REPORT TO MANAGEMENT ON FOLLOW-UP AUDIT OF PETTY CASH FUND LAMAR INSTITUTE OF TECHNOLOGY

Transcription

1 REPORT TO MANAGEMENT ON FOLLOW-UP AUDIT OF PETTY CASH FUND LAMAR INSTITUTE OF TECHNOLOGY MAY 2002

2 TABLE OF CONTENTS Fiscal Year 2002 TABLE OF CONTENTS Page TRANSMITTAL LETTER...3 EXECUTIVE SUMMARY...4 DETAILED FINDINGS AND RECOMMENDATIONS...8 Follow-Up Audit of Petty Cash Fund Table of Contents

3 TABLE OF CONTENTS Fiscal Year 2002 Follow-Up Audit of Petty Cash Fund Table of Contents

4 May 13, 2002 Dr. Robert Krienke, President Lamar Institute of Technology P.O. Box Beaumont, TX Dear Dr. Krienke: Enclosed is a copy of Report to Management on Follow-Up Audit of Petty Cash Fund, May The primary focus of the audit was to evaluate management s progress in implementing the prior audit recommendations addressed in May The audit is classified as a Category II based on criteria prescribed by the Rules and Regulations of The Texas State University System. Management has fully implemented the prior three (3) outstanding audit recommendations. Lamar Institute of Technology has developed procedures to audit the money received from the bank. Also, the Institute has adhered to existing policy and procedures pertaining to reimbursement for small items. Finally, the Institute has established its own policy and procedures for small item purchase reimbursement. If you should have comments or questions, I am available at your convenience to review the report. Sincerely, Twila J. Baker, CPA Director of Internal Audit

5 EXECUTIVE SUMMARY Fiscal Year 2002 EXECUTIVE SUMMARY Follow-Up Audit of Petty Cash Fund Page 5

6 EXECUTIVE SUMMARY Fiscal Year 2002 OBJECTIVES The Internal Audit Plan for fiscal year 2002 provides for a follow-up audit of petty cash fund. The primary focus of the audit was to evaluate management s progress in implementing the prior audit recommendations addressed in May The scope of the original audit was to review the policies and procedures associated with the petty cash fund located in the Cashiering Department. Internal Audit evaluated the petty cash policies and procedures as of May 30, 2001 for compliance with Lamar Institute of Technology s financial policies and procedures and established internal controls. Internal Audit performed the following audit procedures: 1. Conduct a surprise cash count of petty cash located in the vault and cashiers lock boxes; 2. Review selected transactions for appropriateness of supporting documentation, appropriateness of related object codes, and compliance with State and Institute guidelines; and 3. Observe and interview the cashiering personnel in order to ascertain normal operating procedures. The audit is classified as a Category II based on criteria prescribed by the Rules and Regulations of The Texas State University System. RESULTS OF REVIEW Management has fully implemented the prior three (3) audit recommendations. The status of the findings and recommendations are as follows: Management has fully implemented the prior audit recommendations: C C C Developed procedures to audit the money received from the bank. Adhered to existing policy and procedures pertaining to reimbursement for small items. Established its own policy and procedures for small item purchase reimbursement. Follow-Up Audit of Petty Cash Fund Page 6

7 EXECUTIVE SUMMARY Fiscal Year 2002 CONCLUDING REMARK We appreciate the assistance provided to Internal Audit by the staff doing our engagement. Follow-Up Audit of Petty Cash Fund Page 7

8 Fiscal Year 2002 REPORT TO MANAGEMENT ON FOLLOW-UP AUDIT OF PETTY CASH FUND LAMAR INSTITUTE OF TECHNOLOGY MAY 2002 Lamar Institute of Technology Dr. Robert Krienke, President Mr. Jonathan Wolfe, Vice President for Finance and Operations The Texas State University System Mr. J. Wiley Thedford, Vice Chancellor of Finance Mr. Jerry W. Neef, Director of Audits and Analysis Project Auditors Ms. Twila Baker, Project Director Ms. Daphne McIntire, Project Auditor Follow-Up Audit of Petty Cash Fund Page 8

9 DETAILED FINDINGS AND RECOMMENDATIONS Fiscal Year 2002 DETAILED FINDINGS AND RECOMMENDATIONS Follow-Up Audit of Petty Cash Fund Page 9

10 DETAILED FINDINGS AND RECOMMENDATIONS Fiscal Year 2002 CHANGE FROM BANK PROCEDURES Prior Audit Recommendation: We recommend management develop procedures to audit the money received from the bank to avoid shortages. Management has fully implemented the prior audit recommendation. Lamar Institute of Technology has procedures to account for the money received from the bank. Two (2) cashiers will count all wrapped coins to verify the amount in the rolls. Both will sign the Change From Bank form. In the event of a discrepancy, the Institute will notify the bank immediately. RECOMMENDATION There is no further recommendation for this finding. REIMBURSEMENT OF SMALL ITEMS FOR PURCHASE/TRAVEL Prior Audit Recommendations: We recommend management comply with Lamar University s Finance Office - Procedures Manual, in which the Institute uses. We recommend management establish its own written policies and procedures manual for Small Item Purchase Reimbursement. Management has fully implemented the prior audit recommendations. The Institute has developed its own procedures for small item purchase reimbursement; therefore, the Institute no longer uses the Lamar University s Finance Office - Procedures Manual. Internal Audit obtained January and February 2002 Small Item Purchase Reimbursement (F4.7.4) Forms and receipts to ensure the Institute has complied with its procedures. We reviewed and verified the Institute reimbursed only from the local funds accounts and expenditures of $50.00 or less. We also reviewed and verified the Institute did not reimburse sales tax. We noted no exception. Follow-Up Audit of Petty Cash Fund Page 10

11 DETAILED FINDINGS AND RECOMMENDATIONS Fiscal Year 2002 RECOMMENDATIONS There are no further recommendations for these findings. Follow-Up Audit of Petty Cash Fund Page 11