NDUS FY 2010 AUDIT RECOMMENDATIONS - ACTION PLAN

Transcription

1 Prior Recommendations Not Implemented 1 Proper Account Codes 2 Establish Appropriate Internal Controls & Training All Specific recommendations will be identified by March 31st for implmentation in the preparation of FY11 statements, to the extent possible. ongoingthrough FY11 year end close See tab " PY 1 & 2" Perform comprehensive fraud and risk control 3 assessment & Code of Conduct All 06/30/11 On 06/17/10, the SBHE authorized the NDUS to hire an external firm to complete the risk assessment for UND, NDSU, NDUSO and one other campus. LarsonAllen was hired to complete the assessments at each campus & the System Office. Code of Conduct DSU 7/1/11 Code of Conduct is completed. All benefitted employees will be asked to read and sign by 06/30/11 NDSU 7/1/11 4/11/2011 Completed. NDSCS 6/30/11 NDSCS will have the Code of Conduct policy in place by June 30, Internal Audit NDUS/UND/NDSU 09/30/11 A review at UND and NDSU is currently underway. The review is taking into account current internal audit staffing levels, current audit plans and adequate coverage compared to commonly used internal audit benchmarking methodologies. The NDUS Internal Audit Director began employment in February Background Checks MaSU MaSU is in the process of updating the background check policy to require a formal criminal background check prior to employment for security guards, custodians, resident assistants, coaches, child care providers and lifeguards and any position that requires carrying a campus master key or direct interaction with children. It has been approved by the President's cabinet and is expected to go into effect before June 30, 2011 NDSCS NDSCS is performing background checks on applicants before they start employment. VCSU policy V602.3 was revised to incorporate relevant student positions. We reviewed student and other temporary VCSU Y positions and determined which ones fell under the revised policy and retroactively conducted background checks. VCSU was and is conducting required background checks on all new employees; we are now including new student employees hired into positions identified in policy. WSC Y WSC is administering background checks, as required in policy Imaging Software All schools A meeting was held with the SAO on Feb. 15th for more clarification. In summary, the SAO explained that the campuses should follow the checklist in NDUS Procedure

2 PY Recommendation #1 & #2 Action Plan: Estimated Completion Date 1 Make changes to templates that were identified in FY10 audit 6/30/2011 Comments 2 Meet with SAO to discuss reducing # of CU 5/31/ Customize GASB conversion template for each CU to the extent possible 6/30/ Explore possiblity of using PS for generation of statements 6/30/2011 The Director of Financial Reporting is currently discussing various options with GASB, the SAO and OMB. The Director of Financial Reporting met with OMB in January to review their process. A CND analyst also met with them in January. She is developing a SNA that we hope to use at year end. The Director of Financial Reporting and the CND analyst are reviewing the report to determine if it can be used at year end. 5 Annual Controller Group Training & Face-to-Face meeting 4/28/2011 Training occurred on April 27th in Fargo. The face to face meeting was held on April 28th. Larson Allen conducted the training. 6 Meeting with MNSCU and University of Minnesota's financial reporting staff 4/21/ The Controller Group shared their year end checklists through listserve 6/30/2011 Campuses reviewed each other's checklist. Robin will review all checklists and update the NDUS year end list as needed The Director of Financial Reporting met with the Controller of MNSCU and the University of Minnesota at a recent NACUBO conference. There are some software add on products that may be beneficial to NDUS. Although, it is not feasible to have in place by 06/30/11, the Director of Financial Reporting will continue to research and also explore whether there are resources available at CND. 8 Consider hiring external firm to help with year end preparation & review of statements, footnotes, and CU GASB conversions 7/15/2011 The NDUS Director of Financial Reporting is meeting with an external accounting firm on 4/14/11 to get a ballpark estimate of the cost in order to help us to determine if this is a feasible option.

3 Formal Recommendations 10-1 Improved Oversight by the SBHE NDUSO 1. Accounting Manual will be updated by 12/31/11 2. The NDUS System Office will monitor the status of audit recommendations and provide updates to the BAFC semi-annually 12/31/11 on-going 1. Accounting Manual - The campus Controllers have signed up for accounting manual sections and work has begun on several sections. 2. An update on the status of audit recommendations will be presented to the BAFC at their May 5th meeting GASB 40 Risk Disclosures NDUSO Updates will be made to the FY11 financial statement templates 10/31/11 BSC met with BSCF management to review SBHE policy DSU has reminded the DSUF about the importance of submitting the financial statements according SBHE policy 10-3 Foundation Audit Reports BSC DSU LRSC NDSCS NDSU UND 09/15/11 LRSC's Controller reminded the Foundation's auditors of the policy for the FY11 financial statements. NDSCS will make the Foundation's auditors aware of the timelines and policies relating to the submission of the Foundation's financial statements. NDSUDF plans to change their fiscal year end to December 31st, starting in FY12. It is important to note that the NDSUDF Controller is retiring in June 2011 could cause delays in FY11 UND is reminding all foundations of the SBHE policy Misstatement of Grant & Contract Revenue & Receivables UND UND Finance & Operations will work with the UND Division of Research to require advance pay contracts & deferred revenue to be reconciled by June 30th. Modifications to closing schedules will be made by 06/30/11 06/30/11 UND Division of Research is working with NDUS SITS to get a query to identify the balances in the advance pay agreements to review by June 30th.

