Comprehensive Standard 3.10.4
The institution exercises appropriate control over all its financial
resources. (Control of finances)
Narrative:
Lawson State Community College (LSCC) exercises appropriate control over all its financial resources using budget planning, budget control, fiscal and accountability policies and procedures, investment management, risk management, and grants and contract management.
Lawson State Community College is a state supported educational institution operating under the guidance of the State of Alabama Board of Education. The State Board of Education approves the annual operating budget and subsequent budget amendments each year. The operating budget is submitted each year in such form and manner as may be prescribed by the Department of Postsecondary Education (Policy 304.01). Each budget must also include projections of enrollment and justification for new personnel.
As documented in Core Requirement 2.11.1, the annual budget planning process is the primary means of exercising control over financial resources and is an integral part of LSCC’s strategic plan, master plan, programs and activities and provides resources to implement.
The College president, with the
Vice President for Administrative and Student Services supervises
the development of the budget schedule and a specific plan for budget
preparation ensures appropriate input from all levels. (Budget Hearing Schedule) All systems colleges are
required to balance budgeted revenues against budgeted expenditures.
The annual
budget process begins in the spring of each year. Each budget manager and division
administrator receives notification from the Business Affairs Office of the
official due dates for budget hearing.
Each department provides input into the budget process by submitting a Budget
Request Form
with an itemized Equipment Request form
prior to the official budget hearing date.
All budget managers have online access to their respective budgets. Budget managers request funds for operating
costs and equipment. The Business
Affairs Office along with the Human Resources Office calculate and input
personnel costs with considerations for state mandated pay raises, and
adjustments in pay schedules in accordance with State Board Policy. All budgets are due by June 30 of each year
to the Department of Postsecondary Education to be submitted to the State Board
for approval for fiscal year beginning October 1. (Minutes 09-25-08).
The college operates according to the approved budget. Budget managers use online budget inquiry to regularly monitor their respective budgets. Changes may be requested by Budget Managers by submitting a budget revisions form when submitting purchase requests. Budget Amendments are required and are submitted to the Department of Postsecondary Education when conditions during the year indicates changes in revenues, i.e. tuition and fees, grants and contracts, and/or when budgeted expenditures line items increase over original budget.
State
Board policies and accompanying procedures and the procedures outlined in
LSCC’s Business Office Procedures
Manual set forth the guidelines for budgeting, budget
revisions and budget amendments.
Investment management Policy 308.01 is
dictated by State Board Policy which requires all funds available to be
invested in a manner consistent with all applicable state and federal laws, and
regulations.
Lawson State Community College also exercises appropriate control over its financial resources with administrative and accounting controls. Administrative control includes a plan of organization and the procedures and records that are concerned with the decision process leading to management’s authorization of transactions. Lawson State operates on an approved organizational structure designed to ensure consistent workflow and facilitate the decision making process. The college purchasing system must include budget approval before a purchase order is issued. In addition, the President is included in the approval process of all disbursement of funds at the college.
Administrative and accounting controls include an interactive accounting system that includes several levels of security consisting of passwords associated with the user’s identity, user codes assigned to user identity and assignment of access to financial information based on prescribed duties.
Additional controls include segregation of duties and responsibilities within the Business Affairs Office for cash receipts processing, accounts payable process, grants and contract accounting, payroll processing and accounts receivable processing. (Business Office Job descriptions) Examples of these controls are:
·
The cashier does not have access to void receipts,
·
The accounts payable manager does not issue purchase
orders,
·
All purchase orders are signed by the Chief Financial
Officer,
·
Human resources and payroll are performed in different
departments,
·
Accounts Receivable Manager does not make bank deposits,
·
Accountants reconcile bank deposits and update general
ledger.
Control
of financial resources is exercised consistently with requiring accountability and
adherence to college, State Board, and federal policies and guidelines. All revenues and expenditures are recorded in
the colleges’ accounting records and are subject to all the guidelines and
requirements. The annual audit of all college funds
by the Examiners of Public Accounts includes a report on internal controls over
financial reporting, compliance and other matters based on an audit of
financial statements in accordance with Government Auditing Standards.
As
documented in Comprehensive Standard 3.10.5, Lawson State maintains financial
control over externally funded programs.
All externally funded programs are managed in accordance with the terms
of the written grant agreement between the grantor and Lawson State. Externally funded programs are included in
the annual financial audit and audited each year performed by the State
Examiners of Public Accountants.
State
Board of Education Policy 310.02
requires state colleges to insure all buildings and property with the State
Finance Department, Division of Risk Management. Lawson State has internal
controls to protect its capital assets and to record proper value in the
general ledger. A physical inventory is
taken each year of all active inventory items and periodically on all other
inventory items. A detailed subsidiary
is maintained on all buildings, equipment, vehicles infrastructure and library
holdings. The Division of Risk
Management performs a periodic assessment and valuation of the college
facilities to ensure replacement coverage.
In addition,
Lawson State maintains the minimum fidelity bond coverage on certain college
officials and employees.
Documentation:
|
Documentation |
Location |
|
FY 2004-2008 Annual operating budget |
|
|
Approved Budget Amendments |
|
|
State Board Policy on Reporting |
|
|
State Board Minutes on
Budget Approval |
|
|
Budget Hearing Schedule |
|
|
Budget Request Form |
|
|
Equipment Request
Form |
|
|
Budget Revision forms |
|
|
Business Office
Procedures Manual |
|
|
State Board Policy on Cash Management |
|
|
Business Office
Job Descriptions |
|
|
Financial Statement Audits |
|
|
State Board Policy on Insurance |