Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
St. Cloud State University
Internal Control and Compliance Audit

 

Financial Audit Division Report 10-20 Released June 15, 2010

Conclusion

St. Cloud State University generally had adequate internal controls over its major financial activities, such as tuition and fees, employee salaries, and operating expenses.1 These controls generally ensured that the university safeguarded assets, accurately paid employees and vendors in accordance with management’s authorization, produced reliable financial information, and complied with finance-related legal requirements. However, the university had some control weaknesses and noncompliance in certain areas that have a high-risk for errors, including security access to financial systems, management of university-issued credit cards, and employee expense reimbursements.

For the items tested, St. Cloud State University did not comply with some legal provisions related to credit cards, employee expense reimbursements, delegation of authority, procurement, revenue and expense contracts, auxiliary operation receipts, tuition and fee rates, and leave benefits.

St. Cloud State University resolved 6 of the 7 prior audit findings relevant to this audit.2 However, the university did not fully resolve prior audit Finding 13 related to its computer store operations. We repeat this finding as Finding 14. In addition, the university did not resolve four prior findings identified as MnSCU systemic issues in prior reports on other colleges, and we repeat these issues in Findings 2, 4, 13, and 17. 3

Key Findings

  • St. Cloud State University did not adequately assess its business risks or monitor the effectiveness of its internal controls.
  • Prior Systemic Finding Not Resolved: St. Cloud State University did not design, document, or monitor detective controls to mitigate risks created by giving employees incompatible and unnecessary access to computer system functions.
  • St. Cloud State University and the Office of the Chancellor did not promptly intervene when the St. Cloud State University Foundation inappropriately claimed that it had secured the exclusive commercial rights to the university’s athletic facilities and programs and contracted with a marketing firm to sell those rights.
  • Prior Systemic Finding Not Resolved: St. Cloud State University did not adequately restrict employees’ use of university-issued credit cards.
  • St. Cloud State University lacked sufficient controls to ensure that it did not reimburse employees for questionable expenses.

Audit Objectives and Scope

Objectives Period Audited
  • Internal Controls
  • Compliance
July 1, 2007, through December 31, 2009
Programs Audited
  • Financial systems security access
  • Tuition and fee revenues
  • Auxiliary revenues
  • Local bank accounts
  • Personnel and payroll expenses
  • Operating expenses
  • Equipment purchases and inventory
  • Relationship with the St. Cloud State University Foundation

 


1The audit scope did not include student financial aid.

2Minnesota Office of the Legislative Auditor, Financial Audit Division Report 01-20, St. Cloud State University, issued April 26, 2001. The report contained 14 findings. We did not determine resolution of 4 of these findings because they related to financial aid, which was not in the scope of our current audit. We also did not determine resolution of 3 other findings because they were no longer relevant to the university's operations.

3Minnesota Office of the Legislative Auditor, Financial Audit Division Report 09-30, Minnesota State Colleges and Universities, issued September 8, 2009. This report contained four systemic findings, which we define as an internal control or compliance weakness noted at a majority of colleges or universities that we believe can most effectively be resolved by directive, guidance, or oversight by the Office of the Chancellor.

More Information

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