Summary

Our operational audit for the fiscal year ended June 30, 2006, and selected actions taken prior and subsequent thereto, disclosed the following:

Finding No. 1:        Contrary to the University’s Inspector General charter and applicable professional standards, the Inspector General did not report directly to the President, and did not provide for a required peer review.  Also, the University had not documented, of record, why certain Inspector General reports were not published, or that the President and Chair of the Audit Committee had been advised of the decision to not publish these reports and had approved such action.

Finding No. 2:       The University’s accounting records did not accurately reflect budgeted revenues and expenditures per the Board of Trustees-approved operating budget.  Also, contrary to Board policy, the operating budget did not include all planned revenues and expenditures, and several budget amendments were not approved by the Board or President.

Finding No. 3:       The University’s controls over electronic fund transfers needed improvement.

Finding No. 4:       Contrary to law, University personnel wrote off returned checks receivables without Board of Trustees approval.  Also, the University had not, of record, performed collection procedures for certain returned check receivables.

Finding No. 5:       The University’s 2005-06 fiscal year annual physical inventory of tangible personal property disclosed numerous property items that could not be located.  Although University personnel investigated the missing items, they had not, of record, reported all items still missing after the investigation to the appropriate law enforcement agency.  Nor had University personnel timely adjusted the property records for the missing property items.

Finding No. 6:       The University did not reconcile capital outlay expenditures to property record additions.

Finding No. 7:       The University’s procedures for decentralized collections needed improvement.  In addition, the University had not, contrary to Section 119.021, Florida Statutes, retained records supporting $1,823,389 of reported Athletic Department collections.

Finding No. 8:       The University did not adequately monitor compliance with auxiliary contract provisions to ensure that it received the correct amount of commission income it was due.

Finding No. 9:       Contrary to Board of Governors regulations, procedures for determining tuition waivers and refunds had not been approved by the Board of Trustees.  Also, our tests disclosed instances in which tuition refunds were not calculated correctly.

Finding No. 10:     University records did not provide for adequate accountability over receipts and expenditures of financial aid fees.

Finding No. 11:     The University had not established written policies and procedures governing the use of health, athletic, and transportation access fees.  Also, the University’s records did not adequately demonstrate accountability for the receipt and expenditure of student activity and service, health, athletic, and transportation access fees.

Finding No. 12:     Numerous employees were not paid timely for work performed.  Although the University had made an attempt to identify employees still owed salary for work performed, such efforts could be enhanced.  Also, our tests disclosed instances in which payments to resolve claims of untimely payments were not supported by documentation evidencing the propriety of such payments.

Finding No. 13:     The University did not timely implement salary increases for certain employees, and did not promptly resolve resulting salary underpayments.

Finding No. 14:     The University did not always retain adequate documentation for salary payment cancellations or evidence that cancelled payroll warrants were destroyed or defaced.

Finding No. 15:     Fingerprinting was not performed for certain employees in positions of special trust or of a sensitive nature.

Finding No. 16:     University procedures were not adequate to ensure that employee leave records were properly updated for unused leave payments to terminated employees.

Finding No. 17:     The University’s procedures were not adequate to ensure that required annual performance evaluations were completed in accordance with University rules.

Finding No. 18:      The University did not always obtain sabbatical leave reports within the timeframe required by the Collective Bargaining Agreement.  Also, the University had not established policies and procedures requiring notification and approval of changes to planned sabbatical activities.

Finding No. 19:     The University had not updated written policies and procedures for its Purchasing Department to reflect its new financial system.

Finding No. 20:     The University’s disbursement processing procedures needed improvement.

Finding No. 21:     University records for payments to medical providers for student athletes were not always complete, and payments were not always timely.

Finding No. 22:     The University needed to improve its controls over communication expenses.

Finding No. 23:     University procedures did not provide for adequate monitoring of cellular telephone (cell phone) usage.  Also, the University did not confer with the Florida Department of Financial Services to report to the Internal Revenue Service the value of cell phone services as income for employees who did not make an adequate accounting of the business use of their assigned cell phones.  In addition, our review of selected cell phone bills disclosed several instances in which University personnel did not, of record, timely review the cell phone bills to ascertain any personal calls made, and reimbursement thereof.

Finding No. 24:     Our tests disclosed instances in which University records did not evidence that travel payments for student meals were actually disbursed to the students.

Finding No. 25:     Payments to some contractors were not made pursuant to signed, and sufficiently detailed, written agreements.

Finding No. 26:     The University did not always procure contractual services using the competitive selection process prescribed by Board of Governors regulations and University rules, or properly and timely document that such procurements were exempt from competitive selection requirements.  Also, subsequent to the 2005-06 fiscal year, the Board of Trustees changed the University’s competitive procurement threshold to an amount that exceeded the limit established by Board of Governors regulations.

Finding No. 27:     The University did not document its determination of the reasonableness of the labor burden rate the construction management entity applied to construction contracts.

Finding No. 28:     The University’s controls over sponsored research contracts and grants needed improvement.

Finding No. 29:     The University needed to improve accountability over scholarships awarded to students under its Presidential Scholars Program.

Finding No. 30:     The University had not adequately documented that purchases of passenger vehicles were cost-effective.

Finding No. 31:     Vehicle usage logs for University-owned vehicles were not always properly completed or maintained for all months, and generally did not include evidence of supervisory review.

Finding No. 32:     The University needed to enhance its controls relating to grade changes and degree certifications.

Finding No. 33:     The University did not always timely correct deficiencies noted in fire safety inspection reports.

Finding No. 34:     The University lacked a sufficiently comprehensive disaster recovery plan that addressed all information technology resources.

Finding No. 35:     Understaffing of certain areas of the University may have contributed to some of the control deficiencies disclosed in this report, and may have contributed to the need to use consultants to provide support in key operational areas.

The University's response is included as Appendix B of this report.