Stephen F. Austin State University
An Audit Report on Management Controls at Stephen F. Austin State University
Report Number 97-082
August 1997
Overall Conclusion
Major deficiencies exist in Stephen F. Austin State University's (University) design or implementation of management controls in several areas. Collectively, these deficiencies reduce the University's ability to safeguard assets and ensure its mission and objectives will be fully accomplished. Several of the deficiencies have continued from prior audits.
Key Facts and Findings
The University has not always maintained adequate internal controls over the management of cash, resulting in a material weakness. The material weakness was caused by the University's failure to reconcile bank statements promptly and perform supervisory review of the bank reconciliations, monitor bank account and ledger cash balances adequately, and formally recognize borrowing between accounts and fund groups in the University's accounting records. This weakness limits the ability of University management and the Board of Regents (Board) to meet their fiduciary responsibility for funds under their control.
The University has not used its internal audit function effectively, thereby increasing the risk that errors and irregularities could occur without timely detection. The Board of Regents, until recently, has not been sufficiently proactive in using the internal audit function to reduce risk. There is no formal documentation of the Board's oversight function, nor is there a formal process in place for the approval of significant deviations from the audit plan. During fiscal years 1995 and 1996 the Department of Audit Services completed only 20 percent and 25 percent, respectively, of its planned audit work, and did not provide any coverage of electronic data processing systems, program results, and accomplishment of goals.
The University has not exercised appropriate oversight of the University Police Department (UPD) to ensure it is operating efficiently and within appropriate financial constraints. Analysis does not exist to determine whether the level of staffing and resources of the UPD is appropriate given the University's size and nature of operations. The UPD's budget, number of automobiles, and officer staffing level is significantly higher than other state universities of similar size. Additionally, management does not subject the UPD to the same internal controls regarding the use of cellular phones, as applied to other departments, leading to unnecessary costs and increased risk of cellular phones misuse.
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