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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary
Metropolitan State University

Financial Audit For the
Period July 1, 1995, through December 31, 1996


Public Release Date: May 9, 1997 No. 97-26

Background Information

Metropolitan State University is part of the Minnesota State Colleges and Universities System (MnSCU). MnSCU began operations on July 1, 1995, when state universities, community colleges, and technical colleges throughout the state merged. Metropolitan State University, which was founded in 1971, is a four year university serving the metropolitan area. Metropolitan State University has campuses in both St. Paul and Minneapolis. Dr. Susan Cole is the president of Metropolitan State University.


Metropolitan State University initially had great difficulty recording its State Treasury and local account financial activities on the MnSCU or MAPS accounting systems. However, by February 1996, the university was recording most of its financial activities on the MnSCU accounting system completely, except for student financial aid. MSU only recorded student financial aid transactions as summary data on MnSCU accounting in May and December 1996. Also as of December 31, 1996, Metropolitan State University had not reconciled MnSCU accounting to MAPS for either its State Treasury or local account financial activities. In addition, the university had not reconciled MnSCU accounting to its local bank account since June 30, 1996. MSU also did not maintain sufficient collateral for its local bank account.

The university did not design and implement internal controls to provide reasonable assurance that revenue collections were safeguarded, accurately reported in the accounting records, and in compliance with applicable legal provisions and management's authorization. We found several weaknesses in the internal control structure over tuition receipts. The university did not adequately segregate cashier and registration duties. It also did not verify the accuracy of tuition revenue or adequately pursue collection of accounts receivable.

Generally, we found that the university designed internal controls that were reasonable in providing assurance that Federal Student Financial Aid disbursements were in compliance with applicable laws and regulations. In addition, we found that the university has an effective process for packaging, awarding, and disbursing Pell grants. However, we noted some small overpayments and areas where the university could improve internal controls.

Metropolitan State University complied with the relevant provisions of the bargaining unit agreements relating to employee pay rates and leave accruals. The university also properly processed and recorded payments for rent, supplies, and equipment.

Metropolitan State University did not measure the financial results of its computer store. Furthermore, it had inadequate controls over computer store sales and inventory.

We found that the university had designed and implemented internal controls to provide reasonable assurance that private grants were collected, adequately safeguarded, and accurately reported in the accounting records. In addition, we found that Metropolitan State University expended its private grants in compliance with the provisions of the grant.


Office of the Legislative Auditor, Room 140, 658 Cedar St., St. Paul, MN 55155 : or 651‑296‑4708