UNIVERSITY OF NEVADA, LAS VEGAS ALUMNI RELATIONS Internal Audit Report July 1, 2009 through December 31, 2010

Transcription

1 UNIVERSITY OF NEVADA, LAS VEGAS ALUMNI RELATIONS Internal Audit Report July 1, 2009 through December 31, 2010 GENERAL OVERVIEW The University of Nevada, Las Vegas (UNLV) Alumni Relations Department is located in the Richard Tam Alumni Center and currently has five full-time employees. Funding for the department comes from state funds, rental revenue and donor specified gifts. The main function of the Alumni Relations Department is to serve as liaison between the UNLV Alumni Association and its partners, alumnus, and the community. SCOPE OF AUDIT The Internal Audit Department has completed a review of the Alumni Relations Department at UNLV for the period of July 1, 2009 through December 31, The scope of our review included tests of the accounting records and other auditing procedures, as we considered necessary. The tests included, but were not necessarily limited to these areas. 1. Reviewing departmental policies to ensure compliance with Board of Regents policies. 2. Reviewing internal controls over the collection of funds. 3. Reviewing policies and procedures for facility rentals. 4. Reviewing departmental expenditures, as well as purchasing card and travel expenses for reasonableness and compliance with related policies. 5. Reviewing documentation maintained on student employee timesheets, long distance and cell phone records, and employee leave records. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 1 of 18

2 In our opinion, we can be reasonably assured that the Alumni Relations Department is operating in a satisfactory manner and that no major control weaknesses exist. However, implementation of the following recommendations would further improve operations. GENERAL POLICIES AND PROCEDURES During our initial meeting with the department, we noted that the department did not have many written internal policies and procedures. This has made it difficult for employees to determine which procedures to follow for day-to-day operations. The department has also experienced high employee turnover at the director level, and a lack of policies and procedures has made it difficult to train new directors and other key employees on the operations of the department. We recommend a policies and procedures manual be developed to provide day-to-day operational guidance and to ensure a smooth transition when staffing changes occur. The policies and procedures manual should address the functions of the department, the department s relationship with the UNLV Alumni Association, departmental policies and procedures, and a description of the function and processes of each employee. Institutional Forward We recognize the significant number of issues involved in this audit as well as their significance. The overall position we find ourselves in is that this department has had a significant turnover in the recent past. We have had three Executive Directors in the past two years. As such, there is an extremely limited amount of overall guidance and instruction within the department. This has left us without the knowledge to operate successfully within policies and procedures within the University. The Vice President for Advancement s Office will be providing overall guidance and direct assistance in the implementation of these recommendations and ensuring that this guidance will be provided in advance for future administrators. This administrative oversight will provide additional long-term benefits to the department. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 2 of 18

3 We have begun the process of creating a procedures manual for our day-to-day operations. This manual will necessarily incorporate the other recommendations made in this report and is expected to be the final item to be completed. We anticipate the completion of this document by December, Once completed, the Administrative Assistant will make periodic reviews of the procedures and make adjustments as necessary. The manual has been completed. As noted above, the Administrative Assistant will make periodic reviews of the manual and make adjustments as necessary. CASH HANDLING One of the responsibilities of the Alumni Relations Department is to collect funds on behalf of the Alumni Association. The funds that are collected include membership dues, Alumni Association event revenues, and sales of Alumni Association merchandise. We conducted a review of the controls and procedures in place for the collection of Alumni Association funds and noted a large amount of checks and cash being kept in the safe located in the Alumni Relations office. The funds collected by the department are generally deposited on a monthly basis and the deposit schedule is largely controlled by the Alumni Association. During our review, we also noted when deposits occur, one UNLV employee takes the deposit to an offcampus bank without an escort. We recommend a review of the current schedule and procedures for depositing Alumni Association revenues be completed. Based upon the review, policies and procedures should be (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 3 of 18

