A Follow-up Audit Report on Selected Financial Processes at Sam Houston State University
November 2012
Report Number 13-007
Overall Conclusion
Sam Houston State University (University) has fully or substantially implemented 18 (78 percent) of 23 recommendations that auditors issued to the University in An Audit Report on Selected Financial Processes at Sam Houston State University (State Auditor's Office Report No. 10-030, June 2010).
Of the 18 recommendations fully or substantially implemented:
- The University fully or substantially implemented three recommendations related to updating its asset capitalization requirements, providing training to staff regarding asset capitalization requirements, and developing a risk-based approach to inventorying University assets.
- The University fully or substantially implemented three recommendations related to reviewing its investments and presenting investment information in the notes to its annual financial report.
- The University fully or substantially implemented two recommendations related to controls over reporting assets in its annual financial report.
- The University fully or substantially implemented five recommendations related to its management of grants.
- The University substantially implemented two recommendations related to the preparation of annual reports that describe (1) its indirect costs and (2) how its indirect costs support research activities.
- The University fully or substantially implemented three recommendations related to strengthening information technology controls.
While the University has made significant progress in implementing the prior audit recommendations, it should continue its efforts to improve controls related to its inventory of assets, processes related to cash, review of grant-related expenditures, and reviewing user access to automated systems. Specifically:
- The University should monitor to ensure that its departments have implemented adequate segregation of duties for its inventory process.
- The University should continue its efforts to improve controls over its cash processes and provide appropriate training to staff as it continues to implement a new application for processing cash receipts.
- The University should consistently verify that expenditures associated with grants are valid and that it has supporting documentation prior to paying for those expenditures.
- The University should document the results of its reviews of user access to key financial applications and ensure that all business units conduct periodic reviews of user access as required by its policies and procedures.
Auditors communicated other, less significant issues to the University's management separately in writing.