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AUGUST 2002 REPORT NO. 03-018
AUDITOR GENERAL
William O. Monroe, CPA
FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
OPERATIONAL AUDIT
For the Period January 1, 2001, Through December 31, 2001,
and Selected Transactions Through March 31, 2002
SUMMARY Finding No. 7: Payments to vendors did not appear
timely in several instances, contrary to Section
Finding No. 1: We noted reconciling items older than 215.422, Florida Statutes.
six months in several bank account reconciliations.
Finding No. 8: We noted six instances in which
Finding No. 2: Employee underpayments of Social financial aid disbursements by the Controller’s Office
Security and Medicare taxes totaling approximately could not be matched to corresponding entries in the
$10,000 were not collected by the University timely. financial aid award file, thereby eliminating an
effective audit trail.
Finding No. 3: Faculty activity reports were not
adequately monitored by University management to INTRODUCTION
ensure that they were properly completed and
The Florida Agricultural and Mechanical University
documented their intended purposes.
was established in 1887 in Tallahassee, Florida.
Finding No. 4: The University did not adequately During part of the audit period, the University was
monitor contract provisions for the operations of its governed, regulated, and coordinated by the former
bookstore, food service, laundry, and vending Board of Regents, subject to the general supervision of
machines by private contractors to ensure that the State Board of Education. Effective July 1, 2001,
commission income was timely and accurately the Legislature amended Section 229.003, Florida
received. Statutes, abolishing the Board of Regents and
transferring its operations to the Florida Board of
Finding No. 5: No procedures were in place to
Education, responsible for overseeing kindergarten
document a timely and cost-effective resolution to a
through graduate studies education. In addition, the
contract in which timelines and cost were exceeded by
law created a Division of Colleges and Universities,
a significant margin.
and provided for a 12-member board of trustees
appointed by the Governor for each university. The
Finding No. 6: Our review indicated that University
members of the Board of Trustees who served during
records for payment to medical providers for student
the audit period are listed on Exhibit 1. Dr. Frederick
athletes were incomplete, and payment was not
S. Humphries was President until December 31, 2001.
always timely.
Dr. Henry Lewis, III, was Interim President from
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
January 1, 2002, to June 30, 2002. Dr. Fred Gainous than six months in several bank reconciliations. Our
became President effective July 1, 2002. For the 2000- current review again disclosed this problem. For
2001 academic year, the University reported an example, checks totaling $350,902 were listed as
average enrollment of 7,897 full-time equivalent outstanding in the June 30, 2001, Scholarship Fund
students. bank reconciliation. Approximately $69,000 of the
amount represented checks older than six months.
The University’s financial statements are combined
Checks, totaling approximately $32 million annually,
with the other State universities and are reported in
issued from the Scholarship Fund bank account
the general purpose financial statements contained in
represent financial aid checks written to students.
the State of Florida comprehensive annual financial
report issued by the State Comptroller. We reviewed eight Scholarship Fund checks reported
as outstanding over six months and found that six had
An examination of expenditures of Federal awards
been cashed, thus incorrectly reported on the bank
administered by the University under contract and
reconciliation. The remaining two checks had not
grant agreements to finance specific programs and
been cashed and were correctly reported on the
projects is included in our Statewide audit of Federal
reconciliation. The University is currently in the
awards administered by the State of Florida, audit
process of reviewing all outstanding checks for correct
report No. 02-192.
classification and timely disposition (e.g.,
SCOPE, OBJECTIVES, AND METHODOLOGY identification and resolution of outstanding checks
over three months old).