4 developed to safeguard the funds and to reduce the liability of departmental employees and the University. Deposits for the Alumni Association are made at an off-campus bank and the procedures for these deposits were established by the Alumni Association. Our primary concern has been the safety of the employee as she needed to drive to an off-campus location to make the deposits. We have corrected this by asking the bank to provide a courier to make the deposits for us. Using the courier will remain an established portion of our procedures. The Executive Director will retain control over the deposit process and maintain communication with the Alumni Association if problems are detected in the future. FACILITY RENTALS The Alumni Relations department is responsible for the rental of the Tam Alumni Center facilities. Different rooms can be rented by interested parties and the rental revenue is split between Alumni Relations and the Alumni Association. The maintenance of the Alumni Center is paid by Alumni Relations funds. The current arrangement for maintenance of the facility and the split of facility rental revenues has not been formally documented and approved by the department and the Alumni Association. We recommend the current procedures regarding the maintenance of the Alumni Center and the split of facility rental revenues be reviewed and a determination be made whether the current agreement is acceptable to both parties. Once the review has been completed, we (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 4 of 18

5 recommend a written agreement detailing the procedures be created and the agreement be reviewed and approved by the appropriate individuals. The Executive Director of the Alumni Association has met with the President of the Alumni Association and has agreed on the general terms of an agreement between the two agencies. We are currently working with UNLV General Counsel to ensure that the written agreement is in an acceptable legal form. We expect to have this completed by the fall of A memorandum of agreement has been completed between the Alumni Association and the Alumni Relations Department. The document reflects the relationship between the two agencies to include the issues noted by the auditor above. During our review we also noted the current facility rental contract being used does not list the Board of Regents as the contracting party, as required. The contract also does not appear to have been reviewed by General Counsel. We recommend the facility rental contract be revised to include the proper contracting party. We also recommend the contract be reviewed and approved by General Counsel. This document is under review by UNLV General Counsel. We have been advised by General Counsel that this contract cannot be approved until the MOU noted in the previous recommendation has been completed. We anticipate that this will be completed during the fall of The Executive Director will ensure that future rental agreements are within the established approved format. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 5 of 18

6 This document remains under review by General Counsel. We anticipate that the review will be completed by December, Currently, there is no written policy governing the waiver of rental fees and deposits. It appears the rental fees and deposits can be waived by the Senior Director on a case-by-case basis. During our review, we noted the person authorizing the waiver of fees was recorded, but no justification was documented. We recommend a formal policy on rental fee and deposit waivers be developed. The policy should address how and when fees can be waived, and also determine who must approve the fee waiver. We also recommend a justification be provided when rental fees and deposits are waived. We are in the process of developing a formal policy on waivers. We expect to have this completed by July, Once implemented, the Executive Director of Alumni Relations will periodically review the policy to ensure that it reflects the intent of the department. The policy has been completed. The Executive Director of Alumni Relations will have responsibility for periodic review of the policy and making updates as necessary. The Internal Audit Department also noted there are specific groups that have been granted use of the facility free of charge on a recurring basis; however, there is no documentation of an agreement and the responsibilities of the department and respective groups have not been clearly defined. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 6 of 18

7 We recommend an agreement be created and properly approved for all groups that have been granted recurring use of the facility at no cost. We also recommend a policy be created to address the policies and procedures for granting a group use of the facility free of charge. The continued use of the facilities at no cost is being formalized in the agreement noted above which will be reviewed and approved by General Counsel. We expect to have this completed by the fall of Once established, the Executive Director of Alumni Relations will periodically review the agreement prior to each renewal period to ensure that it meets the intent and expectations of both parties. A memorandum of understanding has been prepared between the UNLV Alumni Association and the Alumni Relations Department that addresses this issue. This policy will be periodically reviewed by the Executive Director of Alumni Relations to ensure that it is current. REIMBURSEMENTS FROM ALUMNI ASSOCIATION The Alumni Relations staff is responsible for planning and executing Alumni Association events. This includes obtaining the necessary supplies for the events and creating flyers and other event advertisements. The UNLV Reprographics department is used to meet most reprographics needs for the events. Since the work is completed by a UNLV department, the expenses are billed to the Alumni Relations Department and are paid by an Interdepartmental Requisition (IDR) using the department s state funding. Once the total cost related to the event is determined, the Alumni Association is notified and the department is reimbursed on a quarterly basis. The current reimbursement arrangement creates a situation where some of the (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 7 of 18

