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3.10 Financial Resources

Comprehensive Standard:

3.10.3 The institution exercises appropriate control over all its financial resources. (Control of finances)

Statement of Compliance:   In Compliance.

Narrative:

The President of the University of West Georgia (UWG) has overall responsibility for the control of financial resources [1].  Functionally, operational oversight of the financial operations of the University of West Georgia is delegated to the Vice President, Business and Finance (VPBF).   As part of a “single point of accountability,” each Vice-President maintains functional control and responsibility for financial resources under their purview.  The current VPBF has a Masters of Business Administration, is a Certified Public Accountant, and has 20 years of university experience at the Vice President level [2].   All of the Vice Presidents have many years of experience in higher education and extensive understanding of university budgeting and controls (resumes for all Vice Presidents and financial control employees are available for review upon request for personal privacy reasons; however, some of these resumes are posted publically).

See Comprehensive Standard 2.11.1, 3.10.4, and 4.7 for more information about the financial controls at the University of West Georgia.

Two major units of the university that are involved in the control of university financial resources are the Budget Services Office [3] and the Office of the Controller [4].   A third unit, the Center for Business Excellence [5], supports UWG’s control of financial resources with a focus on enhancing efficiency, effectiveness, and economic use of resources, and serves as the champion of Enterprise Risk Management.  As a separate control, the Department of Internal Audit [6], co-reports directly to UWG President and the Chief Audit Officer and Associate Vice Chancellor of Internal Audit for the Board of Regents of the University System of Georgia (USG) [7].

Based on authority from the USG, the Budget Services Office under the direction of the Budget Director [8] reporting to the VPBF is responsible for the development, implementation, maintenance, and control of University budgets. The budget consists of four main types of operation funding:  Education & General (i.e. state allocation, tuition, fees, indirect cost reimbursements, and departmental sales & service); Auxiliaries (e.g. bookstore, food service, health services, housing, parking & transportation, etc.), Student Activities; and Grants and Sponsored Projects.  In addition, budgets are maintained for a large number of renovation projects and for major new building projects.   

UWG uses “open book” management practices for budgeting and control of resources.  As such, the institution makes all budgets and expenditures available to users in near real time via use of open Operating Budget records [9].    Additionally, copies of the annual budget book containing detail for each department by spending category is available in the University library accessible in multiple media formats.

As part of internal controls, UWG uses various closed software systems such as PeopleSoft Financials and E-Pro.  Additionally, some shared services such as ADP Payroll are controlled by the USG. As payment transactions are processed (e.g. vouchers, payroll, purchase orders, etc.), PeopleSoft financials is programmed to run a budget validation process to ensure spending authority is available for the amount of the payment; spending authority is budgeted in the correct chart string; and the chart string codes are correct on the payment document and match the coding in the budget. 

On occasion, a transaction may fail the budget validation process and needs to be overridden.  An example is when expenditures were charged to the incorrect budget and need transferred.  The expenditures transfer will not “post” to the new department until a budget is established; however, sometimes the expenditures need to move before the budget.  In this case, the expenditure transfer is overridden and then the budget transfer is processed.  The Budget Director and Assistant Budget Director have authority to override both accounting and budget transactions.  A log is maintained in the Budget Office identifying each transaction containing, the date, reason for override, and the accounting chart strings impacted.  The Controller also has access to override when the Budget Service’s directors are not available.  In the past four years, the Controller has had to override less than ten transactions.

The budget system is linked closely with the financial system, and the budget office staff members work closely with their counterparts from the various Vice Presidents, Controller’s Office, Purchasing, Human Resources, and other academic and administrative units to effect budget management and control [10]. Training [11], primarily by the Center for Business Excellence and the Budget Services Office, is provided on an ongoing basis for key administrative personnel on the use of the budget system.

All university units and activities report ultimately either to the university President, the Provost or to one of the other vice presidents. Most budgetary and control measures can be resolved at the dean, director, or department-head levels [12]. Major or university-wide budgetary control issues are resolved with the approval of either the university President, Provost, or the appropriate vice president.

The university currently uses an integrated accounting and budgeting system with PeopleSoft version 8.9. PeopleSoft incorporates budget, encumbrances, and expenditures [13]. Its balance features can be set at the organizational level and budget-category type to affect the desired budget and cash controls. There is also roll-level security implemented on the Spectrum system and workflow set up throughout the university.  ADP Payroll transactions are monitored regularly but can by-pass normal balance controls in cases where an administrative matter or timing delay could prevent an employee from being paid. Expenditures are reviewed on a regular basis. 

The Assistant Vice President for Finance/Controller [14] is primarily responsible for establishing and communicating policies and procedures to ensure the proper and efficient use of university resources, receiving and depositing funds to the university, ensuring the prompt and proper settlement of accounts owed the university, and maintaining the university’s accounting and financial reporting systems (including the accounts-receivable and property subsystems). The Controller has responsibility for the development and enforcement of financial control systems.  Institutional Guidelines and Procedures, including the safeguarding of cash and control of expenditures, can be accessed on the Controller’s website [15].

Separate, but affiliated organizations including the University of West Georgia Foundation [16], [17], [18], the UWG Real Estate Foundation [19], [20], [21], and the UWG Athletic Foundation [22], [23], [24] have their own policies and procedures.  Each organization, operating consistent with their respective missions and Internal Revenue Service requirements, maintain strong financial controls, and are audited annually.

UWG has strong financial controls and shows evidence of the strong financial controls in every area of the university (including auxiliary services, foundations, and other affiliated organizations).  The only area, for which a lack of operational control existed, was in University Athletics (Comprehensive Standard 3.2.11).  The Athletics problems have been resolved and operational control now exists.  UWG, and its affiliated organization, has had no finding of weaknesses in internal controls, in any audit, for at least the past five years [25].   

Supporting Documentation: