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UNIVERSITY OF NEVADA, RENO Joe Crowley Student Union
Internal Audit Report January 1, 2009 through March 31, 2010
GENERAL OVERVIEW
The Joe Crowley Student Union (JCSU) at the University of Nevada, Reno (UNR) falls
administratively under the Vice President of Student Services. The JCSU administrative offices
are located on the fourth floor of the Student Union building. The building has 167,000 square
feet of space which includes a ballroom, a movie theater, student government offices, the campus
bookstore, meeting rooms, and retail vendor locations. During the review period, there were
thirteen retail vendors in the JCSU including eight food establishments, three financial
institutions, a testing center, and a vision service. Lease agreements were negotiated with each
of the vendors. Eleven of the agreements were approved by the Board of Regents. The other
two contracts were for the placement of automated teller machines (ATM) in the building and
were negotiated through the purchasing process.
As of the conclusion of the audit period, there were seven professional and ten classified
employees on the JCSU staff and approximately 127 student employees. The primary functions
of the staff include the lease of retail space within the JCSU and oversight of the associated
vendor agreements, scheduling of the building's meeting rooms and other space, and the
collection of rents and event charges.
JCSU meeting rooms are available for both university and non-university use. JCSU
provides staffing, as necessary, for the functions and events that are held in the rooms and
assesses charges for the labor. Room rental fees are also assessed to outside entities; however,
rental fees are not charged for individuals or groups affiliated with the university.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 1 of 31
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JCSU is funded primarily from student registration fees. It also receives support from
labor and event charges, as discussed above, and state funding.
SCOPE OF AUDIT
The Internal Audit Department has completed a review of the UNR JCSU for the period
of January 1, 2009 through March 31, 2010.
The scope of our review included tests of the accounting records and other auditing
procedures that were considered necessary. The tests included, but were not limited to, these
areas.
1. Reviewing the operations of the department and testing controls over the receipt and
deposit of funds collected from these activities.
2. Reviewing contracts for compliance with the Nevada System of Higher Education
(NSHE) contract policy and to determining whether payments, as specified in the
contracts, were properly received.
3. Testing expenditures for reasonableness, supporting documentation, and proper
signature approvals.
4. Reviewing controls over long-distance and cellular telephone charges.
5. Reviewing leave records and timesheets for proper completion and approval.
6. Examining equipment inventories for proper accountability.
7. Reviewing employee access to the mainframe applications as well as internal
computer applications used by the department.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 2 of 31
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In our opinion, we can be reasonably assured that the JCSU is operating in a satisfactory
manner. However, implementation of the following recommendations would further improve
operations.
LEASE PAYMENTS
As previously mentioned, the university has entered into 13 agreements with vendors for
the lease of space in the JCSU. We reviewed eight of the agreements to determine whether the
payment requirements of the agreements were being satisfied. The following exceptions were
noted.
1. Five of the vendors were delinquent in the payment of rents, security deposits,
commissions, or other payment requirements, as specified by the agreements. The total
amount owed as a result of the missing payments is approximately $117,000.
We recommend that JCSU personnel continue to work with the vendors and UNR
administration in the collection of these payments.
Institution Response: Correction: Full payments have been received from three of the five vendors. A repayment plan was approved by UNR Administration and implemented for one tenant. Another vendor closed its operations; UNR General Counsel is pursuing payment from that tenant. Prevention and Monitoring: Reassignments were made to staff regarding retail administration; staff has been charged with monitoring vendor accounts and ensuring timely payments. A new process was implemented for more accurate record keeping. The Associate Vice President of Student Life Services now monitors payment status monthly. The Student Union works with UNR Administration for the collection of outstanding payments.
2. One agreement, involving the lease of space for a financial institution, stipulated that a
$25,000 payment was required for “food court contribution”. We noted the payment was
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 3 of 31
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not received. The purpose of the food court contribution was to help buy furniture for the
common area that is shared by food vendors. According to JCSU personnel, the food
court contribution should have been excluded from the lease agreement as it did not apply
to the vendor.
We recommend the agreement be amended to accurately reflect the required payments.
Institution Response: Correction: The vendor in question was a non-food retail unit not located in the food court. The University is working with NSHE Real Estate Counsel to correct the oversight in the lease schedule and we expect this to be complete by September 30, 2010. Prevention and Monitoring: All other leases have been reviewed to make sure they are accurate regarding “food court contribution” and other areas. These revisions will be used in future leases.
3. Two lease agreements require vendors to make monthly commission payments based on
gross sales. The documentation submitted to JCSU consists of a report that lists the total
sales for the month and the corresponding commissions that were earned. The sales
activity is not broken down into greater detail, such as daily or weekly sales, that would
assist JCSU personnel in verifying the accuracy of the sales and commissions data. We
also noted the sales and commissions report submitted by one of the vendors does not
include a contact person.
