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University of South Carolina
BOARD OF TRUSTEES
Fiscal Policy Committee
March 30, 2000
The Fiscal Policy Committee of the University of South Carolina Board of Trustees met on Thursday, March 30, 2000, at 2:00 p.m. in Room 107-C of the Osborne Administration Building.
Members present were: Mr. Herbert C. Adams, presiding; Mr. Alexander English via telephone; Mr. Toney J. Lister; Mr. Michael J. Mungo; Mr. John C. von Lehe, Jr.; Mr. Othniel H. Wienges, Jr.; and Mr. Mack I. Whittle, Jr., Vice Chairman. Members absent were: Mr. William W. Doar, Jr.; Mr. Robert N. McLellan, Chairman; and Mr. William C. Hubbard, Chairman. Other Trustees present were: Mrs. Helen C. Harvey, Mr. Miles Loadholt via telephone, and Mr. M. Wayne Staton.
Others present were: President John M. Palms; Secretary Thomas L. Stepp; Executive Vice President for Academic Affairs and Provost Jerome D. Odom; Vice President and Chief Operating Officer J. Lyles Glenn; Vice President for Business and Finance John L. Finan; Vice President for Student and Alumni Services Dennis A. Pruitt; Vice President for Human Resources Jane M. Jameson; Vice President for Development Charles D. Phlegar; Vice Provost and Executive Dean for Regional Campuses and Continuing Education Chris P. Plyler; General Counsel Walter (Terry) H. Parham; Associate Provost John N. Olsgaard; Director of the Department of Internal Audit Alton McCoy; Associate Vice Provost for Regional Campuses and Continuing Education Carolyn A. West; Dean of the College of Hospitality, Retail and Sport Management Patricia G. Moody; Associate Dean of the College of Hospitality, Retail and Sport Management Thomas J. Davis; University Registrar Barbara Blaney; Chair, Faculty Senate, Caroline D. Strobel; Director of Budgetary Systems Ralph B. Summer; Director of Public Affairs Russell McKinney; and representative from Media Relations Jason Snyder.
Mr. Adams, senior member of the Committee, presided. He called the meeting to order, welcomed everyone, and invited them to introduce themselves. Mr. Snyder stated that no members of the media were present. Mr. Adams stated that notice of the meeting had been posted and the press notified as required by the Freedom of Information Act; the agenda and supporting materials had been circulated to the Committee; and a quorum was present.
I. Internal Audits Tracking Report: Mr. McCoy reported that the Tracking Report had been mailed. The audits for the College of Education, the Regional Campuses and Continuing Education, the College of Science and Mathematics, and the Regional Campus Administrative Financial Aid Office were over six months old and the recommendations from these audit reports had been implemented.
Mr. Adams stated that the McKissick audit revealed a large number of findings. He reported that the Fiscal Policy Committee had reviewed the audit at the last committee meeting. Dr. Odom said that he was monitoring the audit recommendations for McKissick Museum. Dr. Odom had a report from the director showing that the McKissick Museum was making substantial progress correcting the findings. The outstanding items would remain on the Audit Tracking Report until they were fully resolved.
A. Office of the Registrar: Mr. McCoy stated that there were no findings in the audit of the Office of the Registrar. Mr. McCoy concluded that the Office of the Registrar was operating efficiently and in compliance with applicable rules, policies and procedures of the University.
Mr. Adams commended Ms. Blaney and stated that he and the committee would like to see more audits like the one from the Office of the Registrar.
B. USC Union: Mr. McCoy stated there were several findings noted during the audit that had been cleared up. The following recommendations were areas which would take longer to correct and compliance was not verifiable prior to the end of the audit.
The Child Development Center (CDC) was operating with a deficit. As an auxiliary account, the CDC should have been self-sufficient and operated on at least a "breakeven" basis. It has been suggested that the campus explore ways to increase enrollment and find alternate funding sources.
