auditor
Report #07-25
Minnesota State Colleges and
Universities System
Internal Control and Compliance Audits
of Selected Colleges
Brad A. White, Audit Manager
Office of the Legislative Auditor
MnSCU Colleges Examined:
• Central Lakes College
• Inver Hills Community College
• Normandale Community College
• Pine Technical College
• Ridgewater College
• Riverland Community College
• Saint Cloud Technical College
Office of the Legislative Auditor
Audit Period
– Fiscal Years 2004, 2005, & 2006
Financial Cycles
– Security Access
– Tuition and Fees
– Personnel/Payroll
– Operating Expenses
– P/T Contracts
– Banking and Local Cash
– Pine TC: ETC Programs
Office of the Legislative Auditor
Professional-Technical Services Contracts:
– Metro State University
– Mpls. Community & Technical College
– MN State Community & Technical College
– Winona State University
– Office of the Chancellor
Audit Period
– Fiscal Year 2006
Office of the Legislative Auditor
Overall Conclusions
Generally……
• Internal controls were adequate
• College transactions complied
However, 24 findings identified
– internal control weaknesses
– instances of noncompliance
Office of the Legislative Auditor
Tuition and Fees – Key Finding:
• Sharing cashier drawers and no review of
negative receipt transactions
– diminishes accountability
– increases risk
Other Important findings:
– tuition credit card documents
– backdated registration changes
– detective controls not formalized
(when granting incompatible security access)
Office of the Legislative Auditor
Personnel/Payroll – Key Findings:
• Ineffective Control Over Supplemental Pay
– increased risk due to course workload changes
dependent on registrations
• Inaccurate Severance Payments
– undocumented and un-reviewed calculations
Other Important findings:
– accounting for paid leave benefits
Office of the Legislative Auditor
Operating Expenses – Key Findings:
None considered critical by MnSCU
management
Other Important findings:
– expense and equipment controls
– credit card purchasing
– detective controls not formalized
(when granting incompatible security access)
Office of the Legislative Auditor
P/T Contracts – Key Finding:
• University contract lacked solicitation, terms,
duration, and proper approval
– noncompliance with MnSCU Policy/Procedure
– oversight and monitoring needed
Other Important findings:
– no written contract or amendments
– ‘best practices’ observations
Office of the Legislative Auditor
Key Findings – Pine Technical College
Employment and Training Center (ETC)
• ETC social service programs may not comply
with higher education mission
• College did not recover indirect costs of
operating the ETC
Office of the Legislative Auditor
Overall Conclusions
The MnSCU colleges examined……..
(except for the 24 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 #07-25
http://www.auditor.leg.state.mn.us
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