Office of the Legislative Auditor - Financial Audit Division

Report Summary
Metropolitan State University
Internal Controls and Compliance Audit

 

Financial Audit Division Report 12-01

Released January 17, 2012

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Conclusion

Metropolitan State University generally had adequate internal controls over its major financial activities, such as tuition and fees, employee salaries, and operating expenses.¹ These controls generally ensured that the university safeguarded assets, accurately paid employees and vendors in accordance with management’s authorization, produced reliable financial information, and complied with finance-related legal requirements. However, the university had some control weaknesses and noncompliance in certain areas that have a high-risk for errors, including security access to financial systems.

For the items tested, Metropolitan State University did not comply with some policies and legal provisions related to purchasing cards, delegation of authority, procurement, tuition and fee rates, and leave benefits.

Metropolitan State University resolved 1 of the 3 prior audit findings.² The university did not fully resolve prior audit Finding 2 related to its verification of commission reports for bookstore operations; we repeat this finding as Finding 6. The university also did not fully resolve prior audit Finding 3 related to the sharing of cashiering activities; we repeat this finding as Finding 2. In addition, the university had three findings (Findings 1, 4, and 8) in areas where prior audits of other colleges and universities had identified common or systemic findings.³

Key Findings

• Prior Systemic Finding Not Resolved: Metropolitan State University did not adequately assess its business risks or monitor the effectiveness of its internal controls.
• Metropolitan State University did not design, document, or monitor internal controls to mitigate risks created by some key employees having incompatible access to computer system functions. The university also did not resolve a prior audit finding when it allowed its cashiers to share logon IDs.
• Metropolitan State University charged some students tuition rates and fees that were different from the amounts approved by the MnSCU Board of Trustees.
• Prior Systemic Finding Not Resolved: Metropolitan State University did not always accurately account for faculty and administrator leave benefits.

Audit Objectives and Scope

Objectives	Period Audited
Internal Controls Compliance	July 1, 2008, through March 31, 2011
Programs Audited
Financial systems security access Tuition and fee revenues Auxiliary revenues Local bank accounts	Personnel and payroll expenses Operating expenses Equipment purchases Relationship with the Metropolitan State University Foundation

 

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¹ The audit scope did not include student financial aid.
² Minnesota Office of the Legislative Auditor, Financial Audit Division Report 02-58, Metropolitan State University, issued September 6, 2002. The report contained three findings.
³ Minnesota Office of the Legislative Auditor, Financial Audit Division Report 10-29, Minnesota State Colleges and Universities, issued September 14, 2010. This report contained six systemic findings, which we define as an internal control or compliance weakness noted at a majority of colleges or universities that we believe can most effectively be resolved by directive, guidance, or oversight by the MnSCU system office.