To the Audit Committee of Kentucky State University
We are pleased to present our initial risk assessment and internal audit plan for Kentucky State University (the “University”). The purpose of our engagement is to assist you in the development of a risk assessment of University operations, to perform various internal audit services, and provide recommendations to strengthen controls and reduce the identified risks. This report was developed from inquiry of University faculty and staff, observations, inspection of various policies and procedures, and assessment of the University’s financial reports and findings from its external auditors.
The University's risks are an action or event which may adversely affect its ability to successfully achieve its objectives. The Risk Assessment section of the report analyzes the significant risk findings that were identified during this initial phase of our engagement. As we continue our work, perform testing to determine the efficacy of internal controls, and submit reports on our findings, our initial risk assessment may change.
For purposes of this report, internal control is a process affected by the Board of Regents (the “Board”), department heads and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the reliability of financial reporting and safeguarding of assets.
As noted, the purpose of our engagement was to assist you in improving the internal controls and reducing the risks that face the University. However, it is ultimately your responsibility to assess the adequacy of your risk management system. In performing our engagement, we relied on the accuracy and reliability of information provided by University personnel. We have not audited, examined, or reviewed the information, and express no assurance thereon.
The accompanying comments are intended solely for the information and use of the Audit Committee, Board of Regents, department heads, and others within the University and should not be used for any other purpose.
We appreciate the opportunity to serve you and thank the individuals in the University for their cooperation. We have already discussed many of these comments with various University personnel, and we will be pleased to discuss them in further detail at your convenience. Through our ongoing involvement with you as a client and our knowledge of your processes, we would be pleased to perform any additional studies of these matters, or to assist you in implementing the recommendations.
July 27, 2012