United States. Bureau of the Census.

Financial-compliance audit : University of Montana; College of Technology, Missoula; Division of Technology, Montana Tech; Helena College of Technology, for the two fiscal years ended June 30, 1995 (Volume 1995) online

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Online LibraryUnited States. Bureau of the CensusFinancial-compliance audit : University of Montana; College of Technology, Missoula; Division of Technology, Montana Tech; Helena College of Technology, for the two fiscal years ended June 30, 1995 (Volume 1995) → online text (page 1 of 4)
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353.88
L72umt
1995




December 1995



Legislative Audit Division



State of Montana



Report to the Legislature



Financial-Compliance Audit

For the Two Fiscal Years Ended June 30, 1995



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-ATE DOCUMENTS COLLECTION

f1AR 1 8 2003

MONTANA STATE LIbi.-M-IY
1515 E. 6th AVE.

5052 :j



nrri _ T T • 'A— J» -Ai^ENA. (\^NTANA £

The University of Motixana

College of Technology, Missoula
Division of Technology, Montana Tech
Helena College of Technology



This report contains three recommendations for improving compliance
with slate law. \Lgor issues addressed in the report include:

> Accounting information misstated on the Statewide Budgeting and
Accounting System.

»■ Uncollectible student loans.



2.
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3



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CO
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95-24
95-26
95-27
95SP-78



Direct comments/inquiries to:
Legislative Audit Division
Room 135, State Capitol
PO Box 201705
Helena MT 59620-1705



MONTANA STATE LIBRARY



II nil fin II



|IP|I|I|IIII||I!I|III||I



3 0864 1001 8356 8



FINANCIAL-COMPLIANCE AUDITS



Financial-compliance audits are conducted by the Legislative Audit Division to determine if an
agency's financial operations are properly conducted, the financial reports are presented fairly,
and the agency has complied with applicable laws and regulations which could have a significant
financial impact. In performing the audit work, the audit staff uses standards set forth by the
American Institute of Certified Public Accountants and the United States General Accountmg
Office. Financial-compliance audit staff members hold degrees with an emphasis in accounting.
Most staff members hold Certified Public Accountant (CPA) certificates.

The Single Audit Act of 1984 and 0MB Circular A-128 require the auditor to issue certain
financial, internal control, and compliance reports regarding the state's federal financial assistance
programs, including all findings of noncompliance and questioned costs. This individual agency
audit report is not intended to comply with the Smgle Audit Act of 1984 or OMB Circular A-128
and is therefore not intended for distribution to federal grantor agencies. The Legislative Audit
Division issues a statewide biennial Single Audit Report which complies with the reporting
requirements listed above. The Single Audit Report for the two fiscal years ended June 30, 1993
has been issued. Copies of the Single Audit Report can be obtained by contacting:

Legislative Audit Division
Room 135, State Capitol

PO Box 201705
Helena MT 59620-1705



MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE


Senator Greg Jergeson,


Vice


Chairman


Representative Ernest Bergsagel, Chairman


Senator Sue Bartlett






Representative Beverly Barnhart


Senator Reiny Jabs






Representative A. R. "Toni" Hagener


Senator Tom Keating






Representative Bob Keenan


Senator Ken Miller






Representative Robert Favlovich


Senator Linda Nelson






Representative Bruce Simon



Montana

Legislative Legislative Audit Division

. tiranCn Scott a. Seacat, Legislative Auditor



January 1996



The Legislative Audit Committee
of the Montana State Legislature:

This is the combined financial-compliance audit report on The University of Montana,
College of Technology, Missoula; the Division of Technology, Montana Tech; and Helena
College of Technology for fiscal years 1993-94 and 1994-95. The report contains three
recommendations for improving compliance with state law and policies. The written
responses to audit recommendations are included at the end of the audit report. We thank the
university officials and the individual college staffs for their cooperation and assistance
throughout the audit.

Respectftilly submitted.