The objectives of this operational audit were to obtain
an understanding and make overall judgments as to We recommend that the University continue its
whether University management controls promoted review of all outstanding checks and other reconciling
and encouraged compliance with applicable laws, items in a timely manner.
administrative rules, and other guidelines; the University Response
economic, effective, and efficient operation of the
The University concurs with the audit
University; the reliability of records and reports; and
recommendation. The University implemented
the safeguarding of assets. Specifically, we reviewed
procedures to review all reconciling items monthly.
management controls and administration of cash,
Outstanding checks over three months old will be
faculty activity reporting, contracts, purchasing,
researched thoroughly, and when appropriate,
insurance, and student records for the period January
cancelled through stop payment procedures and
1, 2001, through December 31, 2001, and selected
placed in a suspense account. Additional resources
transactions through March 31, 2002.
will be provided by the Controller’s Office to assist in
We conducted this audit in accordance with the reconciliation process.
applicable standards contained in Government
Finding No. 2: University Receivables
Auditing Standards issued by the Comptroller General
of the United States. The State Comptroller’s Office, Bureau of State
Payrolls, conducted a compliance review of the
FINDINGS AND RECOMMENDATIONS University for the period January 1, 1998, through
December 31, 1998. The date of the review was June
Finding No. 1: Bank Reconciliations
30, 1999.
In audit report No. 13681, we noted unresolved
outstanding checks and other reconciling items older
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
The review indicated that the University did not reports show a faculty member’s percentage of work
comply with Internal Revenue Code section 3121 in effort for each duty.
properly exempting employees from Social Security
Final after-the-fact faculty activity reports are
and Medicare taxes. As a result, the University
prepared after the end of each term to show actual
underpaid the Social Security Administration (SSA)
duties performed. The reports are to be signed and
$62,700 for 10 employees who were improperly
dated by the faculty member and the Dean or
exempted. The University made the correct payment
department head.
to the SSA in July 1999.
In addition to documenting a faculty member’s
The employees’ portion of the underpayment was
percentage of work effort, final faculty activity reports
approximately $31,000. The University sent letters to
serve other purposes, such as:
the employees in question to collect the amount of
underpayment. Apparently through oversight, the M Providing a basis for meeting the requirements
University did not pursue timely collection efforts for of the 12-Hour Law as defined in Section
four employees. Untimely collections totaled 240.243(2), Florida Statutes.
approximately $10,000, and ranged from 5 months to M Reporting required faculty activity to the Florida
30 months after the University’s first request in July Department of Education.
1999. For example, one employee, after receiving four
M Providing a basis for faculty members to allocate
collection requests over 19 months, was forced to
charges to the Federal government for time
make payroll deduction payments totaling $3,571
worked on a Federal grant.
beginning in March 2001. Failure to timely pursue
collections may result in loss of amounts owed to the M Documenting whether the faculty member has
University. We recommend that collection contributed the required State work effort
procedures be reviewed and strengthened to provide (matching requirement) to a Federal grant.
timely collection efforts. M Serving as a tool for the department head to
University Response monitor the faculty member’s assigned duties.
The University concurs with the audit The University uses two faculty activity reports. The
recommendation. The University has strengthened its Office for Academic Affairs maintains the official
collection efforts and operating procedures for the Assignment of Responsibility Form for the portion of
underpayment of Social Security and Medicare taxes. faculty work effort funded from State (Educational
By September 20, 2002, the amount owed will be fully and General) funds. The Division of Sponsored
collected through payroll deductions. Research maintains the Academic Assigned Activity
Report for the portion of faculty work effort funded
Finding No. 3: Faculty Activity Reporting
from sponsored projects (e.g., contracts and grants).
