MAS NEWSLETTER
A quarterly publication distributed by UMBC Management Advisory Services
Web Site: http://www.umbc.edu/mas
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VOLUME 6, NUMBER 1 |
OCT, 2004 |
New Internal Control
Education Sessions for Campus Administrators
Contact MAS if You Suspect a Potential
Occupational Fraud or Theft
Status of Audit
Report Items
New P-Card
Verification Procedure
$$$$$
Cash Receipts Handling Reminder! $$$$$
Help Facilitate
the UMBC Equipment Inventory Process
Federal Work
Study Reminder
P-CARD CORNER
New Internal Control Education Sessions for Campus Administrators
At the request of Dr. Hrabowski, Management Advisory Services has developed an Internal Control Education Session for Campus Administrators. The one hour session will explain the importance of internal controls and discuss components, limitations, and the critical control points of internal controls from the perspective of the approver or authorizer of various department transactions. As we are expecting the legislative auditors to return to campus this Fall, attendance is strongly encouraged. You can register for a session via the UMBC Training site at http://www..umbc.edu/training/.
The University places a high level of trust in you, its faculty and staff, and requires that university assets under your control be protected and properly safeguarded from loss and misuse. This responsibility rests with employees at all levels and throughout all departments. Employees cannot take or use for their personal benefit property belonging to the university.
Employees are further encouraged to report any instance of a suspected fraud or theft to the Director of Management Advisory Services (MAS). If an instance of suspected fraud is reported instead to a supervisor, chairperson, director, dean, vice president, or other responsible person, that person is to report the instance to the Director of MAS.
We are still expecting the Legislative Auditors to return to campus in the next few months. In addition to identifying new areas to audit, the auditors will follow-up on the corrective actions we have implemented to address the items that appeared in their last report. Here is a summary of the eight items that appeared in the audit report from October 2002 and a brief status update.
Purchasing Cards – We did not always adhere to State and University policies for purchasing card purchases (e.g., supervisory review, documentation). This was a REPEAT item.
Current Status: Procurement trains and provides numerous tools so users can comply with the p-card program requirements. MAS continues to perform unannounced p-card reviews and report noncompliance to applicable levels. Quarterly verification by Vice Presidents and Deans was implemented beginning FY 05. See the next article for further explanation.
Student Accounts Receivable – We did not adequately reconcile the student accounts receivable detail records with the general ledger control account. This was a REPEAT item.
Current Status: Financial Services and OIT will be working together to complete this reconciliation.
Purchases and Disbursements – We had not established adequate internal controls over the processing of purchase and disbursement transactions.
Current Status: Controls were improved over the processing of purchase and disbursement transactions.
Tuition Waivers – We did not ensure that tuition waivers were properly authorized.
Current Status: Authorizations for tuition waivers were updated for UMBC and all System institutions.
University Bookstore – We had improperly granted security capabilities to two employees.
Current Status: The Bookstore deleted security capabilities for one employee and is in the process of switching security capabilities for the remaining employee.
Information System Security and Control – We did not have adequate security measures in place over our critical network resources.
Current Status: Additional firewalls were added to better secure critical network resources.
Information System Security and Control – We did not have formal IT security or disaster recovery plans.
Current Status: A disaster recovery plan has been developed and a mock disaster drill was held. The IT security policy is in process and should be completed Fall 2004.
Information System Security and Control – We did not have sufficient controls over program change procedures and user account password requirements for the administrative minicomputer.
Current Status: Controls over program change procedures and password requirements were improved.
Please contact MAS if you need more information about these items or if you have questions about how they may affect you or your department.
With the next Legislative Audit looming around the corner its time for a friendly reminder about proper cash receipt handling in your areas. If your department or area is responsible for collecting cash (including checks) from people there are certain controls to be considered.
Help Facilitate the UMBC Equipment Inventory Process
With so many Departments relocating on campus this is just a reminder to make sure Departments are completing all necessary forms to ensure the University wide inventory database maintained by the Plant Funds and Inventory Control area within Financial Services is as up to date and accurate as possible. All necessary forms can be located at the following web address:
It is important to cooperate with the Inventory Control personnel when they are conducting periodic inventories. The Legislative Auditors are due back in the near future and the Equipment area is always one of their major focal points. We also would like to remind Departments that if they have individuals using University equipment at home they must complete an Off Campus Equipment Authorization Form. This form can also be located via the link mentioned above.
If your department employs Federal Work Study (“FWS”) students, please remember that although a faxed timesheet to the FWS coordinator in the Office of Financial Aid (“OFA”) will get your student paid, the original timesheet must immediately follow via campus mail or be hand carried to OFA. Maintain a copy of the timesheet in your department for subsequent verification to checks and direct deposit advices. Receipt of the original timesheet in OFA for verification purposes is a critical control in this process. The FWS coordinator will be notifying MAS of departments who do not regularly submit original timesheets so that we can follow-up with the department. Additionally, departments who do not comply risk being eliminated from participating in the FWS program. If you have any questions about this process, you may contact MAS or the FWS coordinator. Note that Amy Spinnato, FWS coordinator, is currently on maternity leave but Joi Stanley (ext 52387) is filling in until Amy gets back.
In a recent audit of state agencies the legislative auditors found exorbitant charges for goods and services purchased with the purchasing card, as well as some employees accepting personal items from a vendor in return for purchasing items at inflated prices. Acceptance of personal items is in violation of the State’s Ethics Law which states that an employee may not knowingly accept a gift from an entity that does or seeks to do business with the employee’s governmental unit. Acceptance of an item is also in violation of the Governor’s Executive Order, issued in January 2003, which provides that an employee shall not solicit or accept any gift or other item of monetary value from an entity doing business with the employee’s agency. Additionally, purchasing card program policy requires the cardholder to take reasonable steps to determine that the price quoted is the best you can obtain (Section 4.2). It is appropriate to first consider those sources available under existing State of Maryland, UMBC contracts and certified Minority Business Enterprise (MBE) and Small Business Enterprise (SBE) vendors which can be found on the Department of Procurement’s web site. However, the use of the card is not restricted to these contract vendors.
In many of our P-card reviews we are finding that cardholders are not preparing the Inventory Addition forms and submitting them to Inventory Control. Inventory Addition forms are the only way Inventory Control is made aware of sensitive equipment purchases on purchasing cards. If your department has an Inventory Custodian, it is the responsibility of the cardholder to notify the custodian of any sensitive equipment purchases. Sensitive equipment is any computer equipment costing between $750 and $4,999 and any audio-visual equipment costing between $1,000 and $4,999. Please ensure the forms are completed and submitted to Inventory Control.
KUDOS...…
to the Career Development Center. A recently completed purchasing card review by MAS has shown that the Center is managing its program well. Thanks for your efforts and keep up the good work!
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