MAS NEWSLETTER
A quarterly publication distributed by UMBC Management Advisory Services
Web Site: http://www.umbc.edu/mas
|
VOLUME 3, NUMBER 3 |
JAN, 2003 |
HAPPY NEW YEAR…
…and welcome back! We would like to take this opportunity to
say we appreciate the cooperation we have received from the campus community
throughout the past year, and look forward to working with you all in the
coming year to make UMBC the best it can be!
A MESSAGE FROM THE MAS DIRECTOR
By the time you read this, I will be on maternity leave. While I am off getting acquainted with my new arrival, please feel free to contact either of the other two MAS team members, Frances Toth (x56257 or ftoth@umbc.edu) or Sharon Doherty-Ritter (x51620 or doherty@umbc.edu), with questions concerning audit requirements, internal controls, or other MAS related topics. I will return at the end of March.
LEGISLATIVE AUDIT REPORT AVAILABLE
In our last newsletter, we notified you that the legislative audit was complete and outlined the issues the auditors brought to our attention. The audit report is now finalized and is available for public viewing at: http://www.ola.state.md.us/educatio. htm. If you have any questions or would like additional information about items appearing in the report, please contact us.
INTERNAL CONTROL EDUCATION SESSION
ATTENDANCE
We wish to thank all those who attended our semiannual Internal Control Education Session on November 19th. There were 63 attendees from 36 departments. We hope the session provided you with useful information on how to improve the internal controls in your area. We will be planning another session for Spring 2003. If you were unable to attend this session, we hope to see you in the Spring!
We also want to thank you for your helpful comments on the evaluation forms. We will be using them to improve this session and to design new sessions so we can continue to provide the campus community with timely and relevant information. If you have any additional questions or comments about the information we presented at this session or regarding future sessions, please call or email Frances Toth (x56257 or ftoth@umb.edu) or Sharon Doherty-Ritter (x51620 or doherty@umbc.edu).
IRS AUDIT OF THE UNIVERSITY
SYSTEM OF MARYLAND
We have recently been notified by the Vice Chancellor for
Administration and Finance of the University System of Maryland (“USM”) that USM
has been selected by the Internal Revenue Service (“IRS”) for a Coordinated Examination
Programs (“CEP”) audit. This audit is described as a comprehensive review of
institutional compliance with a wide range of tax requirements, including
unrelated business income tax (“UBIT”), non-resident aliens, and fellowship
stipends. The audit will primarily include calendar year 2001, but could be
expanded to cover other areas or tax years as they deem necessary. At this
time, we have not been notified when the IRS will visit our campus.
Tom Vogler, UMBC Assistant Vice President for Finance has designated Ralph Thomas, Financial Services Technical and Procedural Manager, as the point of contact for UMBC faculty and Staff during the course of this audit.
As the results of this audit could impact the University’s tax liability, please ensure any requests for information from the IRS are coordinated through Ralph Thomas. Further instructions will be forthcoming from Financial Services.
If you have any questions about this notification, you may contact Sharon Doherty-Ritter on extension 51620 or Clolita M. Williams, Assistant Vice President for Administrative Services, on extension 52772.
P-CARD CORNER
Split-Purchases Clarification
In reviewing monthly purchasing card transactions we are
finding a significant number of transactions that appear to be split purchases.
The Purchasing Card Program prohibits purchases in excess of the cardholder’s
transactions limit. Currently the maximum per transaction limit is $4,999. When
identified, MAS pursues the propriety of the purchase(s) with each cardholder
and/or supervisor. However, there still appears to be confusion about what is
considered a split purchase. Below are some questions that cardholders and
supervisors can ask themselves to clarify whether the transaction would be
considered a split purchase.
- Has the cardholder placed an order, by telephone or
other means, for more than his/her per transaction limit and told the
vendor to charge it in more than one transaction?
If so, this would be a split purchase. - Has the supervisor authorized a purchase for more than
the cardholder’s per transaction limit?
If so, this would be a split purchase. - How was the transaction recorded on the purchasing card
log?