The University has designed specific faculty activity The two reports together should provide 100 percent
reports to document faculty time and effort. These of a faculty member’s work effort for the term.
reports list the duties of each faculty member for each
Our review of 30 faculty members in 4 departments
academic term. Duties are divided into
indicated that University management (i.e., the Office
noninstructional and instructional. Noninstructional
for Academic Affairs, the Division of Sponsored
duties include activities such as research, public
Research, and the department heads) did not
service, and academic advisement. Faculty activity
adequately monitor these reports to ensure that they
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
were properly completed and maintained for their undergraduate students, but only reported 10
intended purposes. For example: percent of her total work effort as academic
advisement. Without standard calculations, or
M Final Assignment of Responsibility Forms in the
justification to use other calculations, University
Office for Academic Affairs did not always
management cannot evaluate comparability of
agree with the ones on file in the departments.
work effort or determine optimum faculty work
In addition, several forms were not dated. As a
load.
result, we could not determine which form, the
one in the Office for Academic Affairs or the one M No documentation was on file to support the
on file in the Department, was correct. performance of noninstructional duties for
several faculty members. As a result, we could
M University management does not review both
not conclude whether these faculty members
reports (Assignment of Responsibility and
completed their assigned duties. Also, there
Academic Assigned Activity Report) together to
was no central file available in two of four
determine total faculty work effort. Several
departments tested that contained
faculty members reported work effort for a term
noninstructional duty documentation. In these
in excess of 100 percent. As a result, we could
departments, the instructor was contacted to
not determine if faculty work effort was always
provide the documentation. A central file
properly reported.
would facilitate the department’s efforts to
M One faculty member reported work effort of 35 monitor the timely and adequate completion of
per cent for research on Federal grants. faculty assigned duties.
However, the member was paid entirely from
We recommend that the Office for Academic Affairs
State (Educational and General) funds for that
improve efforts to coordinate faculty activity
term. As a result, the Federal grant may not
reporting. The Office may wish to consolidate all
have been correctly charged.
information on one faculty activity report to facilitate
M The final Assignment of Responsibility Form accountability. We also recommend that department
does not generally detail whether faculty paid heads improve their efforts to monitor faculty activity
from State funds contributed the required reports to ensure that faculty duties are timely and
matching effort for Federal grants when adequately completed.
required to do so. Therefore, the University did
University Response
not document whether the matching
requirement in these cases was met. The University concurs with the audit
recommendations. A new form was developed that
M The University’s written guidelines provide that
captures both the assignment of responsibility
a faculty member can report a full-time
identified under educational and general funding and
equivalent work effort for every 250 students
the academic assigned activity identified under
advised. However, percentages of work effort
contracts and grants funding for each faculty
for academic advisement duties were reported
member’s work effort. This consolidation of
inconsistently in several instances. For example,
information will better facilitate accountability and
a professor in one department advised 6
management. Also, the University plans continuous
undergraduate students and reported 20 percent
monitoring.
of her total work effort as academic advisement;
a professor in another department advised 8
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
Finding No. 4: Auxiliary Revenue Contracts M The University received several food service
commission checks months after due dates. No
The University contracts the operations of its
documentation was available to demonstrate
bookstore, food service program, laundry services,
that the University had requested the contractor
snack vending, and soft drink vending to private
to timely remit commission checks. Untimely
contractors.
receipt of commission checks increases the
The University earned commission income totaling possibility that errors or mistakes in commission
$617,000 for the 2001 contract year from these five calculations will not be timely detected.
contractors. Commission income ranged from $25,000
M An annual independent audit was not on file for
for the snack vending contract to more than $330,000
one of the contractors at the time of our request.
for the bookstore contract.
Although not a substitute for University
Contract terms generally provide that the contractors monitoring, independent audits add assurance
will provide annual independent audits, timely that contractors are paying the correct
submission of commission income, and commission amount.
documentation (cash register tapes, invoices, etc.,
M Commissions did not appear to be paid by the
when applicable) for commission reports submitted.
food service contractor for the College of
All of the contracts provided that the University could
Engineering location as required by the contract.
review the contractor’s financial information to ensure
Our review of the College’s gross sales for
the accuracy of commission income due the
October 2001 indicated that $746 in commissions
University.
should have been paid to the University. It was
Our review indicated that the University did not not practicable for us to determine the
adequately monitor contract provisions to ensure that commissions due for this location; however, the
commission income was timely and accurately amount may be estimated at several thousand
received. For example: dollars for the audit period.
