YSU Audit recommends improved supervision

A late report resulted in a $10,500 penalty to YSU.
YOUNGSTOWN -- Independent audits of Youngstown State University recommend the college improve its supervision over payroll, general accounting and the financial gifts it receives.
Personnel from the Youngstown office of Packer Thomas, a certified public accounting firm, did "internal" audits of YSU's general accounting department, payroll process, and gifts received by the university. An internal audit is done at the request of the agency audited, which also pays for the audit.
The firm also will audit the university's financial aid and computer controls departments and release those findings in June.
"The audits are very constructive and useful," said John Habat, YSU's vice president of administration. "It's a great management tool to have an objective set of eyes come in and look at your system to see that it's function, and you have the right controls."
Packard Thomas has a $200,000 contract with YSU to conduct internal audits of the university, Habat said. The state auditor conducts external audits that focus on YSU's financial statements.
"The internal audits look at controls that are in place, and makes sure there's no opportunity for any inappropriate activity," he said.
While the audit points out deficiencies at YSU, Habat said he was pleased with the results, and many of the recommendations have been or are being implemented.
"You'll always find areas of improvement in any audit," he said.
The audit calls for more checks and balances at the university.
For example, an audit of gifts showed that mail is opened by an employee who records the amount without a second set of eyes double-checking it.
Also, the annual statements for unused sick leave and accrued vacation aren't being reviewed by anyone other than the original preparer.
The audit pointed out that an oversight by the payroll department resulted in a $10,500 penalty to YSU.
A report to the Ohio Public Employees Retirement System due May 31, 2004, was filed June 28 of that year. The delinquency resulted in the penalty. The late payment was caused by procedural change in submitting these employee reports, the audit states.
YSU management's response was the incident was "a unique oversight due to a change in reporting and payment submission procedures."
One employee didn't have a deduction taken from his first paycheck, the audit states. YSU management's response was the problem was a "rare oversight."
The audit also mentioned that W-2 forms aren't being processed efficiently, causing discrepancies in payroll summaries prepared by the university's payroll and general accounting departments. YSU management states the problem has already been addressed.
Also, the audit states that there isn't an adequate emergency backup procedure to print payroll checks. Only one computer does this, and if it was inoperable, the audit states, payroll checks couldn't be processed in a timely manner.
Management is moving to a new payroll system, but even so, the current system isn't a problem. A high percentage of employees have direct deposit, YSU has a maintenance agreement on the payroll equipment that requires a response within 24 hours, and checks are printed three days before they are supposed to be distributed, according to YSU management's response.