We recommend the vendors be requested to provide daily and/or weekly sales activity in
the sales and commissions report. We recommend one vendor, as mentioned above, be
requested to provide the name of a contact person. We also recommend the university
consider conducting a periodic review of the vendors’ sales records, as allowed in the
lease agreements.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 4 of 31
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Institution Response: Correction: The Student Union is receiving monthly sales summaries from all three vendors. The Student Union worked with the Business and Finance Office to create new standards for documentation required from tenants regarding commission based sales. The University now has a contact person for each of the vendors regarding commission payments. Prevention and Monitoring: The Office Manager has been assigned the responsibility of reviewing weekly/monthly sales activity as provided in the sales and commission reports. In addition, the University conducts periodic reviews of vendor’s sales records.
4. JCSU receives monthly rent payments from the Associated Students of Nevada (ASUN)
bookstore. A rental agreement has not been completed.
We recommend a Memorandum of Understanding (MOU) be created that documents the
rental agreement between JCSU and the bookstore.
Institution Response: Correction: The MOU that documents the rental agreement between the Student Union and the ASUN Bookstore was signed and agreed to by all parties on July 30, 2010. Prevention and Monitoring: The MOU will be reviewed or renegotiated by all parties on an annual basis.
CATERING COMMISSIONS
JCSU receives a portion of the catering commissions that are generated by campus
events. Payment of the commission is addressed in a MOU between JCSU and the UNR
Residential Life, Housing and Food Services (RLHFS) Department. The MOU provides that of
the 10% commission paid to UNR by the outside food service provider, JCSU is to receive 50%
of the commission for events held in JCSU and 10% of all other catering commissions paid to
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 5 of 31
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the university. The RLHFS Department provides a monthly sales and commission report to
JCSU and is responsible for calculating JCSU’s portion of the commission.
We obtained the sales and commission reports on file in JCSU for each month of the
audit period and recalculated JCSU’s commission payments. We then determined whether the
payments were posted to a JCSU account. The following exceptions were noted.
1. No documentation was on file for six months of the audit period. Five catering deposits
were posted to a JCSU account within the same period of time as the missing
documentation. However, we were unable to verify whether the deposits were related to
the missing months noted and whether the deposit amounts were accurate.
2. For one month, two sales and commission reports were submitted to JCSU. The sales
and commission figures indicated in the two reports varied significantly.
3. The commission for two months was calculated incorrectly. We noted the department is
not consistently verifying commission payments.
For items one through three above, we recommend the department take greater care to
ensure catering documentation is received on a monthly basis for each commission
payment. We recommend the documentation be reviewed to ensure the commissions are
accurate and the correct amount was posted to a JCSU account in the financial accounting
system. We also recommend the department work with the RLHFS Department to
correct any errors or unusual situations that are noted through this process.
Institution Response: Correction: A new process and format for monthly reporting from the UNR Residence Life, Housing and Food Services (RLHFS) to the Student Union is being developed and we expect implementation by August 30, 2010. Reporting will include documentation from RLHFS of total sales activity and corresponding commissions. The Associate Director of Operations is receiving monthly
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 6 of 31
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comparison reports with catered events scheduled in the Student Union to ensure commissions are accurate. Documentation is reviewed by the Associate Director of Operations to ensure commissions are accurate and posted to a Student Union account. If there are discrepancies in the report, the Associate Director of Operations will work with RLHFS to resolve the discrepancy. Prevention and Monitoring: The Director has been assigned the responsibility of reviewing monthly reconciliation reports from JCSU and RLHFS.
CASH CONTROLS
A review of the department’s procedures for receiving cash and other forms of payments
was performed to determine that adequate controls are in place. We also tested 20 deposits to
ensure payments were properly received and were posted to the department’s event management
software application and to the financial accounting system.
We noted the department’s procedures lack an end of the day reconciliation between the
payments that were manually recorded on the payment log to the payments that were posted to
the event management software application.
To help ensure each receipt is accounted for, we recommend a daily transaction report be
generated from the event management application and reconciled to the payment log.
Institution Response: Correction: On July 30, 2010 an end of day reconciliation between payments that were manually recorded on the payment log for events and those which were posted to the event management software was implemented. Prevention and Monitoring: The Associate Director of Operations has been assigned the responsibility to review the weekly transaction report every month. Of the 20 deposits tested, we noted one payment that was posted to the incorrect expense
category in the financial accounting system by the Cashier’s Office. The payment was a
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 7 of 31
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recharge transaction and was posted to the “operating” expense category, rather than the
“recharge,” expense category.
