The University of Montana (all campuses) : report to the legislature : financial related audit for the two fiscal years ended ...

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by  Montana. Legislature. Legislative Audit Division

s
378.106
L72UMA
2005
Legislative Audit Division
State ofMontana
Report to the Legislature
August 2005 Financial-Related Audit
For the Two Fiscal Years Ended June 30, 2005
The University of Montana
Campuses)
(All
We
performed a financial-related audit ofThe University ofMontana for
the two fiscal years ended June 30, 2005. This audit covered all four
campuses affiliated with The University ofMontana: The University of
Montana-Missoula; Montana Tech ofThe University ofMontana; The
University ofMontana-Western; and The University ofMontana-Helena
College ofTechnology. This report contains two recommendations to the
University concerning internal control and compliance with state and
federal laws and regulations related to:
University Funds Held by the Foundations
Federal Grants and Contracts
The financial audit ofThe University ofMontana's consolidated
financial statements forthe fiscal year ended June 30, 2004, was
issued in a separate report in December 2004 (04-10). The financial
statement auditforthe fiscal year ended June 30, 2005, will be issued
in December 2005 (05-10).
Direct comments/inquiries to:
Legislative Audit Division
Room
160, State Capitol '°' 30
PO Box 201705 2005
05-12 Helena MT 59620-1705
^^
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FINANCIAL-RELATED AUDITS
A Financial-Related audit is a component ofthebiennial financial-compliance audit. In these
audits, the Financial-Related and Financial audits are combined for a two-yearperiod to
constitutethe financial-compliance audit. Financial-compliance audits are classified as Financial
Audits according to Government Auditing Standards. The primary objectives ofthe Financial-
Related audits areto determine compliance with regulations relating to contract and grant
expenditures, other governmental financial assistance, and to test compliance with requirements
ofselected state laws, regulations, and rules, hiperforming the audit work, the audit staffuses
standards set forthbythe American Institute ofCertified Public Accountants and the United
States Government Accountability Office. Financial-compliance audit staffmembers hold
degrees with an emphasis in accounting and most staffmembers hold Certified Public Accountant
(CPA) certificates.
OMB
Government Auditing Standards, the Single Audit Act Amendments of 1996 and Circular
A-133 requirethe 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 fordistribution to federal grantor agencies. The Legislative Audit Division
issues a statewidebiennial Single Audit Report which complies withthe above reporting
requirements. The Single Audit Report forthe two fiscal years ended June 30, 2005, will be
issuedby March 31, 2006. The Single Audit Report forthe two fiscal years ended June 30, 2003,
was issued on March 23, 2004. Copies ofthe Single Audit Report can be obtained by contacting:
Single Audit Coordinator Legislative Audit Division
Office ofBudget and Program Planning Room 160, State Capitol
State Capitol PO Box 201705
MT MT
Helena 59620 Helena 59620-1705
Phone [phone]
MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE
SenatorJoe Balyeat Representative Dee Brown
SenatorJohn Brueggeman Representative Hal Jacobson
SenatorJim Elliott Representative Christine Kaufmann
Senator Dan Harrington Representative Scott Mendenhall
Senator Lynda Moss RepresentativeJohnMusgrove
SenatorCorey Stapleton RepresentativeJanna Taylor
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
August 2005
The Legislative Audit Committee
ofthe Montana State Legislature:
This is our financial-related audit report ofThe University ofMontana (All Campuses) forthe
two fiscal years ended June 30, 2005. A financial-related audit is a component ofthe biennial
financial-compliance audit. Inthese audits, the financial-related and financial audits are
combined for a two-yearperiod to constitute the financial-compliance audit. We issue a financial
audit report on the University's consolidated financial statements annually. We issue a financial-
related audit report every otheryear. The fiscal year 2003-04 financial audit ofThe University of
Montana's consolidated financial statements was issued in December 2004. The financial audit
for fiscal year 2004-05 will be issued in December 2005.
This audit report includes recommendations related to internal control and compliance with state
and federal laws and regulations.
We
thankthe president and University stafffortheirassistance and cooperation during the audit.
Respectfully submitted,
Scott A. Seacat
Legislative Auditor
Room 160, StateCapitol BuildingPO Box 201705 Helena, MT 59620-1705
Phone[phone] FAX [phone] E-Mail [email protected]