8 department s state funds may not be readily available for the department s use, and may also create a situation where a lump sum of money is reimbursed to the state account at the end of the fiscal year and reverted to the state if it is not used. We recommend the current arrangement for the reimbursement of state funds be reviewed and a determination be made whether the current process is the most beneficial and cost-effective process for the parties involved. Once a review is completed, we recommend the procedures be documented to ensure continued compliance. We are currently working on alternative solutions to this arrangement that will resolve this problem. We expect to have the issue resolved by the summer of Approximately 95% of the reimbursement issues were due to payments by the Alumni Relations Department to the UNLV Reprographics Department on behalf of the Alumni Association. The Reprographics Department now directly bills the Alumni Association, effectively eliminating this problem. All other reimbursement issues are included in the current memorandum of understanding between the Alumni Relations Department and the Alumni Association. During our review of travel expenditures, we noted airfare was purchased for a guest and justification or approval was not available. Upon further review, it was determined this purchase was made on behalf of the Alumni Association because sufficient funds were not available on the Association s credit card to purchase the airfare. The expenses were paid using the department s self-supporting funds in November 2010 and were reimbursed by the Alumni Association in February (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 8 of 18

9 UNLV policy states the use of University resources for private or personal purposes is generally prohibited. We recommend transactions of this type be reviewed and a determination be made whether they are allowable. If it is determined that this is an appropriate use of University resources, we recommend policies, procedures, and a justification be documented and approved by the appropriate individuals. We also recommend that the reimbursement of funds be completed in a timely manner. This situation occurred when the Alumni Association invited a basketball player from the 1990 championship team to attend the 20-year reunion at the UNLV Homecoming football game. The cost of travel of about $4500 was paid by the Alumni Relations Department on behalf of the Alumni Association and was reimbursed to us in January. We are now aware that we are prohibited from loaning any funds to the Alumni Association. As noted by the auditor, all funds have been reimbursed to the University and we have no out-of-pocket expenses for this event at this time. The Executive Director of Alumni Relations will ensure that the use of University resources for this type of purpose will not occur in the future. STUDENT EMPLOYEES We reviewed four student employee timesheets for the period of July 1, 2010 through December 31, We noted 45 instances in which a student employee worked six or more hours and did not take a required 30-minute unpaid lunch break. We recommend students and supervisors be (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 9 of 18

10 reminded that a 30-minute unpaid lunch break must be taken and indicated on the employee s timesheet when working six or more hours. We had believed that we were in compliance with all established policy regarding this matter. We were unaware that the UNLV Student Employment Guide has established that a six-hour work period is the requirement for a 30-minute unpaid break. The three supervisors of student employees have been advised of this policy and now ensure that it is enforced. The Administrative Assistant now performs a review of samples of timesheets to help ensure compliance with this policy. On eight occasions, an employee worked more than eight hours in a day and was not compensated with overtime pay. Overtime should be paid when an employee works more than eight hours in one day or 40 hours in one week. We recommend the department ensure that overtime worked is properly compensated. We also recommend a review of student timesheets be completed to determine whether other employees are owed additional compensation for overtime worked. The students had already been paid at a regular rate for the hours worked and were only due the difference between overtime and the regular rate. The student identified in the audit was owed $63 for 14 hours of overtime. We also have reviewed all timesheets for the current year and have identified three other students who are owed overtime pay. The (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 10 of 18