M Although University personnel reviewed The University is in the process of implementing
reports submitted by the contractor, the procedures to monitor commission income.
University did not review documentation, such Additional staff has been added to assist in this
as cash register tapes and invoices from the process. We recommend that the University continue
contractors supporting bookstore and food its efforts to establish adequate monitoring
service commission income. Such procedures for auxiliary revenue contracts. We also
documentation was generally not on file at the recommend that the University obtain, and timely
University but should be available at the review, all independent audits of the auxiliary
contractor’s office. In addition, the University operations and investigate problems noted.
did not physically verify cash sales and or meter
University Response
counts from coin operated laundry and vending
machines periodically to determine that cash The University concurs with the audit
sales reported by the contractors were accurate. recommendations. The University has taken
As a result, the University could not aggressive steps to review and monitor commission
demonstrate that it received the commission income. Staff personnel have begun to plan for audits
income it was due. and reviews of contractors’ books and records. Also,
Auxiliary Services has established a system to
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
track:(a) the receipt of commission earnings, (b) the Extenuating circumstances causing increases in time
receipt of independent audit reports of contractors, and cost should be justified in writing, establishing
and (c) the resolutions of noted problems or new specific timelines and cost, and providing actions
exceptions. The University has received commission to be taken to negate the necessity of further
payments from the Food Service Contractor for the modifications.
College of Engineering location and payments are
University Response
current.
The University concurs with the audit
Finding No. 5: Contract Management
recommendations. The University will develop
The University entered into a contract to provide an procedures to derive reasonable estimates of
indirect cost proposal required by the Federal anticipated cost of services from past history, current
government. The contract was for the period March industry practices and from other similar Universities’
21, 2000, through June 30, 2000. The University did cost experiences. The Office of Sponsored Research
not use a competitive selection process for choosing will use competitive procurement and contracting
this contractor, but used a sponsored research practices to ensure services are provided timely and at
exemption provision authorized by Section 240.241(9), fair and reasonable costs.
Florida Statutes.
Finding No. 6: Insurance
The contract provided detailed timelines for specific
Student athletes receive various forms of health
activities; however, the University did not ensure that
insurance. Coverage is administered by the
these timelines were met, or provide a timely and
University’s Athletic Department (department).
cost-effective solution for completion of this contract
Primary coverage is provided by the athletes’ parents’
once time and cost were exceeded. A final work
policy, if available. The University provides
product was never provided to the University, and
additional coverage through a secondary insurance
the University’s General Counsel informed the
policy that pays remaining expenses after the primary
contractor in October 2001 that the contractor was in
insurance. The secondary provider pays expenses up
breach of the $68,800 contract. By that time, the
to $50,000 per injury. Any expenses that exceed
University had paid the contractor in excess of
$50,000 are paid by a policy provided by the National
$200,000. These costs did not include University staff
Collegiate Athletic Association (NCAA).
time, which could not be practicably quantified. A
new contractor was hired and provided the product The University pays approximately $70,000 annually
for $90,000. for secondary insurance coverage. The University
also paid approximately $6,700 for the calendar year
Before entering future contracts, we recommend that
2001 for costs in excess of insurance coverage
the University establish a reasonable cost for the
provided.
services. This is most effectively accomplished by
inviting cost proposals from several prospective Our review disclosed weaknesses in the department’s
contractors, rather than one contractor as is the case records for monitoring payments to medical
with a sponsored research exemption. Once a providers, as follows:
reasonable cost has been established, we recommend M The department’s records for payments to
that the contract be written with clearly understood medical providers were incomplete. For
deliverables and timelines. Payments should be made example, amounts paid by the primary and
only after receipt of required deliverables. secondary insurance providers were not always
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
evident, increasing the risk that department timely and accurately to medical providers. Also, a
payments will be inaccurate. history of payments by the secondary insurance
provider will be maintained to compare, for
M Numerous department payments totaling $6,000
reasonableness, claims paid to premiums charged.
