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Report #07-25

Minnesota State Colleges and Universities System

Internal Control and Compliance Auditsof Selected Colleges

Brad A. White, Audit Manager

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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

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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

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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

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Overall Conclusions

Generally……

• Internal controls were adequate• College transactions complied

However, 24 findings identified– internal control weaknesses– instances of noncompliance

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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)

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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

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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)

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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

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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

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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

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Audit Report #07-25

http://www.auditor.leg.state.mn.us

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