UNIVERSITY OF NEVADA, LAS VEGAS HARRY REID CENTER FOR ENVIRONMENTAL STUDIES Internal Audit Report July 1, 2007 through June 30, 2008

Transcription

1 UNIVERSITY OF NEVADA, LAS VEGAS HARRY REID CENTER FOR ENVIRONMENTAL STUDIES Internal Audit Report July 1, 2007 through June 30, 2008 GENERAL OVERVIEW The Harry Reid Center (HRC) at the University of Nevada, Las Vegas (UNLV) provides support for programs which conduct research and testing in the areas of environmental studies. According to the HRC website, their principle mission is to support multidisciplinary research teams, to provide expertise to solve complex environmental problems, and to develop innovative environmental monitoring technology. The HRC consists of nine divisions and most of the funding for activities of the HRC is provided through federal and state grants. AUDIT SCOPE The Internal Audit Department has completed a review of the Harry Reid Center for the period of July 1, 2007 through June 30, The scope of our review included tests of the accounting records and other procedures as considered necessary. The tests included, but were not limited to, these areas. 1. Examining HRC grant agreements and backup documentation. 2. Reviewing grant employee effort certification reports for accuracy and timely submission. 3. Testing host expenditures for propriety, supporting documentation and proper signature approvals. 4. Testing departmental travel expenditures for propriety, supporting documentation and proper signature approvals. (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 1 of 11

2 5. Examining departmental purchasing card transactions for supporting documentation and approval. 6. Reviewing student employee timesheets for accuracy and approvals. In our opinion, we can be reasonably assured that the HRC at UNLV is operating in a satisfactory manner and no major control weaknesses exist. However, implementation of the following recommendations would further improve operations. STUDENT EMPLOYEES The Internal Audit Department performed a review of timesheets and payroll records for six students who were employed by the HRC during the audit period. During our review, various errors were noted on all six student employee timesheets. According to the UNLV student employee guide, a student working a full eight-hour day is entitled two 15-minute breaks with pay and no less than a 30-minute lunch break without pay. The breaks may not be taken at the beginning or end of a work period. During our review of student employee timesheets, we noted 77 instances in which there was no indication that a 30- minute unpaid lunch break was taken. The exceptions were noted for five of the six students reviewed. We recommend that employees and supervisors be reminded that an unpaid 30-minute lunch break must be taken when working a full eight-hour shift. We agree with this recommendation. As a result of this audit, we sent an to each supervisor of student employees advising them of this requirement. We also disseminated the information at a staff meeting. All supervisors of student employees have been provided a copy of the UNLV Student Employment Manual. Supervisors of student employees are now aware of the requirement and this problem no longer occurs. All (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 2 of 11

3 student employees take a 30-minute off-the-clock break when working an eight-hour shift as required by federal regulations. We respectfully request that this item be closed. We also noted 10 instances in which an employee worked in excess of eight hours in one day. According to UNLV policy, overtime is defined as work in excess of 40 hours per week or eight hours per day. In addition, it is strongly advised that students not work over 20 hours per week. We recommend consideration be given to discontinuing the practice of allowing student employees to work in excess of eight hours. We also recommend that the employee timesheets be reviewed to determine whether the employees are owed overtime pay for the hours worked. We agree with this recommendation. We have discontinued the practice of allowing student employees to work more than eight hours in a day or 40 hours in a week. As a result of the audit, we reviewed timesheets for all of FY08 and FY09 to ensure that students were properly paid for overtime hours worked. We identified additional instances in which the overtime rate was not paid, and have sent correcting information to the Payroll Office. The student who had not received overtime pay has now been properly paid. We respectfully request that this item be closed. On five occasions, we noted that a supervisory signature was not obtained on student timesheets. This occurred on timesheets for four employees. On one occasion, the total number of hours worked during the pay period did not agree with the hours recorded on the employee s timesheet. We recommend that greater care be taken to ensure that timesheets are properly reviewed and approved by the employee and their supervisor. We agree with this recommendation. The lack of appropriately signed timesheets was due to an incorrect interpretation of UNLV policy by the previous Director of Finance of the Harry Reid Center. The Center is now operating under senior management with a stronger emphasis on business operations and management oversight. All timesheets are now signed by both the student employee and his/her supervisor. As an additional cross- (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 3 of 11