We recommend greater care be taken to ensure transactions are posted correctly.
Institution Response: Correction: A journal voucher was entered on July 7, 2010 to correct the expense category. Prevention and Monitoring: The Office Manager has been assigned the responsibility to review deposits for accuracy.
ACCOUNT RECONCILIATION
JCSU personnel perform a periodic reconciliation of the department’s accounts. The
reconciliation consists of a comparison between the revenue and expenditure transactions that
were posted to the financial accounting system and the corresponding documentation that is on
file in the department. We noted the reconciliation is not complete in that not all transactions are
being verified, only the ones for which documentation is on file. We also noted the
reconciliation is not consistently performed each month and that print-outs of the reports from
the financial accounting system are not always maintained.
We recommend departmental accounts be reconciled on a monthly basis. A report of
transactions for the month should be generated from the financial accounting system and a
review of each transaction should be performed and verified to the department’s supporting
documents. The report should be dated and initialed by the employee performing the review and
maintained for three years.
Institution Response: Correction: The Student Union accounts are now reconciled on a monthly basis. A transaction report is generated and verified with expense and revenue documents. The
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 8 of 31
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employee performing the review dates and initials the report which will be maintained for three years. Prevention and Monitoring: The Associate Director of Operations has been assigned the responsibility to review the monthly reconciliation reports several times each year.
PAST DUE ACCOUNTS
We reviewed the department’s past due accounts, derived from meetings and events held
in the JCSU, for reasonableness and to determine whether the accounts are adequately
monitored. Meetings and events held in JCSU are tracked in the event management software
application. Total past due charges appear reasonable; however, the following exceptions were
noted.
1. One event was canceled but the charges were not removed from the event management
software application. As of the end of the audit period, the charges were 77 days old.
We recommend the charges be removed from the application. We also recommend the
past due accounts that are included on the application’s aging report be reviewed each
month for accuracy.
Institution Response: Correction: A software glitch previously prevented the removal of the charge. Staff worked with IT to address the technical issue and the charges were removed. The Associate Director of Programs has been assigned the responsibility of reviewing aging reports on a monthly basis. Prevention and Monitoring: The Director has been assigned the responsibility of monitoring the review by the Associate Director of Programs on a quarterly basis.
2. Monthly notifications are sent to customers with past due accounts. This task is currently
performed by three JCSU employees. During a recent submission of the notifications, a
notice was not sent for two of the accounts.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 9 of 31
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We recommend the employees coordinate with each other to ensure a notification is sent
for each past due account.
Institution Response: Correction: A staff vacancy previously required the task to be shared by two people. The Associate Director of Programs position was filled on July 1, 2010 and has been assigned the responsibility for reviewing aging reports, notifications and collection of past due accounts. Prevention and Monitoring: The Director has been assigned the responsibility of reviewing the past due account notification process on a quarterly basis.
3. One account with a small credit balance has been on the aging report for nearly two
years. According to the JCSU Facility Usage Guidelines, any credits due to
overpayments or events that are rescheduled should be used prior to June 30th of the
fiscal year unless authorization to carryover the credits is granted by the appropriate
JCSU personnel. No documentation was on file to indicate permission was granted for
this account.
We recommend a determination be made as to whether the credit should be removed or
continued to be carried forward.
Institution Response: Correction: The $16.50 credit has been refunded. Prevention and Monitoring: The aging report is reviewed quarterly by the Director to review and monitor any overdue credit balances.
4. We were informed accounts 90 days past due are placed on "alert" in the event
management application. We noted two accounts in excess of 90 days past due for which
an “alert” was not entered in the application.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 10 of 31
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We recommend a monthly review of the aging report be performed to ensure "alerts" are
entered.
Institution Response: Correction: The two accounts were put on “alert” status. The Scheduling Coordinator informed the users that future scheduling would be suspended until payment is received. Prevention and Monitoring: Aging reports are reviewed monthly by the Associate Director of Programs who ensures follow-up attempts are made to collect. The Director reviews the aging reports on a quarterly basis.
VOIDS AND ADJUSTMENTS
Invoices are sometimes voided or charges are adjusted in the event management
application due to errors and for other reasons. The ability to perform these transactions has
been provided to a select group of JCSU employees. We examined a sample of voids and
adjustments that were made in the application to determine whether they were properly
documented and reviewed.
We noted that each of the transactions was properly documented by the employees that
performed them but frequently the employees did not provide their initials.
For improved documentation, we recommend employees' initials be provided each time a
void or adjustment is performed.
Institution Response: Correction: Employees authorized to perform voids or adjustments have been instructed to document this action by initialing the transaction. Prevention and Monitoring: The Associate Director of Programs has been assigned the responsibility to review the list of voids on a quarterly basis to ensure compliance with policy.
