Official: Three problems in audit are linked

One concern is lack of professional-level workers in the accounting department.
By JoANNE VIVIANO
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- Three accounting issues at Youngstown State University recently deemed deficient by a Cleveland auditing firm are intertwined and can be remedied by improving technology and staffing, a top YSU official said.
"They're interrelated," said Terry R. Ondreyka, YSU's vice president for financial affairs. "As you begin to fix one, you begin to address the others."
The audit by Ernst & amp; Young of Cleveland is a review of YSU's financial statements for the fiscal year ending June 30, 2003.
The report suggests that YSU address three main issues:
UThe timeliness with which financial reports from various departments are integrated with the overall accounting system and the supervision over such reports.
UStaffing.
UThe completion of written policies and procedures at the departmental and board-of-trustee levels.
Levels of concern
Of 20 recommendations the auditing firm made, 19 are considered "basic" findings, with one termed a "reportable condition," Ondreyka said.
The reportable condition represents a higher level of concern; however, Ondreyka added, the audit found no findings of "material weakness" -- a third level that represents highest concern.
The reportable condition involves all three of the aforementioned issues.
Despite this condition, Ondreyka praised the university's finances.
"The institution is in a good financial position. We've had a balanced budget in a very difficult ... economic time," he said.
Among positive indicators is YSU's increase in a state ranking based on the university's financial strength, net income and capability to satisfy debt obligations. Additionally, Moody's Investors Service has recently upgraded YSU's credit rating.
Details of findings
In the audit, presented last week to a subcommittee of the YSU Board of Trustees, basic findings include YSU's lack of an official policy for the approval of employee timecards, which could lead to employees' receiving pay for time they have not actually worked. The report further found that the university does not always comply with regulations surrounding research and development grants; in one case, the university did not remit interest earned on a federal grant to the government on a yearly basis as required.
In addressing the reportable condition about the timely reporting of departmental finances, Ondreyka said the university's technology in the area is "antiquated" and not geared to integrate all such reports into one system.
As for supervision over such reporting, he explained that "tight and thin" professional-level staffing means that, often, supervisors are the ones who are preparing these reports. The issue feeds into the auditing firm's concern over staffing.
Ondreyka said staffing levels have remained consistent in the 21/2 years he has been at YSU; however, regulations have increased, requiring accounting staff to adhere to more regulations and produce more reports.
Ondreyka pointed out that Ernst & amp; Young are not critical of current staff but say that there simply are not enough professional workers.
Regarding the implementation of policies and procedures, Ondreyka said there is a campuswide effort to update both the board of trustee guidebook and official accounting-department policies.