Office of the Legislative Auditor - Financial Audit Division

Report Summary

Financial-Related Audit Report

Normandale Community College

July 1, 1996, through December 31, 1999

Normandale Community College operated within available financial resources and generally complied with applicable legal provisions and management's authorization. However, we found the following internal control weaknesses impacting the safeguarding of assets and recording of financial activities in the college's accounting systems:

Key Findings and Recommendations:

• Employee access to college computerized business systems was not sufficiently restricted. We recommended the college limit access to the minimum level necessary to complete employee job responsibilities. (Finding 1, page 7)
• The college did not properly record certain financial activity and did not timely reconcile state treasury and bank balances to the accounting system timely. We also noted that cash balances in two inactive bank accounts need to be resolved. We recommended that the college resolve reconciliation differences and close unneeded bank accounts. (Findings 2 through 4, pages 9 - 11)
• The college did not ensure that all tuition collections were deposited and properly posted in the accounting system. Increased risk results from inadequate control over sensitive waiver transactions and backdated registration cancellations. We recommended formal policies addressing documentation, review, and authorization requirements. Also, college management should receive periodic reports quantifying the extent of these activities. (Finding 6, page 14)
• We recommended that the college reconcile payroll and Federal Perkins Loan activities to the MnSCU accounting system in a timely manner. (Findings 7 and 8, pages 18 - 21)
• The college did not properly record liability dates in MnSCU Accounting. We recommended proper posting of liability dates on its disbursement transactions in the accounting system. (Findings 9, page 24)
• College bookstore receipts were not promptly deposited and financial statements do not reflect all operating costs. We recommended daily deposits and requested the college to formalize its plan to allocate certain costs to the bookstore. (Findings 10 and 11, page 26)

Normandale Community College is part of the Minnesota State Colleges and Universities (MnSCU) system. This financial-related audit report focused on financial management, tuition and fees, payroll, operating expenditures, and auxiliary enterprises for the period from July 1, 1996, through December 31, 1999. We also reviewed the college's internal controls over compliance with federal student financial aid for fiscal year 2000. The college's response is included in the report.