A-



Scott A. Seacat
Legislative Auditor




Room 136. State Capitol Building PO Box 201706 Halana MT 69620-1706
Phone 406-444-3122 FAX 406-444-9784



Digitized by the Internet Archive

in 2010 with funding from

IVIontana State Library



http://www.archive.org/details/financialcomplia1995hele



Legislative Audit Division



Financial-Compliance Audit

For the Two Fiscal Years Ended June 30, 1995



The University of Montana

College of Technology, Missoula
Division of Technology, Montana Tech
Helena College of Technology



Members of the audit staff involved in this audit were Jody Brandt, Pete
Brustkern, Jeane Carstensen-Garrett, Renee Foster, Geralyn Hoffman,
Cindy S. Jorgenson, Jim Manning, Vickie Rauser, and Patti J. Robertson.



Table of Contents



Introduction



Prior Audh
Recommradations



Division of Tedinology,
Montana Tedi of The
Univansity of Montana
Findings and
Recommendations



Indq)«idNit Auditor's
R^Mrt & Division of
Tedmology, Montana
Tech of The Unim'sity
of Montana Flnandal
Sdiedules



Hdoia CoD^e of
Tedmology
Findings and
Recommoidations



Appointed and Administrative Officials iii

Summary of Recommendations v

Introduction and Audit Objectives A-1

Background A-2

Governance A-2

Operations A-2

Prior Audit Recommendations A-4

Division of Tedmology, Montana Tech A-4

Helena College of Technology . A-4

College of Technology, Missoula A-4

Accounting Issues BA-1

Cafeteria Subsidy BA-1

Waste Technology Grant BA-1

Equipment Charges BA-2

Independent Auditor's Report BB-3

Schedule of Changes in Fund Balance For

The Two Fiscal Years Ended June 30, 1995 BB-5

Schedule of Budgeted Revenue & Transfers
In - Estimate & Actual For The Two Fiscal

Years Ended June 30, 1995 BB-6

Schedule of Budgeted Program Expenditures

By Object & Fund for Fiscal Year Ended

June 30, 1995 BB-7

Schedule of Budgeted Program Expenditures

By Object & Fund for Fiscal Year Ended

June 30, 1994 BB-8

Notes to the Financial Schedules BB-9

Accounting Issues CA-1

Uncollectible Student Loans CA-2



Page i



Table of Contents



Independent Auditor's
Report & Helena
Collie of Technology
Financial Schedules



Independent Auditor's
Report & Collie of
Tedinology - Missoula
Financial Schedules



University's Response



Independent Auditor's Report CB-3

Schedule of Qianges in Fund Balances For

The Two Fiscal Years Ended June 30, 1995 CB-5

Schedule of Budgeted Revenue & Transfers
In - Estimate & Actual For The Two Fiscal
Years Ended June 30, 1995 CB-6

Schedule of Budgeted Program Expenditures

By Object & Fund for Fiscal Year Ended

June 30, 1995 CB-7

Schedule of Budgeted Program Expenditures

By Object & Fund for Fiscal Year Ended

June 30, 1994 CB-8

Notes to Financial Schedules CB-9

Independent Auditor's Report DB-3

Schedule of Changes in Fund Balances For

The Two Fiscal Years Ended June 30, 1995 DB-5

Schedule of Budgeted Revenue & Transfers
In - Estimate & Actual For the Fiscal Year
Ended June 30, 1995 DB-6

Schedule of Budgeted Revenue & Transfers
In - Estimate & Actual For the Fiscal Year
Ended June 30, 1994 DB-7