to medical providers were untimely. These
payments appeared to have been made months Finding No. 7: Vendor Payments
and, in some cases, years, after the dates of
In audit report No. 13681, we noted that vendors were
medical treatment. For example, the
not always paid by the University in a timely manner.
department paid a medical provider in August
Section 215.422, Florida Statutes, provides that
2001 for student athlete medical services dated
payments to vendors should be made within 40 days
from September 1998 to October 2000.
of the receipt of the vendor’s invoice, and receipt,
Payments totaled $701. A pattern of untimely
inspection, and approval of the goods or services.
payments may result in interruption of medical
Interest is required to be paid to the vendor for late
services. Also, untimely department payments
payments.
resulted in the medical provider informing two
student athletes that debt collection proceedings We again noted that University payments to vendors
would be started against them. did not appear timely in several instances (19 of 131
items tested). Although the University Controller’s
Department personnel indicated that the primary
Office makes the final approval for payment, it relies
problem with health care provider payments in the
on dates provided by department personnel. The
past was due to poor payment records and lack of
dates provided by the departments were in many
response to requests for information by the secondary
instances incomplete or indicated that payment was
insurance provider. During the latter part of 2001, the
untimely. For example, University records showed
department contracted with a new secondary
one vendor invoice dated April 24, 2001, for $4,334,
insurance provider to improve payment procedures.
for which the University received the goods on May 1,
Department personnel also began updating both past
2001. However, the vendor was not paid until
and current records to ensure that health care
October 4, 2001. Although valid reasons may exist
providers were properly paid.
why this payment should not be considered untimely,
We recommend that the department continue to no documentation was on file to support such a
improve its monitoring procedures to ensure that conclusion.
payments are timely and accurately made. We further
University management periodically sends reminders
recommend that the department maintain a history of
to departments on the importance of prompt vendor
payments made by the secondary insurance provider.
payment. We recommend that management identify
The payment history would assist the department in
departments responsible for incomplete and untimely
determining if premiums charged by the secondary
information and take the actions necessary to ensure
insurance provider are reasonable by providing, over
that vendors are timely paid.
a period of time, a comparison of claims paid with
premiums charged. University Response
University Response The University concurs with the audit
recommendations. The University will develop and
The University concurs with the audit
issue periodic reports to senior management
recommendations. The University is stepping-up its
identifying those offices, which have not submitted
monitoring process to ensure payments are made
Page 7 of 10
FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
timely and approved vendor invoices for payment. correct the noted problem. In the interim, procedures
This will improve the University’s prompt payment will be implemented to monitor award adjustments
compliance rate. These offices will also receive by submitting account receivable requests to the
extensive awareness training on the payment process. Controller’s Office to post adjustments on student
accounts. Once the adjustments have been posted to
Finding No. 8: Financial Aid Record Deletions
student accounts, the student financial aid award files
We noted six instances in which financial aid are adjusted to reflect the new award amounts and
disbursements by the Controller’s Office could not be revised letters are sent to students. Also, the awards
matched to corresponding entries in the award file are reconciled monthly with the Controller’s Office
administered by the Office of Financial Aid. The and all adjustments are crosschecked and confirmed.
reason for the discrepancies is that when adjustments
are made in the financial aid award file, the original OTHER MATTERS
transactions are deleted, thereby eliminating an audit
The United States Congress passed the Health
trail.
Insurance Portability and Accountability Act of 1996
The University compensates for this control weakness (HIPAA), Public Law 104-191, which addresses
through periodic comparisons of the financial aid electronic data interchange, privacy, and information
award file and the disbursement file by the University security standards for personal health information.
