St. Cloud State University
July 1, 1998, to June 30, 2000
St. Cloud State University's budgetary controls provided reasonable assurance that it operated within available resources and effectively monitored its revenue and expenditure budgets. These budgetary controls allowed the university to foresee a projected budget deficit of $4,000,000, as of December 2000, for the current fiscal year ending June 30, 2001. We found the university has developed formal plans to eliminate this projected shortfall.
Our prior audit noted that the university had not reconciled its accounting system to the state treasury and local bank account records. The current audit found these critical reconciliations were up-to-date as of December 2000. We noted, however, the following compliance concerns and internal control weaknesses impacting the safeguarding of assets and recording of financial activities in the accounting system.
- The university entered into a contract that directed certain revenues to its affiliated foundation. We found that no MnSCU board or campus policies existed to govern this practice. While foundation funding is eventually returned to support university programs, the university loses control over the availability and use of the money. We believe the university should have retained these moneys in university accounts for operating uses and to offset costs incurred under the contract. It was also noted that a university employee executed the contract on the foundation's behalf contrary to MnSCU policy.
- University cashiers had excessive system access to adjust receivables and post waivers. We recommended modification of their access rights and an independent review of daily cash close-out and system waiver reports to mitigate the risk of unauthorized transactions Also, the university did not have a sufficient process to refer old uncollected student accounts receivable balances to the Minnesota Collection Enterprise (MCE) for recovery.
- Certain accounting system payments were not coded correctly by the university. We found that transactions coded as supplies were not necessarily supply purchases. We also noted concern with the improper identification of the date of obligation on payment transactions.
- The university did not adequately control access to its computerized financial aid system and did not timely return undisbursed FFEL loan proceeds to lenders. We also noted the need for improved assurances that amounts reported in MnSCU accounting agree with the financial aid system and the Perkins Loan Management System.
- We noted that the university was in litigation with the former bookstore operator and had not collected over $930,000 from its new operator. The new bookstore operator is now facing bankruptcy and full recovery of the amount owed is in jeopardy.
- The university lacked formal policies providing management direction on the spending of various commissions and interest earnings. Improved financial reporting and internal control were recommended for the university's computer store operations.
St. Cloud State University is part of the Minnesota State Colleges and Universities (MnSCU) system. This audit report focused on financial management, tuition and fees, room and board, payroll, selected operating expenditures, computer store operations and miscellaneous revenues for the period from July 1, 1998, through June 30, 2000. We also reviewed the college's internal controls over compliance with federal student financial aid for fiscal years 2000 and 2001.