4 Informal Recommendations 1 Inventory Ratios LRSC The VP of Administrative Services will review the size & content of inventories with the Bookstore & Food Service Directors to develop a plan to reduce items that may be contributing to the deviation from the auditors' benchmarks 03/01/11 Corry G. Kenner, VP for Administrative Services, discussed the auditor s concerns regarding the Bookstore and Food Service inventories with the Directors of those auxiliary operations, Melissa Stotts and Myrna Unger respectively. During FY11, the Food Service Director has discarded or, if appropriate, utilized inventory items that have contributed to the slower turnover rate. Because the Food Service is called upon to do many special events, sometimes without much advance notice, certain food staples are kept on hand and may, at times, contribute to slower turnover rates. The Food Service Director also takes advantage of sale items when she knows those items will be utilized within a reasonable timeframe. We don t believe the inventory of $12,380 for the Food Service operation at year end is unreasonable. Average inventory costs for basic food staples needed to meet the demands of a small college operation generally do not result in a favorable economy of scale. During FY11, the Bookstore Director has targeted specific items for special sales to reduce potential excess and slow moving inventory categories. The Bookstore does purchase a considerable number of textbooks from students (during scheduled Book Buy Back days) in the spring for the following school year for courses that anticipate use of those textbooks. These textbook purchases may cause an increase in days in inventory; however, the process results in a lower cost to students by ensuring the availability of the used texts. The Bookstore Director is reviewing course materials for obsolescence and will remove items from the inventory that no longer have value. 2 Overspent Project MiSU Monthly meetings are held between Plant, ITC, Purchasing, & the Business Office. In addition, the Business Office reviews budget to actual on a regular basis. on-going Y 3 Bank Reconciliation NDSCS NDSCS will revise their procedures in regards to these money market accounts so they will be properly recorded in the ntoes to the financial statements 09/30/11 Will be done during the year end close process 4 Overstatement of Salaries Payable NDSCS The general ledger will be corrected before FY11 is closed to eliminate the overstatement. August-11 Will be corrected during the FY11 close. 5 Graduate Application Fee NDSU NDSU will cease collecting the amount over the approved rate of $35 and will seek the required approval of the additional amount above $35 from the Chancellor March-11 1/6/2011 NDSU ceased collecting the amount over the approved rate of $35 on January 6, NDSU requested but did not receive approval for the additional amount above $35, 6 Inventory Internal Control NDSU NDSU Internal Audit will work with the departments on clearly documenting who has primary responsibility and identifying mitigating controls when pure segregation of duties is not feasible by March 31, /31/11 4/30/2011 NDSU Internal Audit will be observing inventory counting and further reviewing internal controls. 7 Expenditure Approval NDSU The NDSU Accounting Department will work with the departments to ensure proper approvals are documented on-going By April 30, NDSU Accounting will send out an notice to all departments requesting they make sure authorizations on invoices match the names on the authorized signature list. 8 Functional Expense Elimination NDUSO 9 Restricted Cash UND The year-end templates will be changed to ensure the information is reported correctly in FY11 If funds remain at the end of FY11, UND will add add to closing schedule to reclasify these funds to restricted funds 10/31/11 Will be done during the year end close process 08/31/11 Will be done during the year end close process 10 Payroll Withholding Payables WSC WSC will prepare timely accrued payroll liability reconciliations by March 31, /31/11 N WSC continues to perform the reconciliations but the accounts have reconciling items that WSC is continuing to research. They expect to have all items reconciled to zero by June 30, FAMIS Incompatible Duties NDSU/UND NDSU will review FAMIS access for all users by 03/31/11 UND will review access by June 30, /31/11 - NDSU 06/30/11 - UND NDSU: On 02/07/11, as a result of the review, the FAMIS administrator duties were reduced from 16 roles to nine. The seven eliminated were data entry functions. The remaining nine roles are essential for the job. UND - The review is currently taking place.

5 Informal Recommendations 12 Revenue Net of Allowance for Receivab All Schools the information is reported correctly in the FY11 financial statemetns 13 Direct Lending, Stafford & Plus Loans All Schools 14 Revenue Producing Building Schedule All Schools 15 Non-operating Revenue & State GrantsAll Schools 16 Notes Receivable NDSCS Changes will be made to the cash flow templates at yearend to ensure the information is reported correctly in the FY11 financial statements the information is reported correctly in the FY11 financial statemetns the information is reported correctly in the FY11 financial statements NDSCS will revise their year-end close procedures so this reclassification is not ommitted in the future 06/30/11 The NDUS Director of Financial Reporting will research the specific requirements and make the necessary changes to the year-end templates 17 Interim Financial Statements All Schools A plan will be submitted to the SBHE BAFC by 06/30/11 The Controller Group discussed in the Controller Group meetings in February and in April. A plan will be submitted to the BAFC by June 30, 2011.