Schedule of Budgeted Program Expenditures

By Object & Fund for Fiscal Year Ended

June 30, 1995 DB-8

Schedule of Budgeted Program Expenditures

By Object & Fund for Fiscal Year Ended

June 30, 1994 DB-9

Notes to Financial Schedules DB-10

The University of Montana E-3



Page ii



Appointed and Administratiye Officials



Board of Regents of
Hi^o* Education



Marc Racicot, Governor*

Nancy Keenan, Superintendent of Public Instruction*



"Ex Officio Member



Term

Expires



Jim Kaze, Chairman


Havre


1999


Cordell Johnson


Helena


1996


Kermit R. Schwanke


Missoula


1997


Paul F. Boylan


Bozeman


1998


Patrick P. Davison


Billings


2000


L. Colleen Conroy


Hardin


2001


Mike Green, Student Regent


Belgrade


1996



Conunissionor of EG^n*
Education



Jeffery D. Baker
Richard Crofts

Rod Sundsted

Laurie O. Neils



Commissioner of Higher Education

Deputy Commissioner for Academic
Affairs

Associate Commissioner for Fiscal
Affairs

Director of Budget and Accounting



The Unim^sity of
Montana



George M. Dennison
Robert Kindrick

James Todd

Raymond Murray

David Aronofsky
Barbara Hollmann
Rosi Keller



President

Provost and Vice President for
Academic Affairs

Vice President for Administration and
Finance

Vice President for Research and
Development

Legal Counsel

Dean of Students

Controller



Page iii



Appointed and Administrative Officials



Montana Tedi of The
Uniyersity of Montana



Diyision of Tedinology,
Montana Tedi of The
UniyersHy of Montana



Hdma College of
Technology of Tlie
Uniyershy of Montana



College of Tedinology,
Hie Unlyersity of
Montana - NGssoula



Lindsay Norman


Chancellor


Tom Waring


Vice Chancellor for Academic Affairs
and Research


John Hintz


Vice Chancellor for Administration
and Student Services


John Badovinac


Controller


Jane Baker


Dean


Mary Jo Riley


Accountant


Alex Capdeville


Dean


Chuck Wetterling


Business Manager


Dennis Lerum


Dean


Jim Taylor


Assistant to the Vice President for



Administration and Finance



Page iv



Summary of Recommendations



The listing below serves as a means of summarizing the recommendations contained in the report, the
college's response thereto, and a reference to the supporting comments.



Recommendation #1



Recommendation #2



Recommendation #3



We recommend Division of Technology, Montana Tech
personnel establish procedures to ensure financial
activity is properly recorded on SBAS in accordance
with state law and policy



BA-2



University Response : Concur. See page E-4.

We recommend Helena College of Technology personnel
establish procedures to ensure financial activity
is properly recorded on SBAS in accordance with
state law and policy



CA-2



University Response : Concur. See page E-4.

We recommend the Helena College of Technology:

A. Determine the amount of short term loans that are
uncollectible and adjust the state's accounting
records accordingly.

B. Follow state policy in transferring identified
uncollectible accounts to the Department of
Administration



CA-3



University Response : Concur. See page E-4.



Page V



Introduction



Introducrtion and Audit We performed financial -compliance audits of the Division of

Objectives Technology, Montana Tech; Helena College of Technology; and

College of Technology of the University of Montana - Missoula for
the two fiscal years ended June 30, 1995. The audits mcluded
compliance tests of internal controls, student financial aid proce-
dures, cash management, inventory systems, purchasing policies,
and other state and federal laws and regulations. The issues
discussed identify instances of noncompliance with regulations and
accounting policies. Overall, we found the colleges complied with
laws and regulations tested. We issued unqualified opinions on
each of the colleges' financial schedules for the fiscal years 1993-
94 and 1994-95.

Our audit objectives were to:

1 . Make recommendations for improving internal and manage-
ment controls.

2. Determine compliance with applicable state and federal laws
and regulations.

3. Determine the implementation status of prior audit recom-
mendations.

4. Determine if the financial schedules for the two fiscal years
ended June 30, 1995, present fairly the results of operations
and changes in fund balances in accordance with state
accounting law and policy.

