Audit Finds Major Payroll Issues at Mayville State University, Several Other Issues Found

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The Auditor’s Office has found that Mayville State University does not have correct training or procedures in place for running payroll for its employees. The University staff found and reported to the Auditor’s Office that over $175,000 was overpaid to 15 employees. The Auditor’s Office found that an additional $10,000 of overpayments were made to seven employees. Because employees at the University have varied paychecks depending on special projects, interim assignments, or course overload teaching, employees themselves would not necessarily notice an incorrect amount on their paycheck. In addition to the lack of payroll training, the auditors also found that the human resources department had the ability to manually delete records of additional pay that was given.  

The Auditor’s Office also identified the following issues:
 

Bank Statements not Reconciled
*PRIOR AUDIT IDENTIFIED, THE UNIVERSITY STILL HAS NOT ADDRESSED*
Reconciliation is a key part of accounting that compares two sets of data to make sure they match each other. If differences are identified, they are investigated. If reconciliations do not happen, errors could occur. The audit found that the University did not reconcile bank statements to the general ledger. Unreconciled amounts ranged from $975 to $162,690.

 

Systems not Reconciled  
The University is not documenting who performed reconciliations, or who approved reconciliations for both student finance, and payroll. University staff is also not reconciling student finance accurately, in the documents reviewed, the unreconciled differences ranged from $150 to $10,100 in the student finance system.

 

Documentation Not Retained for Journal Entries
Transactions that record, correct, or adjust financial transactions are made directly to the general ledger.  These transactions are called journal entries. The University did not maintain correct journal entries for multiple transactions. In the 32 entries reviewed by the Auditor’s Office, the following issues were found with journal entries:

  • 13% did not have supporting documentation.
  • 25% did not have approval from an authorized person.
  • 19% were not coded correctly, which defines the type of activity being recorded.


Purchase Cards
When making financial purchases for organizations, a credit card called a purchase card (or p-card) is used. The University does not have processes in place to make sure p-card purchases are proper and approved by appropriate individuals.  Processes (referred to as “controls” in accounting terms) should be in place so proper and approved purchases are made by cardholders.

The following issues were found with purchase cards:

  • 13% of purchase card reconciliations reviewed were missing procedures of signing reconciliations by the main cardholder.
  • 13% of purchase card reconciliations reviewed were not correctly approved by the cardholder’s supervisor.
  • 16% of purchase card transactions reviewed were not in compliance with both the State Board of Higher Education policies, as well as North Dakota University System procedures.

     

Improper Awarding of Waivers
*PRIOR AUDIT IDENTIFIED, THE UNIVERSITY STILL HAS NOT ADDRESSED*
Because the University does not have procedures in place, tuition waivers may be going to ineligible students. The University is also not awarding waivers based on the criteria listed in those waivers. If the criteria is not followed when awarding waivers to students, these benefits may be given to students based on preferential treatment, rather than ability or need.


“Mayville State University has communicated their commitment to addressing these issues, including the repeat findings,” said State Auditor Joshua Gallion. “Training and processes must be improved at the University to prevent these issues from continuing to happen.”

For the full audit report, visit: https://bit.ly/MayvilleState

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