USC Union had an outstanding receivable of $8,000 that was a loan awarded to a particular student who was later deemed ineligible. This resulted in USC Union having to repay the Student Loan Corporation because of the mistake. Mr. Mungo also asked where the problem originated: USC Union or USC Columbia and how the finding had been reviewed. Dr. Plyler responded that the situation had been monitored for some time and that it was determined to be a management problem which had been identified, isolated, and resolved with a new director currently in place.
Mr. McCoy stated that the review of the TRIO Program failed to meet federal requirements in the criteria of the Higher Education Act 1965 402DC, because five students did not meet the individual requirements which were disability, low income, or first generation college students. The program could be financially penalized because of this matter.
The outstanding items would remain on the Audit Tracking Report until they were fully resolved.
C. College of Hospitality, Retail and Sport Management: Mr. McCoy reported on the internal audit of the College of Hospitality, Retail, and Sport Management for the fourteen months ending on August 31, 1999.
The audit was to determine that the College of Hospitality, Retail and Sport Management was operating in accordance with the policies and procedures of the University.
The following audit findings were revealed and recommendations were given.
1. Cash receipts and checks had not been deposited in a timely manner, one book of receipts was missing from the deposit, and deposit revenue from the Capstone lab had not been posted to the correct accounts. It was recommended that Management Level I monthly reports be sent to the dean's office for further review.
2. Visa Purchasing Cards had been used by six people in the College. Too many liaisons could lead to improper accounting and internal control. It was recommended that summaries for Visa Purchasing Cards be signed by the holder and charge sheets be attached in the order shown on the monthly purchase summary.
3. Travel exceptions showed Travel Authorizations (TAs) had been authorized after the actual trip had been completed, meals had been reimbursed inappropriately, and TAs had been approved for travel but the respective trips were not taken. Department Chairs, faculty, and administrative assistants had been sent written notice by the Dean instructing them to pay careful attention to University regulations pertaining to travel.
4. Inactive E-Funds had been noted with several accounts that had no or very little activity for the past eighteen months. It was recommended that the Dean would monitor all "E" accounts.
5. The Ecuadorian Education Project noted a net loss for the past two fiscal years. The University was optimistic that with a change in that country's economy, the enrollment would increase.
6. Thirty-eight scholarships were issued from accounts during the fiscal year which had allowed non-resident students to pay reduced out-of-state tuition rather than full tuition. The University Scholarship Policy stated: "Non-resident students who are awarded scholarship stipends (cash awards) of $250 or more per semester by the University Scholarship and Financial Aid Committee shall be entitled to pay reduced tuition. The amount of the reduction would be determined annually by the Board of Trustees."
Mr. Adams asked Dr. Pruitt to comment. Dr. Pruitt replied that the Office of Financial Aid and Scholarships to date was only charged with administering financial aid. The office assumed that when academic departments or colleges submitted aid recipients they met institutional standards. For at least twenty years that had been the practice. In order to clarify this practice and insure appropriate use of institutional funds allocated for scholarships, a policy change would be recommended by the Financial Aid and Scholarship Committee to the Business and Finance office for a fall 2001 implementation.
7. Graduate programs admissions did not meet established criteria. A recommendation was made to require that exceptions to admissions standards be documented.
The outstanding items would remain on the Audit Tracking Report until they were fully resolved.
II. SEC and ACC Endowment Values: Mr. McCoy reported that each year the National Association of College and Business Officers (NACUBO) published a report of all the universities who participated in the schedule of endowment values at Southeastern Conference (SEC) and Atlantic Coast Conference (ACC) universities. Mr. Whittle had previously requested that the University prepare a schedule of all endowments of SEC and ACC Schools and present the schedule to the Board. Mr. Adams stated that this was received as information.
III. Other Matters: Mr. Finan reported that the designated fund activity for the second quarter of the Fiscal Year 1999 showed all expenditures within the revenue.
There being no further matters to come before the Committee, Mr. Adams declared the meeting adjourned at 3:15 p.m.
Respectfully submitted,
Thomas L. Stepp
Secretary