This operational audit for the period January 1, 2003, through December 31, 2003, and selected transactions through June 30, 2004, disclosed the following:

Finding No. 1:        The University terminated staff that previously prepared the financial statements without providing adequate knowledge transfer and training to the new financial statement preparers.  Consequently, the University incurred an additional expense of $80,000 for an accounting firm to assist in the preparation of the financial statements for the year ended June 30, 2003.

Finding No. 2:        Bank reconciliations were untimely, incomplete, contained numerous errors, and indicated a lack of understanding on the part of the preparer.

Finding No. 3:        Incomplete written procedures and deficiencies in the University’s check writing system for local bank accounts provided the potential for unauthorized access to the check writing machine, duplicate checks issued without detection, and checks written without approval.

Finding No. 4:        Deficiencies in the administration of electronic fund transfers included incompatible employee duties, lack of restrictions on accounts to which transfers can be made and the amounts that can be transferred, and lack of documentation for processing transfers.  

Finding No. 5:        Journal vouchers (manual accounting entries) were not adequately documented and controlled.

Finding No. 6:         The University entered into a contract with a contractor without soliciting competitive proposals or exercising due diligence, resulting, in part, in additional costs to the University and a shortfall in the Athletic department of approximately $950,000.

Finding No. 7:        We noted deficiencies in the University’s monitoring of its contracts for auxiliary operations. 

Finding No. 8:        We again noted that vendors were not always paid in a timely manner. 

Finding No. 9:        We again noted that medical providers were not paid timely for services rendered to the University’s student athletes.

Finding No. 10:      The University’s purchase of passenger vehicles does not always appear to be cost-effective. 

Finding No. 11:     Cellular phone charges have more than doubled since the year ended June 30, 2003.  However, the University had no coordinated procedure for determining the most economic and efficient use of cellular phones.

Finding No. 12:     The University  did not perform a complete and timely annual physical inventory of its tangible personal property for the year ended June 30, 2003, contrary to law.

Finding No. 13:     The University paid three employees as independent contractors even though they were performing their normal University duties.  This practice does not comply with Internal Revenue Service regulations regarding employees and independent contractors.

Finding No. 14:     The University is in the process of reviewing and closing over 900 expired contract and grant accounts that had either positive or negative cash balances.  However, because of the age of many of the grant accounts, the likelihood of collecting amounts due is low and may result in a significant loss to the University.

Finding No. 15:     The University administers a scholarship program in which there is inadequate monitoring of the number of students awarded, the amount of money available to pay the students, and the record keeping for actual awards and disbursements.

Finding No. 16:     Work effort reported on the faculty activity reports was inconsistent among departments, resulting in a decreased ability to evaluate comparability of work effort or determine optimum faculty work load.

The President's written response to the audit findings can be viewed in its entirety on the Auditor General's web site.