Standard 7.C.1 - Financial Management

Operating budgets reflecting actual expenditures for the previous year with the projected current year are submitted annually to the Board of Regents. The budgets are reviewed internally and approved by the BOR. A report is made annually to the Board of Regents regarding long-term and short-term loans, all outstanding debt, negative fund and/or cash balances.

Audit reports, including those for revenue bonds, and the public radio station, are reviewed by the Chancellor’s Executive Cabinet. Clean audit opinions reflecting financial adequacy and stability are reported to the Board of Regents. Any recommendations made in audits are responded to by the Director of Financial Services, Administrative Vice Chancellor and Chancellor. A plan of corrective action is developed following the issuing of the report. During an audit review, auditors review progress on addressing previous audit recommendations. The Chancellor brings major financial and administrative matters to the Board of Regents for their review and approval.

Evidence:

• 7.12 Financial Report;
• 7.10 Negative Cash and Fund Balance Reports

Standard 7.C.2 - Financial Management Experience

The administrative and staff experience related to fiscal affairs at MSU Billings is exceptional and noteworthy because of the stability it provides in all areas of the University. All fiscal operations are centralized under the Administrative Vice Chancellor, who reports to the Chancellor. A Certified Public Accountant, the Administrative Vice Chancellor has 26 years of experience in finance, 24 of those at MSU Billings in the finance area, with 17 years as the Administrative Vice Chancellor.

Accounts receivable, accounts payable, cashiering, and purchasing are centralized under the responsibility of the Director of Business Services, who reports to the Administrative Vice Chancellor. The Director of Business Services has 25 years of experience, with 23 years at the University and has held that position for 13 years.

Accounting, reporting, payroll, recharges, investing, property management and grant accounting are under the Director of Financial Services, who reports to the Administrative Vice Chancellor. The Director of Financial Services is a Certified Public Accountant and has 23 years of experience, 21 of them on a university campus. She has been the Director of Financial Services for 17 years.

Budget development, monitoring, reporting, and internal auditing are the responsibility of the University Budget Officer, who reports to the Administrative Vice Chancellor. The University Budget Officer has 27 years of experience in financial operations. MSU Billings recently hired the first budget analyst. This individual comes to the University with governmental accounting experience.

Financial and compliance audits demonstrate that the financial aspects of the University are efficiently and responsibly conducted.

The University is involved in Business Process Redesign (BPR) with all other units of Montana State University to assure optimal effectiveness and efficiency in business operations. The accounting and budget related functions have been reviewed and most agreed upon changes have been implemented or are in the process of being implemented.

Evidence:

• 9.3 Business Process Redesign (http://www.montana.edu/wwwtreas/ BPR.htm );
• 7.12 Financial Report

Standard 7.C.3 - Business Office Procedures

Expenditures and revenue are recorded in Banner, the University’s Administration-Finance-Accounting System. The Banner System is audited by the Legislative Audit Division of the State of Montana. All revenues and expenditures are subject to the same laws, policies and procedures. Revenues and expenditures are grouped and reported by funds. With the exception of agency funds, all funds are budgeted and included in planning and budgeting.

All funds, including financial aid funds, are subject to audit by the Legislative Auditor’s Office. Revenues and expenditures are controlled through a process of fund controller approval, supervisory review, budgetary and internal controls, and adherence to federal, state, local, Board of Regents, University laws, policies, and procedures. The MSU Billings Foundation is audited annually by an independent CPA firm.

The Business Office Procedures guide is online and updated regularly to provide guidance to financial managers regarding the proper accounting and expenditure of funds.

Evidence:

• 7.22 Business Office Procedures
  (http://www.msubillings.edu/boffice/ );
• 7.12 Financial Report

Standard 7.C.4 - Cash Collection Policies

The University has centralized its cash collection sites, which are periodically reviewed for adequate safeguarding of the assets. The University follows the State of Montana policies regarding cash management, invests its funds in accordance with State policies, and directs investments through the State Board of Investments or Bond Trustee. The Business Office Procedures guide online provides guidance to University fund controllers for cash management procedures.

Evidence:

• 7.22 Business Office Procedures http://www.msubillings.edu/boffice/;
• Montana Board of Investments STIP Program (http://www.investmentmt.com/Programs/STIP/default.asp )

Standard 7.C.5 - Accounting Records

University Accounting records are processed through the Banner accounting system. The system has been designed to make it possible to present financial statements in compliance with Generally Accepted Accounting Principles (GAAP) as well as Governmental Accounting Standards Board (GASB). The University follows guidance in GASB 35, which substantially modified the previous financial reporting model. The University maintains its accounting system and prepares its financial statements in accordance with the guidelines established by College and University Business Administration, as published by the National Association of College and University Business Officers. Adjustments are made to comply with GAAP. The accounting system is audited by the Legislative Auditor’s Office.

Evidence: 7.12 Financial Report

Standard 7.C.6 - Standard 7.C.7 - Standard 7.C.8
Not Applicable

Standard 7.C.9 - Audit Procedures

University funds are subject to governmental audit performed by the Legislative Auditor’s Office. Title IV financial aid programs may be audited by the Federal Government. Independent audits are performed for revenue bonds, Yellowstone Public Radio, NCAA athletic programs and the MSU Billings Foundation.

Evidence:

• 7.12 Financial Report;
• 7.10 Revenue Bond Report;
• 7.10 Yellowstone Public Radio Report;
• 7.12 and 7.10 MSU Billings Foundation Report

Standard 7.C.10 - Audit Procedures

Financial aid funds are included in the regular audits by the Legislative Audit Division. Scholarship funds at the Foundation are audited annually by an independent CPA firm.

Evidence:

• 7.12 Financial Report;
• 7.19 Foundation Report

Standard 7.C.11 - Internal Controls and Audit Procedures

The University has a well-established system of internal controls. Internal audits are conducted by the University Budget Officer on an as-needed basis. The Internal Audit Office of Montana State University Bozeman performs periodic internal audits at the University:

• A monthly payroll reconciliation is performed by the Budget Office comparing payroll expenditures per the payroll reports to projected amounts based on budgeted salaries. These amounts are also compared to the expenditures reported in Banner.
• Bank statements for the local bank accounts are reconciled on a monthly basis. Discrepancies and problems are reported to the Director of Financial Services, Budget Officer and the Director of Business Services for resolution.
• Surprise cash counts are performed periodically at University cash collection points. Inquiries into and reviews of cash collection procedures are conducted at the various sites.
  The Budget Officer is consulted for objective input on maintaining adequate internal controls as system procedures are added, deleted or modified. Particular attention is given to maintaining adequate separation of duties where appropriate to protect the institution’s fiscal integrity.

Evidence:

• 7.22 Business Office Procedures http://www.msubillings.edu/boffice/
• MSU Billings Summary of Financial Reporting Controls

Standard 7.C.12 - Audit Recommendations

Audit recommendations are addressed and responded to by management in the audit report. Depending on the nature of the recommendation, management may choose to concur, partially concur or not concur with the recommendation. Management takes every opportunity to work with the auditors to remedy the sources of or find solutions to the audit recommendations. Auditors follow up on recommendations in subsequent audit periods and report on the status of the audit recommendations.

Evidence: 7.12 Financial Report

Standard 7.C.13 - Audit Report Availability

Audit reports will be available for review by the Northwest Commission on Colleges and Universities. Audited financial statements are provided for fiscal years 2005-07. The Standard 7 tables and reports provided are based on the most recent fiscal year for which audited financial statements are available, which is fiscal year 2007.

Evidence: 7.19 Foundation Report

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