Controller. Additional procedures include restrictions HIPAA also provides for civil and criminal penalties
of the record deletion capability of financial aid for noncompliance. Pursuant to HIPAA, the United
employees by the financial aid director. In addition, States Department of Health and Human Services has
adjustments relating to disbursements are made by published regulations on electronic data interchange
the Financial Aid Office after notification is received standards and privacy, with security regulations
from the University Controller’s Office. expected to be published in 2002. Because of the
Notwithstanding these compensating controls, we significance of these provisions on the handling and
recommend that the University modify or replace the transmission of personal health information, advance
current financial aid award file so that records are not planning to evaluate the impact of the HIPAA
deleted when adjustments are made. This should requirements on the University will serve to reduce
assist in detecting errors in a timely manner. The the difficulties in making the necessary transition to
Office of Financial Aid indicated that it is in the comply with these new requirements.
process of obtaining a computer software package Status of the University’s Efforts
that will include an on-line detailed audit trail for
The University Computer Systems Center of the
adjustments. The proposed implementation period is
Office of Planning and Analysis and the Student
July 2003 through August 2004.
Affairs Division have collaborated in the continuous
University Response review the institution’s current Health Care
The University concurs with the audit Information System. Upgrades were accomplished to
recommendation. The current automated student the Healthcare Clinic’s information-processing
financial aid system does not allow adjustments to be platform. The University has also contacted Florida
made to the award file without writing over the universities and other institutions of higher learning
previous or original award amount. Nevertheless, the to ascertain what health care systems currently handle
new proposed Student Information System will their student health care information needs.
Page 8 of 10
FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
The review has been based on system capabilities, noted in audit report No. 13681, except as discussed in
information processing, technical support, cost and finding Nos. 1 and 7.
compliance with 1996 Public Law 104-191 Health
Insurance Portability and Accountability Act AUTHORITY
(HIPAA). As the information is collected, a thorough Pursuant to the provisions of Section 11.45, Florida
review will be made to identify a replacement Statutes, I have directed that this report be prepared
Healthcare Clinic system. to present the results of our operational audit.
The University has requested in a proposal for a
solution for Enterprise Resource Planning for Student
Information, Human Resources and Financial William O. Monroe, CPA
Management Systems, a requirement that any Auditor General
application (system) that deals with the processing of
student health related information must be HIPAA UNIVERSITY RESPONSE
compliant.
The University President’s response letter dated
PRIOR AUDIT FINDINGS August 16, 2002, can be viewed in its entirety on the
Auditor General’s Web site.
During our current audit, we found that the
University substantially corrected the deficiencies
To promote accountability in government and improvement in government operations, the Auditor General makes operational
audits of selected programs, activities, and functions of universities. This operational audit was made in accordance with
applicable Government Auditing Standards issued by the Comptroller General of the United States. This audit was conducted
by Jack Bechtol and supervised by Alan Sands, CPA. Please address inquiries regarding this report to Jim Raulerson, CPA,
Audit Manager, via e-mail at jimraulerson@aud.state.fl.us or by telephone at (850) 487-4468.
This report, as well as other audit reports prepared by the Auditor General, can be obtained on our Web site
(http://www.state.fl.us/audgen); by telephone at (850) 487-9024; or by mail at G74 Claude Pepper Building, 111 West Madison
Street, Tallahassee, Florida 32399-1450.
Page 9 of 10
EXHIBIT 1
UNIVERSITY BOARD OF TRUSTEES
FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY
The Board of Trustee members who served from July 1, through December 31, 2001, are listed below:
Lt. Gen. Julius W. Becton, Jr. Mr. Randall Hanna
Dr. Regina Benjamin Reverend Robert B. Holmes, Jr.
Dr. Castell V. Bryant Mr. C. William Jennings
Mr. Arthur Collins Ms. Marta Prado
Dr. James D. Corbin Ms. Norma S. White
Mr. Andrew Gillum (1)
Note: (1) The student body president, who is a voting member
of the Board in accordance with Section 229.003(4),
Florida Statutes.
