Ninety-Day_Response_to_APA.pdf — PaddleOCR-VL (Baidu)

Finding 7: The University Failed to Implement Sufficient Internal Controls to Ensure an Effective Budgeting Process and Prevent Overspending.

Recommendations:

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.

Response: KSU has not implemented this recommendation. The University cannot implement this policy due to standard 4.2.b of SACSCOC, the accrediting body for the University, which states that the Board should not be involved in the implementation of any policy or internal control system. While the Board cannot implement policies and control systems, it can approve and establish them. The Board has not yet established such a system because the FY24 budget is still under development due to the University focusing on ensuring that adequate financial controls were in place before budgeting for the upcoming fiscal year.

The Board should ensure Board members are sufficiently knowledgeable about the budgeting process and the intricacies of college and university budgeting.

Response:

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.

KSU has not implemented this recommendation. The University is behind on establishing a FY24 budget due to unforeseen challenges. Additionally, the University focused on ensuring that adequate financial controls were in place before budgeting for the upcoming fiscal year.

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.

Response: KSU has not implemented this recommendation. The University is currently undergoing a restructuring of its chart of accounts and report automation to ensure that the Board receives accurate, reliable information in the budget packet and that overspending of budgeted accounts is prevented.

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.

KSU has implemented this recommendation. The University’s Board of Regents received comprehensive training regarding the budgeting process on June 23, 2022. This training session was conducted by a senior consultant with CPE.

Response: KSU has not implemented this recommendation. The University is behind on establishing a FY24 budget due to unforeseen challenges. Additionally, the University focused on ensuring that adequate financial controls were in place before budgeting for the upcoming fiscal year.

KSU has not implemented this recommendation. The University cannot implement this policy due to standard 4.2.b of SACSCOC, the accrediting body for the University, which states that the Board should not be involved in the implementation of any policy or internal control system. While the Board cannot implement policies and control systems, it can approve and establish them. The Board has not yet established such a system because the FY24 budget is still under development due to the University focusing on ensuring that adequate financial controls were in place before budgeting for the upcoming fiscal year.

KSU has not implemented this recommendation. The University is currently undergoing a restructuring of its chart of accounts and report automation to ensure that the Board receives accurate, reliable information in the budget packet and that overspending of budgeted accounts is prevented.