We also noted that void and adjustment transactions are not independently reviewed.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 11 of 31
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We recommend a monthly report of void and adjustment transactions be generated from
the event management application and reviewed for reasonableness by an employee with limited
access to the application. We recommend the reports be dated and initialed to document the
review and maintained for three years.
Institution Response: Correction: The Associate Director of Operations, with limited access to the software application, has been assigned the responsibility of reviewing voids and adjustments on a quarterly basis. The reports are now being dated, initialed by Associate Director of Operations and maintained for three years. Prevention and Monitoring: The Director reviews the reports on a quarterly basis.
EQUIPMENT INVENTORY
A review of the equipment inventory assigned to JCSU was performed to determine
whether items listed on the equipment inventory report were physically present and whether
there were other items that met the $5,000 reporting threshold that were not included on the
report. We also reviewed JCSU’s sensitive equipment inventory.
Equipment Inventory
A total of 19 equipment items were included on the equipment inventory report. Of
these, 11 were located without exception. The following exceptions were noted with the eight
remaining items.
1. Six items did not contain an inventory tag.
We recommend replacement tags be obtained from the Business Center North (BCN)
Purchasing Department and affixed to these items. To assist in the annual inventory
process, we recommend the tags be placed in a location that can be easily viewed.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 12 of 31
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Institution Response: Correction: The inventory tags have been placed on the equipment in a location that can be easily viewed. Prevention and Monitoring: The Operations Manager has been assigned the responsibility of ensuring that inventory tags have been placed on equipment.
2. One item, a video projector, could not be located. We were informed the projector was
damaged due to a broken water pipe that occurred in the JCSU building in 2009. JCSU
staff worked with the BCN Risk Management Office to replace the item through
insurance.
We recommend JCSU personnel work with the BCN Purchasing Department to remove
the item from the department’s equipment inventory list.
Institution Response: Correction: The projector was removed from the inventory by BCN Purchasing in April 2010. Prevention and Monitoring: In an email from the Director on July 14, 2010, full-time staff were reminded to follow proper BCN Purchasing procedures for documenting the removal of equipment.
3. Equipment was observed that appeared to have an acquisition cost of $5,000 or more that
was not included on the equipment inventory report. This included kitchen equipment
located in the Cantina de Lobo and pianos that were in storage.
We recommend the purchasing records of the equipment be reviewed to determine
whether the acquisition cost met the $5,000 reporting threshold. If so, we recommend the
equipment be included in the inventory system and that inventory tags be affixed to the
items.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 13 of 31
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Institution Response: Correction: The Operations Manager is working with staff in BCN Purchasing and Facilities Services to review all equipment in the area. By September 30, 2010, inventory tags will be affixed to all applicable items. Prevention and Monitoring: An annual review and inventory of all items as required by University policy will be conducted by the Operations Manager to ensure all tags are in place and equipment inventory policy is complied with.
4. One item listed on the equipment inventory report is located in the Jot Travis Building
and is no longer being utilized by JCSU. According to the BCN Purchasing Department,
this item is being transferred to the Davidson Academy upon the completion of the
necessary paperwork. We were informed that BCN Purchasing would complete the
paperwork.
We recommend JCSU personnel follow-up on this matter to ensure the equipment is
transferred, as intended.
Institution Response: Correction: The equipment has been transferred from Student Union inventory by BCN Purchasing in April 2010. Prevention and Monitoring: In an email from the Director dated July 14, 2010, full-time staff were reminded about the proper procedures for documenting the transfer of equipment. Any equipment that has been transferred will be reported to BCN Purchasing at the time of transfer.
Sensitive Equipment Inventory
1. We were informed the department’s sensitive equipment list contained inaccuracies due to
the manner in which the document was saved in an electronic file. We also noted that
serial numbers were not provided for some equipment on the list which makes it difficult
to positively identify the items.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 14 of 31
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2. A number of items are included on the sensitive equipment list that do not qualify as
sensitive equipment, such as microphone cables and surge protectors.
For items one and two above, we recommend a complete review of the sensitive
equipment list be performed and that the list be updated so it is accurate and more useful.
Institution Response: Correction: A complete review was performed and the electronic file was modified by the Office Manager to include all recommendations from the auditors. Prevention and Monitoring: The sensitive equipment list is reviewed for accuracy by the Operations Manager and the Office Manager.
RECHARGE
Each year university departments are required to submit documentation to the Business
and Finance Department for good or services that are provided to other departments on campus.
