Vermilion Community College
July 1, 1998, through June 30, 2001
Vermilion Community College, with financial assistance from the MnSCU system office, operated
within its available resources and generally complied with applicable legal provisions and management's authorization. However, the college had several internal control weaknesses that impacted the safeguarding of assets and the recording of financial activities in the accounting records.
Key Findings and Recommendations:
- The college and the Office of the Chancellor did not establish appropriate reports and management procedures to allow the college to adequately manage an environment where it shared its automated database and financial management duties with another college. We recommended that the college work with the Office of the Chancellor to create ad hoc reports and design control procedures to assure financial operating integrity. Also, the college should formally document their responsibilities in shared service arrangements with other colleges.
- The college did not timely reconcile its main operating bank account and did not ensure that it had sufficient collateral to safeguard bank balances during peak enrollment periods. We recommended that the college timely complete the bank reconciliation, determine the reason for any differences, and make any adjustments needed to properly record its financial activity. We also recommended that the college ensure that its bank pledges sufficient collateral for the college's bank balance.
- The college did not sufficiently limit access to its computerized business systems. We recommended that the college limit employees' access to the minimal level necessary to complete their job responsibilities. The college should also eliminate computer system access to incompatible functions, or develop effective detective controls, such as periodic, independent reviews of the employees' work.
- The college had poor control of tuition waiver transactions. The college did not adequately separate duties related to waiver transactions and did not establish mitigating controls to effectively monitor the use of waiver transactions. Furthermore, the college inappropriately used waiver transactions to accommodate work-study students who wanted to apply a portion of their paycheck to their outstanding balances. We recommended that the college separate the incompatible duties of collecting tuition and processing waivers, or establish mitigating controls to effectively monitor the use of waivers. We also recommended that employees authorize and document waiver transactions and only use waivers when appropriate.
- The college did not enter the correct occurrence dates on the MnSCU accounting system for various types of expenditures. The occurrence date should be the date the college received the goods or services, which is when the college had a financial liability according to accounting principles. Incorrect occurrence dates may cause data on the MnSCU accounting system to misstate the financial statement amounts for year-end accrued liabilities.
Vermilion Community College is part of the Minnesota State Colleges and Universities (MnSCU) system. This financial-related audit report focused on financial management, tuition and fees, payroll, administrative expenditures, and bookstore operations for the period from July 1, 1998, through June 30, 2001.