Office of the Commissioner of Higher Education financial-compliance audit for the two fiscal years ended June 30 ...

2005·0.99 MB·English

by  Montana. Legislature. Legislative Audit Division

353.88
L720CHE
2005
Legislative Audit Division
State ofMontana
Report to the Legislature
Financial-Compliance Audit
December 2005
For the Two Fiscal Years Ended June 30, 2005
Office of the Commissioner of Higher
Education
This report contains two recommendations regarding compliance with
state law. Major issues addressed in the report include:
Reimbursing the state's General Fund $756,060
Accounting for federal indirect cost recoveries
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FINANCIAL-COMPLIANCE AUDITS
Financial-compliance audits are conducted by the Legislative Audit Division to determine ifan
agency's financial operations are properly conducted, the financial reports arepresented fairly,
and the agency has complied with applicable laws andregulations. In performingthe audit work,
the audit staffuses standards set forthby the American Institute ofCertified Pubhc Accountants
and the United States Government Accountability Office. Financial-compliance audit staff
members hold degrees withan emphasis inaccounting. Most staffmembers hold Certified Public
Accountant (CPA) certificates.
OMB
Government Auditing Standards, the SingleAudit Act Amendments of 1996 and Circular
A-133 require the auditorto issue certain financial, internal control, and compliance reports. This
individual agency audit report is not intended to comply with these reporting requirements and is
therefore not intended for distribution to federal grantor agencies. The Legislative Audit Division
issues a statewide biennial Single Audit Report, which complies withthe above reporting
requirements. The Single Audit Report forthe two fiscal years ended June 30, 2005, will be
issued by March 31, 2006. The Single Audit Report for the two fiscal years ended June 30, 2003,
was issued on March 23, 2004. Copies ofthe SingleAudit Report can be obtainedby contacting:
Single Audit Coordinator Legislative Audit Division
Office ofBudget and ProgramPlarming Room 160, State Capitol
State Capitol PO Box 201705
MT MT
Helena 59620 Helena 59620-1705
Phone [phone]
MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE
LEGISLATIVE AUDIT DIVISION
Scott A. Seacat, Legislative Auditor Deputy Legislative Auditors:
John W. Northey, Legal Counsel Jim Pellegrini, Performance Audit
&
Tori Hunthausen, IS Audit Operations
James Gillett, Financial-Compliance Audit
December2005
TheLegislative Audit Committee
ofthe Montana State Legislature;
This is our financial-compliance audit report on the Office ofthe CommissionerofHigher Education
(OCHE) for the two fiscal years ended June 30, 2005. This report contains two recommendations where
OCHE could improve compliance with state law. Thewritten response to the audit recommendations is
included at the end ofthe audit report.
We
thankthe commissioner and herstafffortheirassistance and cooperationthroughout the audit.
pectfully submitted.
j^O
Scott A. Seacat
Legislative Auditor
Room 160, StateCapitol BuildingPO Bo.x201705 Helena, MT 59620-1705
Phone[phone] FAX[phone] E-Mail [email protected]
Digitized by the Internet Archive
in 2010 with funding from
IVIontana State Library
http://www.archive.org/details/officeofcommissi2005mont
Legislative Audit Division
Financial-Compliance Audit
For the Two Fiscal Years Ended June 30, 2005
Office of the Commissioner of
Higher Education
Members ofthe audit staffinvolved in this audit wereJohnFine,
Alexa O'Dell, JeffTamblyn, Lena Tamcke, andAmberThorvilson.

1
Table of Contents
Elected, Appointed and Administrative Officials ii
Report Summary S-1
Introduction 1
Introduction 1
Background
1
Board ofRegents ofHigher Education
1
Office ofthe CommissionerofHigher Education 2
PriorAudit Recommendations 4
Findings & Recommendations 5
Federal Indirect Cost Recoveries 5
Accounting For Federal Indirect Cost Recoveries 5
Transfers ofExcess Indirect Costs 7
&
Independent Auditor's Report Office Financial Schedules ^ A-1
Independent Auditor's Report A-3
Schedule ofChanges in Fund Balances & Property
Held in Trust fortheFiscal Year Ended June 30, 2005 A-5
Schedule ofChanges in Fund Balances & Property
Held inTrust forthe Fiscal Year Ended June 30, 2004 A-6
&
Schedule ofTotal Revenues Transfers-In
For the Fiscal Year Ended June 30, 2005 A-7
&
Schedule ofTotal Revenues Transfers-In
For the Fiscal Year Ended June 30, 2004 A-8
&
Schedule ofTotal Expenditures Transfers-Out
Forthe Fiscal Year Ended June 30, 2005 A-9
&
Schedule ofTotal Expenditures Transfers-Out
FortheFiscal Year Ended June 30, 2004 A-10
Office ofthe CommissionerofHigherEducation
Notesto theFinancial Schedules A-1
Office Response B-1
Office ofthe Commissioner ofHigher EducaUon B-3
Elected, Appointed and Administrative Officials
Board ofRegents of John Mercer, Chair
Higher Education
Report Summary
We
Office ofthe performed a financial-compliance audit ofthe Office of
Commissioner ofHigher the CommissionerofHigherEducation (OCHE) forthetwo
Education
fiscal years endedJune 30, 2005. Theprioraudit report
contained three recommendations. OCHE implemented all
threerecommendations. The two recommendations in this
report relate to compliance with state laws.
We
issued anunqualified opinionon the financial schedules
contained inthis report. This means the readermayrelyonthe
informationpresented inthe fmancial schedules andthe supporting
information onthe state's accounting system.
The listingbelow serves as a means ofsummarizing the
recommendations contained inthe report, the department's
responsethereto, and areference to the supporting
comments.
Recommendation#1 Werecommend the commissioner's office:
A. Record indirect costs recovered from the federal awards
to the appropriate fund and account, in accordance with
state law.
B. Reimbursethe state's General Fund forthe $756,060 in
indirect cost recoveries improperlyrecorded to the
Federal Special Revenue Fund
Office Response Concur. See page B-4
:
Recommendation#2 Werecommendthecommissioner's office ceaserecording
financial activity in university Designated Subfunds
Office Response Concur. See pageB-4
:
Page S-1