Summary

Summary of Report on Financial Statements

The Board's financial statements are combined with the other State universities and are reported in the State general purpose financial statements of the State of Florida as of and for the fiscal year ended June 30, 1998. The general purpose financial statements include the financial position of the State of Florida and its component units at June 30, 1998, the results of its operations, changes in fund balances of the State University System and Community College fund types, and the cash flows of its proprietary fund types, nonexpendable trust fund, and discretely presented component units for the fiscal year then ended. On February 17, 1999, this Office issued audit report No. 13393, on the general purpose financial statements of the State of Florida.

Summary of Report on Compliance and Internal Control

The Board generally complied with significant provisions of laws, administrative rules, and other guidelines. The Board has established and implemented procedures which generally provide for internal control of Board operations. We did note compliance and internal control findings which are summarized in the Summary of Audit Findings below.

Summary of Report on Federal Awards

An examination of expenditures of Federal awards administered by the Board under contract and grant agreements to finance specific programs and projects is included in our Statewide audit of Federal awards administered by the State of Florida. On June 3, 1999, this Office issued audit report No. 13490, presenting the results of our Statewide audit of Federal awards administered by the State of Florida for the fiscal year ended June 30, 1998.

Summary of Audit Findings

Research Contracts, Grants, and Income

In audit report No. 13263, we recommended that the Board review the propriety of accounting for moneys received for various research contracts and grants and related income in the universities' research foundations rather than in the universities’ divisions of sponsored research, which require greater restrictions on their use and accountability. In response, the Board’s General Counsel issued an opinion that cites specific references and requirements for the deposit of moneys received from patents, royalties, copyrights, and trademarks, and from various research contracts and grants. Given the distinctions set forth in the Board’s opinion, specific written guidance on the administration and record keeping of these moneys should be provided to the universities by the Board.

Faculty Activity Reporting

Section 240.243(2), Florida Statutes, requires a minimum of 12 classroom contact hours per week or equivalent noninstructional duties for each full-time equivalent teaching faculty member who is paid entirely from State funds. The Board has prescribed instructions in Chancellor’s Memorandum CM-87-17.2, revised 1994, for developing information for complying with this Statute. Our audits of universities have indicated that faculty members taught the assigned classroom contact hours but that records for other professional (noninstructional) duties did not demonstrate compliance with this Statute. Since attendance records reporting clock-time are historically not kept by university faculties, the universities have been unable to document compliance with the Statute as it relates to noninstructional duties.

Employee Evaluations

Board of Regents Rule provides for annual evaluations. Our test disclosed that no written performance evaluations were on file for 4 of 20 employees, in either current or prior years. We recommend that annual written evaluations of personnel performance be timely conducted as prescribed by Board of Regents Rule.

Subcontractor Licenses

As of June 30, 1998, the Board of Regents reported expenditures in excess of $9 million on the FAMU-FSU College of Engineering construction project. Board personnel indicated that they did not verify the licensure of the major subcontractors. Instead, they relied on the construction manager to verify these licensures. However, Board personnel have indicated that they do not monitor the construction manager’s verification of the subcontractors’ licensure. We recommend that the Board of Regents monitor the construction manager’s verification of the licensure of major subcontractors.

Year 2000 Compliance

Board personnel have developed plans and identified steps necessary to prepare year 2000 compliance for their Information Resource Management (IRM) department’s four sections. The Board estimated that one IRM section is approximately 90 percent complete for becoming year 2000 compliant. The target date for completion is December 1999. The Board indicated that the remaining three sections are already year 2000 compliant. Inasmuch as the year 2000 problem has a clearly defined and fast approaching deadline that requires timely resolution, Board management should continue to monitor progress being made in implementing the plans and ensure that the year 2000 compliance project remains on schedule.

The Chancellor's written response to the audit findings and recommendations included in audit report No. 13503 is presented as Exhibit A.