Expecting an Audit
What to look for from the NSHE Internal Audit Department
The Nevada System of Higher Education (NSHE) Internal Audit department routinely conducts audits of UNLV departments, similar to those in existence at most other institutions of higher learning across the country. Auditing is an important tool to help assure that activities are efficient, effective, and in compliance with requirements. The Internal Audit Department is primarily interested in determining whether your department operations use good business practices and are in compliance with established laws, policies and procedures. These include Nevada Revised Statutes (NRS), the NSHE Board of Regents Handbook, UNLV policies and procedures, and any internal policies and procedures your department has established. Federal laws and any other applicable regulations will also be reviewed.
The audit process will primarily focus on a review of the documents prepared by your department. There are several specific areas in which the auditors routinely find discrepancies. It would benefit your department to check the following items on some routine basis, to help assure good practices:
- Cash collection. If your department collects cash from sources outside the University, you should expect the NSHE Internal Audit department to pay you a visit. Cash collection procedures should be periodically reviewed to ensure the following:
- Do you have written procedures that explain how your department performs the collection, depositing, recording, and reconciliation processes?
- Is there adequate separation of controls in handling cash and keeping accounting records? These processes should be managed by separate individuals whenever possible:
- Cashier/accepting of payments.
- Preparation of deposit and posting to the University’s accounting system (Advantage).
- Reconciliation of cash deposits to your department account in Advantage.
- Authorization to write off bad debts (should be performed by a supervisor).
- Are all collections recorded on pre-numbered receipts (or cash registers)? Are handwritten cash receipts filled out completely?
- Are missing receipts accounted for?
- Does the department maintain a check log for checks received by mail? Are checks endorsed “For Deposit Only” immediately upon receipt?
- Physical security of cash collected.
- Are separate containers (such as a cash register or lockbox) available to each person collecting money and is reconciled on a daily basis to products sold or services performed?
- How is money safeguarded before presenting it for deposit (overnight storage).
- Is the safe combination periodically changed?
- Are all deposits turned in to the Bursar’s Office in accordance with established procedures (immediately if over $250 has been received, at least weekly if less than $250 has been received).
- Inventory records. You should obtain a current inventory list of items assigned to your department. You may obtain this list by contacting the Inventory Control Department at x51180. This list should be compared with inventory items that are actually present in your department (Pay special attention to computers and computer accessories, since there is a higher turnover of this type of item). Also, close attention should be paid to items that you have recently received or recently returned to Inventory Control for disposition. ANY discrepancies that are noted should be reported to Inventory Control so that your inventory list may be updated. Policies for all aspects of the control of University equipment can be found at http://www.unlv.edu/depts/purchasing/property_control.
- Petty cash. Your petty cash and/or change funds should be reconciled and replenished on a regular basis so that any variations in the amounts can be corrected. The UNLV Petty Cash Policy requires that this reconciliation occur at least once per quarter. You should also check to ensure that charges to your petty cash fund are for allowable items. With the advent of the procurement card, you should also decide whether there is still a need for a petty cash account. See how often the account is used. Close it if it is not needed. For information on obtaining a procurement card, please contact PCard Department at x42273 or visit the UNLV web at http://www.unlv.edu/depts/purchasing/pcard.htm.
- Monthly phone logs. Your monthly phone logs should be reviewed and signed by the department supervisor. This would include department phone lines, fax machine and cell phones. The signature shows that the log has been reviewed. The auditors will specifically be looking to see if personal long distance calls are made from University phones and have been reimbursed to the University. The policy concerning the reimbursement of phone calls made for personal use can be found at http://disbursements.unlv.edu/Topics/phone.htm
- Leave records. The auditors routinely question the timeliness of completing leave records. Sick leave should be submitted the next working day. Annual leave should be requested in advance; however, if not possible, the reason should be noted for the after the fact request. Comp time should be used before annual leave whenever possible.
- Student timesheets are particularly scrutinized to make sure that:
- Timesheets are signed by both the student and the supervisor.
- Students are not working during actual class times.
- If the student worked during a scheduled class time, an acceptable reason for working is documented on the timesheet.
- Students working more than for hours took lunch break. It most be documented.
- Student overtime was paid if they exceed 8 hours in a day or 40 hours in a week.
- Hours are calculated properly.
We recommend that you put each student’s class schedule in the student’s records. This will help the supervisor review whether the student worked during scheduled classes.
- Software security procedures. The auditors will check to see if written procedures are in place, appropriate, and ensure your department is following them. They will also be checking to see if passwords are changed on a regular basis. We recommend passwords be changed quarterly as a minimum.
- Computer backup and disaster recovery plans. The auditor will check to see if any written computer backup and recovery plan is in place. The always require off-site storage.
- All Contracts have been executed properly.
- Both parties should initial changes made to contracts.
- Non-standard form contracts are approved by legal counsel. Legal Counsel can be reached at x55185.
- Certificates of Insurance have been obtained for all service contracts administered by your department.
Contracting policies and procedures can be found at http://www.unlv.edu/depts/purchasing/policies.htm.
- PCard Records:
- Are “Monthly Statement of Accounts” printed and signed by cardholder and immediate supervisor? Supervisor is responsible for insuring purchases are for legitimate university purposes.
- Are all original receipts attached to the “Monthly Statement of Account”?
- Are “Affidavits of Loss Receipts” completed for any missing receipts? Policies and procedures for lost receipts can be found on UNLV Accounts Payable website.
- Are all records easily accessible (i.e. maintained in a central location for past employees).
- Are Hosting Forms pre-approved and included with PCard transactions? They must be signed by Dean or higher position.
- Are all fixed asset purchased been reported to Inventory Control and tagged?
- Are Travel Documents (TD’s) referenced as part of the PCard transaction?
The full PCard Manual can be found on the UNLV Purchasing website. Please review and insure you are in compliance with all policies and procedures.
- Are all host expenditures charged to designated UNLV host accounts?
- Are all hosting expenditures documented in accordance with Internal revenue service guidelines? This includes, but is not limited to, amount, date, time, place, business purpose, and business relationship with those attending the function. We recommend you use the Pcard Hosting form to document these purchases.
Hosting Policies and Procedures can be found on the UNLV Accounts Payable website.
This information is designed to provide general guidance on areas that the NSHE auditors find discrepancies with most often. This is not a complete reference guide to all aspects of an audit. Each department has its own individual characteristics and processes which must be looked at independently to determine if they are sufficient. If you have questions about the organization of your paperwork or your internal processes, the Campus Audit Department is available to assist you. Please feel free to contact Jim Moore at x53476 or by email at firstname.lastname@example.org to set up an appointment.
Last Revised: 4/13/15