The documentation includes the calculations used in determining the recharge rates and the
accounts to which this activity is posted. JCSU submits the documentation for the labor it
provides at events held in the student union building. We reviewed the recharge documentation
that was submitted by JCSU for the 2009-2010 fiscal year to determine whether it was properly
prepared and approved. We also reviewed six recharge transactions to verify the correct rate was
applied and that adequate supporting documentation was maintained.
In reviewing the documentation, we noted the data provided on the financial statement
did not agree with the self-supporting budget form. These documents should be in agreement.
We were informed the departmental employee who prepares the financial statement is not the
same employee that prepares the self-supporting budget.
We recommend the employees coordinate with each other to ensure these documents are
accurate and in agreement before they are submitted to the Business and Finance Department.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 15 of 31
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Institution Response: Correction: The Office Manager and the Scheduling Coordinator will work with the Controller’s Office to ensure that documents are in agreement before submitting to the Controller’s Office. Prevention and Monitoring: The Associate Director of Programs has been assigned the responsibility to review recharge documentation and to ensure agreement with the self-supporting budget before being submitted to the Controller’s Office.
Of the six recharge transactions reviewed, we noted three occasions for which the
incorrect number of work hours was charged for event staff based on a review of the staffs’ time
reports. For two of these, departments were overcharged for the labor and for one a department
was undercharged.
We recommend the work hours reported on the invoices be verified for accuracy.
Institution Response: Correction: The Administrative Assistant II now verifies student hours worked and amounts invoiced to ensure the hours are billed accurately. Prevention and Monitoring: The Office Manager has been assigned the responsibility to review the hours billed to ensure accuracy.
One of the six recharge transactions involved a monthly rent payment received from the
ASUN Bookstore. These payments should be posted to a revenue object code in the financial
accounting system, rather than to the “recharge” object code.
We recommend rent payments be posted correctly.
Institution Response: Correction: The Office Manager prepared a journal voucher on May 23, 2010 to correct the object code. Prevention and Monitoring: The Office Manager will review the transactions on a quarterly basis to ensure they are coded and posted correctly.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 16 of 31
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SPONSORED EVENTS
As previously mentioned, room rental fees are assessed to outside entities that use the
student union facilities. Rental fees are not charged to individuals or groups affiliated with the
university. Labor fees are charged in both instances; however, they are discounted for internal
groups. In addition, outside groups who are “sponsored” by a university group are not assessed
rental fees and receive the discounted labor fee.
Through discussions with JCSU personnel and in reviewing the event policies that are
documented in the JCSU Facility Usage Guidelines and the UNR Administrative Manual, the
following observations regarding “sponsored” events were noted.
1. A form does not currently exist within JCSU to document “sponsored” events. Such a
form should be developed on which the name and signature of the university
representative(s) authorizing these events can be recorded.
We recommend a “sponsored” event form be developed. In doing so, we recommend a
determination be made as to the level of authorization that is needed to sign the form.
The authorization level should be clearly denoted on the form and documented in the
policies.
Institution Response: Correction: The Director will work with a committee to develop a sponsored event form. An authorization level will be clearly defined on the form and documented in the policies. It is estimated that the form will be completed by October 1, 2010. Prevention and Monitoring: Once developed the sponsored event form will be reviewed by the Associate Director of Programs to ensure all the required information has been provided and an authorized representative has signed the form.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 17 of 31
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2. An official representative or designee from the sponsoring university group is not always
present for the duration of “sponsored” events, including set-up and post-event clean-up,
as stated in the UNR Administrative Manual.
We recommend a representative from sponsoring groups be present at events, as required
by current policy. The policy should be included on the “sponsored” event form
described in item one above.
Institution Response: Correction: The sponsored event form will include the current policy from the University Administrative Manual stating that a representative from the group must be present during events. Prevention and Monitoring: Once developed the sponsored event form will be reviewed by the Associate Director of Programs verifying the responsible person has been listed and is attending the event prior to each event confirmation.
3. An Internal Purchase Order (IPO) is required to be completed by campus groups to pay
event charges. We noted the forms are not always received by JCSU within 10 business
days prior to the event, as stated in the facility usage guidelines.
We recommend the policy be included on the reservation confirmation that is issued by
JCSU and on the “sponsor” form, as mentioned in item one above. The sponsoring group
should be responsible for collecting from outside entities, if necessary.
Institution Response: Correction: The policy will be included on the reservation confirmation. Prevention and Monitoring: The Associate Director of Programs will be responsible for ensuring an IPO has been received at the time the reservation confirmation has been received.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 18 of 31
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EXPENDITURES
A sample of 39 expenditures, incurred by the JCSU during the audit period, was selected
for testing. The expenditures were reviewed for proper supporting documentation, approval,
reasonableness, and compliance with established purchasing policies. Of the 39 expenditures
tested, no exceptions were noted with 36. The following was noted with the three remaining
transactions.