4 check to this process, the administrative assistant who prepares the timesheets for the Payroll Department performs a review of each timesheet to ensure that all timesheets are properly signed. We respectfully request that this item be closed. GRANT FILE REVIEW We performed a review of 12 grant files, noting two exceptions in one file reviewed. According to the UNLV policy, approval to utilize human subjects in research must be obtained from the UNLV Office for the Protection of Research Subjects prior to the start of the study. For one grant reviewed, we noted that human subjects were utilized in the study and the required research protocol proposal form was submitted after the anticipated start date of the study and therefore, authorization to use human subjects was not obtained prior to the start of the study. We recommend that all Principle Investigators be reminded that the research protocol proposal forms and approval must be obtained prior to the start of any study involving human subjects. We agree with this recommendation. The Center is operating under new management with a stronger emphasis on business processes and management oversight. The individual who began the research protocol prior to obtaining formal approval no longer works for the University. All current staff members have been specifically advised of the requirement to have all necessary approvals in place prior to beginning any study involving human subjects. Each of our executive directors reviews projects under his control to ensure that the appropriate request is submitted and approved prior to beginning any such project. We respectfully request that this item be closed. During our review, we noted one instance in which an invoice for subcontracting services was received from the vendor prior to having a contract with the vendor in place. (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 4 of 11

5 We recommend greater care be taken to ensure that the required documents and contracts are in place before services are provided by subcontractors. We agree with this recommendation. This problem occurred due to a breakdown in communication between the Principle Investigator and the Business Office. When the grant proposal was approved, the Principle Investigator believed that the subcontracts had been approved and the contracts put in place, and acted accordingly. This resulted in the use of the subcontracting services prior to an executed contract being put in place. The Financial Administrator now takes a more proactive role in the execution of subcontracts. She also takes an active role in ensuring that Principle Investigators are informed in writing of the status of subcontracts and when a contract has been fully executed. We respectfully request that this item be closed. Upon the completion of our initial review of grant files, we were provided with further insight into the circumstances surrounding some of the exceptions noted. The explanation was verbally communicated, but no written documentation was available. In an effort to ensure that as much information as possible is available when a divergence from the policies and procedures occurs, we recommend that circumstances surrounding the divergence be documented in the grant file. While the additional documentation will not correct the error, it will help to clarify the circumstances which lead to the situation. We agree with this recommendation. These situations normally occur when a Principle Investigator who is not fully aware of the financial requirements takes action without first consulting the Business Office. The correction to this situation lies in informing staff of requirements of monitoring the projects as they progress. The Financial Administrator has advised staff through s and at staff meetings of the importance of including the Business Office in financial decisions. This has had the effect of reducing the number of variations of policy. The Financial Administrator now documents variations of policy. We respectfully request that this item be closed. (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 5 of 11

6 EQUIPMENT INVENTORY The Internal Audit Department reviewed a sample of 48 pieces of equipment inventory with a total value of $860,307. The following exceptions were noted during our review. During our review of equipment inventory, we were unable to locate three items on the departmental inventory listing. We recommend that an attempt to locate the missing items be made. In the event that the equipment cannot be located, we recommend that the proper procedures be followed to have the items removed from the departmental inventory. We agree with this recommendation. Two of the three missing items have been located. The remaining item, a carbon monoxide monitor, was acquired in 1990 and had no remaining book value. The item has been reported as missing to the UNLV Inventory Control Department and has been removed from our inventory. The department now conducts an annual review of all inventory items assigned to our department to ensure that inventory records are accurate. We respectfully request that this item be closed. In addition, two items were located based upon the serial number, but the items did not have a property asset tag. We agree with this recommendation. Immediately upon learning of this discrepancy, the UNLV Inventory Control Department was contacted and the items were retagged. Similar situations in the future should be detected during our annual review of inventory equipment. We respectfully request that this item be closed. (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 6 of 11