In accordance with section 5-13-307, MCA, we analyzed the costs
of implementing the recommendations made in this report. Each
report section discloses the cost, if significant, of implementing the
recommendation. We did not include concerns deemed not to have
a significant effect on the successful operations of the colleges in
this report, but discussed the concerns with management.



Page A-1



Introduction



Background



Governance



Effective July 1, 1994 the Board of Regents of Higher Education
merged Montana's four colleges and five vocational-technical
centers with the state's two universities. The former Butte,
Helena, and Missoula Vocational-Technical Centers along with the
Montana College of Mineral Science and Technology were aligned
with The University of Montana. Western Montana College was
previously merged with The University of Montana.



The Montana College of Mineral Science and Technology became
Montana Tech of The University of Montana. The Butte
Vocational -Technical Center became the Division of Technology of
Montana Tech. Effective July 1, 1995, Montana Tech and the
Division of Technology became one agency, consolidating all
accounting, financial aid, and other administrative funrtions.

The Missoula Vocational-Technical Center became the College of
Technology, The University of Montana - Missoula. The Missoula
College of Technology merged with the University of Montana to
become one agency as of July 1, 1995.

The Helena Vocational-Technical Center became the Helena
College of Technology of The University of Montana. The Helena
College of Technology continues to account for its financial activity
as a separate agency, administratively attached to The University of
Montana.



Operations



The three colleges are accredited by the Commission of Colleges of
the Northwest Association of Schools and Colleges. The following
schedule, represents broad categories of programs offered by the
colleges but not necessarily each specific program offered at the
colleges.



Page A-2



Introduction



Programs by Area Butte Helena Missoula

AGRICULTURE

Agri -Diesel Technology .... C

COMPUTER AND INFORMATION SCIENCES

Computer Processor ................... C

Computer Prograrming AAS ...... AAS

Microcomputer Applications ....... ............. AAS

FOOD SERVICE TECHNOLOGY

Culinary Arts ... ....... ......... C

Food Service Management ............. . . AAS

HEALTH

Nursing/Practical C........ C.. C

Surgical Technology ....... . C

Respiratory Therapy Technology ^

LAW

Legal Assisting (Paralegal) • **S

MARKETING. MANAGEMENT. BUSINESS

Fashion Sales and Marketing C

Retail Management • • • AAS

Sales and Marketing C

Small Business Management ......... C

OFFICE TECHNOLOGY AND ADMINISTRATIVE SUPPORT

Accounting Technology ..... AAS ....... AAS AAS

Adninistrative Assistant .... AAS ....... AAS

Bookkeeping ..... C C ........C

Information Processing AAS ....... AAS C

Legal Secretary/Technology AAS AAS AAS

Medical Office Technology .............. ........ AAS

Medical Receptionist .... ... C ........ C

Medical Secretary ....... ...... AAS ....... AAS

Office Adninistration . AAS

Office Assistant C

Receptionist . ..... C

Small Business Management ........... C

Word Processing C C C

TECHNICAL AND INDUSTRIAL

Automotive Technology ..... AAS C/AAS

Aviation Maintenance Technician (Airframe & Powerplant) AAS

Building Maintenance C

Building Maintenance Engineering AAS

Carpentry C

Civil Engineering Technology .............. AAS

Diesel Equipment Technology C AAS

Drafting Technology . AAS

Electronics Technology AAS AAS

Environment Sampling and Hazardous Materials Technology . AAS

Heavy Equipment Operation C

Small Engine and Equipment Technology C

Truck-Diesel Technology .... C

Truck Driving C

Welding Technology C C C

Combination Welding . C

Machine Tool and Welding Technology C

C = Certificate

AAS = Associate of Applied Science



Page A-3



Prior Audit Recommendations



Prior Audit
Recommendations



Our office performed the vocational -technical center audits for the
two fiscal years ended June 30, 1993. The prior audit report
contained two recommendations which addressed system-wide
concerns or common issues found at more than one vocational -
technical center. The colleges implemented the two recommenda-
tions.



