Summary

The audit of the financial statements of Florida Agricultural and Mechanical University for the fiscal year ended June 30, 2007, 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, 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 University’s financial statements:

• We found that the University’s financial statements presented fairly, in all material respects, the financial positions of the University and its aggregate discretely presented component units as of June 30, 2007, and the respective changes in financial position and cash flows, where applicable, thereof 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 significant deficiencies and, collectively, material weaknesses, as follows:

•  The University needed to improve its financial reporting process to ensure its financial statements are accurate and fairly presented.

• The University did not perform monthly bank account reconciliations for the operating and four other bank accounts, and reconciling items were not always timely resolved through adjustments to the general ledger.  Also, our review of the June 2007 consolidated bank account reconciliation disclosed immaterial errors.

• Subsidiary records supporting amounts reported as accounts receivable and deferred revenue related to contracts and grants contained errors that resulted in an understatement of the amount reported as net assets on the financial statements.  Also, the validity of some of the contracts and grants balances included in the subsidiary records was questionable because the contract’s or grant’s period of availability had ended several months prior to fiscal year end.

• Subsidiary records supporting amounts reported as loans and notes receivable, and interest and dividends receivable, had not been reconciled to the general ledger.

• Amounts reported for capital assets and related depreciation were misstated as a result of several recording errors. 

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

• A security control deficiency continued to exist related to protecting the PeopleSoft Financials System.

• The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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