FARMINGTON — Staff and administrators at San Juan College have made a number of changes after findings in an audit report shed light on the college's lack of oversight in certain procedures.
Vice President for Administrative Services Russell Litke presented the findings to the college board Tuesday night as part of a presentation on the college's annual financial report.
Board members approved the audit findings, along with the financial report, after Litke informed the board of four findings discovered by Accounting and Consulting Group, LLP, of Albuquerque, an auditing firm the college used for the first time this year.
"We expected to have more (findings) this year with the new auditor," Litke said. "We expect new auditors to look at things much closer."
Litke said the findings are ranked in terms of severity, starting with "other matters," and then going to "significant deficiencies" and "material deficiencies."
The auditors founds two "significant deficiencies" related to accounting records.
One was that the college's payroll department was preparing and uploading direct deposit files to the bank without a review from the business office.
The other was that while staff reviewed bank reconciliation forms, they were not indicating those reviews on the forms. Litke said signing the bank reconciliation forms was previously a policy, but it was not taking place.
"Either one of those on their own would fit into 'other matters,' but because they remain closely as part of interior controls, they were combined as a 'significant deficiency' to correct," Litke said.
Litke had no information suggesting the business office reviewed payroll direct deposits before they were uploaded to the bank. But, he said, no irregularities had been found with payroll direct deposits.
"The one (finding) that causes me the most concern is the payroll direct deposits were not being reviewed," Litke said.
An employee could have, for example, created a payroll check for a nonexistent employee, he said.
"One of the things we looked for when we check payroll is to verify these names are employees and the dollar amounts are reasonable," Litke said.
Changes have been made to ensure direct deposit files are being reviewed by the business office and bank reconciliation forms are initialed and dated after being reviewed.
"It's an additional step to make sure nobody is doing anything improper," Litke said.
Two other findings in the audit were labeled as "other matters." One concerned the college failing to obtain certification from the board regarding the physical inventory of capital assets. The other was that two of the three standard campaign contribution disclosure forms from responsive bidders were missing.
Litke said the winning bid for a purchasing contract has to submit a campaign contribution disclosure form that states if any contributions were made to the campaigns for college board members.
The auditors asked for three forms, and the office was able to produce one.
Litke said the college's new director of purchasing is ensuring all forms are properly collected for any purchase an outside company bids on.
The failure to obtain certification for inventory of capital assets was brought up by the auditors after looking at the law regarding the approval of physical inventory. Assets like desks, chairs, technology equipment, motor vehicles and buildings are included as capital assets.
Litke or the president of finances have been signing off on the certification.
When the certification is up for approval at the end of the fiscal year, it will come before the board members to approve.