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 Questions ???