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Good internal controls require a budget process that allows for sufficient time for an oversight body to review, question, and approve a budget. The process should be built on accurate, verifiable data to ensure decisions are made that allow the University to provide services to students while operating within existing budget parameters.

An effective internal control system cannot exist without a clear tone at the top that sets the organization’s commitment to honesty, integrity, and ethical behavior. Controls should also be in place to standardize the procurement process so that every department spends only within its approved budget, and there should be a mechanism in the accounting system that prevents the obligation of funds if the funds are not available within that budgeted account.

Recommendations

We recommend:

• The KSU Board of Regents implement a comprehensive internal control system over the budgeting process, including written policies and procedures for all University departments to follow.
• The Board should ensure board members are sufficiently knowledgeable about the budgeting process and the intricacies of college and university budgeting.
• There should be sufficient time built into the budget approval process to allow the board to comprehensively review and analyze the budget before voting for approval.
• The accounting system should include general controls that ensure the board receives accurate, reliable information in the budget packet and that prevent overspending of budgeted accounts.
• Strong internal controls should be implemented that would discourage and prevent any attempts to subvert the normal procurement process, including appropriate discipline for noncompliance. An effective internal control system cannot exist without a clear tone at the top that sets the organization’s commitment to honesty, integrity, and ethical behavior.
• The Board of Regents and KSU's Administration develop and communicate a strong ethical tone to all faculty and staff.