Fergus Falls Community College
July 1, 1996, through December 31, 1999
Key Audit Conclusions:
Fergus Falls Community College (FFCC) has demonstrated a commitment to sound financial management practices. We concluded the college administered its financial operations in a reasonable and prudent manner. The college operated within available resources and had an effective process to monitor revenue and expenditure budgets.
FFCC's internal controls generally provided reasonable assurance that its financial transactions were authorized and properly recorded on the accounting system. The college complied with finance-related legal provisions in the following areas: student financial aid, payroll, and operating expenditures. However, we did note the following key findings and recommendations that the college needs to resolve.
Key Findings and Recommendations:
- FFCC has not reconciled the cash balance in its bank accounts to amounts recorded in the accounting records since July 1999. Bank reconciliations help ensure accurate accounting and bank records and protect against errors and irregularities going undetected. We recommended that FFCC reconcile its bank accounts to MnSCU accounting in a timely manner. (Finding 1, page 6)
- FFCC did not adequately control non-cash receipt transactions. We cited weak controls over tuition waivers, negative receipt transactions, and voided transactions in the bookstore. The weaknesses could potentially result in unauthorized waivers or misappropriation of assets without detection. We recommended that FFCC have an independent person review these transactions for propriety. (Finding 3, page 8)
- FFCC did not adequately control non-credit tuition receipts, such as continuing education, customized training, and community service programs. These receipts totaled $75,000 in fiscal year 1999. One individual was responsible for registration and tuition collection for each of the three types of non-credit classes. Inadequate separation of duties increases the chance of errors and irregularities occurring and going undetected. We recommended that FFCC improve controls to provide reasonable assurance that these receipts are adequately safeguarded from loss or theft. (Finding 4, page 9)
In its written response, the college agreed with the findings and recommendations. It has developed a corrective action plan to address the issues contained in the report.