7 According to HRC records, one piece of equipment was loaned to a subcontractor located in San Diego, CA. An equipment loan agreement was completed, but the loan period stated on the form began prior to the approval date. We recommend that greater care be taken to ensure that all equipment loan agreements are completed and approved prior to the transfer of the equipment. We agree with this recommendation. This discrepancy occurred due to an individual not understanding the necessity of documenting equipment located off-campus. When the individual was made aware of this requirement, the agreement form was completed and in place at the time of the audit. The Financial Administrator has performed a full review of all equipment not located on campus and ensured that all such equipment has an equipment loan agreement on file. Additionally, she has sent an to all staff reminding them of this requirement and included a copy of the loan agreement form with the . We respectfully request that this item be closed. EMPLOYEE LEAVE RECORDS We reviewed nine employee leave records and noted the following exception. On three occasions, a leave request form was not submitted in a timely manner. These occurrences were noted for two of the nine employee leave records reviewed. According to the Board of Regents policy, insofar as possible, all leave must be requested and approved in advance by the supervisor and the approval and recording of unanticipated leave must occur immediately after use. We recommend that employees be reminded that leave requests must be submitted prior to taking leave or as soon as possible upon returning to work. We also recommend that when it is not possible to adhere to the Board of Regents policy, the justification be noted on the employee s leave request form. (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 7 of 11

8 We agree with this recommendation. The Financial Administrator, who serves as the department s leavekeeper, reminded all staff of the necessity of obtaining approval in advance for annual leave. This same individual now documents any variation from policy on the leave request form. We respectfully request that this item be closed. (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 8 of 11

9 STATEMENT OF REVENUE AND EXPENDITURES A statement of revenues and expenditures based on the activity of the HRC accounts is shown below. The statement is provided for informational purposes only. Unrestricted Grant Accounts Accounts Total Balance, July 1, 2007 $2,953,755 $ - 2,953,755 Transfers-In 179, ,902 Revenues Sales & Educational Services 135, ,819 Indirect Cost Recovery 859, ,098 Local Grants - 313, ,395 State Grants - 2,175,163 2,175,163 Federal Grants - 35,257,551 35,257,551 Private Grant - 1,145,221 1,145,221 Total Revenues 994,917 38,891,330 39,886,247 Transfers-Out 490,042 35, ,150 Expenditures Salaries 1,065,024 11,354,287 12,419,311 Travel 22, , ,827 Operating 241,675 1,809,921 2,051,596 Recharge (73,943) - (73,943) Equipment - 1,688,660 1,688,660 Sub-contracts - 19,337,748 19,337,748 Indirect Cost - 5,450,021 5,450,021 Total Expenditures 1,255,281 40,083,939 41,339,220 Balance, June 30, 2008 $2,383,251 ($1,227,717) $ 1,155,534 Note: The deficit balance in the grant accounts are a result of expense reimbursements that were submitted but still pending payment from granting agency at year end. (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 9 of 11

10 The Internal Audit Department would like to thank the personnel at the Harry Reid Center for their assistance and cooperation during the audit. Las Vegas, Nevada March 31, 2009 Tami T. Taketa Senior Internal Auditor Joseph Sunbury Internal Audit Manager Sandra K. Cardinal Assistant Vice Chancellor for Internal Audit and Risk Management (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 10 of 11

11 AUDIT: Harry Reid Center for Environmental Studies AUDIT PERIOD: 07/01/ /30/2008 NUMBER OF FINDINGS: 10 NUMBER OF RECOMMENDATIONS IMPLEMENTED: 10 Nbr Finding Agree Implemented Est Date of Completion 1 Students working without required breaks X X 2 Students working in excess of eight hours X X 3 Student timesheets need adequate review and supervisory signature X X 4 Human subjects used prior to obtaining approval X X 5 Contract services used prior to establishing a contract X X 6 Divergence from policy without written explanation X X 7 Missing equipment items X X 8 Equipment items need to be re-tagged X X 9 Equipment loaned prior to obtaining an equipment loan agreement X X 10 Annual leave taken without prior approval X X Campus Audit 4505 Maryland Parkway Box Las Vegas, Nevada (702) FAX: (702) (AUDIT COMMITTEE 09/17/09) Ref. A-7, Page 11 of 11