Departmental Review
Political Science Special Review
November 18, 2011 Georgia Southern University Office of Audit and Advisory Services P.O. Box 8038 Statesboro, GA 30460-8038 Phone: (912)478-1652 Fax: (912)478-0448 services.georgiasouthern.edu/internalaudit
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................ 2 INTRODUCTION ............................................................................................................. 4 BACKGROUND .............................................................................................................. 4 SCOPE AND OBJECTIVES ........................................................................................... 4 AUDITOR’S OPINION .................................................................................................... 5 RESULTS OF THE REVIEW .......................................................................................... 7 ACKNOWLEDGEMENT ............................................................................................... 14
1 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
EXECUTIVE SUMMARY The Office of Audit and Advisory Services has completed a limited review of the Department of Political Science. Based upon the results of the review, the Department of Political Science is not conducting business matters in compliance with established guidelines and in accordance with sound business practices. Our review revealed the following observations: • • • •
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•
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The current Bylaws do not appear to accurately reflect current practices and procedures. The department does not maintain administrative policies or procedures that are associated with the operations of the department. Purchasing Card (P-Card) o Business purposes listed for transactions are generic and non-descriptive. o The Department Chair was the only individual issued a P-Card. Petty Cash o Two transactions exceeded the $1,000 reimbursement threshold. o Six transactions included sales tax (taxes were reimbursed on one transaction). Department Expense and Revenue Reports o A deposit of $7,200 is listed as “revenue” for a departmental sales and service account (Fund 14000). The payment is associated with an external professional association and qualifies as sponsored funds, which should be coordinated through the University’s Office of Research Services and Sponsored Programs (ORSSP). Foundation Transactions o One deposit of $2,500 from a current faculty member’s personal funds was for his/her course buyout for spring 2010 semester (as indicated by the Memo section of the personal check and interview with the faculty member). Travel Statements o One instance of payment for other persons. o One instance of membership dues payment. o One instance of traveling to a destination not specified on Request for Authority to Travel. o One instance of missing hotel receipt (third-party email confirmation only). o Two instances of lodging upgrades to an executive room instead of the standard room rate (only partial reimbursement was claimed for one instance). o Three instances of excessive taxi expenses when less expensive travel alternatives were available. o Five instances of significant and excessive mileage claims. 2 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
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o Six instances of incomplete reimbursement information (missing dates, times, point-to-point travel locations) o Seven instances of “Request for Authority to Travel” form not submitted to Accounts Payable or approved by the appropriate authority 15 days prior to out-of-state travel. Property Control o Of 76 pieces of equipment reviewed valued at $123,497, six items valued at $8,782 could not be located or accounted for. 18 items were in the incorrect location as compared to records maintained by Property Control.
Further details of the areas examined may be found in the section of this report entitled “Results of the Review.”
3 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
INTRODUCTION At the request of Dr. Michael Smith - Dean of the College of Liberal Arts and Sciences (CLASS), the Office of Audit and Advisory Services performed a review of the Department of Political Science. The review was requested due to a recent change in management within the department.
BACKGROUND The Department of Political Science is a unit of the College of Liberal Arts and Social Sciences (CLASS), which reports to the Provost and Vice President for Academic Affairs. The department consists of Political Science, Justice Studies, and Public Administration.
SCOPE AND OBJECTIVES Based upon the background information and data obtained, it was determined that the period for the review would be Fiscal Years 2010-12. The scope of the review included the following objectives: 1. To determine whether the Department of Political Science incorporates an effective internal control environment that includes clear lines of organizational authority and responsibility and documented policies, procedures, and/or governing documents. 2. To determine if non-payroll operating and travel expenditures are reasonable, comply with University policies, are properly authorized, and are adequately documented. 3. To determine if the Department of Political Science maintains proper controls and records for inventory and adheres to University policies relating to Property Control. This review was not intended to cover all aspects and control issues associated with the Department of Political Science. We performed tests on the records and utilized other auditing procedures deemed necessary.
