Alberta Auditor General Merwan Saher has advised Olds College to “significantly improve its (financial) processes and internal controls.”
The comment was part of the Auditor General of Alberta March 2012 Report on Advanced Education and Technology – Post-Secondary Institutions, which was made public last Monday.
In the report, Saher repeats his April 2011 recommendation to Olds College that the institution improve its processes and controls over year-end financial reporting.
“The college made unsatisfactory progress to resolve its control weakness,” said Saher.
According to the report, during the audit, “a significant amount of information and supporting documents, such as detailed listings of accounts and variance explanations, was missing from the working papers.”
Furthermore, “of the items in the working paper binders, many were not reconciled to the financial statements. In addition, management could not respond to general queries and variance analyses, indicating that they had not done a sufficient internal review of the financial statements.”
The Auditor General also found fault with the college's system access controls. According to the report, the college gave privileged system access to too many employees.
“The college should have effective controls to segregate incompatible job functions that might otherwise allow a privileged user to manipulate data or compromise security,” said Saher.
“Users who have privileged systems access should not also have job functions that involve entering or approving data.”
Auditor General office employees compared a list of staff with privileged systems access to a list of staff with data entry responsibilities and found that segregation was inadequate.
However, the report does state that the Auditor General is “satisfied that the various management groups and their respective audit committees, and the Minister (of Education) himself, have acknowledged the problems they face and have begun remedial action.”
When contacted, Olds College CFO and director of sustainability Stewart MacNabb said that all recommendations have been addressed by the institution. The college was made aware of the issues at the end of the audit last October.
“When these things come forward, we don't sit on them. We take steps as quickly as we can,” MacNabb said.
“These recommendations come from a very comprehensive audit. While there are some presentation issues, there is no issue that indicates that our financial administration is anything but good. We are quite confident in our financial administration.”
The college has already tightened up system access and MacNabb has met with the financial staff to improve the year-end financial reporting.
Regarding the missing items during the audit, MacNabb has already written to the Auditor General to know what these items were.
“That way, we can embed (them) in our next year-end process,” he said.
As for the items that were not reconciled to the financial statements, MacNabb said it was just an issue of updating the items.
“Those updates occurred after the Auditor General employees arrived. That is the point that they were making,” he said.
“This is not as though the work had not been done. It is just that some of the work needed to be updated, based on other transactions that had occurred.”
When contacted, assistant auditor general Jeff Dumont stressed that the report was based on the October 2011 audit.
“We don't talk about afterwards or the communications that we have had with the management specifically,” Dumont said.
“Until we actually go back and see a plan of action put in place, we cannot conclude that the issues have been dealt with, but we certainly agree that management is responding.”
In the report, four other colleges received improvement recommendations. They are Northern Lakes College, Grant MacEwan University, Alberta College of Art and Design, and NorQuest College.