Page 10 of 10
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY’S RESPONSE
TO THE AUDITOR GENERAL’S REPORT ON THE PRELIMINARY
AND TENTATIVE FINDINGS OF THE OPERATIONAL AUDIT
FOR THE PERIOD JANUARY 1, 2001, THROUGH
DECEMBER 31,2001 AND SELECTED
TRANSACTIONS THROUGH MARCH 31, 2002
Finding No.1 - Bank Reconciliations - Reconciling items older than six months in several bank account
reconciliations were noted.
Recommendation: The Auditor General recommends the University continue their review of all
outstanding checks and other reconciling items in a timely manner.
University’s Response
The University concurs with the audit recommendation. The University implemented procedures
to review all reconciling items monthly. Outstanding checks over three months old will be
researched thoroughly, and when appropriate, cancelled through stop payment procedures and
placed in a suspense account. Additional resources will be provided by the Controller’s Office to
assist in the reconciliation process.
Finding No. 2 - University Receivables - The University did not timely collect employee underpayments
of Social Security and Medicare taxes totaling approximately $10,000.
Recommendation: The Auditor General recommends the University’s collection procedures be
reviewed and strengthened to provide timely collection efforts.
University’s Response
The University concurs with the audit recommendation. The University has
strengthened its collection efforts and operating procedures for the underpayment of
Social Security and Medicare taxes. By September 20, 2002, the amount owed will be
fully collected through payroll deductions.
Finding No. 3 – Faculty Activity Reporting – Faculty activity reports were not adequately monitored by
University management to ensure that they were properly completed and documented their intended
purposes.
Recommendations: The Auditor General recommends the Office of Academic Affairs improve
efforts to coordinate faculty activity reporting, and that the department heads
improve their efforts to monitor faculty activity reports to ensure that faculty
duties are timely and adequately completed.
University’s Response:
The University concurs with the audit recommendations. A new form was developed that
captures both the assignment of responsibility identified under educational and general funding
and the academic assigned activity identified under contracts and grants funding for each faculty
member’s work effort. This consolidation of information will better facilitate accountability and
management. Also, the University plans continuous monitoring.
Finding No. 4 – Auxiliary Revenue Contracts - The University did not adequately monitor contract
provisions for the operations of its bookstore, food service, laundry, and vending machines by private
contractors to ensure that commission income received was timely and accurate.
1
FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY’S RESPONSE
TO THE AUDITOR GENERAL’S REPORT ON THE PRELIMINARY
AND TENTATIVE FINDINGS OF THE OPERATIONAL AUDIT
FOR THE PERIOD JANUARY 1, 2001, THROUGH
DECEMBER 31,2001 AND SELECTED
TRANSACTIONS THROUGH MARCH 31, 2002
Recommendations: The Auditor General recommends the University continue its efforts to establish
adequate monitoring procedures for auxiliary revenue contracts, and obtain and
timely review all independent audits of auxiliary operations, which includes
investigating noted problems.
University’s Response:
The University concurs with the audit recommendations. The University has taken aggressive
steps to review and monitor commission income. Staff personnel have begun to plan for audits
and reviews of contractors’ books and records. Also, Auxiliary Services has established a system
to track:(a) the receipt of commission earnings, (b) the receipt of independent audit reports of
contractors, and (c) the resolutions of noted problems or exceptions. The University has received
commission payments from the Food Service Contractor for the College of Engineering location
and payments are current.
Finding No. 5 – Contract Management - The University did not have procedures in place to document a
timely and cost effective resolution to a contract in which timelines and cost were exceeded by a
significant margin.
Recommendations: The Auditor General recommends a reasonable cost of services be established
before entering future contracts by the University and that a contract be written
with clearly understood deliverables and timelines, once a reasonable cost has
been established.
University’s Response
The University concurs with the audit recommendations. The University will develop procedures
to derive reasonable estimates of anticipated cost of services from past history, current industry
practices and from other similar Universities’ cost experiences. The Office of Sponsored
Research will use competitive procurement and contracting practices to ensure services are
provided timely and at fair and reasonable costs.