1. On one occasion, airfare was purchased for an employee which was subsequently
cancelled. A credit for the transaction was not obtained.
We recommend a review of this matter be performed to determine the reason a credit was
not received. We recommend greater care be taken in the future to ensure airfare credits
are received in a timely manner.
Institution Response: Correction: The Office Manager requested the airline to credit the purchasing card and this request was denied. A second request was made and a credit was issued if used within a year to the passenger named. Prevention and Monitoring: The Office Manager has been assigned the responsibility to ensure that refunds are requested from cancelled flights.
2. One purchasing card transaction, which occurred on the same day with the same vendor,
was split into two separate transactions. The total of the transactions exceeded the $2,000
threshold at which purchase orders are required to be completed.
Purchase orders are required to be completed for transactions of $2,000 and above. We
recommend compliance with purchasing policies.
Institution Response: Correction: Purchasing card users have been reminded to follow purchasing policies with regards to P-Card purchases.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 19 of 31
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Prevention and Monitoring: The Office Manager has been assigned the responsibility to review the transactions to ensure purchasing card policies are being followed.
3. One transaction for audio equipment was charged as an operating supply rather than to
non-inventory or audio visual expense.
We recommend expenditures be charged to the proper expense category.
Institution Response: Correction: A journal voucher was prepared by the Office Manager on July 2, 2010 to correct the object/sub-object code. Prevention and Monitoring: The Office Manager has been assigned the responsibility to review transactions to ensure they are charged to the proper expense category.
INDEPENDENT CONTRACTORS
We reviewed a sample of three independent contractor agreements to determine whether
the forms were properly completed and signed and whether the individuals met the requirements
for independent contractor status. We noted that none of the agreements were signed by the
university's contract review authority and one was not signed by a JCSU representative until
after the start of the contract period. In addition, the Affidavit of Rejection of Coverage for
Workers Compensation section on one form was not completed by the contractor until after the
start of the contract period.
We recommend independent contractor agreement forms be reviewed and signed prior to
the start of the contract period.
Institution Response: Correction: The Coordinator of Programs has been informed by email from the Director on July 14, 2010, that paperwork for Independent Contractors must be initiated 30 days prior to the contract period.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 20 of 31
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Prevention and Monitoring: The Associate Director of Programs has been assigned the responsibility to review each Independent Contractor form prior to the commencement of work to ensure compliance.
LEAVE RECORDS
The leave records of one professional and three classified JCSU employees were
reviewed to determine whether the records were accurately completed and proper record keeping
procedures were followed. The following exceptions were noted.
1. On five occasions, a leave request form was not submitted by an employee for sick time
taken. A leave request form for the missing leave was subsequently submitted after the
omissions were noted by the employee’s supervisor.
2. On nine occasions, sick leave request forms were not submitted by employees within two
days after returning to work. On one other occasion, an annual leave request form was
not submitted before the leave was taken.
For items one and two above, we recommend employees be reminded of the requirements
for completing and submitting leave request forms.
Institution Response: Correction: Employees have been instructed by email from the Director on July 14, 2010, to comply with University policy when completing and submitting leave forms. Prevention and Monitoring: The Office Manager has been assigned the responsibility to review all leave records for accuracy and compliance prior to submitting to the AVP’s office.
3. On one occasion, an employee changed the date furlough leave was taken. The change
was not reflected on the leave record.
We recommend the employee’s leave record be corrected.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 21 of 31
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Institution Response: Correction: The employee’s leave record was corrected on April 30, 2010. Prevention and Monitoring: Leave records are reviewed by the Office Manager and double-checked for accuracy.
STUDENT TIMESHEETS
The timesheets of ten student employees were reviewed for proper completion, accurate
work hours, and compliance with the university’s student employment policies. Three separate
pay periods were reviewed for each student. The following exceptions were noted.
1. Twelve occasions were noted in which students did not take an unpaid lunch break while
working a shift of six hours or more, as required by the student employment policies.
We recommend the department comply with the student employment policies.
Institution Response: Correction: Student Facility Supervisors have been instructed by the Associate Director of Operations to adhere to student employment policies in regards to lunch breaks during shifts. Prevention and Monitoring: The Associate Director of Operations will remind all student employees during monthly meetings to comply with student employment policies with regards to lunch breaks.
2. On one occasion, the work hours recorded on a student’s timesheet did not agree with the
hours for which the student was paid.
We recommend greater care be taken to ensure the correct number of work hours is
reported to the UNR Payroll Department.
Institution Response: Correction: Staff has been instructed by the Associate Director of Operations to ensure the correct number of work hours are reported to UNR Payroll.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 22 of 31
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Prevention and Monitoring: Student hours worked are recorded by Administrative Assistant II and double-checked for accuracy.