If the transaction is recorded as being ordered / purchased on one date, and the vendor’s invoice shows another order date, then it would be a split purchase if the dollar amount of the purchase is more than the cardholder’s limit. - Were the purchases made as a result of a request from
one or more individuals (i.e., one or more faculty members)?
If one individual makes a request (e.g., two computers) and the order is placed for more than the cardholder’s limit, it would be considered a split purchase. If more than one cardholder makes requests for the same type purchase (e.g., each individual requests a computer), the transactions should be recorded separately. This would not be considered a split purchase. - Were the purchases for like merchandise or components
of a system (e.g., tee shirts, computer and printer)?
If the purchase was for like merchandise or appears to be components of a system, then it would be considered a split purchase.
If you have questions regarding whether a transaction would be considered a split purchase, please call Frances Toth of MAS (e56257 or ftoth@umbc.edu) or Ina Caplan, the Purchasing Card Program Administrator (e54558 or
Computer Purchases and Sales Tax
In reviewing monthly purchasing card transactions we are
also finding some cardholders are paying sales tax on computer purchases (i.e.,
Dell, Compaq). UMBC is exempt from paying Maryland sales tax. If charged Maryland
sales tax, cardholders must then request a credit from the vendor for the
amount of the sales tax paid. These prohibited sales tax charges can be avoided
by purchasing the computer through the new contract established by the
University System of Maryland with the Maryland Education Enterprise Consortium
(“MEEC”). The following
is an excerpt from the October 2002 issues of the Procurement Press newsletter describing the MEEC contract.
The MEEC contract gives aggressive discounts for the purchase of microcomputer hardware, services, and associated lease options. Sample contract vendors are: Dell, Gateway, Hewlett Packard, and IBM. To obtain further contract information such as contact information, etc., USM has established for your convenience the following website: www.meec-edu.org.
When making purchases remember to verify with the contract vendor that you have received “MEEC” pricing. Use the P-card to pay for the purchase if the total is under $4,999. Departments must submit a requisition to Procurement if the total purchase is over $4,999 (You may attach a faxed quote from the contract vendor).
The State of Maryland contract for computers is still in effect and the campus may use that as well. (See the Department of Procurement’s website). To ensure that you are getting the lowest price and for comparison purposes, the department can obtain a quote from both the MEEC contract and the State of Maryland contract before you make a purchase. Some of the vendors that are on the State of Maryland contract are on the MEEC contract as well.
Remember if you are making a computer purchase over $5,000 not on contract, the request must be submitted with a requisition to Procurement for processing. Procurement will obtain competitive pricing. To expedite the purchase, departments may obtain 3 faxed quotes and submit them with your request for processing.
If you have any questions contact Ina Caplan, x54558.
Supervisory Review
The recently completed legislative audit again commented on
a lack of supervisory review over purchasing card activity. The timely and
complete supervisory review of purchasing card activity is the most critical control
in the purchasing card system. We have all heard the stories of misuse of government
issued purchasing and credit cards. An appropriate supervisory review of usage
and record keeping will keep UMBC from becoming one of those news stories. If
supervisors have any questions about how to complete a valid supervisory review
of their cardholders usage and record keeping, please contact either Frances Toth
of MAS (x56257 or ftoth@umbc.edu) or Ina Caplan, Purchasing Card Program
Administrator (x54558 or caplan@umbc.edu).
Unannounced Follow-Up Reviews
To better prepare departments for review of their purchasing card documentation by auditors, MAS will be conducting unannounced follow up reviews of purchasing card usage and record keeping. These reviews will be focused on ensuring the appropriate corrective actions have been taken since our initial review. As with our initial reviews, we will discuss any areas in need of improvement with the cardholders, supervisors, and department heads and make recommendations to assist departments better prepare for the next audit of our purchasing card activity. Our goal is to eliminate the purchasing card item from the next audit report.
MANAGEMENT ADVISORY SERVICES
Michele L. Evans, CPA
Director
Email: mevans@umbc.edu
Extension: 51354
Frances Toth, CPA
Management Analyst
Email: ftoth@umbc.edu
Extension: 56257
Sharon D. Doherty-Ritter, CPA
Management Analyst
Email: doherty@umbc.edu
Extension: 51620
Shared Fax: 51009