ALBANY, GA (WALB) - A recent financial audit of the Albany State University Foundation reveals serious suggestions by auditors having to do with internal controls and record-keeping.
University officials said they have created new policies to strengthen the internal control of the foundation's finances. But, overall they described the audit as "clean."
The Albany State University Foundation is the non-profit organization and fundraising entity for Albany State University.
"The foundation as a whole maintains the charitable assets, the endowments, some properties, gifts and contributions that benefit Albany State University advanced education," explained Randae Davis, the interim chief development officer at ASU.
According to the 2016-2017 year audit, the Foundation has almost $83 million in liabilities and net assets.
"Albany State University Foundation holds the bonds for dorms one through six and the student center on the east campus," said Davis.
Mauldin and Jenkins completed the most recent, independent audit for the Foundation. In it, auditors noted several pages of significant findings and a slew of recommendations based on areas where auditors found internal control weaknesses.
"It was a clean audit," said Davis. "There were some definite issues the auditors spoke to in the way of weak processes and procedures."
Here are just a few of the auditor's findings:
- The foundation didn't keep separate accounts for legal entities.
- There was no evidence the foundation was monitoring its investment performance.
And, auditors also questioned the effectiveness of ASU's record keeping in certain aspects.
The lack of records reveals that some entities owe the foundation money and there is even possibly surplus money in one account, although it's not clear how much.
Davis said the Foundation has corrected many of these findings, even before the audit was completed.
"There was certainly areas of opportunities and weaknesses that we had that were corrected prior to the audit beginning," said Davis.
University officials said in the spring of 2017, the foundation adopted new financial control policies.
Davis said during the consolidation, officials took a look at the policies and guidelines and started to identify areas where improvements could be made.
One of the most significant findings from the audit was who had control of cash disbursements.
The audit said seven employees had access to the accounting system and electronic signatures stored within that system. Those people did not have to get additional approval from someone independent of the preparation process, something officials said has since been fixed as well.
"It had been corrected in such that one person has the authority and ability to cut a check, three people have the ability to sign it, over a certain dollar value requires two signatures," explained Davis about the new policy.
Davis said some of those employees didn't know they had access to the system.
He also said many of those employees are no longer working at ASU.
But, easy access to the account wasn't all auditors found.
When auditors took a random sample of 40 disbursements from the foundation's only bank account, 33 of those disbursements did not have the required signatures and 12 did not have invoices of receipts.
University officials said changes have been put in place. Now, no one can withdraw money without the proper signatures, but they haven't said if they have gone back to review those past disbursements.
"In some cases, there were some lack of documentation that occurred," explained Davis. "Obviously again an area for our processes and procedures that have been corrected prior to and continue to be maintained post the audit."
Albany State University and Darton State College have officially been one institution for more than a year, but the two non-profit foundations working with each school remain separate.
The two audits were done by separate companies.
The auditors who did the Darton Foundation audit listed two 'material weaknesses' they found when they looked at the Foundation's finances and internal control of them.
They suggested the foundation assign one person to have access to the physical assets and a separate person have access to those account transactions.
Meantime, the auditors who did the ASU Foundation audit listed eight 'material weaknesses' that stem from a lack of internal control.
Many of them say the foundation needs to put in place policies to make sure people are keeping correct records of bonds, cash disbursements and bank reconciliations.
I sat down with ASU's Interim Chief Development officer to talk about the audits.
WALB asked Davis if the two foundations are planning to come together as one in the future. Davis said to his knowledge there are no plans in the immediate future.
"Their board governs that decision so I can't tell you definitely why they are separate. I know they have both met on numerous occasions to consider and discuss future consolidation of the two institutions," said Davis.
WALB is continuing to learn more about the audit and the changes to policies that Albany State University is making.