Office of the Legislative Auditor - Financial Audit Division

Report Summary
Perpich Center for Arts Education
Internal Controls and Compliance Audit

 

Financial Audit Division Report 12-18

Released August 30, 2012

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Conclusion

Internal controls were generally adequate to ensure that the Perpich Center for Arts Education (center) safeguarded its financial resources, accurately paid employees and vendors in accordance with management’s authorizations, produced reliable financial data, and complied with finance-related legal requirements, including those associated with the use of money from the Arts and Cultural Heritage Fund; however, the center did not have adequate internal controls for financial activity related to student fee receipts and capital assets.

For the items tested, the center generally complied with finance-related legal requirements, including those associated with the use of money from the Arts and Cultural Heritage Fund; however, the center had some instances of noncompliance related to receipts, capital assets, and payroll.

The center resolved 13 out of 17 prior audit findings.¹ The center did not resolve four prior audit findings related to internal controls for receipts (including access to its computerized business systems), its overall financial management responsibilities, and the relationship with its foundation.

Key Findings

• Prior Finding Not Resolved: The Perpich Center for Arts Education had fundamental internal control weaknesses in its processes to collect, deposit, and accurately record receipts of student fees.
• The Perpich Center for Arts Education did not have adequate internal controls over its capital asset inventory and purchases.
• Prior Finding Partially Resolved: The Perpich Center for Arts Education did not adequately assess its financial risks or monitor the effectiveness of its internal controls.

Audit Objectives and Scope

Objectives	Period Audited
Internal Controls Finance-related legal compliance	Fiscal years 2010 and 2011
Programs Audited
Student fees and other selected receipts Payroll and other selected administrative expenditures Capital assets	Foundation relationship Use of money from the Arts and Cultural Heritage Fund

 

 

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¹ Office of the Legislative Auditor’s Financial Division Report 08-24, Perpich Center for Arts Education, issued October 9, 2008.