FINANCIAL FACTS. October 2016

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1 FINANCIAL FACTS October 2016

2 In This Month s Issue... Chip and PIN Card Information 3D Secure Verified by Visa/Mastercard SecureCode Accounts Receivable Updates CSU Internal Audit Round 6, Group 2 Compliance Audit Update 2

3 Chip and PIN Card Information To enhance the security of your credit card purchases, your new commercial card features chip and personal identification number (PIN) technology, in addition to a magnetic stripe. With this card, you will have added identity verification and more flexibility at chip-enabled and traditional magnetic stripe terminals. Please review the important information below to help you get started with your new card. About chip-enabled cards Over the next year, U.S. merchants will begin using terminals that accept chip-enabled credit cards. Until then, you may use your card by swiping at the point of sale, just as you do today. As chip-enabled terminals are already being used internationally, you may use your card to complete chip- enabled transactions in Europe, Asia, South America and Canada. Getting started with your new card 1. To activate your card, you will need your unique identification (ID) number. If you do not know your unique ID, please contact your program administrator. 2. Activate your new card immediately by calling , 24 hours a day, 7 days a week. When dialing from outside the U.S. or Canada, dial This is not a toll-free number when calling internationally. If you need help internationally, please call customer service collect at When you activate your card, you will select a personal identification number (PIN). Use this PIN for chipenabled transactions when prompted by the terminal. This same PIN will be used for cash advances, if you are authorized to make them. Depending on the terminal set-up, you may be prompted to provide your signature instead of your PIN. Once activated, the card is ready for use at either mag stripe terminals or chip enabled terminals. 4. If you forget or need to change your PIN, call the Business Purchasing Service Center at , option 1, option 7. Should you have any questions, please contact Pauline Anongdeth at x2907 or pswong1@cpp.edu. 3

4 3D Secure Verified by Visa/MasterCard SecureCode What is 3D Secure: 3D Secure is the industry name for Verified by Visa and MasterCard SecureCode. 3D Secure technology secures online transactions using an additional level of cardholder authentication. With the introduction of Chip and PIN cards, fraud is increasingly moving online. International and now U.S. internet merchants are beginning to require 3D Secure to complete transactions. How it Works: Cardholders must register their cards online prior to completing their purchase at a 3D Secure enabled merchant. As part of the registration process, you will need to provide correct answers to three identity authentication questions. You will then create a personal passcode to be used for future purchases. Once enrolled, you will be prompted to input your personal passcode during the checkout process at 3D Secure enabled merchants. How to Enroll: In order to enroll in this free, online security service, cardholders must register their card at: During the registration process, you will be asked to provide the last four digits of your unique ID, your monthly credit limit and the zip code tied to your card to verify your identity. (All information may be found in your personal profile.) Once this has been provided, you will create a personal passcode to be used when making online purchases with participating merchants. Should you have any questions, please contact Pauline Anongdeth at x2907 or pswong1@cpp.edu. 4

5 Accounts Receivable Updates The beginning of the school year is a good time to review your accounts receivable aging report. If an accounts receivable invoice is not paid within one year, we will establish an allowance (an expense to the project) for doubtful accounts receivable. If the accounts receivable invoice is still uncollected by the end of the second year, it will be written off. We changed our policy over the summer of In the past, we required your permission to write off the amount after two years outstanding; we no longer require your approval, and will automatically write off all accounts receivable balances outstanding greater than two years. Please remember to take the initiative to follow-up and collect accounts receivable. We will provide you with your accounts receivable aging report on a quarterly basis, or you can call Kathleen at ext or Alicia at ext to request an aging report. 5

6 CSU Internal Audit Round 6, Group 2 Compliance Audit Update Once every three years, the Office of the University Auditor conducts a compliance audit (internal audit) of the Foundation as directed by the Committee on Audit of the CSU Board of Trustees. The compliance audit focused on procedures in effect from July 1, 2015 to April 8, 2016, and the auditor s fieldwork began on Monday, March 14, 2016 and concluded on Friday, April 8, An entrance conference was held on Monday, March 14, 2016, and we invited members of the Audit Committee and the Board to attend. At the entrance conference, the CSU auditors discussed the scope, objectives, schedule and the process of the compliance audit. The auditors interviewed key personnel and explained their audit was based upon standards as set forth in the CSU Board of Trustee policies, Office of the Chancellor policies, letters and directives, campus and Foundation procedures, and other sound administrative practices. Foundation management and staff completed a self-risk assessment survey, gathered various documents and completed questionnaires in preparation for the audit. The audit was conducted in conformance with the Institute of Internal Auditors International Standards for the Professional Practice of Internal Auditing. The auditor s fieldwork included weekly meetings to discuss the preliminary observations and recommendations followed by a formal exit conference held on Tuesday, July 5, The Foundation s timeline for implementing the corrective actions was August 31, 2016 and included in the auditor s final report dated July 5, Following are the auditor s recommendations and the Foundation s corrective actions; all the correction actions were accepted by the Office of the University Auditor: Cash Overages and Shortages Update the Bronco Bookstore Cash Receipts/Sales Transactions Procedures to define an overages/ shortages threshold that warrants additional Bronco Bookstore management review and significant discrepancies that need to be elevated to Foundation executive management in order to align these procedures with Foundation Cash Receipts policies and procedures. The Foundation incorporated the Bronco Bookstore Cash Receipts/Sales Transactions Procedures into the Foundation s Cash Receipts Procedure. Please see section Unit Depositing Procedures for further details. Establish a process to document evidence of communication with management regarding overages and shortages over an acceptable amount as defined in the Bronco Bookstore Cash Receipts/Sales Transactions Procedures. The Bookstore Director signs the daily deposit report to document evidence of communication. Please see the last document in this recommendation. 6

