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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary
State University System

Selected Scope Financial Audit

For the Period July 1, 1991 - June 30, 1993

Public Release Date: November 23, 1994 No. 94-55

Agency Background

The State University System operates seven universities under the control and direction of a nine member board. The State University Board appoints a chancellor to oversee system operations and also appoints university presidents for each campus. The Chancellor's Office provides 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 is the Chancellor of the State University System.

Selected Audit Areas

Tuition Registration and Collections

Universities effectively assess and collect tuition revenue but need to compare registration charges to the receivable system. We found that universities have differing expectations of when students are obligated to pay for registered credits. Four universities cancel unpaid registrations well into the academic quarter, eliminating possible additional tuition revenue. Due to tuition reciprocity, Wisconsin students attend Minnesota universities at a lesser rate than Minnesota students. We also noted that universities have the flexibility to reduce nonresident tuition charges for high achieving students from other states and countries.

Outstanding Student Receivables

State universities maintain receivable systems for accumulating and pursuing collection of outstanding tuition balances. Most universities diligently refer delinquent charges to collection agencies and revenue recapture, however, some universities do not. We noted that time frames for referral, collection agency rates, and methods to recover these costs vary between universities.

Tuition Waivers

Waived tuition is a unique benefit offered to university faculty, staff, and dependents. The contractual intent is to provide these waivers on a "space availability" basis to avoid any lost tuition revenue. However, tuition waivers are not controlled on a "space availability" basis as specified in the employee bargaining agreements. Universities also provide tuition waivers to war orphans, wards of the state, and senior citizens. We also found that duties at one university were not effectively segregated, and the receivable system does not distinguish waiver transactions.