Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
State University System

Selected Scope Financial Audit

For the Period July 1, 1993 - March 31, 1995;

 

Public Release Date: October 27, 1995 No. 95-47

Agency Background

The State University System operated seven universities under the control and direction of a nine member board. The State University Board appointed a chancellor to oversee system operations and also appointed university presidents for each university campus. The Chancellor's Office provided policy leadership and coordination of the system as a whole and coordinated financial activities for accounting, budgeting, financial reporting, labor relations, and construction. Dr. Terrence J. MacTaggart was the Chancellor of the State University System until July 1, 1995.

Effective July 1, 1995, the State University System merged with the state's community and technical colleges to form the Minnesota State Colleges and Universities (MnSCU). Our audit examined selected aspects of the state universities prior to the merger. It did not include a review of community or technical college activities.

Selected Audit Areas and Conclusions

Our audit scope included a review of cash and investments, banking services, and imprest cash and change funds for the period from July 1, 1993 through March 31, 1995.

We found that universities lack cash management and investment strategies. Maximum levels for checking accounts have not been established, and as a result, large checking account balances exist at three universities and the Chancellor's Office. Written investment policies are also needed to guide strategy, risk, liquidity, diversification and reporting requirements. We also found specific problems with cash and investment practices and procedures at the various campuses.

We found that certain universities have too many local bank accounts and many of these accounts are not interest-bearing. The larger universities commingle funds in one bank account providing more efficient cash management and administrative controls. Two universities recently bid for bank services, however, accounts at five universities were not bid or have not been bid recently. Three universities have bank balances that are not sufficiently collateralized as required by statute. Also, Credit card fee rates vary between universities.

Finally, we found that university imprest cash and change funds were subject to adequate safeguards, but some need improved accountability. We cite ten findings regarding problems with imprest cash and change funds at the campuses.

 

Office of the Legislative Auditor ♦ Room 140, 658 Cedar St., St. Paul, MN 55155