Division of Technology,
Montana Tech



The prior audit report for the former Butte Vocational-Technical
Center contained five recommendations which are still applicable to
its operations. The division concurred with all five prior recom-
mendations. The division implemented four recommendations and
partially implemented one recommendation. The recommendation
partially implemented relates to establishing procedures to ensure
financial activity is properly recorded on SBAS in accordance with
state law and policy. This issue is addressed on page BA-2 of this
report.



Helena College of
Technology



The prior audit report for the former Helena Vocational-Technical
Center contained six recommendations which are still applicable to
its operations. College personnel concurred with all six prior
recommendations. The college implemented five, and partially
implemented one, of the prior reconmiendations. The
reconmiendation partially implemented relates to recording fixed
assets on SBAS in accordance with state accounting policy and is
addressed on page CA-2 of this report.



College of Technology,
Missoula



The prior audit report for the former Missoula Vocational-
Technical Center contained one recommendation which is still
applicable to its operations. The prior reconmiendation was
implemented by the college.



Page A-4



w

c



o



Division of Technology,
Montana Tech of The University of Montana

Findings and Reconunendations



Accounting Issues



The division's financial information is used by various officials to
manage and establish funding levels for the division. These
officials include the Board of Regents, Commissioner of Higher
Education, Governor's Office of Budget and Program Planning, the
legislature, and university officials. Section 17-1-102, MCA,
requires all state agencies to record their financial transactions on
the Statewide Budgeting and Accounting System (SBAS) in
accordance with generally accepted accounting principles (GAAP).
In addition, state accounting policy is established to ensure •
information recorded on SBAS complies with GAAP. We noted
the following instances where the activity recorded by the division
on SBAS does not comply with state accounting law and policy.



Cafeteria Subsidy



The division transferred funds to subsidize its cafeteria. It
recorded expenditures in the Unrestricted Subfund plant account
and revenue in the Auxiliary Subfund cafeteria account. State
policy requires agencies to identify amounts transferred out of one
account and into another as transfers instead of revenues and
expenditures. As a result. Unrestricted Subfund expenditures are
overstated and transfers out are understated by $19,700 and
$13,318 in fiscal years 1993-94 and 1994-95, respectively. In
addition. Auxiliary Subfund revenues are overstated and transfers
m are understated by $19,700 and $13,318 for the same fiscal
years, respectively.



Waste Technology Grant



In fiscal year 1993-94, the division received federal funding
through Montana Tech of The University of Montana to cover the
preliminary costs of offering a degree program in Environmental
Sampling and Hazardous Materials. Division personnel classified
the grant revenues as gifts, grants, and donations on SBAS.
Because the federal Environmental Protection Agency (EPA) is the
original provider of the fiinds, the grant should have been recorded
as federal revenue. Gifts, Grants & Donations revenue is
overstated and Federal revenue is understated by $5,200 in the
Current Restricted Subfund for fiscal year 1993-94.



Page BA-1



Dhision of Technology,

Montana Tech of The University of Montana

Findings and Reconunendations



Equipment Charges Division personnel recorded all fiscal year 1993-94 equipment

expenditures, other than equipment specifically purchased for the
plant programs, in the instruction program. In the next fiscal year,
division personnel initially recorded equipment expenditures in the
instruction program. We noted that once the instruction program
equipment budgets were exceeded, division persoimel recorded
equipment expenditures against other programs.

Accounting standards direct the division to record its equipment
expenditures in the program receiving the use of the equipment.
Equipment expenditures are overstated in the instruction program
and understated in the student services program by $8,409 in fiscal
year 1993-94. In addition, installment purchase expenditures are
overstated in the instruction program and understated in the student
services program by $29,556 in the same fiscal year.

