Office of the Legislative Auditor - Financial Audit Division
Minneapolis Community and Technical College
July 1, 1999, through June 30, 2001
Minneapolis Community and Technical College made substantial progress with the overall management of its financial operations since our last audit in fiscal year 1999. During the audit period, the college operated within available resources and, except as noted below, has improved its internal control structure, including controls to provide assurance over compliance with applicable legal provisions. Although the college implemented many of the improved financial practices in fiscal year 2002, the college has emphasized structural organizational changes and process improvements that should provide reasonable assurance over its financial operations, assuming its commitment to sound financial management practices continues.
Specifically, we concluded that the college had an adequate process for recording and depositing tuition revenue during the audit period. However, the controls over tuition waivers and accounts receivable were not fully developed until after the end of the audit period. For payroll and bookstore activities, the college's controls provided reasonable assurance that employees were accurately paid in compliance with applicable legal provisions and management's authorization, and that transactions were accurately recorded in the accounting records. The college's controls provided reasonable assurance that cash receipts and bookstore inventory were adequately safeguarded. As noted below, however, the college needs to continue to strengthen its controls over financial operations in certain areas. Many of the following issues relate to prior audit findings that had been partially corrected at the time of our audit.
Key Findings and Recommendations
We found several instances where individuals had unnecessary or incompatible access to the college's business systems. We recommended that the college review access reports and reevaluate the access granted to ensure an adequate separation of duties and to prevent unauthorized access to data.
The college did not adequately monitor collateral requirements for local bank accounts, which resulted in several instances of noncompliance with statutory collateralization requirements. We recommended that the college monitor collateral requirements, including estimating collateral needs based on current bank activity.
We found numerous exceptions to excluded administrators and faculty leave reporting. We recommended that the college ensure that faculty and excluded administrators accurately and timely report leave activity.
Our testing of administrative expenditures through June 30, 2001, identified numerous exceptions where the college incurred obligations prior to encumbering funds or negotiating contracts and could not find documentation supporting expense transactions. Our testing of fiscal year 2002 transactions identified some minor exceptions but demonstrated the college had improved its controls and compliance over administrative expenditures. We recommended that the college implement its plans to monitor compliance with its revised procedures and controls over administrative expenditures.