Office of the Legislative Auditor - Financial Audit Division

The higher education institutions of the Minnesota State Colleges and Universities (MnSCU) system included in our scope generally safeguarded assets and correctly recorded financial activity for the areas we examined. With certain exceptions, these colleges and universities complied with MnSCU policies and management’s authorization for tested transactions.

Our report contains findings relating to internal control or legal compliance at several colleges and universities. Many findings in this report were raised in prior audits of other colleges.

• Most colleges and universities we reviewed did not formalize, document, or test detective controls designed to mitigate the risks resulting from staff assigned incompatible financial duties.
• Five colleges unnecessarily retained sensitive credit card information. MnSCU has not updated its procedures to guide college credit card record retention practices.
• Colleges had controls over regular instructional assignments, but four colleges did not effectively control pay for supplemental assignments and severance, and six colleges did not accurately account for leave benefits. These weaknesses caused inaccurate payments to some faculty and administrators.
• Five colleges had control weaknesses with procuring, documenting, and recording expenses, and three had problems controlling equipment assets.
• Colleges, universities, and the Office of the Chancellor did not always comply with contract requirements for professional/ technical services.
• The Pine Technical College’s Employment and Training Center programs may not comply with MnSCU’s statutory mission.

Selected Colleges

• Central Lakes College
• Inver Hills Community College
• Normandale Community College
• Pine Technical College
• Ridgewater College
• Riverland Community College
• Saint Cloud Technical College

Four additional colleges and universities, and the Office of the Chancellor (fiscal year 2006 professional/technical services only)

• Fiscal Years 2004 — 2006

• Security Access to Computerized Financial Applications
• Tuition and Fees
• Employee Payroll
• Professional/Technical Services
• Administrative Expenses
• Local Cash and Banking
• Employment and Training Center Programs at Pine Technical College

Agency Background:

MnSCU’s Office of the Chancellor provides system-wide administrative management and develops policies for 32 state universities and colleges. The MnSCU Board of Trustees appoints a president to oversee the activities at each college. The colleges finance their operations from state appropriation allocations and tuition. MnSCU had a total student full-year equivalent enrollment of 134,220 for fiscal year 2006, a slight decrease from 2005.