State law calls for an annual financial-compliance audit of the general purpose financial statements and “the financial affairs and transactions of a state agency required to comply with federal government audit requirements…” RubinBrown, under contract with Legislative Post Audit, conducted this two-part audit. The first part was the report on the state’s Comprehensive Annual Financial Report (report R-13-005, released in March 2013). This second part, the Report on Federal Awards in Accordance with OMB Circular A-133, reports on compliance with laws, regulations, and provisions of contracts and grant agreements.
The auditors concluded that, except for the Unemployment Insurance program, the state complied, in all material respects, with the requirements applicable to each of the federal programs audited. However, the auditors reported 28 deficiencies in internal control, two of which were material weaknesses. The auditors also projected up to $73.4 million in questioned costs ($65,000 in known questioned costs). Six of the findings were repeated from prior years.
State Universities: Can State Universities Provide Postsecondary Education More Efficiently To Reduce Costs? (A K-GOAL Audit)
Our focus was on general-use operating expenditures funded with State General Fund and tuition revenues; we excluded restricted funds like federal grants and student fees, the University of Kansas Medical School, and Kansas State’s Veterinary Medicine School and Extension Programs. In fiscal year 2008, general use operating expenditures per FTE student ranged from $8,330 at Fort Hays State to $14,191 at the University of Kansas. Overall, Emporia State and the University of Kansas spent about $2,000 more per FTE student than their in-State counterparts. The vast majority of the universities’ general use operating expenditures were for education-related expenditures (72% to 85% of the total). Most of the differences in the amounts spent for educational programs appeared to be caused by differences among the six universities in staffing and salary levels. Numerous options exist for delivering universities’ academic programs and courses more economically or efficiently. Actions that universities in other states have reported taking to help reduce academic spending include eliminating or combining low-enrollment course sections, academic departments, or degree programs within universities; collaborating across universities to share course content, teachers, and instructional programs; increasing the number of courses offered online or through distance learning; and increasing faculty workloads. Actions they’ve reported taking to help reduce their institutional spending include maximizing the use of existing classroom and laboratory space to reduce the need for additional space; consolidating or changing administrative functions or processes—both within and across universities; outsourcing some non-academic services such as food service and grounds maintenance; sharing purchasing costs, and reducing energy costs. The State’s six universities have implemented some of these ideas to varying degrees, but there are numerous opportunities for additional efficiencies. Given recent budget cuts, the universities already may have taken some of the actions described in this report.
Regents’ Information Systems: Following Up On Computer-Security Issues at Various Universities
This audit followed up on a 2005 computer-security audit of Kansas State University, Emporia State University, and the University of Kansas. That audit included a large number of recommendations related to missing or inadequate security policies, and to non-policy areas such as the authority of the security officer position and the efficiency of the policy-setting process. In this audit, we found that the three universities have fully implemented very few of the policy recommendations from the 2005 report. While ESU did the best, fully complying with 28 of 41 recommendations, KSU complied with only 7 of 33, and KU complied with only 5 of 33. In testing some of the areas, we found significant access control problems at one university. Finally, we found that the universities have implemented most of the non-policy recommendations from the 2005 audit report.
Board of Regents’ Information Systems: Reviewing Computer Security at Various Universities
Universities must balance the need for computer security in an extremely complex environment with the need for a free and open exchange of information. Our review of computer security policies at Kansas State and Emporia State Universities and the University of Kansas showed that in many areas the security procedures described were adequate, but hadn’t been adopted as official written policies. Written policies are important in security because they help ensure consistency and communicate the intent of upper-level management. We also noted many instances of no or inadequate policies in such areas as encrypting confidential data, having disaster recovery plans, and planning for security in new systems. The policy-setting process at these universities can be lengthy and cumbersome, requiring review and sometimes approval by many campus committees. The security function is strongest at the two larger universities. They both have taken a proactive approach to managing computer security by developing policies and incident response teams, actively promoting security awareness to their users, and protecting computers belonging to students living in the residence halls from computer viruses.Because of security considerations, specific problems with security policies were not discussed in any detail in this report. We provided separate confidential reports and recommendations to each university.
Compliance and Control Audit: Emporia State University Fiscal Year 1993
Between 1983 and 1987, the Board of Regents and the State universities eliminated or modified 185 individual degrees and made16 additional changes to departments or subject areas. Of those changes, 29 allowed the universities to reallocate a total of about $1 million to other university activities. The remaining changes generally did not affect the numbers of faculty and courses, often because another degree was still offered in the same subject area.
New faculty members generally have less experience and lower rank than the faculty members they replace, but are paid nearly as much. Universities have some difficulties recruiting qualified applicants for positions; about one-fourth the job offers made were declined. Comparisons show that percentage increases in Regents’ faculty salaries between 1974 and 1985 generally kept up with inflation, but actual salaries and fringe benefits are generally lower than at the Regents’ peer institutions.
Entry Into Retirement Annuity Plans at the Regents’ Institutions
Most employees who were signed up immediately for a retirement annuity plan either had a valid contract or the required experience when they started work. But many of those employees got their contract just before they started; they had not been enrolled in a valid plan at another school. The State incurs a cost of about $250,000 a year to pick up these employee’ retirement contributions. The Legislature will need to determine if it intended for these contibutions to be picked up.
Student Wage Expenditures at the Regents’ Institutions
Universities’ actual expenditures for student wages may differ significantly from the amount authorized by the General Fund line-item appropriation for student salaries and wages because student wages can be paid from other funds. Controls on student wage expenditures also vary between the universities and have different purposes. The audit presents options for increasing legislative control and oversight in this area.
This report lists average classes taught and average hours spent each week in class for all levels of instructor, by school and by department. Graduate teaching assistants served as primary instructors for two-thirds of the 768 courses they were assigned to, mostly in math and English.
Inventory of Computer Equipment: Emporia State University
Emporia owns rather than leases most of its computer equipment. The annual property inventory of purchased equipment it submits to the Division of Accounts and Reports is substantially accurate and complete. The Division of Information Systems and Communications is in the process of developing a Statewide computer inventory. Requiring the universities to submit a listing of thier computer equipment, and related suggestions can help in that effort.