Finding 1: KSU's Weak Internal Control Environment, Coupled with Poor Fiscal Management Practices, Led to a Pervasive Lack of Accountability.
While each finding of the report provides specific recommendations, we recommend that KSU management work to improve the “tone at the top” of its internal control environment. Internal controls should be enforced at all levels, expenditures should be fully supported by documentation that is properly retained, budget limits should be consistently enforced, and monitoring efforts should be fully implemented and supported.
While each of the specific findings and recommendations has been addressed separately in our responses below, KSU has taken steps to address findings noted. KSU is working to improve the “tone at the top” of our internal control environment. We understand that Internal controls must be fully implemented and monitored to maintain efficiency effectiveness of operations. Also, identifying and strengthening weak internal controls should be a priority to ensure operations are efficient and effective to reduce fraud, waste, or abuse.
Establishing and maintaining complete financial records is critical in the reliability of financial data for decision making in the areas of budgeting, procurement and contracting, expenditures, travel, expense reimbursement, and federal grant funding.
Preventive controls as it relates to unapproved or over budgeted spending will be address in the revise policy and procedures for Capital Project, Endowment, Payroll and Payroll Related Expense and Travel Disbursements and other functional areas as needed.
Finding 2: Examination Procedures Were Limited Due to the Condition of KSU Records, Policies, and Significant Staff Turnover.