4 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
AUDITOR’S OPINION Overall, based upon the results of the review, the Department of Political Science is not conducting business matters in compliance with established guidelines and in accordance with sound business practices. Our review revealed the following observations: • • • •
•
•
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The current Bylaws do not appear to accurately reflect current practices and procedures. The department does not maintain administrative policies or procedures that are associated with the operations of the department. Purchasing Card (P-Card) o Business purposes listed for transactions are generic and non-descriptive. o The Department Chair was the only individual issued a P-Card. Petty Cash o Two transactions exceeded the $1,000 reimbursement threshold. o Six transactions included sales tax (taxes were reimbursed on one transaction). Department Expense and Revenue Reports o A deposit of $7,200 is listed as “revenue” for a departmental sales and service account (Fund 14000). The payment is associated with an external professional association and qualifies as sponsored funds, which should be coordinated through the University’s Office of Research Services and Sponsored Programs (ORSSP). Foundation Transactions o One deposit of $2,500 from a current faculty member’s personal funds was for his/her course buyout for spring 2010 semester (as indicated by the Memo section of the personal check and interview with the faculty member). Travel Statements o One instance of payment for other persons. o One instance of membership dues payment. o One instance of traveling to a destination not specified on Request for Authority to Travel. o One instance of missing hotel receipt (third-party email confirmation only). o Two instances of lodging upgrades to an executive room instead of the standard room rate (only partial reimbursement was claimed for one instance). o Three instances of excessive taxi expenses when less expensive travel alternatives were available. o Five instances of significant and excessive mileage claims. 5 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
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o Six instances of incomplete reimbursement information (missing dates, times, point-to-point travel locations) o Seven instances of “Request for Authority to Travel” form not submitted to Accounts Payable or approved by the appropriate authority 15 days prior to out-of-state travel. Property Control o Of 76 pieces of equipment reviewed valued at $123,497, six items valued at $8,782 could not be located or accounted for. 18 items were in the incorrect location as compared to records maintained by Property Control.
Further details of the areas examined may be found in the section of this report entitled “Results of the Review.”
6 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
RESULTS OF THE REVIEW To achieve the objectives of the Department of Political Science review, methods ranging from interviews to selective testing were used to provide reasonable assurance that the department is operating in compliance with the bylaws of the Department of Political Science, policies of the College of Liberal Arts and Social Sciences (CLASS), policies and procedures of the University Faculty Handbook, and University policies and procedures. The following provides a brief description of the resources used and the results of our review: OBJECTIVE #1: To determine whether the Department of Political Science incorporates an effective internal control environment that includes clear lines of organizational authority and responsibility and documented policies, procedures, and/or governing documents. Lines of authority and reporting structure are consistent with other academic departments, with the Chair reporting to the Dean of the CLASS, who reports to the Provost. The Department of Political Science has its own Bylaws, which are comprised of 17 Articles. These Articles include items such as the department’s mission statement, voting rights, meetings, committees, and guidelines for promotion and tenure decisions. The Bylaws were adopted on April 6, 1999 and were last amended on May 3, 2010. The current Bylaws do not appear to accurately reflect current practices and procedures. The department does not maintain administrative policies or procedures that are associated with the operations of the department. RECOMMENDATION: Based upon the results of the review, the Department of Political Science relies upon the University’s administrative policies and procedures for operational guidance. The department should develop administrative policies or procedures associated with the operations of the department. The department’s Bylaws should be updated annually to properly reflect current practices. OBJECTIVE #2: To determine if non-payroll operating and travel expenditures are reasonable, comply with University policies, are properly authorized, and are adequately documented. A judgmental sample of 135 financial transactions was selected from departmental and foundation accounts for Political Science. The transactions were reviewed to assess compliance with University policies, reasonableness, proper authorization, and adequate supporting documentation. A summary of the observations is listed below: 7 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
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Purchasing Card (P-Card) Transactions – A sample of 50 transactions was selected for review. Based on the sample: o Business purposes listed for transactions are generic and nondescriptive. o Records show that the only P-Card in the department is issued to the Department Chair. o Reviewed purchases appear to be allowable and appear to be reasonable in costs.
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Petty Cash – A sample of five petty cash reimbursements (eight total transactions) was selected for review. Based on the sample: o The five petty cash reimbursements were for Political Science faculty members but funded by other University accounts. The department chair reviewed and approved three of the transactions even though he did not have budgetary authority (further, appropriate approval was subsequently granted). o Two transactions exceeded the $1,000 reimbursement threshold. o Six transactions included sales tax (taxes of $72.59 were reimbursed on one transaction). o Supporting documentation was not provided for reimbursement.
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Department Expense and Revenue Reports – A sample of 20 transactions was selected for review. Based on the sample: o A deposit of $7,200 is listed as “revenue” for a departmental sales and service account (Fund 14000). The payment is associated with an external professional association and qualifies as sponsored funds, which should be coordinated through the University’s Office of Research Services and Sponsored Programs (ORSSP). o Reviewed purchases appear to be allowable and reasonable costs.
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Foundation Transactions – A sample of 10 foundation transactions was selected for review. Based on the sample: o One deposit of $2,500 from a current faculty member’s personal funds was for his/her course buyout for the spring 2010 semester (as indicated by the Memo section of the personal check and interview with the faculty member). Records do not indicate a transfer of $2,500 from the foundation account to the department account. The faculty member that made the payment did not teach during the spring 2010 semester. 8 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
The deposit is considered as a contribution and created a personal tax benefit for the faculty member. Faculty member confirmed that the contribution was made for a personal tax benefit. Faculty member indicated that the department chair told him/her that “this is the way that it should be done.”
