The Minnesota State Colleges and Universities' Northeast Service Unit (NESU) collected and accurately recorded campus support service fees in the accounting records. NESU properly charged the colleges for services rendered. NESU also accurately recorded payroll and administrative expenditures in the accounting records and complied with applicable legal provisions and management's authorization, except as noted below.
Key Finding and Recommendations:
NESU had inadequate controls over procurement practices and monitoring of contract payments. Some vendors provided services before the preparation of a requisition or purchase order. MnSCU policy and statutory provisions require that NESU ensure it has sufficient funds in the accounting system before incurring an obligation. NESU also paid a vendor $1,000 more than the $8,000 contract amount. Neither NESU nor the program director was monitoring the total amount of payments made against the contract. Also, the vendor's invoices did not distinguish between services provided and travel expenses. We recommended that NESU improve control over its procurement and purchasing process by prohibiting staff from incurring obligations before an encumbrance of funds in the accounting system. We also recommended that NESU monitor payments to ensure that they do not exceed contract amounts and that vendors comply with contract provisions.
The Minnesota State Colleges and Universities' Northeast Service Unit (NESU) provides administrative services to Fond du Lac Tribal and Community College, Hibbing Community and Technical College, and the Northeast Higher Education District. NESU's services include institutional research, a database of library materials, and grant administration. This financial-related audit report focused on revenue, payroll, and other administrative expenditures for the period from July 1, 1998, through June 30, 2001.