Legislative Audit Division
Financial-Related Audit
For the Two Fiscal Years Ended June 30, 2005
The University of Montana
Campuses)
(All
Members ofthe audit staffinvolved in this audit were Danielle Gamradt,
Jeane Carstensen-Garrett, Cindy S. Jorgenson, Paul J. O'Loughlin,
Laura L. Norris, Vickie Rauser, and JeffTamblyn.

Table of Contents
Appointed and Administrative Officials ii
Report Summary S-l
Introduction 1
Audit Objectives
1
Background
1
TheUniversity ofMontana Funding 5
TheUniversity ofMontana-Missoula 5
Montana Tech ofThe University ofMontana 5
TheUniversity ofMontana-Western 6
TheUniversity ofMontana-Helena College ofTechnology 6
PriorAudit Recommendations 6
Findings and Recommendations 7
Unrecorded University Resources 7
Endowment Research Grant 7
KMSM
Broadcast Frequency Exchange 8
Summary 9
Research and Development Internal Control and Compliance 9
Subrecipient Monitoring 10
Technical and Performance Reporting 11
University Response A-l
The University ofMontana A-3
Page
i
Appointed and Administrative Officials
Board ofRegents ofHigher Brian Schweitzer, Governor*
Education Linda McCullough, Superintendent ofPublic Instruction*
John Mercer, Chairman
Mike Foster, Vice Chairman
Stephen Barrett
Kala French, Student Regent
Lynn Morrison-Hamilton
Mark Semmens
Lila Taylor
*Ex officio members
Commissioner ofHigher Sheila M. Stearns Commissioner ofHigher Education
Education Rodger Barber Deputy Commissioner forAcademic and
Student Affairs
Appointment Pending Associate Commissioner for Fiscal Affairs
David Gibson Associate Commissioner for Economic
&
Development Outreach
PamJoehler DirectorofAccounting and Budget
Cathy Swift ChiefLegal Counsel
The University ofMontana George M. Dennison President
The University ofMontana- Lois Muir Vice President for Academic Affairs,
Missoula University Provost
&
Robert Duringer Vice President for Administration Finance,
University Vice President
Daniel J. Dwyer Vice President forResearch & Development,
University Vice President
Teresa S. Branch Vice President for Student Affairs,
University Vice President
David Aronofsky Legal Counsel
James R. Darcy Director ofBusiness Services
Montana Tech ofThe W. Franklin Gilmore Chancellor
University ofMontana University Executive Vice President
Susan B. Patton Interim Vice Chancellor forAcademic Affairs
and Research, University Associate Provost
JosephF. Figueira Vice Chancellor for Research, Graduate
Studies, and International Programs,
University Associate Vice President
John C. Badovinac Controller/Business Manager
Lynn Job Director ofAccounting, Grants and Contracts
Page
ii
8
Appointed and Administrative Officials
The University ofMontana- Richard Storey Chancellor,
Western University Executive Vice President
Karl E. Ulrich Vice Chancellor forAcademic Affairs
Thomas R. Yahraes Vice Chancellor ofUniversity Advancement
&
Susan D. Briggs Vice Chancellor forAdministration Finance,
University Associate Vice President
Virginia Dale Director ofBusiness Services
The University ofMontana- Daniel Bingham Dean/CEO
Helena College of Barbara Yahvah Interim Associate Dean forAcademic Affairs
Technology Cristobal Valdez Assistant Dean for Student Services
Russ Fillner Assistant Dean forFiscal and Plant Operations
For furtherinformation onthe University ofMontana (All Campuses)
contact:
KathyBurgmeier, Director
Internal Audit
University Hall 01
MT
Missoula 59812
[phone]
[phone] (fax)
[email protected]
Page
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