7 Returned Checks Document collection and follow-up activity for returned checks. The Foundation, using Filemaker, developed a system to document collection and follow-up activity for returned checks. Please see write up of the procedures for further details. Timely write off long-outstanding returned checks that have not been recovered, and submit these checks to the collection agency. The Foundation updated the Accounts Receivable Procedure to timely write off long-outstanding returned checks. Please see section c. Update Foundation Cash Receipts policies and procedures to address unit manager/project director responsibilities for collection and follow-up activity of returned checks. The Foundation updated the Cash Receipts Procedures to address unit manager/project director responsibilities for collection and follow-up activity of returned checks. Please see section B. Petty Cash and Change Funds Petty cash should be properly reconciled and timely submitted for reimbursement on June 30 of each year. The Foundation reiterated to the petty cash and change fund custodians that petty cash should be properly reconciled and timely submitted for reimbursement on June 30 of each year. Please see Foundation Newsletter and dated June 23, Petty cash and change funds should not be commingled. The Foundation reiterated to the petty cash and change fund custodians that the petty cash and change funds should not be commingled. Please see dated July 26, Accounts Receivable Document collection and follow-up activity for delinquent accounts receivable to facilitate collection or support account write-off. The Foundation, using Filemaker, has developed a system to document collection and follow-up activity for delinquent accounts receivable to facilitate collection or support account write-off. Please see write up of the procedures for further details. Write off uncollectible accounts receivable in accordance with Foundation Accounts Receivable policies and procedures. The Foundation has updated the Accounts Receivable procedure to write off uncollected accounts receivable. Please see section b. Document management review of accounts receivable reconciliations. The Foundation documents management s review of accounts receivable reconciliation. Please see the last document in this section. 7

8 Travel Administration Remind travelers to submit a Travel Authorization and Expense Report form within 60 working days of return from travel, whether or not any balance of monies is due to the traveler or the Foundation. The Foundation reminded travelers to submit a Travel Authorization and Expense Report form within 60 working days of return from travel, whether or not any balance of monies is due to the traveler or the Foundation. Please see Financial Facts article for further details. Remind travelers to complete Section I of the Travel Authorization and Expense Report form and obtain the executive director s approval for all international travel. The Foundation reminded travelers to complete Section I of the Travel Authorization and Expense Report form and obtain the executive director s approval for all international travel. Please see Financial Facts article for further details. Ensure that all consulting arrangements are supported by a written agreement showing permitted expenses. The Foundation has revised its Travel Policy to ensure that all consulting arrangements are supported by a written agreement showing permitted expenses. Please see paragraph #2 under Transportation Expenses. Personnel and Payroll We recommend that the Foundation implement a documented process for pre-approval of employee overtime. The Foundation updated the employee handbook. See Overtime Pay on page 13 and evidence of approval from KRONOS screen shots. Open Purchase Orders We recommend that the Foundation timely disencumber and remove paid purchase orders from the accounting system. The Foundation discussed outstanding purchase orders at the semi-annual focus group meeting in June 2016; explained how to run their program s outstanding purchase order report; and how to request to disencumber and the removal of paid purchase orders from the purchasing system. We also notified project directors/authorized signers to submit purchase order requests in the June Financial Facts Newsletter. Please see attached documents. Dining Storage Rooms We recommend that the Foundation adequately secure storage rooms at the central receiving location of the Campus Center Marketplace. The Foundation has updated the Dining Services Purchasing Desk Manual. Please see the fifth bullet point under Storage and pictures of locked storage rooms. 8

9 Safe Access Update its listing of vault/safe access to include employee names and the last combination change date. The Foundation has update its listing of vault/safe access to include employee names and the last combination change date. Please see July Financial Facts Newsletter and Cash Receipts procedure, section D. Change its vault/safe combination annually. The Foundation has changed the vault/safe combinations and updated its Cash Receipts procedures for changing its vault/safe combination. Please see section A and invoice. Instruct Foundation satellite locations to maintain a listing of individuals with safe access and the last combination change date. The Foundation has instructed Foundation satellite locations to maintain a listing of individuals with safe access and the last combination change date. Please see July Financial Facts Newsletter. The complete Auxiliary Organizations Audit Report dated July 5, 2016 is available for your reference on the Office of the Auditor s website at the Chancellor s Office. If you have any questions or would like to discuss further, please contact David Prenovost at dfprenovost@cpp.edu or ext