11 total for these three students is 2.5 hours and $ We sent the appropriate documentation to the UNLV Payroll Office to pay the employees the full amount due. Supervisors of student employees will be responsible for ensuring that we remain in compliance with overtime policy. As a cross-check, the Administrative Assistant IV will perform a sample review of timesheets. We noted one instance in which an employee s total hours worked was not properly calculated. We recommend greater care be taken to ensure hours worked are properly calculated for student employees. The incorrect calculation of one hour resulted in a small overpayment of $9 to the student employee. This is one of the students who was owed overtime pay in the finding above. We subtracted the money from the amount due to the student. The three supervisors of student employees have been reminded that their signature on the timesheet indicates that the hours worked are correct, to include the calculation of hours worked. Supervisors of student employees will be responsible for ensuring that timesheets are accurate to include the calculation of hours worked. As a cross-check, the Administrative Assistant now performs a review of samples of timesheets. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 11 of 18

12 During our review of student employee records, we noted some of the department s student employees work at Alumni Association events which fall outside of normal office hours. One of the student employees is on-call and generally only works during Association events. The wages for student employees working Association events is paid from the department s state funds. We recommend a review be completed of funding for student employees and a determination be made on how student employees working Alumni Association events should be funded. If it is determined that the current arrangement is appropriate, we recommend an agreement be created that clearly documents the terms of the arrangement. A review has been performed by the Associate Vice President for Finance. The opinion was formed that the current arrangement is appropriate based on Board of Regents policy in Title 4, Chapter 10, Section 9 regarding NSHE and Member Institution Foundations Administration and Accounting Policies. These policies apply to foundations or other fund-raising groups that are not member institution foundations, but which have been established to raise funds primarily for the institutions or programs within the NSHE. The University and Community Relations Department supports the Alumni Association whose primary function is to establish relationships with alumni for the purpose of raising funds. In our opinion, the University has followed the policies in Title 4, Chapter 10, Section 9. These policies document the arrangement between the Institution and fund-raising groups. Our review determined that no corrective action is necessary. TELEPHONE RECORDS During our review of long distance and cell phone records, we noted one employee pays 15% of the total bill each month instead of reimbursing UNLV for each personal call. The (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 12 of 18

13 employee did not indicate on the bill whether calls made from the University issued cell phone were for personal or business purposes. This made it difficult to determine whether the 15% monthly payment was sufficient to cover personal use. We recommend a periodic review of personal calls made on University issued cell phones be completed to ensure reimbursements from employees are sufficient to cover all personal use. We now provide a taxable phone allowance to the employee through the Payroll Office. This is in compliance with all applicable regulations. There will be no need for monitoring under the new process. TRAVEL EXPENDITURES During our review of travel expenditures, we noted expenses for airfare and lodging were paid on behalf of a guest using a departmental purchasing card. These expenditures were coded using the expense codes used for employee travel. The University uses a different expense for travel for individuals not affiliated with the University and does not fall into the category of an employee, volunteer, student, or independent contractor. We recommend the proper guest travel expense be used when travel arrangements are made for University guests. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 13 of 18

14 This is the same expense incurred when the Alumni Relations Department paid the cost of a former basketball player to attend the UNLV Homecoming. The cost of this travel was already reimbursed to the University. Therefore, no correction is necessary. The Administrative Assistant has received direction regarding the usage of various travel codes. She now understands how to properly account for guest travel. The Executive Director will ensure that coding is properly done. PURCHASING CARD According to UNLV travel policy, non-meal tips are not reimbursable and may not be charged to a purchasing card. During our review, we noted a tip for a taxi was charged to a purchasing card while the cardholder was traveling on official business. We recommend greater care be taken to ensure non-meal tips are not charged to purchasing cards. In the event it cannot be avoided, we recommend a proper reimbursement be made in a timely manner. This is an example of our procedures working properly. During review of the receipts submitted with the travel document, the Travel Office noted this payment and deducted the $5 from the traveler s reimbursement. The net effect to the University is zero. Staff members have been advised of the proper items which may be paid using University funds during travel status. The Administrative Assistant will perform additional reviews of travel documents to ensure that these are properly completed. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 14 of 18

