3.10.4 Control of finances

The institution exercises appropriate control over all its financial resources.

Judgment of Off-Site Review Committee

Non-Compliance

Comments of Off-Site Review Committee

The management letter disclosed several findings, e.g. a sizeable pledge that was not recorded, large credit balances owed to students, undocumented credit card transactions, bond covenants requirements that were not being kept, elimination of the Controller position, and Title IV compliance exceptions.  There were also significant deficiencies (not material findings) on internal control over the major financial aid programs that were mentioned in the financial aid audit.  These include financial aid not being reconciled to the general ledger, Perkins Loan program problems with default rates and insufficient management of the program, and federal financial aid not being posted to student’s account.

The supporting documents do not reflect the change in the organizational structure which eliminated the Controller’s position during the fiscal year.  A resume was provided for the Controller which is no longer effective and the new position created does not have effective control of the finances with its limited capacity according to the management letter.  The General Accounting Policies and Procedures outlines a Comptroller position as being a key position in controlling finances of the college; however, this position is not referenced in any supporting documentation as to who occupies this position or if this is the actual organizational structure of the college.  The organizational chart provided also reflects the Comptroller position with four positions reporting to it. 

Bennett Focused Response

A comprehensive corrective action plan to address the deficiencies cited in the audit and management letter for fiscal year 2006-2007 was developed and implemented.  The plan involved re-establishing the Controller position, hiring a Default Manager and establishing a Reconciliation Committee. 

• Effective February 1, 2008, the position of Controller was filled by hiring Latonya Flamer.  Ms. lamer served the institution as the Senior Accountant prior to this appointment.  Please see the Controller Resume and the Controller Job Description. 

• Effective February 1, 2005, procedures were implemented to ensure that student accounts are reconciled monthly.  The College instituted a Reconciliation Committee chaired by the Controller.  Student Financial Aid prepares reports to show student awards.  Student Accounts ensures that awards are timely and accurately posted.  The Committee meets monthly to discuss reconciliation issues between the two offices.  Information gathered at these meetings is used to ensure that accurate information is reflected in the General Ledger.  In addition, Student Accounts working in conjunction with the Comptroller ensures that amounts received by the University (via federal drawdown, check or direct deposit) reconcile to the amounts awarded/posted. This Committee also works with the Registrar to ensure that there is proper accounting for students that withdraw or otherwise leave the university.

• The College hired a Director of Default Management in June 2007.  It is anticipated that the default rate will be positively influenced by this position.  Please see Director of Default Management Resume.  

The steps listed above have solved the problems and improved the processes that were previously cited as audit deficiencies. 

Supporting Documents

SOURCE	LOCATION/Special Instructions
Controller Job Description	Office of Human Resources
Controller Resume	Office of Human Resources
Director of Default Management Resume	Office of Human Resources