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Susan Montee: MSU needs to rethink its accounting system.
Susan Montee: MSU needs to rethink its accounting system.

State auditor to MSU: provide better documentation

Posted online
State Auditor Susan Montee was on campus Oct. 19 to present the Missouri State University state audit report. Above all, Montee said the school's improper documentation and lack of control were the major issues.

In the presentation, Montee highlighted the major points of the 58-page audit, which can be viewed in its entirety on the auditor's Web site. The audit examined the fiscal years ending June 30, 2008, and June 30, 2009, but it wasn't necessarily limited to those years, according to audit.

The audit states that between January 2007 and June 2009, the university implemented a new $7.6 million computer system for processing payroll, human resource, financial aid, student admissions, registration information and accounting information for the university and the Missouri State University Foundation.

A major problem arose as a part of that implementation, Montee said, as documentation settings were not added properly.

"Many standard reports were not set up in that system," Montee said. "We were very unhappy when we asked for what we considered basic financial statements, and the university could not produce those for us."

She said the fact that university officials could not produce certain documents meant the computer system was not keeping track of financials on a daily basis, disallowing officials to control those finances adequately.

"Our problem with that is when the university is handling $270 million of in-and-out, they ought to be routinely producing income statements (and) cash flow statements for planning and working tools," Montee said. "That was really a concern for us."

A specific example Montee pointed to was the Child Development Center, which the audit states could not be accounted for properly in terms of monies received. She said the CDC portion of the audit was probably the biggest issue.

Montee noted discrepancies between the amount spent and the amount transmitted to the bursar, with no supporting documents clarifying the differences.

"There were no controls. There were no oversights. Some of the money was not accounted for," Montee said, pointing to missing attendance records and receipts. "I'm not going to say there was fraud, but I'm also not going to say there wasn't fraud."

However, Montee noted that since the years audited, the university has taken steps to correct missteps in the CDC, particularly through internal auditing services provided by BKD.

"I feel confident the internal auditors are on top of it and will be following up on any of that themselves," she said.

Another issue Montee pointed out was the brushed over line in the sand between the university and its fundraising arm, the MSU Foundation.

She said in some instances, monies were crossing over between the two entities.

"You either draw the line and operate as separate entities or you just try to not have the smokescreen that says they are separate entities," she said. "If you are separate, you are separate."

Montee completed the point that while the university was in the wrong in some of the issues found in the audit, the problems were mostly documentation issues.

"We're not saying the university has a real problem here," she said. "We're saying that we are in a different climate than we have been in the past, and we have to be tighter on everything out there.

"When the university changed over to a new accounting system, they didn't keep up with the records they need to keep to have daily decision making. The issues in here are not major, red flag, huge problem issues, but everything could be tighter."

Montee said without steps taken to adequately bandage the current system, the result will be one where unnecessary and inefficient digging will be part of the process.

"A new system needs to be taken into consideration here," she said.

In response to the audit, the MSU Board of Governors wrote a letter on Sept. 30 to Montee stating its willingness to use the advice in the audit to better improve the university.

"The review and report from the state auditor provides another fresh perspective for us to consider toward our goal of making the university a better place to work and study," wrote Gordon Elliott, vice chairman. "Please know that the Board of Governors, President Cofer and the entire campus community believe in constantly improving."
 
Read more about the state MSU audit in Springfield Business Journal’s Oct. 25 print edition.[[In-content Ad]]

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