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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

City University of New York
Central Office: Controls Over Bank Accounts


Issued: November 29, 2017
Link to full audit report 2015-S-94

Purpose
To determine whether officials of the City University of New York’s (CUNY) Central Office adequately ensured that all bank accounts were authorized and only used for appropriate purposes and transactions. The audit covers CUNY Central Office bank accounts for the period January 1, 2013 through July 13, 2016.

Background
CUNY is the public university system of New York City, and the largest urban university in the United States, consisting of 24 institutions. More than 270,000 degree-credit students and 273,000 continuing and professional education students are enrolled at campuses located in all five New York City boroughs. CUNY Central Office provides administrative support and business services to its institutions.

CUNY’s Cash Management and Banking Policy (Policy), effective July 1, 2008, requires the University Controller to ensure that each bank account complies with University policies and procedures. According to the Policy, the Office of the University Controller (OUC) is responsible for managing centralized cash collections, including centralized tuition and payments of fees. Additionally, the Treasurer oversees Cash Management, Student Financial Aid Distributions, and the University Bursar.

Key Findings

  • There were multiple internal control weaknesses related to the use of bank accounts. These weaknesses impacted various aspects of the banking process, including: opening and properly authorizing accounts; making deposits to accounts; and ensuring all accounts are used for appropriate business purposes. Collectively, these weaknesses increased the risk of fraud, waste, and/or abuse from unauthorized bank accounts and expenditures.
  • CUNY lacks a formal policy to address custodial credit risk. As of June 30, 2016, CUNY’s Money Market balances of about $163 million were uninsured and uncollateralized beyond the Federal Deposit Insurance Corporation (FDIC) limit of $250,000.

Key Recommendations

  • Fully comply with prescribed procedures for opening new bank accounts and monitoring existing accounts.
  • Strengthen controls to ensure that funds are appropriately disbursed from bank accounts by: reinforcing with staff the importance of adhering to New York State, City, federal, and CUNY requirements; and training OUC employees on the required policies and procedures related to bank accounts and banking operations.
  • Develop and implement formal policies and procedures for repurposing bank accounts and ensuring that large bank account balances are adequately collateralized or otherwise secured.

Other Related Audits/Reports of Interest

CUNY Lehman College: Controls Over Bank Accounts (2014-S-69)
CUNY SPS: Controls Over Bank Accounts (2014-S-78)
CUNY Medgar Evers College: Controls Over Bank Accounts (2015-S-92)
CUNY Borough of Manhattan Community College: Controls Over Bank Accounts (2015-S-93)


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