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Numerous staff had KSU credit cards for which supervisor approval was not required. While purchasing staff were to review each credit card statement and ensure a supporting receipt was attached, procedures revealed:
Supervisors were not required to review the statement to ensure receipts existed or that the expenditures were legitimate KSU expenses and not personal in nature.
Credit cards were paid regardless of whether budget funds existed because the payment had already been incurred by the staff member.
With the former President stating that credit cards were used to manage all KSU purchasing and operations, this lack of institutional control is a material weakness.
Addressing these weaknesses is necessary to properly monitor and control spending within the university. If these weaknesses are not addressed moving forward, KSU cannot ensure that funds are purposefully spent towards meeting the University’s goals and objectives.
Though the Purchasing department creates its own internal report listing the credit card transactions with the vendor information included, vendor information is not recorded in Banner. In Banner, vendor information is entered in a description field with other data, but not in a vendor field that would allow KSU to track expenditures per vendor. This type of tracking information could be used to determine duplication, excessive spending, or help KSU identify services for which a contract may be needed. See Finding 2 in which difficulties in determining KSU's full contract population were noted.
KSU has a separate check writing system that is used after a check has been entered and approved in Banner. Staff with access to the check writing system, can void a check before it is printed without the void being reflected in Banner. According to KSU Accounts Payable, this has occurred and can create additional issues for KSU in addressing outstanding accounts payable as Banner will show that a check was written even though it did not actually occur. KSU’s system will consider this an expense but KSU’s bank account will not be affected. KSU’s accounting system and banking information will not agree for reconciliation purposes.
As noted by current and former KSU personnel, Banner has not been accurately implemented by KSU; a problem that has been reportedly ongoing since it was fully implemented by KSU in 2011. This has led to difficulties in extracting data from the system and caused staff to resort to maintaining financial tracking and monitoring tools external to its accounting system. Additionally, due to consistent cash flow problems encountered by KSU throughout the period, accounting and accounts payable staff were meeting and communicating regularly with the former Controller and former EVP for Finance to determine the invoices that could be paid weekly. The APA was able to reconstruct some of this data through a review of emails maintained by KSU for the period July 1, 2018, through June 30, 2021, for select members of KSU’s former administration and financial personnel.