15 EQUIPMENT INVENTORY The Alumni Relations Department has an inventory listing that includes 28 pieces of equipment with a total value of $61,000. Of these items, we were unable to locate one piece of equipment. Upon further review, it was determined the item does not belong to the department and it was requested that the item be deleted from the department s inventory during the last yearly review conducted by the department. According to Inventory Control, the movement of the item must be requested by the department to whom the item belongs. We recommend the department work with Inventory Control and the department that owns the missing item to ensure the proper forms are completed to remove the item from the Alumni Relations inventory listing. The item in question is a laptop computer that was purchased in It belonged to an employee who transferred from this department to another department and took the laptop with him to the new department. The item has since been surplused and is no longer in the UNLV inventory in either department. This department performs a review of inventory equipment each year during April. The laptop was noticed during this annual review but no follow-up action was taken. The Administrative Assistant is now aware of the property movement request process and will complete the documentation for this type of action in the future. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 15 of 18

16 STATEMENT OF REVENUE AND EXPENDITURES A statement of revenues and expenditures, based on the activity of the UNLV Alumni Relations accounts, is shown below. The statement is provided for informational purposes only. State Accounts Self-Supporting Gift Accounts Total Balance, July 1, 2009 $ - $ 22,317 $ 1,355 $ 23,672 Transfers-In - 2,777-2,777 Revenues State Appropriations 754, ,643 Sales Gifts - - 4,900 4,900 Total Revenues 754,643-4, ,543 Transfers-Out Expenditures Salaries 659, ,355 Travel - 1,643-1,643 Operating 95,288 8, ,277 Hosting - - 5,617 5,617 Recharge - (10,584) - (10,584) Total Expenditures 754, , ,308 Balance, June 30, 2010 $ - $ 25,046 $ 638 $ 25,684 Balance, July 1, 2010 $ - $ 25,046 $ 638 $ 25,684 Transfers-In Revenues State Appropriations 698, ,754 Sales Gifts Total Revenues 698, ,754 Transfers-Out Expenditures Salaries 263, ,363 Travel - 3,291-3,291 Operating 50,405 3,570-53,975 Hosting Recharge - (1,125) - (1,125) Outstanding Encumbrances 224, ,017 Total Expenditures 538,336 6, ,762 Balance, December 31, 2010 $ 160,418 $ 18,861 $ 397 $ 179,676 The Internal Audit Department appreciates the assistance and cooperation received from the Alumni Relations personnel during this review. (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 16 of 18

17 Las Vegas, Nevada March 11, 2011 Tami T. Taketa Senior Internal Auditor Joseph R. Sunbury Internal Audit Manager Sandra K. Cardinal Assistant Vice Chancellor for Internal Audit and Risk Management (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 17 of 18

18 AUDIT: UNLV Alumni Relations AUDIT PERIOD: 07/01/ /31/2010 NUMBER OF FINDINGS: 16 NUMBER OF RECOMMENDATIONS IMPLEMENTED: 15 Nbr Finding Agree Implemented Est Date of Completion 1 Department needs written policies Yes Yes 2 Alumni Association revenue deposits are not done properly Yes Yes 3 Facility rental agreement with Alumni Association needs to be updated Yes Yes 4 Facility rental agreement does not list BOR as the contracting party Yes No 12/ Need formal policy on rental waivers Yes Yes 6 Need documentation on agencies with a rental waiver Yes Yes 7 Reimbursements from Alumni Association are not timely Yes Yes 8 Funds may have been used for private purpose Yes Yes 9 Students did not take 30 minute break Yes Yes 10 Student not paid overtime Yes Yes 11 Hours not calculated properly Yes Yes 12 Source of student pay may be incorrect Yes Yes 13 Employee cell phone charges may be too low Yes Yes 14 Incorrect coding for guest travel Yes Yes 15 Non-allowable tip charged to PCard Yes Yes 16 Inventory item missing Yes Yes Campus Audit 4505 Maryland Parkway Box Las Vegas, Nevada (702) FAX: (702) (AUDIT COMMITTEE 12/01/11) Ref. A-2d, Page 18 of 18