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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

City University of New York
CUNY SPS - Controls Over Bank Accounts


Issued: June 02, 2015
Link to full audit report 2014-S-78
Link to 90-day response

Purpose
To determine whether there was fraud, waste, or abuse in the use of funds held in its bank accounts.

Background
The City University of New York School of Professional Studies (CUNY SPS) was founded in 2003 to meet the educational needs of working adults, organizations, and employers. In April 2014, CUNY SPS offered nine bachelor’s degrees and six master’s degrees, as well as a number of certificate programs. The school’s enrollment has grown to over 2,200 students in the credit-bearing programs and over 10,000 non-credit registrants each year. CUNY SPS’s revenues increased from $7.94 million in fiscal year 2009 to $17.5 million in fiscal year 2013, and its expenditures increased from $8.11 million to $16.5 million for the same period. Over 70 percent of CUNY SPS’s revenues come from tax levy allocations. As of December 1, 2013, CUNY SPS reported it had four bank accounts at two financial institutions. The four accounts were for Tuition and Fees, School Depository, Tax Levy funds, and the CUNY SPS Foundation.

Key Findings

  • We found a lack of separation of duties in the handling of CUNY SPS finances, as well as poor internal controls over bank accounts held in the school’s name. Consequently, a former CUNY SPS employee had complete control over all aspects of the school’s finances and bank accounts.
  • CUNY SPS lacked adequate formal policies to open and close bank accounts. A former employee was able to obtain and sign checks for significant dollar amounts and use them to open two unauthorized bank accounts in the name of CUNY SPS. As of the end of our audit fieldwork, $23,500 remained missing from a CUNY SPS account.

Key Recommendations

  • Effectively separate the duties for administering bank accounts and related financial activities functions so that no person has excessive control over the deposit and disbursement cycle. Where duties cannot be adequately separated, develop and implement appropriate compensating controls.
  • Fully comply with prescribed procedures for opening new bank accounts and the monitoring of existing accounts. Develop and implement additional policies and procedures to administer bank accounts, as warranted.

Other Related Audits/Reports of Interest

None


State Government Accountability Contact Information:
Audit Director: Carmen Maldonado
Phone: (212) 417-5200; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236