Summary

The audit of the financial statements of Florida Agricultural and Mechanical University for the fiscal year ended June 30, 2005, was conducted pursuant to Section 11.45, Florida Statutes, and applicable standards contained in Government Auditing Standards issued by the Comptroller General of the United States.

The scope of this audit included an examination of the financial statements of the University, a component unit of the State of Florida, and a determination as to whether management has complied with applicable laws, administrative rules, regulations, contracts, and grant agreements and other matters that are material to the financial statements.  An examination of Federal awards administered by the University is included in our Statewide audit of Federal awards administered by the State of Florida.

The following provides a summary of the findings of our audit of the financial statements of the University:

We found that, except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to satisfy ourselves as to the amounts reported for certain accounts as discussed in the FINDINGS AND RECOMMENDATIONS section of this report, the University’s financial statements presented fairly, in all material respects, the financial position of the University and its aggregate discretely presented component units as of June 30, 2005; the revenues, expenses, and changes in net assets; and the cash flows for the fiscal year then ended.

We noted certain matters involving the University's internal control over financial reporting and its operation that we considered to be material weaknesses or reportable conditions, as follows:

• Our recent information technology audit of the University’s new financial management system (report No. 2006-187) disclosed that the University did not provide sufficient records and documentation to allow for a timely evaluation of certain IT controls related to the support of the University’s financial management system, and that deficiencies existed in various information technology controls over the University’s financial management system, jeopardizing the integrity of application programs and data.

• Several individuals that made journal entries were not, of record, authorized to do so.  Also, numerous journal entries were not adequately supported as to amount or purpose, or had not been reviewed and approved, of record, by appropriate University employees.

• The University’s operating bank account was not reconciled during the 2004-05 fiscal year.  Although this account was reportedly reconciled by the University subsequent to fiscal year end, documentation supporting reconciling items was not adequate to demonstrate that a complete and proper bank account reconciliation had been accomplished.

• Records were not maintained to adequately support amounts reported as contracts and grants receivable.

• Subsidiary records did not agree with amounts reported as student fee accounts receivable.  Also, audit tests disclosed several instances in which student fee accounts receivable balances per the subsidiary records, or journal entries recording student fee revenue, were in error or unsupported.

• The amount reported as depreciable capital assets on the University’s financial statements did not agree with the amount recorded in the subsidiary property records, partly because the subsidiary records were not updated for certain depreciable capital asset additions for the last three fiscal years. 

• Controls over collections received at the Central Cashier’s Office were not adequate to ensure that amounts collected were deposited timely and intact, and were properly recorded to the accounting records.

• The University had not provided for an adequate separation of duties, or established adequate compensating controls, in certain areas of its business operations.

• Significant turnover in key positions, and understaffing of certain areas of the University’s business operations, contributed to the material weaknesses disclosed in this report and may have contributed to the need to use consultants to provide support in key operational areas and to assist in preparing the financial statements.

	The University did not record Book Voucher and Regents Emergency loan program transactions in accordance with generally accepted accounting principles.
	The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.