TELEPHONES AND CELLULAR PHONES
We noted the long-distance telephone log maintained by the department contains the
personal identification numbers (PIN) that are used by employees to complete long distance
calls. The log is maintained in an electronic file that is accessible to all departmental employees.
For improved security, we recommend the PINs be removed from the log.
Institution Response: Correction: PINs were removed from the telephone logs in April 2010. Prevention and Monitoring: The Office Manager has been assigned the responsibility to review the logs to ensure that PINs are not included.
We also noted the cellular telephone bills received by the department do not include a
detailed listing of calls made. As a result, the department is unable to verify whether calls were
for business purposes.
We recommend the cellular telephone service provider be requested to include the call
detail on the billings.
Institution Response: Correction: Cellular telephone bills with call details have been obtained on-line. Prevention and Monitoring: The Office Manager has been assigned the responsibility of printing monthly cellular telephone bills with call details for review and signature by cell phone users.
COMPUTER ACCESS
Four internal computer applications are utilized in operating the JCSU. We reviewed
employees’ access to each application for appropriateness and noted a terminated employee with
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 23 of 31
24
access to one of the applications. We also noted an employee who has, but no longer needs,
administrative access to the event management application. Administrative access allows users
to access all functions within the application.
We recommend the access for these individuals be removed. We also recommend a
process be developed for periodically reviewing and updating access to the applications when
employees terminate, transfer, or change responsibilities.
Institution Response: Correction: The access for both individuals has been removed. Prevention and Monitoring: The Office Manager works with the Technology Coordinator to ensure computer access removal is part of each employee’s separation process. The Technology Coordinator has been assigned the responsibility to review access to the software applications quarterly.
OTHER
The following items were noted during this review; however, they are not the
responsibility of the JCSU Department.
LEASE AGREEMENTS
Most of the vendors occupying space in the JCSU are assessed lease payments based on
the size of each vendor’s location. Food and beverage vendors are also charged a fee for the
common area that sits between the establishments which is frequently occupied by the vendors’
customers. The fee is calculated based on the size of the common area. The purpose of the fee is
to help pay the maintenance costs of this area.
During a review of vendor lease agreements, we noted the square footage figures on
which the vendors’ lease and common area assessments are calculated were not provided in the
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25
agreements. The vendors were verbally notified of these dimensions at the beginning of the
leases. The figures have been revised since this time but remain undocumented.
It is understood that construction of the building may not have been completed at the time
the agreements were negotiated and as a result, definitive square footage figures could not be
provided. We recommend the square footage figures be documented in the agreements when
future contracts are negotiated.
Institution Response: Correction: A formal notice was sent on July 1, 2010 to each vendor by the Office Manager clarifying the square footage. Prevention and Monitoring: The Associate Director of Operations will review the notices for each tenant. Future leases will include current or updated square footage.
RECHARGE
As previously mentioned in this report, the recharge documentation that was submitted
by JCSU to the Business and Finance Department contained inconsistent information in that the
data provided on the financial statement did not agree with the information on the budget form.
These two documents should be in agreement.
We recommend the Business and Finance Department take greater care to ensure
recharge documentation is accurate before the rates are approved.
Institution Response: Correction, Prevention and Monitoring: Beginning in May 2010 the Controller’s Office or the Business and Finance Office is verifying that the financial statement, the self-supporting budget and the rate calculations are all in agreement.
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26
KEY ISSUANCE
JCSU employees and vendors are provided with keys and access cards to the student
union building. We reviewed the process by which keys and access cards are issued to
determine compliance with the procedures established by the university. The department
maintains issuance forms for each person who has been issued a key or access card. We
reviewed a sample of 11 forms for proper completion. The following exceptions were noted.
1. According to university policy, when employees terminate or transfer within the
university, keys must be returned to the UNR Lockshop. Of the 11 issuance forms
reviewed, 6 were for the issuance of keys and 5 for access cards. We noted all 6 keys
were issued by the department instead of the UNR Lockshop. We were informed that
when keys are turned in by separating employees they are maintained by JCSU and
reissued as necessary.
2. Four key issuance forms did not contain an approval signature. Two other key issuance
forms and two card issuance forms were approved by an unauthorized employee.
3. According to the UNR Administrative Manual and the UNR Key Control Policy, access
cards are issued by the Facilities Management Department. We noted the cards are issued
through UNR Police Services.
4. The key issuance form contains an “Authorized Signature” line. Neither the key request
form nor the university policies identify authorized signers.