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Other Per Diem and Fees – A sample of 20 Other Per Diem and Fees expenses was selected for review. Based on the sample: o Two payments (total of $1,500) were made to a student to “reconstruct Political Science webpage.” o Five payments (total of $10,500) were made to four professors who assumed positions with the University one semester after receiving payment. Two payments ($2,000 each) were made to two professors for “consultant fees.” Two payments ($2,000 each) were made to two professors for “guest speaker fees.” An additional payment ($2,500) for “cleaning and organizing huge data sets” was made to a professor who also received a $2,000 guest speaker fee payment. o Ten payments (total of $8,017.12) were made to ten students for research work Only one payment ($217.50) was documented with the calculation for minimum wage rate for work completed.
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Travel Statements – A sample of 30 travel expenses statements was selected for review. Based on the sample: o One instance of payment for other persons (exhibit admission ticket $4.50). o One instance of membership dues payment ($60). o One instance of traveling to a destination not specified on Request for Authority to Travel. o One instance of missing hotel receipt (Expedia email confirmation only). o Two instances of lodging upgrades to an executive room instead of the standard room rate (partial reimbursement of $125/night was claimed in one instance for the rate amount of $155 plus applicable taxes). o Three instances of excessive taxi expenses ($123.10 roundtrip to/from hotel/airport, $88 roundtrip to/from hotel/airport, $72.65 to unexplained destinations) when less expensive travel alternatives were available. 9 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science Five instances of significant and excessive mileage claims. Four of the five instances were to the same destination and each trip varies significantly from the estimated mileage. The roundtrip mileage to the destination is approximately 1,430 miles; however, for the four instances, 3,636 miles ($1,999.80), 1,998 miles ($1,098.90), 1,635 miles (see below), and 1,640 miles (see below) were claimed for roundtrips. Two instances coincided with Thanksgiving and Winter Holidays. Accounts Payable noted that the cost of flying and renting a car would be a less expensive mode of travel after the second claim of 1,998 miles. The faculty member continued to travel by personal vehicle for the next two trips but only requested reimbursement of $450 (1635 miles) and $451 (1640 miles) for mileage instead of $899.25 and $902.00. The faculty member was a resident of the destination city prior to his/her employment at Georgia Southern University. The faculty member is also involved in an ongoing (2004 to present) domestic relation case in the destination city. 475 miles ($235.00) were claimed for a roundtrip to a destination for a trip that is approximately 410 miles. o Six instances of incomplete reimbursement information (missing dates, times, point-to-point travel locations) o Seven instances of “Request for Authority to Travel” form not submitted to Accounts Payable or approved by the appropriate authority 15 days prior to out-of-state travel. o 23 instances of failure to provide supporting documentation (conference itineraries, travel itineraries, hotel information, reason for travel) for reimbursement. o
RECOMMENDATION: The review regarding financial transactions:
revealed
several
deficiencies
• P-Card – The business purpose for P-Card transactions should briefly describe the items purchased, the business purpose(s) of the item/service(s) purchased, and should not contain generic descriptions such as “office supplies.” The Department Chair was the only individual issued a P-Card. Although the purchases appear to be allowable and reasonable costs, administrative positions are discouraged from maintaining a P-Card. The Chair’s card was 10 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science canceled in September 2011. We recommend that the Administrative Assistant apply for and be issued a P-Card to purchase items necessary for the department. • Petty Cash – Although the transactions were reimbursed by other University funds, department faculty and staff should be aware of and comply with the University’s petty cash policies and procedures. Payments to vendors may be made in cash from personal funds or in cash from funds temporarily withdrawn from the department’s petty cash fund. If required by the vendor, institutional personnel must provide a tax exemption certificate at the time of the purchase to eliminate sales tax from being charged. Within limits, employees may make direct purchases from vendors for immediate needs of not more than $1,000 per purchase; however the use of a University P-Card is encouraged whenever possible. The transactions could have been paid for by other means such as P-Card or Interdepartmental Transfer. The department should focus on reducing the amount of petty cash transactions. • Department Expense and Revenue Reports – The department should not allow co-mingling of funds. The department’s sales and services account is not appropriate for external funding sources such as the funds associated with the external professional association identified in the transaction. These external funds qualify as sponsored funds and should be coordinated through the University’s ORSSP. External funds processed through ORSSP ensure that a contract or memoranda of understanding has been properly developed with the professional association, funds and transactions have additional review and approval for transparency, and that the relationship with the professional association has been documented so that the University receives recognition for services and properly accounts for contributions. A memorandum of understanding has now been filed with ORSSP and the external professional association and ORSSP are currently in the process of contractual negotiations. • Foundation Transactions – The review revealed that the $2,500 transaction was negotiated between the Department Chair and a faculty member in lieu of the faculty member teaching for the spring 2010 semester. The foundation deposit created a tax benefit for the contributor. Donor letters issued by the Foundation for contributions state that “Georgia Southern University provided no goods or services, in whole or in part, in consideration of this contribution.” Individuals making contributions to the Foundation should ensure that no goods or services, in whole or in part, were provided in consideration for the 11 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science donation. The Foundation was notified and has removed the transaction from the faculty member’s record in Banner. • Other Per Diem and Fees – Political Science’s web page could be maintained by an individual within the department or the department could have contacted the Center for Academic Technology Support (CATS) for assistance with the department’s website. The services are provided at no charge thus saving the department money. For payments to consultants, guest speakers, and student researchers, the department should consider performing due diligence by providing supporting documentation with the request for payment to explain how/why payment amounts are determined and to provide specific descriptions/examples of services performed. The College may consider establishing a second-tier signature requirement (Dean’s approval) for all requests for payment that surpass a specified monetary threshold. • Travel – The review revealed deficiencies and inconsistencies which indicate that the department’s travel procedures do not comply with University System of Georgia (USG), State Accounting Office (SAO), and Office of Planning and Budget’s (OPB) travel regulations. The department should review the USG’s Business Procedure Manual (BPM) – Section 4, as well as the SAO and OPB’s Statewide Travel regulations. The department should perform due diligence by properly providing specific information on Request to Travel authorizations, specific point-to-point locations, and supplemental documentation to support travel purposes. Management should verify all travel expense information prior to approval for travel authority and for reimbursement. Overall, the fiduciary practices of the department do not appear to comply with established policies and procedures or best practices. Department personnel should thoroughly review all payment request information and provide supporting documentation prior to signing the request. Department management should thoroughly review all requests for payment prior to approval to verify that all information provided is correct, to ensure that expenditures are reasonable, acceptable, support the mission of the department and University, and comply with University policies and procedures. Although administrative and fiduciary duties and responsibilities vary among the University’s departments and personnel, all University employees (administrators, faculty, and staff) are required to be aware of governing policies and procedures, conduct their duties ethically and responsibly, and act in the best interest of the University, USG, and the State of Georgia. 12 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science OBJECTIVE #3: To determine if the Department of Political Science maintains proper controls and records for inventory and non-inventory and adheres to University policies relating to Property Control. The departmental inventory report for the Department of Political Science listed seven inventory items valued at $3,000 or more and 69 noninventory items valued below the $3,000 threshold worth a total of $123,497. Of these, six items valued at $8,782 could not be located or accounted for. 18 items were in the incorrect location as compared to equipment inventory records. All items were previously verified and accounted for during the last inventory in March 2011. RECOMMENDATION: Based upon the results of the review, the department does not appear to have effective controls and monitoring mechanisms to ensure that equipment is properly accounted for and can be located. The review revealed that only four off-campus use forms were filled-out. The four forms lacked sufficient information (dates and location of items) and were never submitted to Property Control. Individuals who are responsible for the inventory, supervisors approving the annual inventory, as well as employees who take University assets off-campus, are responsible for safeguarding and maintaining the University’s assets. We recommend that those persons certifying and accounting for departmental assets comply with University procedures for maintaining the asset inventory through the following actions: •
The responsible individuals should physically verify the existence and location of all departmental assets and ensure the decals are readable and properly displayed. Once the inventory has been completed and submitted to Property Control, the department should verify that changes or revisions made to the inventory were done correctly.
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Employees are required to complete, sign, and have their supervisor sign an “Authorization for Off-Campus Use of Equipment” form when items are taken off-campus. Copies of the forms should be retained by the department and the originals filed with Property Control for insurance purposes and to ensure the proper documentation and account for items not being maintained on campus. The items should be brought in and verified at least once a year and the forms should be updated. Otherwise, the forms should be updated when items are returned to the department. 13 Department of Political Science – Special Review
Georgia Southern University Office of Audit and Advisory Services Department of Political Science
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Inventory should be maintained on a continuous basis instead of once a year during the annual inventory. Individuals responsible for inventory may attend a training session, which is held the month prior to the department’s scheduled inventory, to learn how to properly conduct the inventory. This will help the department maintain accountability of the inventory and ensure that Property Control’s records are accurate.
ACKNOWLEDGEMENT We sincerely appreciate the cooperation and assistance extended to us by the Dean of CLASS, the Associate Dean of CLASS, and the Department of Political Science during this review.
Jana Briley Director Office of Audit and Advisory Services
Jeb Tyson Auditor II Office of Audit and Advisory Services
14 Department of Political Science – Special Review