Without all financial activity properly recorded on the state's
accounting records, the quality, consistency, and comparability of
the resulting financial information is affected. Referring to state
accounting policies for guidance in recording various accounting
transactions and establishing procedures to ensure all transactions
are properly recorded will improve the accuracy of the division's
financial records.



Recommendation #1



We recommend Division of Technology, Montana Tech
personnel establish procedures to ensure Hnandal activity
is properly recorded on SBAS in accordance with state law
and policy.



Page BA-2



Independent Auditor's Report &
Division of Technology, Montana Tech
of the University of Montana
Financial Schedules



Page BB-1



Page BB-2



Montana

Leg! lative Legislative Audit Division

Ordt ■ 3n Scott A. Seacat, Legislative Auditor



INDEPENDENT AUDITOR'S REPORT



The Legislative Audit Committee
of the Montana State Legislature:

We have audited the financial schedules of the Division of Technology, Montana Tech
of The University of Montana for each of the two fiscal years ended June 30, 1994 and 1995,
as shown on pages BB-5 through BB-12. The information contained in these financial
schedules is the responsibility of division management. Our responsibility is to express an
opinion on these financial schedules based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial schedules are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
schedules. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial schedule
presentation. We believe that our audit provides a reasonable basis for our opinion.

As described in note 1 , the financial schedules are presented on a comprehensive basis
of accounting other than generally accepted accounting principles. The schedules are not
intended to be a complete presentation and disclosure of the division's assets and liabilities.

In our opinion, the financial schedules referred to above present fairly, in all material
respects, the results of operations and changes in fund balances of the Division of
Technology, Montana Tech of The University of Montana for the two fiscal years ended
June 30, 1994 and 1995, in conformity with the basis of accounting described in note 1.

Respectfully submitted,

James Gillett, CPA
Deputy Legislative Auditor

October 17, 1995

Page BB-3

Room 13B. State Capitol Building PC Box 201 706 Helena MT 69620-1706
Phone 406-444-3122 FAX 406-444-9784



PageBB-4



DIVISION OF TECHNOLOGY. MONTANA TECH OF THE UNIVERSITY OF HONTAMA

SCHEDULE OF CHANGES IN FUND BALANCES

FOR THE TWO FISCAL YEARS ENDED JUNE 30. 1995



CURRENT FUND



PLANT FUND



Unrestricted Restricted Designated Auxiliary Unexpended
Subfund Subfund Subfund Subfund Plant Subfund



FUND BALANCE: July 1, 1993



$ (244,783) $ 6,449 $ 8,977 $ 22,901



$ 52,968



ADDITIONS:

Fiscal Year 1993-94
Budgeted Revenue & Transfers In
Nonbudgeted Revenue & Transfers In
Prior Year Transfer In Adjustments

Fiscal Year 1994-95
Budgeted Revenue & Transfers In
Nonbudgeted Revenue & Transfers In
Prior Year Revenue Adjustments
Prior Year Transfer In Adjustments
Total Additions



1,772,828


620,728


17,207


149,382


6,763








(308)








1,734,380


519,649


16,550


154,624


2,778








2,295








(2.295)








3,516.441


1.140.377


33.757


304.006



52,865
138

52,596

105.599



REDUCTIONS:

Fiscal Year 1993-94
Budgeted Expenditures & Transfers Out
Nonbudgeted Expenditures & Transfers Out
Prior Year Expenditure Adjustments

Fiscal Year 1994-95
Budgeted Expenditures & Transfers Out
Nonbudgeted Expenditures & Transfers Out
Prior Year Expenditure Adjustments
Total Reductions

FUND BALANCE: June 30, 1995



1,753,416
(10,901)
(1,460)



1,746,299


1 3 4

Online LibraryUnited States. Bureau of the CensusFinancial-compliance audit : University of Montana; College of Technology, Missoula; Division of Technology, Montana Tech; Helena College of Technology, for the two fiscal years ended June 30, 1995 (Volume 1995) → online text (page 1 of 4)