For items one through four above, we were informed that the university’s policies for
issuing keys and access cards and the requirements for signing issuance forms are in the
process of being revised. We recommend the revisions be completed in a timely manner
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27
and that they address the issues mentioned above. We recommend the university’s key
policies be updated when the revisions are completed.
Institution Response:
Correction: A group comprised of representatives from Police Services, Facility Services, IT and Business and Finance are currently working on updating and merging the hard key and card key policies for inclusion in the University Administrative Manual.
It is estimated that this process will be complete by December 31, 2010 and will address the issues of who maintains hard key inventory records and levels of approval for issuance of keys and or card keys and will clarify where such keys are issued from.
Prevention and Monitoring: Once the policy is in place the respective responsible office will review compliance with the policy on a semi-annual basis.
LEAVE RECORDS
During a review of employee leave records, we noted the incorrect leave balances for one
employee were carried forward from 2009 to 2010. The employee’s leave records are
maintained in the office of the Associate Vice President of Student Life Services.
We recommend the leave records be corrected.
Institution Response: Correction: The employee’s leave record was reviewed and corrected. Prevention and Monitoring: In the future; a second employee in the Associate Vice President of Student Services Office will double check the leave records. STATEMENT OF REVENUES AND EXPENDITURES
The statement of revenues and expenditures provided below is based on the activity of
the one state and 20 auxiliary accounts assigned to JCSU. The revenue and expenditure
information was obtained from the financial accounting system. The statement is provided for
informational purposes only.
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28
Auxiliary
State
Enterprise
Funds
Funds
Total
Balance, July 1, 2008
$ -
$ 299,540
$ 299,540
Transfers In
-
274,199 1
274,199
Revenues
State Appropriations
172,704
-
172,704
Tuition & Fees Unrestricted
-
906,745
906,745
Sales Auxiliary
-
399,770
399,770
Investment Income
-
894
894
Total
172,704
1,307,409
1,480,113
Transfers Out
-
271,237 1
271,237
Expenditures
Salaries
172,704
1,068,444
1,241,148
Travel
-
4,893
4,893
Operations
-
161,942
161,942
Equipment
-
18,388
18,388
Recharge
-
(307,165)
(307,165)
Total
172,704
946,502
1,119,206
Balance June 30, 2009
$ -
$ 663,409
$ 663,409
Balance July 1, 2009
$ -
$ 663,409
$ 663,409
Transfers In
-
750,185 2
750,185
Revenues
State Appropriations
151,725
-
151,725
Tuition & Fees Unrestricted
-
837,784
837,784
Sales Auxiliary
-
214,489
214,489
Other
-
53,542
53,542
Total
151,725
1,105,815
1,257,540
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29
Transfers Out
-
748,844 2
748,844
Expenditures
Salaries
151,025
1,097,776
1,248,801
Travel
-
7,092
7,092
Operations
-
260,068
260,068
Equipment
-
27,914
27,914
Recharge
-
(266,946)
(266,946)
Reserves
34
34
Total
151,025
1,125,938
1,276,963
Balance March 31, 2010
$ 700
$ 644,627
$ 645,327
1 These transactions consist primarily of transfers between JCSU accounts. In addition, $6,219 was transferred from other university department accounts for event related activities and $3,257 was transferred to the Student Services division host account.
2 These transactions consist primarily of transfers between JCSU accounts. In addition, $4,000 was received from the sale of equipment to another department and $2,659 was transferred to the Student Services division host account.
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 29 of 31
30
The Internal Audit Department appreciates the cooperation received from JCSU
personnel during this review.
Reno, Nevada July 7, 2010 Mary S. Stoltz
Senior Internal Auditor Eric Wilber Internal Auditor Grant Dintiman Information Technology Auditor Scott Anderson Internal Audit Manager Sandra K. Cardinal
Assistant Vice Chancellor for Internal Audit and Risk Management
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 30 of 31
Memorandum
To: Sandi Cardinal, Assistant Vice Chancellor for Internal Audit and Risk Management, Nevada System of Higher Education
From: Tom Judy Date: August 2, 2010 Subject: Response to the Audit of Joe Crowley Student Union The purpose of this memorandum is to transmit the response from the University of Nevada, Reno Student Services Department for the audit of Joe Crowley Student Union covering the period January 1, 2009 through March 31, 2010. I have reviewed and concur with all responses. cc: Milton Glick, President Ronald Zurek, Vice President, Administration and Finance
Shannon Ellis, Vice President, Student Services Gerald Marczynski, Associate Vice President, Student Life Services
Business and Finance University of Nevada, Reno/1124
Reno, Nevada 89557-1124 Telephone: (775) 784-6662
Fax: (775) 327-2306
(AUDIT COMMITTEE 09/09/10) Ref. A-5, Page 31 of 31
a-5a-5aMemorandum