Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Hibbing Community College

Financial Audit For the Period July 1, 1995,
through June 30, 1997

 

Public Release Date: July 24, 1998 No. 98-40

Background Information

Hibbing Community College (HCC) is part of the Minnesota State Colleges and Universities (MnSCU). MnSCU began operations on July 1, 1995, when the state universities, community colleges, and technical colleges throughout the state merged under one governance structure. HCC is a two-year technical and community college. Dr. Anthony Kuznik is the president of the college.

Objectives and Conclusions

The objectives of our audit were to gain an understanding of the internal control structure over the accounting and reporting of financial activities of the college, and to determine if the college complied with material finance-related legal provisions. The areas covered by our audit were tuition, payroll and other administrative expenditures, and bookstore activities for the period July 1, 1995, through June 30, 1997. We also audited the administration of the federal student financial aid program for fiscal year 1998.

We concluded that HCC operated within its available resources. Generally, the college designed and implemented internal controls to provide reasonable assurance that the college recorded its state treasury and local account financial activities on the MnSCU and MAPS accounting systems in a timely manner. However, the college did not record federal financial aid on its accounting system timely. Finally, the college could improve controls over local bank accounts.

We found that HCC had several internal control weaknesses in administering federal student financial aid. The college did not perform certain key reconciliations, adequately separate awarding and disbursing functions, and ensure that eligible students received correct financial aid.

HCC generally accounted for tuition receipts properly. However, the college did not review administrative adjustments and failed to deposit receipts timely. Also, the college did not reconcile total tuition received to total credits issued, and they did not have adequate control over customized training receipts.

HCC designed and implemented internal controls to provide reasonable assurance that payroll and other administrative expenditures were processed in compliance with applicable legal provisions and accurately recorded in the accounting records. However, we noted that the college did not independently verify its fixed asset records.

HCC designed and implemented internal controls to provide reasonable assurance that bookstore financial activities were properly recorded in the accounting records. However, the college should prepare an income statement to monitor its bookstore activity. In addition, the college should allocate all applicable costs to the bookstores including overhead.

HCC responded positively to the audit recommendations presented in the audit report. The college stated that it has already taken corrective action on many of the areas.

 

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