1. Office of the Legislative Auditor Report #07-25 Minnesota State Colleges and Universities System Internal Control and Compliance Audits of Selected Colleges Brad A. White, Audit Manager

2. Office of the Legislative Auditor MnSCU Colleges Examined: Central Lakes College Inver Hills Community College Normandale Community College Pine Technical College Ridgewater College Riverland Community College Saint Cloud Technical College

3. Offi ce of the Legislative Auditor Audit Period –Fiscal Years 2004, 2005, & 2006 Financial Cycles –Security Access –Tuition and Fees –Personnel/Payroll –Operating Expenses –P/T Contracts –Banking and Local Cash –Pine TC: ETC Programs

4. Offi ce of the Legislative Auditor Professional-Technical Services Contracts: –Metro State University –Mpls. Community & Technical College –MN State Community & Technical College –Winona State University –Office of the Chancellor Audit Period –Fiscal Year 2006

5. Office of the Legislative Auditor Overall Conclusions Generally…… Internal controls were adequate College transactions complied However, 24 findings identified –internal control weaknesses –instances of noncompliance

6. Office of the Legislative Auditor Tuition and Fees – Key Finding: Sharing cashier drawers and no review of negative receipt transactions –diminishes accountability –increases risk Other Important findings: –tuition credit card documents –backdated registration changes –detective controls not formalized (when granting incompatible security access)

7. Office of the Legislative Auditor Personnel/Payroll – Key Findings: Ineffective Control Over Supplemental Pay –increased risk due to course workload changes dependent on registrations Inaccurate Severance Payments –undocumented and un-reviewed calculations Other Important findings : –accounting for paid leave benefits

8. Office of the Legislative Auditor Operating Expenses – Key Findings: None considered critical by MnSCU management Other Important findings: –expense and equipment controls –credit card purchasing –detective controls not formalized (when granting incompatible security access)

9. Office of the Legislative Auditor P/T Contracts – Key Finding: University contract lacked solicitation, terms, duration, and proper approval –noncompliance with MnSCU Policy/Procedure –oversight and monitoring needed Other Important findings : –no written contract or amendments –‘best practices’ observations

10. Office of the Legislative Auditor Key Findings – Pine Technical College Employment and Training Center (ETC) ETC social service programs may not comply with higher education mission College did not recover indirect costs of operating the ETC

11. Office of the Legislative Auditor Overall Conclusions The MnSCU colleges examined…….. (except for the 24 finding areas) had internal controls ensuring –safeguarding of assets & public funds –accurate recording & control of transactions complied with MnSCU policies and management authorization

12. Office of the Legislative Auditor Audit Report #07-25 http://www.auditor.leg.state.mn.us Questions ???