Finding 6 – Insurance - The University’s records for payment to medical providers for student athletes
were incomplete, and payments were not always timely.
Recommendations: Auditor General recommends the department (Intercollegiate Athletics) continue
to improve its monitoring procedures to ensure payments are timely and
accurately made, and that the department maintains a history of payments made
by the secondary insurance provider.
University’s Response:
The University concurs with the audit recommendations. The University is stepping-up its
monitoring process to ensure payments are made timely and accurately to medical providers.
Also, a history of payments by the secondary insurance provider will be maintained to compare,
for reasonableness, claims paid to premiums charged.
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY’S RESPONSE
TO THE AUDITOR GENERAL’S REPORT ON THE PRELIMINARY
AND TENTATIVE FINDINGS OF THE OPERATIONAL AUDIT
FOR THE PERIOD JANUARY 1, 2001, THROUGH
DECEMBER 31,2001 AND SELECTED
TRANSACTIONS THROUGH MARCH 31, 2002
Finding 7 – Vendor Payments - Payments to vendors did not appear timely in several instances, contrary
to Section 215.422, Florida Statutes.
Recommendation: The Auditor General recommends the University identify departments
responsible for incomplete and untimely information and take the actions
necessary to ensure that vendors are timely paid.
University’s Response:
The University concurs with the audit recommendations. The University will develop and issue
periodic reports to senior management identifying those offices, which have not submitted timely
and approved vendor invoices for payment. This will improve the University’s prompt payment
compliance rate. These offices will also receive extensive awareness training on the payment
process.
Finding 8 – Financial Aid Records Deletions - Six instances were noted in which (student) financial aid
disbursements by the Controller’s Office could not be matched to corresponding entries in the award file
administered by the Office of (Student) Financial Aid.
Recommendation: Auditor General recommends the University modify or replace the current
financial aid award file so that records are not deleted when adjustments are
made.
University’s Response:
The University concurs with the audit recommendation. The current automated student financial
aid system does not allow adjustments to be made to the award file without writing over the
previous or original award amount. Nevertheless, the new proposed Student Information System
will correct the noted problem. In the interim, procedures will be implemented to monitor award
adjustments by submitting account receivable requests to the Controller’s Office to post
adjustments on student accounts. Once the adjustments have been posted to student accounts, the
student financial aid award files are adjusted to reflect the new award amounts and revised
letters are sent to students. Also, the awards are reconciled monthly with the Controller’s Office
and all adjustments are crosschecked and confirmed.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
Status of the University’s Efforts:
The University Computer Systems Center of the Office of Planning and Analysis and the
Student Affairs Division have collaborated in the continuous review the institution’s current
Health Care Information System. Upgrades were accomplished to the Healthcare Clinic’s
information-processing platform. The University has also contacted Florida universities and
other institutions of higher learning to ascertain what health care systems currently handle their
student health care information needs.
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FLORIDA AGRICULTURAL AND MECHANICAL UNIVERSITY’S RESPONSE
TO THE AUDITOR GENERAL’S REPORT ON THE PRELIMINARY
AND TENTATIVE FINDINGS OF THE OPERATIONAL AUDIT
FOR THE PERIOD JANUARY 1, 2001, THROUGH
DECEMBER 31,2001 AND SELECTED
TRANSACTIONS THROUGH MARCH 31, 2002
The review has been based on system capabilities, information processing, technical support, cost
and compliance with 1996 Public Law 104-191 Health Insurance Portability and Accountability
Act (HIPAA). As the information is collected, a thorough review will be made to identify a
replacement Healthcare Clinic system.
The University has requested in a proposal for a solution for Enterprise Resource Planning for
Student Information, Human Resources and Financial Management Systems, a requirement that
any application (system) that deals with the processing of student health related information
must be HIPAA compliant.
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