Audit Uncovers “K-Cash” Theft, President Orders Comprehensive Audit of Auxiliary Enterprises
KENNESAW, Ga. (December 8, 2011) — A final report of an extensive audit of Kennesaw
State…
Georgia
(Dec 8, 2011) —
The audit findings, which cited a lack of adequate internal controls of KSU’s K-Cash
processes prior to calendar year 2011, have led Kennesaw State University President
Daniel S. Papp to order a comprehensive audit of all university auxiliary enterprises,
which is now underway. In addition, KSU Police are conducting an investigation, and
appropriate disciplinary actions have been taken to address the lack of appropriate
fiscal oversight in the impacted operating unit.
The University’s Auxiliary Services and Programs (ASaP) unit is comprised of vending
services, copy and print services, culinary and hospitality services, the Department
of Parking & Transportation, and the KSU Bookstore. Prior to December 2010, ASaP
was a department within the university’s Financial Services Office. KSU Vice President
For Operations Dr. Randy Hinds began supervising ASaP in December 2010, and he asked
the university’s auditor to audit the K-Cash operation due to concerns regarding loose
protocols.
The University’s K-Cash program allows KSU faculty, staff and students to access nine
terminal locations throughout the campus where they can deposit money into machines
to create fund balances on their KSU ID cards. Eight machines accept cash only, and
one machine accepts both cash and credit card deposits. The funds can be applied
to two different accounts: A General Declining Balance Account, which can be used
by faculty, staff and students to make meal and service purchases on campus; and a
Food Restricted Account, which can be used only by students to purchase food at campus
venues. No faculty, staff or students who deposited funds into either account lost
any funds or balance credits. The missing money involved the collection of cash after
the monies were deposited into the K-Cash terminals and were properly credited to
the respective purchasers’ accounts.
“I was extremely disturbed by the initial concerns which led to this audit,” Hinds
stated, “and I commend the auditors for the thorough review that they conducted of
the K-Cash operations. The improved processes and tightened controls that have been
and will be implemented are giant steps in the right direction. Meanwhile, I look
forward to the results of the comprehensive audit to determine if additional improvements
are needed. We must and will ensure that all auxiliary enterprises are functioning
appropriately with effective internal controls.”
The K-Cash audit covered the period from February through October 2010. The audit
addressed the adequacy, integrity, and effectiveness of K-Cash internal controls;
and the level of compliance with Kennesaw State University and Board of Regents’ policies,
procedures, and regulations. In particular, the review focused on: identifying material
control weaknesses that were inherent in the K-Cash collection and deposit processes
prior to calendar year 2011; identifying control weaknesses within the current K-Cash
collection and deposit processes; and making recommendations for improvement.
The audit report put forward eight recommendations to address its findings and to
tighten internal controls, all of which the management team has implemented or will
implement, with a specific timeline cited for the implementation of each recommendation
. A copy of the full audit report, including the findings and management responses,
can be accessed by clicking
here.
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A leader in innovative teaching and learning, Kennesaw State University offers undergraduate, graduate and doctoral degrees to its nearly 43,000 students. With 11 colleges on two metro Atlanta campuses, Kennesaw State is a member of the University System of Georgia. The university’s vibrant campus culture, diverse population, strong global ties and entrepreneurial spirit draw students from throughout the country and the world. Kennesaw State is a Carnegie-designated doctoral research institution (R2), placing it among an elite group of only 6 percent of U.S. colleges and universities with an R1 or R2 status. For more information, visit kennesaw.edu.